FIN 3410 - INVESTMENTS FALL 2015 Sections A01 and A02

UNIVERSITY OF MANITOBA
I. H. ASPER SCHOOL OF BUSINESS
DEPARTMENT OF ACCOUNTING AND FINANCE
FIN 3410 - INVESTMENTS
FALL 2015
Sections A01 and A02
Instructor:
Course Website:
Class Time:
Class Room:
Office:
Office Hours:
Telephone:
E-mail:
Dr. Usha R. Mittoo
https://universityofmanitoba.desire2learn.com
Mondays and Wednesdays
A01: 11:30am–12:45 pm
A02: 1:00 pm–2:15 pm
138 Drake Centre
660 Drake Centre
Wednesdays 3:00 pm - 4:00 pm, OR by appointment
(204) 474-8969
[email protected]
E-MAIL
It is university policy that e-mail communication between students and faculty is conducted solely
with University of Manitoba e-mail accounts. Students must use their University of Manitoba e-mail
account in all correspondence with me and include full name and student number in every e-mail.
COURSE OBJECTIVES
The objective of this course is to provide an understanding of the theory and practice of investments.
The course will begin with an overview of capital markets and cover market efficiency, capital asset
pricing models, portfolio theory and management, options and futures, international investments
and market efficiency. The students will learn financial concepts, tools and techniques, and their
application to investment decisions.
PREREQUISITES
The course prerequisite is FIN 2200 (C+). The course assignments will require Excel spreadsheet
analysis and the students are expected to have a good knowledge of Excel.
PEDAGOGY
A combination of lectures, practical examples and spreadsheet problems will be used. The lectures
will focus on the theoretical concepts and tools. The assignments and class presentations will focus
on the application of financial concepts and tools to investment issues and problems. Recent
developments in investment theory and practice in financial markets will be emphasized through
assigned readings and class discussions.
REQUIRED TEXTBOOK
Bodie, Kane, Marcus, Perrakis, Ryan and Switzer, Investments: Eighth Canadian Edition, McGrawHill Ryerson, Inc., Toronto, 2015.
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OTHER RESOURCES
Class notes, End-of-Chapter Solutions and additional readings will be available through
UMLearn(D2L). Students should read the assigned material prior to its coverage in class. The
End-of-Chapter questions and problems from the textbook and other reading materials will be
assigned weekly. Students are strongly advised to work on these assignments independently and to
correct their own solutions with the text-book solutions. Students will also be required to use
Bloomberg and internet sources for articles and data collection for their assignments and
presentations.
McGraw-Hill Ryerson’s Online Learning Centre (OLC): McGraw-Hill Ryerson has an Online
Learning Centre for the 8th edition of the required text. For every chapter in the book, this site
includes some flash cards that may be helpful for understanding the main terms in each chapter. The
URL of the Online Learning Centre is:
http://highered.mheducation.com/sites/007133887x/student_view0/index.html
7th edition
http://highered.mheducation.com/sites/0070071705/student_view0/index.html
GRADING AND EXAMINATIONS
Final grades are based on the student’s weighted mark and performance relative to other students.
EVALUATION
Class Participation
Mid-term Examination
Assignments
Class Presentation
Final Examination
Total
5%
30%
10%
10%
45%
100%
ATTENDANCE POLICY
Class attendance is required. Students can miss up to two classes during the term without penalty.
All further absences over this limit will reduce the student’s participation grade. Habitual lateness
and leaving class early will be noted as evidence of low course commitment and penalized.
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CLASS PARTICIPATION/CONTRIBUTION
Attendance and class participation will be extremely beneficial towards understanding the course
material, while earning points towards your grade. To earn the marks for participation, show your
name plate on the table in every class and try to answer the questions asked by the professor. It is
important that you be an active contributor to class discussion. Class participation grade will depend
on both the quantity and quality of your class contributions.
ASSIGNMENTS AND PRESENTATIONS
Assignments and presentations will be done on a group basis with three to four students in a group.
ASSIGNMENTS
The main objectives of the assignments are to learn the application of Excel in estimating risk and
return, selecting optimal portfolios, and regression analysis using real market data. Only one
assignment per group should be submitted.
LAB SESSIONS
This course will incorporate one or two in-class computer lab sessions that are designed to teach
application of the portfolio theory and single index models using Microsoft Excel. The Lab sessions
would be very helpful in doing assignments and presentations. The outline lists the tentative dates for
these sessions.
