This course provides an in-depth discussion of investment and portfolio management. Students are expected to learn about various investment alternatives that are available in the market. Most importantly, students are trained to recognize the future investment opportunities in different industrial sectors by developing an appropriate portfolio, which satisfies an individual risk-return objective. At the beginning of each class meeting, I discuss "What is news" keeping students informed about updated economic news, FOMC possible move on interest rate, upcoming important earning announcements, merger/acquisition announcements, and other corporations announcements. Especially, students are encouraged to participate in discussing current news in financial markets. This course provides an appropriate combination of rigorous theoretical knowledge with practical issues in the arena of investment and portfolio management.

In addition, this class requires students to work on various assignments, which are designed to test some finance-contested models and theories. The discussion and application of financial empirical models reflects an important fact that it is essential for finance theories to be tested in the real world. Students are often required to report the progress of their assignments. For each assignment, students have to document their findings in their written reports.

 

II. Course Objective

The purpose of this course is designed to help students understand the advanced investment and portfolio management knowledge and further develop empirical models testing skills accompanied by computer proficiency. The methodology used to achieve this objective is the active involvement in hand-on exercises. Students are expected to apply investment knowledge taught in class and relevant financial empirical models to complete each assignment. Throughout the whole semester, students can communicate the encountered problems of doing assignments with the instructor. This whole learning experience should be interactive rather than passive. At the end, students will be tested for their technical analyzing skills via an empirical model test conducted in a computer lab.

While each assignment focuses on a particular subject, for example, beta, expected return, abnormal return, Brown-Warner test, multi-variable regression, etc., all assignments are designed to enhance students’ empirical modeling skills. A good security analyst should be able to grasp news in the market. Thus, in order to better understand firms business operation as well as strategic decisions making processes, students are expected to read news (on paper or on internet) and particularly pay much more attention to headline news. At the end, students with solid performance in this course are expected to thrive in a real investment and corporate world.

 

III. Course Organization

Course Material -

The required text is Frank Reilly and Keith Brown, "Investments, Analysis and Portfolio Management", Dryden Press, 6th edition.

The optional text is Frank Fabozzi, "Bond Markets, Analysis and Strategies", Prentice Hall, 4^th edition.

The recommended computer skill and other supplementary readings

Microsoft application (Word, Power Point and Excel) and SPSS

Wall Street Journal, Business Week, Internet electronic resources (ex. Yahoo business summary, stock quotation, CBS Market Watch, CNN financial news, etc.)

All supplementary teaching material and notes will be distributed in the class. Problems solving will be demonstrated in class. In addition, text reading will be assigned in class. Since all the above requirements will be included in exams, for students missing the class, they need to ask for copies of distributed material and notes from the instructor or their classmates.

 

Course Evaluation

Participation
(attendance, text readings and class discussion)                                                                                              40 points

Assignments                                                                     60 points

An empirical model test                                                   50 points

Quiz
(each is 10 points and can drop the lowest score)       40 points

2 Midterms (40% of lowest score and 60% of highest score)                                                                                             200 points

Final (Comprehensive)                                                  150 points

Total points                                                                    540points

 

Course Policy

All drop-add policy complies with the University/College rules.

The assignment can be a group work but an individual work is preferred. The maximum number of people in one group is 5. The assignment should be completed with the help of application of software.

The maximum length of each assignment reprot is 5 pages, not including the spreadsheets or other supplementary notes. The first page of the assignmnet report is an executive summary, which provides a brief summarized findings and recommendations. Students are expected to turn in a disk, which contains the detailed calculation process along with a printout of written report summarizing findings and explanations. Most importantly, students should interpret results and relate results to relevant finance theory.

Late assignment report will be deducted 40% out of full points. Late assignment report is defined as the report should be submitted no later than ONE day grace period (before 5:00 pm) after the original due date. The assignment report will NOT be accepted if it is submitted after this grace period.

Dates of changing exams and other information concerning exams will be announced in the class. However, instructor reserves the right to change the syllabus based on the progress made in the class.

 

NO MAKE-UP EXAMS.

ATTENDANCE IS MANDATORY

 

IV. Course Outline