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Week - 1
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Week 1 – Introduction to the Financial System
- Definition and economic functions of the financial system
- Financial system and the real economy
- Savers, borrowers, and flow of funds
- Financial intermediation
- Major types of financial markets
- Money and capital markets
- Primary and secondary markets
- Overview of financial instruments
- Basic features of the Turkish financial system
Textbook: Chapter 1 – An Introduction to Financial System |
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Week - 2
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Week 2 – Financial Stability and Financial Crises
- Concept and major dynamics of financial crises
- Risk perception and risk aversion
- Role of interest rate and exchange rate movements
- Financial crises and economic activity
- Concept of financial stability
- Micro-financial stability
- Macrofinancial stability
- Systemic risk
Textbook: Chapter 2 – Financial Stability, Regulation, and Supervision |
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Week - 3
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Week 3 – Financial Regulation, Supervision and Macroprudential Policies
- Rationale for financial regulation and supervision
- Microprudential policies
- Macroprudential policies
- Financial architecture
- Role of the banking system in financial stability
- Monetary policy and financial stability
- Role of central banks in financial stability
- Financial stability in Türkiye
Textbook: Chapter 2 – Financial Stability, Regulation, and Supervision |
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Week - 4
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Week 4 – Risk and Return in Financial Economics
- Concept of financial return
- Simple returns
- Single- and multi-period returns
- Logarithmic returns
- Risk-free rate and equity premium
- Expected return
- Distribution of financial returns
- Mean, variance, and standard deviation
- Skewness and kurtosis
Textbook: Chapter 3 – Risk and Return in Financial Economics |
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Week - 5
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Week 5 – Portfolio Theory and Risk Management
- Portfolio return and portfolio risk
- Risk-return trade-off
- Covariance and correlation
- Two-asset portfolios
- Multi-asset portfolios
- Portfolio diversification
- Risk reduction through diversification
- Optimal portfolio approach
- Markowitz efficient frontier
Textbook: Chapter 3 – Risk and Return in Financial Economics |
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Week - 6
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Week 6 – Interest Rates and the Time Value of Money
- Timing of cash flows
- Simple and compound interest
- Future value
- Present value and discounting
- Annuities
- Perpetuities
- Nominal and real interest rates
- Inflation and interest rates
- Calculation of real interest rates
Textbook: Chapter 4 – Interest Rate Calculations |
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Week - 7
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Week 7 – Midterm Exam Preparation
- Comprehensive review of Weeks 1–6
- Financial system and financial markets
- Financial stability and financial crises
- Micro- and macroprudential policies
- Risk and return calculations
- Portfolio diversification
- Interest rates and the time value of money
- Problem solving and sample questions
MIDTERM EXAM |
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Week - 8
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Week 8 – Investment Evaluation
- Investment decisions and cash flows
- Net Present Value (NPV)
- Net Present Value Ratio (NPVR)
- Profitability Index (PI)
- Internal Rate of Return (IRR)
- Comparison of NPV and IRR
- Modified Internal Rate of Return (MIRR)
- Payback Period
- Discounted Payback Period
Textbook: Chapter 5 – Investment Evaluation |
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Week - 9
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Week 9 – Derivative Markets: Forwards and Futures
- Basic features of derivative markets
- Spot and derivative markets
- Exchange-traded and over-the-counter markets
- Forward contracts
- Counterparty risk
- Futures contracts
- Margin mechanism
- Hedging
- Futures markets in Türkiye
Textbook: Chapter 6 – Introduction to Derivative Markets |
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Week - 10
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Week 10 – Options, Swaps and Financial Hedging
- Basic features of option contracts
- Call and put options
- Basic option positions
- Hedging with options
- Swap contracts
- Types of swaps
- Management of interest rate and exchange rate risks
- Corporate financial hedging
Textbook: Chapter 6 – Introduction to Derivative Markets |
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Week - 11
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Week 11 – Financial Statements and Stock Valuation
- Basic financial statements
- Balance sheet
- Income statement
- Cash flow statement
- Tools of financial analysis
- Basic features of stocks
- Principles of stock valuation
- Dividend Discount Model (DDM)
- Relative valuation
- Market efficiency
Textbook: Chapter 7 – Financial Statements and Stock Valuation |
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Week - 12
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Week 12 – Bond Valuation and Yield
- Basic features of bonds
- Bond pricing
- Coupon and zero-coupon bonds
- Yield to Maturity (YTM)
- Real Yield to Maturity
- Bond price-interest rate relationship
- Effects of maturity and coupon rates on bond prices
- Interest rate risk
- Duration
- Convexity
Textbook: Chapter 8 – Bond Valuation and Term Structure of Interest Rates |
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Week - 13
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Week 13 – Term Structure of Interest Rates and the Yield Curve
- Term structure of interest rates
- Spot rates
- Forward rates
- Yield curve
- Different shapes of the yield curve
- Expectations hypothesis
- Inflation expectations and interest rates
- Inflation-indexed bonds
- Monetary policy and the yield curve
- Term structure of interest rates in Türkiye
Textbook: Chapter 8 – Bond Valuation and Term Structure of Interest Rates |
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Week - 14
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Week 14 – Final Exam Preparation and Comprehensive Review
- Integration of the core concepts of the course
- Financial system and financial stability
- Risk, return, and portfolio relationship
- Interest rates, present value, and investment decisions
- Derivatives and risk management
- Financial statements and stock valuation
- Interest rates, bond prices, and the yield curve
- Quantitative problem solving
- Conceptual and applied sample questions
FINAL EXAM |
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