Sections: #03565 (MW 8:00-9:30 am) and #03570 (MW 9:30-11:00 am)
Keith C. Brown
Course Website: via Canvas
Office Hours: MW 11:00 am– 12:30 pm or by appointment
Teaching Assistant: Adam Winegar (Office: CBA 5.334N ; Office Hours: TTh 2:00-3:00 pm)
To become a successful investor, an individual must command a considerable amount of financial market knowledge as well as a wide variety of qualitative and quantitative skills.
This course is designed to provide students with a solid conceptual and analytical basis for making investment decisions. In addition to establishing a background for evaluating and managing financial risk and return dynamics, as well as how global capital markets are organized and function, the focus of the course will be on the examination and valuation of the major investment vehicles and strategies popular today. In particular, we will consider how investors allocate their financial assets by forming, managing, and evaluating the performance of portfolios consisting of instruments such as stocks, bonds, alternative assets, futures and option contracts, exchange-traded funds and mutual funds. Although the ultimate objective will be to develop a theoretical background upon which the student can expand his or her knowledge of the field of investments, the topical treatment will be rather practically oriented. This course is also appropriate for anyone contemplating a career as professional investment advisor, portfolio manager, or security analyst.
Prerequisites: The prerequisite courses for FIN 397.1 are: (i) completion of BA 385T (Financial
Management); or (ii) completion of BA 285T (Financial Management) and completion of or concurrent enrollment in FIN 286 (Valuation). There will be no exceptions to this policy.
Students will be expected to have access to the following course materials on a continual basis throughout the entire semester:
Investment Analysis and Portfolio Management 10e by F. Reilly and K. Brown
(Cengage South-Western, 2012)
(2) Supplementary Readings:
As detailed in the Course Outline, in addition to formal assignments from the textbook there will also be a significant amount of supplementary reading in the form of journal articles and other lecture notes. All of these supplementary readings can be downloaded from the course website. (3) Financial Calculator:
Any business calculator with versions of the following function keys will be acceptable: PV,
FV, PMT, i, n, CF and IRR. (The HP 12c is considered by many to be the finance industry standard, along with the TI BA II Plus.) The use of a calculator will be required on the inclass portion of all examinations in the course. It will also be useful to have your calculator available for each class session.
The material covered in the course can be divided into the following parts and sections that will be taught over 25 class sessions (excluding periods devoted to examinations):
I - Overview of the Investment Process
II - Portfolio Theory, Risk Analysis & Asset Pricing Models
III - Investment Instruments: Equity & Fixed-Income Securities
IV - Investment Instruments: Alternative Asset Classes
V - Investment Performance Measurement
VI - Investment Instruments: Derivative Securities
(1) Location of Daily Class Sessions:
The class will meet every Monday and Wednesday of the semester, with the exception of the following days on which no session will be held: (i) March 9 and 11 (Global Connections trips); and (iii) March 16 and 18 (Spring Break). All sessions will be held in our assigned classroom (UTC 3.134). Each class session will run between 75-80 minutes in length.
On a few occasions during the semester, we may hold our class meeting—or an additional information session—in the Financial Trading