Course title: Investments
Code:
Credit: 3
Teaching Hours: 3 hrs/w X 16weeks

Overview

This course is to help students understand the activities and principles of investment in the international financial markets. First, the course will introduce the structure and mechanism of financial markets, with emphasis on the practical issues in stock markets. Then, we will study the modern portfolio theories and the equilibrium asset pricing theories, which lie theoretical foundations for modern investment and portfolio management. Next, it will discuss the popular models and methodologies of the valuation and analysis of equity securities and fixed income securities. Finally, the issues on portfolio performance evaluation and investment strategies will be explored.

The student is responsible for material that is introduced in the classroom even if the material is not covered by the textbook

 Textbook
Investments, 8st , by Bodie, Kane, and Marcus: McGraw-Hill Irwin, 2009

COURSE EVALUATION

Assignments (3~4) 20%
Midterm Exam 30%
Final Exam 50%
 

To receive credit for this course, students must achieve a minimum grade of 60% in the final examination and a minimum of 60% overall for the course.

There will be 3~4 assignments with a total of 20 marks. The marks assigned to each assignment may vary. No late assignment will be accepted.

There will be midterm exam with 30 marks. The time and place for the exam will be announced in advance.

There will be a final exam.

All exams are book-closed.

COURSE OUTLINE
(This outline of topics is subject to change at the instructor’s discretion.)

Part I: Introduction

1. Introduction

2. Financial Instruments and Markets (Reading: Ch. 2)

3. Stock Trading (Reading: Ch. 3)

4. Investment Funds (Reading: Ch. 4)

Part II: Portfolio Theory

5. Return, and Risk (Reading: Ch. 5.1-5.8)
6. Risk Aversion (Reading: Ch. 6.1-6.6)
7. Optimal Risky Portfolio: The Markowitz Portfolio Selection Model (Reading: Ch. 7.1-7.4, Appendix B)

Part III: Asset Pricing

8. The Capital Asset Pricing Model (CAPM) (Reading: Ch. 9.1,9.3)

9. Market efficiency (Reading: Ch. 11.1-11.4)

Part IV: Fixed- income Securities

10. Bonds: Prices and Yields(Reading: Ch. 14)
11. Term Structure of Interest Rates and Interest Rate Risk(Reading: : Ch. 15.1-15.4, 16.1)

Part V: Stocks: valuation and analysis

12. Equity Valuation Models and Analysis(Reading: Ch. 17, Ch.18.1-18.5)
13. Financial Statement Analysis(Reading: Ch. 19)

Part VI: Portfolio Management

14. Portfolio Performance Evaluation(Reading: Ch. 24.1,24.4-24.8)
Active Portfolio Management