Fin 521

Course description
The purpose of this course is to familiarize students with the basic knowledge in investment environment instruments, and markets, and to provide them with a rigorous knowledge in investment analysis including the underlying modern portfolio management theories and techniques of estimating risk and return of individual securities and of investment portfolios, and in knowing how investment managers should value equities. This course covers also topics related to market efficiency and investment decisions, with applications.
 

Course objectives
Upon completion of the course, students should acquire a clear understanding of the underlying investment theory, and how investment decisions should be made to maximize the value of investments. Also, student should be familiar with the fundamental tools of equity valuation and portfolio selection.
 

Course requirements and grading
Your final grade will be based on your performance on three exams, case study, and class participation. 
Grading distribution:
 
First midterm                 20%
Second midterm            20%
                           Case study                      10%
Class participation         10%
Final                                  40%
 
There will be one case study in the course. It should be an individual work.  You will be required to make a brief presentation in the class, and to submit a written report of the case- study analysis.
Regular attendance is required and positive contributions to class are strongly encouraged.
 
 
 
Course outline

• The Investment Environment
• Asset Classes and Financial Investments
• How securities are traded
• Risk and Return
• Risk Aversion and Capital Allocation to Risky Assets
• Optimal Risky Portfolios
• Index Model
• The Capital Asset Pricing Model
• Arbitrage Pricing Theory and Multifactor Models of Risk and Return
• The Efficient Market Hypothesis
• Behavioral Finance and Technical analysis
• Empirical Evidence on Security Returns
• Macroeconomic and Industry Analysis
• Equity Valuation

 
 
Required readings
 
Reilly Brown, Analysis of Investments & Management  of Portfolios, international Edition South Western, 10th edition.