Course detail

Personal Finance

FP-pfPAcad. year: 2020/2021

The course is focussed on the following areas: personal income, planning and budgeting, savings and investments, debts, personal risk and bankruptcy, law and tax contexts of personal finance.

Learning outcomes of the course unit

Knowledge: The student can define various concepts of personal finances. They can explain the
role of personal budgeting and planning. They know how to explain complicated procedures of investments and assess their advantages and disadvantages. They know the basics of personal risk management and bankruptcy process according the Czech law system.
Skills: The student can draw up personal financial plan and budget, handle calculations of various investments profitability and set up payment plan for debts amortization.
Abilities: The student is able to orient themselves in comprehensive personal finance literacy, can make oral presentations on their work and carry responsibility for the correctness of their results.

Prerequisites

An ability to solve equations and calculate minimum and maximum values of functions, working out function graphs in various rasters, knowing the relationship between graphs and numerical formulation.

Co-requisites

Not applicable.

Recommended optional programme components

Not applicable.

Recommended or required reading

Ryan, J. Personal Financial Literacy. Cengage. 2012. ISBN 978-0-8400-5829-4
Aprea, C. et al. International Handbook of Financial Literacy. Springer. 2016. ISBN 978-981-10-0358-5
Kaminski, K. Financial Literacy: Introduction to the Mathematics of Interest, Annuities, and Insurance. UPA. 2010. ISBN 978-0-7618-5309-1
Lawless, R.E. The Student's Guide to Financial Literacy. Greenwood. 2010. ISBN 978-0-313-37718-1
Smith, A.O. Financial Literacy for Millennials: A Practical Guide to Managing Your Financial Life for Teens, College Students, and Young Adults. Praeger. 2016. ISBN 978-1-440834028.
Holmquist, J. Budgeting: How to Make a Budget and Manage Your Money and Personal Finances Like a Pro. CreateSpace Independent Publishing Platform. 2016. ISBN 978-1-530487264.
Tyson, E. Personal Finance For Dummies. For Dummies. 2012. ISBN 978-1-118117859.
Twomey, B. Inside the Currency Market: Mechanics, Valuation and Strategies. Bloomberg Press. 2012. ISBN 978-0-470-95275-7

Planned learning activities and teaching methods

The course is made up of lectures that explain the basic principles, problems and methodology of the discipline. The lectures combines theory with illustrative solutions of examples.

Assesment methods and criteria linked to learning outcomes

Requirements for gaining the credit:
a) Active participation in seminars, individual assessment by the teacher (max. 10 points) – calculation of examples (set in e-learning), presentation of approaches and results.
b) 1 credit test at previously set date. The test will include 4 examples, the maximum score from the test is 20 points. To pass the test a score of at least 50%, i.e. 10 points, is needed. The test can only be resat once.
c) Students will gain a credit if they have at least 50% of the total possible number of points from the seminars (max. 30 points) and at the same time gets at least 50% in the test. The assessment from the seminars is entered into the overall assessment of the course with a weighting of 30%.

Examination requirements:
Knowledge is verified by a written examination. Only students who have applied in IS and have the credit entered will be allowed to sit the examination. The examination is made up of 1 theoretical question and 1 case study, or 2 theoretical questions. The examination lasts 45 minutes. The maximum score for the examination is 70 points. The resulting assessment of the course is the sum of the points scored from the seminars and the examination. The examination is classified according to the ECTS scale. Incorrect or illegible answers are assessed as unsatisfactory.

Language of instruction

English

Work placements

Not applicable.

Course curriculum

The main objective of the course is present how finance works at business and personal level, i.e. to provide students with the necessary theoretical knowledge and practical skills regarding personal finance. It requires mastering the up-to-date approaches to defining the personal financial needs, budget and plan as well as fundamentals of savings and investments. Also necessary is to understand personal risk management, bankruptcy, law and tax context of personal finances.

1 Financial literacy in 21st century: Introduction, definition and conceptions of financial literacy
2 Income: Earned income and benefits, unearned income and payments, fixed income, purchasing power
3 Personal budgeting: definition, elements and importance of personal budget, personalized budget, monitoring and evaluation
4 Savings: General principles of compound interest and its impact, rates, inflation, financial decisions and planning, principals of investing (risk versus return, diversification, active and/or passive investing, personal investment objectives), banks and other financial institutions
5 Investments: Bank products, equities, mutual funds, exchange traded funds, stocks
6 Investments: Bonds, real estates, commodities
7 Alternative investments and cryptocurrencies
8 Debts: Identifying financial issues, importance of personal credit score, collateral and repayment, amortization, long-term debt, mortgage, consumer loans, microloans, credit cards, P2P loans
9 Currency market: Exchange rates, currency spot and currency forward market, Foreign exchange market
10 Personal risk management: portfolio theory, protecting income and property, insurance
11 Personal bankruptcy: Types of bankruptcy, discharge of debts, bankruptcy process, avoiding bankruptcy
12 Law contexts of financial literacy: Consumer protection, EU and Czech Republic
13 Tax contexts of financial literacy: Income taxes and other deduction

Aims

The main objective of the course is present how finance works at business and personal level, i.e. to provide students with the necessary theoretical knowledge and practical skills regarding personal finance. It requires mastering the up-to-date approaches to defining the personal financial needs, budget and plan as well as fundamentals of savings and investments. Also necessary is to understand personal risk management, bankruptcy, law and tax context of personal finances.

Specification of controlled education, way of implementation and compensation for absences

Attendance at lectures and seminars, including credit tests, is mandatory. Attendance is checked by tests and an attendance sheet.

Classification of course in study plans

  • Programme BAK-UAD Bachelor's, 2. year of study, summer semester, 5 credits, compulsory-optional

Type of course unit

 

Lecture

26 hours, optionally

Teacher / Lecturer

Exercise

13 hours, compulsory

Teacher / Lecturer