- •Financial market: notion, structure and infrastructure.
- •Notion, functions, types of financial intermediaries. Financial intermediaries in Russia.
- •International foreign exchange market: functions, participants, operations.
- •Foreign exchange risks: definition, types, insurance methods.
- •3 Types of currency risk:
- •Definition and types of exchange rates. Exchange rate forecasting, currency parity. Factors of exchange rates.
- •Foreign exchange regulation: purposes and instruments.
- •International securities market: definition, structure, participants.
- •Financial system of a country: structure, interrelation between the elements.
- •Budgetary system of a country: principles of construction, structure, Russian and foreign experience.
- •12. State budget revenues and expenditures.
- •Income distribution
- •13. Public debt and sources of its formation.
- •14. Federal budget of the Russian Federation: revenues, expenditures, modern peculiarities.
- •Imf's main responsibilities:
- •2.1 Over the counter (otc) and exchange-traded derivatives
- •2.2 Forward contracts
- •2.3 Futures contracts and their difference to forwards
- •2.4 Options
- •2.5 Swaps
- •Interest rate swaps,
- •19. Securities market regulation in Russia and abroad.
- •20. Professional activity on securities market.
- •21. The problem of risk and the notion of insurance. Functions of insurance company.
- •Insurance aids economic development in at least seven ways.
- •22. Features of corporate insurance products. Commercial insurance.
- •23. Notion and purpose of reinsurance. Types of reinsurance contracts.
- •25. Obligatory and voluntary types of insurance in Russia and abroad.
- •Voluntary:
- •Voluntary:
- •27. Bank liquidity: notion, analysis, regulation.
- •29. Bank’s credit risks: methods of evaluation and minimization.
- •Interest Rate Risk
- •30. International banks: transactions and risks.
- •31. Monetary policy: purpose, types, tools.
- •32. International credit: notion, functions, forms, tendencies.
- •33. Credit market: functions, participants, instruments, indicators.
- •34. Analysis of a borrower’s creditworthiness by banks.
- •7 Functions of financial management:
- •37. Structure of a company’s balance sheet. Analysis of assets and liabilities structure
- •39. Capital structure and company’s cost of capital.
- •42. Classification of sources of corporate financing.
- •Instruments
- •Issuing and trading
- •Valuation
- •Ipo via foreign bank
- •44. Corporate credit policy.
- •Various Types of Corporate Credit and Corporate Credit Policy
- •45. Types of financial risks, quantitative analysis.
- •46. Investment portfolio construction: calculation and analysis of risk and return.
- •48. Types of bonds, calculation of present value of discount and coupon bonds. Types of bond yield.
- •50. Capital Assets Pricing Model (capm).
- •52. Price structure and its components. Factors of a price.
- •53. Methods of pricing.
- •55. Profit taxation in Russia.
- •56. Taxation of foreign corporate entities in Russia.
- •57. Income taxation of individuals.
- •59. Tax planning: notion, purposes, stages.
2.1 Over the counter (otc) and exchange-traded derivatives
Broadly speaking there are two distinct groups of derivative contracts, which are distinguished by the way they are traded in market:
Over-the-counter (OTC) derivatives are contracts that are traded (and privately negotiated) directly between two parties, without engaging any kind of intermediary. Products such as swaps, forward rate agreements, and exotic options are almost always traded in this way.
Exchange-traded derivatives (ETD) are those derivatives products that are traded via specialized derivatives exchanges or other exchanges. A derivatives exchange acts as an intermediary to all related transactions, and acts as a guarantee. To minimize credit risk to the exchange, typically traders post margin or a performance bond of 5%-15% of the contract's value.
2.2 Forward contracts
Forward contracts represent agreements for delayed delivery of financial instruments or commodities in which the buyer agrees to purchase and the seller agrees to deliver, at a specified future date, a specified instrument or commodity at a specified price or yield.
Therefore, the trade date and delivery date are separated. It is used to control and hedge risk (for example, currency exposure risk or commodity prices risk).
In a forward transaction, no actual cash transaction is made. If the transaction is collateralized, exchange of margin will take place according to a pre-agreed rule or schedule. Otherwise no asset of any kind actually changes hands until the contract reaches its maturity.
Forward prices are based on the future spot price anticipation at maturity, the cost of capital and in particular cases, the anticipated future cash flows generated by a traded good.
The difference between the spot and the forward price is called a forward premium or a forward discount.
Selling something through a forward contract is called having a short forward contract, and buying is called having a long forward contract.
Forward contracts are generally not traded on organized exchanges and their terms and clauses are not standardized.
EXAMPLE of forward deal (опционально) For instance, a coal producer and a steel producer enter into a spot futures contract to exchange cash for coal in 1 year. The coal producer obliges to supply x tons of coal which currently cost $500,000 on the coal market, and the buyer obliges to pay that amount.
Both the seller and the buyer anticipate the market price to rise about 10%, so they agree on a futures price of $550,000. Both parties have reduced a future risk: for the coal producer, the instability of demand for coal and the uncertainty of the price, and for the steel manufacturer, the risk of raw materials undersupply and again the price uncertainty.
However, it may happen that in 1 years’ time the market price for coal increases by 15%, so the coal could be sold on the market for $575,000. In this case, the buyer gains a profit of $25,000 and the seller writes this amount off as a loss.