Investment Analysis & Management I

CATALOG DESCRIPTION: Investment theory and practice including risk and return, asset allocation and diversification. Analytical techniques for investment planning and selection in the environment in which investment decisions are made.

RATIONALE: This is the first of two courses in investment analysis and management. In this course, students are exposed to the theory of portfolio choice for the purposes of evaluating investment alternatives and constructing portfolios with desirable risk/return characteristics. The course prepares future portfolio managers to handle efficiently the tools for selecting assets, managing risk and constructing optimal portfolios. The analytical tools discussed in this course are as useful in solving cases as they are in research and are, therefore, useful to economics and finance students who intend to pursue graduate studies in this topic.

LEARNING OUTCOMES: As a result of taking this course, the student should be able to:

1. Demonstrate knowledge and understanding of the key elements of investment theory and portfolio management.

2. Analyze the risk and return of alternative combinations and portfolios of financial assets.

3. Construct and manage an efficient portfolio.

4. Demonstrate knowledge and understanding of the relationship between systematic risk and return of a security and of a portfolio.

METHOD OF TEACHING AND LEARNING: In congruence with the learning and teaching strategy of the college, the following tools are used:

- Classes consist of lectures, problem-solving sessions, and interactive class discussions.

- Use of the Simulated Trading Room for illustrating examples.

- Portfolio construction and optimization: Students construct and optimize a stock portfolio. Students develop an investment strategy, screen and review prospective securities, and update the status and performance of existing positions.

- Office hours: students are encouraged to make full use of the office hours of their instructor, where they can ask questions and go over lecture material.

- Use of Blackboard, where instructors post lecture notes, assignment instructions, timely announcements, as well as additional resources.

ASSESSMENT:

Summative:

1st assessment: Individual project (1,800–2,000 words) 40 %

Final assessment: In-class written examination (Two-hour, closed book, comprehensive) 60 %

Formative: Practice exercises, problems 0 %

The formative assignments prepare students for the examination and ensure that students are actively engaged during the term. The 1st assessment tests Learning Outcomes 1, 2 and 3. The final assessment tests Learning Outcomes 1, 2, 3, and 4. The final grade for this module will be determined by averaging all summative assessment grades, based on the predetermined weights for each assessment. If students pass the comprehensive assessment that tests all Learning Outcomes for this module and the average grade for the module is 40 or higher, students are not required to resit any failed assessments.