Important: The attendance in Lab sessions is mandatory. Students are responsible to sign the lab
attendance sheets. For the lab session, students are required to bring a laptop computer ready with
Microsoft Excel.
CLASS PRSENTATION
The presentation is group work and members of each group should work together on the
presentation. The main objective of the presentation is to examine an investment issue or topic using
investment concepts and tools learned in the class. The professor will distribute a list of presentation
topics and each group should pick one topic from the list. Each group’s topic has to be approved by
the professor and the approval is on a ‘first come, first served’ basis.
Important: All students are required to be present in the class for all presentations. The
professor will schedule the dates of presentations. The group presentation will be about 8-10
minutes. The presenting group must email the professor their PowerPoint presentation slides and a
one-page summary that provides a brief description of the topic/issue, information sources, and data
analysis used in the presentation one day prior to their scheduled presentation.
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EXAMINATION
The midterm exam will take place on Monday, November 2, 6:00 pm to 8:00 pm (Room 343 Drake).
There will be no make-up mid-term examination. Students who miss the mid-term exam and have a
valid medical excuse will have the weight of the mid-term added to the final examination. Students
with valid medical excuses must obtain a doctor's certificate that the student's condition is severe
enough to prevent the student from taking the examination. Students who miss the midterm exam
without a valid medical excuse will receive a grade of zero on the mid-term examination.
Both mid-term and final exams will be closed book except as follows: a one-sided 8.5" x 11" sheet
with anything hand written on it can be taken into the mid-term and a two-sided 8.5" x 11" sheet
can be taken into the final. Formula sheets must be hand written. No word-processed or
photocopied material is allowed on your formula sheet. Improper formula sheets will be confiscated.
The use of laptops and mobile phones is not permitted during the exams. You can bring a financial
calculator, but in the event that your calculator is programmable you may not enter any text,
formulae, or data. Note: the final exam is cumulative.
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DATE
TENTATIVE COUSE OUTLINE
TOPIC
CHAPTER
September 14
1. The Recent History of Investing and the
Investment Objective
1
September 16-23
2. Financial Markets and Instruments
3. How Securities are Traded
2
3
Sept. 28- Oct. 14
No class- Oct 12
4. Risk and Return
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5. Capital Allocation to Risky Assets, Optimal Risky Portfolios 5, 6
October 14
LAB I: Estimating the Markowitz Frontier and the Capital 6.5
Market Line (CML)
October 19-21
7. The Capital Asset Pricing Model
8. Index Models
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8
October 21
Assignment 1- Due
LAB II: Estimating the Single Index Model
8.3
October 26-28
9. Factor Models and the Arbitrage Pricing Theory
10. Empirical Evidence on Security Returns
11. Managed Funds
8
11
23
October 28 –
Assignment 2 Due
November 2
No class
Office hours:
12:00-1:30 pm
November 4-9
MID-TERM EXAM (30%)
Drake Centre: Room 343
6:00 pm to 8:00 pm
11. International Investing
24
November 16-18
No Class- Nov. 11
November 23-25
12. Futures and Forward Markets
20
Nov. 30-Dec. 2
13. Options and other Derivatives
Options – Introduction
Option Strategies and Payoffs
Option Pricing Models
18,19
December 7-9
14. Market Efficiency
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Class Presentations
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AACSB Assurance of Learning Goals and Objectives.
The Asper School of Business is proudly accredited by AACSB. Accreditation requires
a process of continuous improvement of the School and our students. Part of
“student improvement” is ensuring that students graduate with the knowledge and
skills they need to succeed in their careers. To do so, the Asper School has set the
learning goals and objectives listed below for the Undergraduate Program. The
checked goal(s) and objective(s) will be addressed in this course and done so by
means of the items listed next to the checkmark.
Goals and Objective in the Undergraduate Program
1

Entire course

Entire course

Assignments
B.
Use correct English grammar and mechanics in their written
work.
Communicate in a coherent and logical manner

C.
Present ideas in a clear and organized fashion.

Written
assignments
Class presentation


Chapter 1
Chapter 1

Entire course
B.
C.
Ethical Thinking
A.
B.
C.
D.
4
Determine which quantitative analysis technique is appropriate
for solving a specific problem.
Use the appropriate quantitative method in a technically
correct way to solve a business problem.
Analyze quantitative output and arrive at a conclusion.
Written Communication
A.
3
Course Item(s)
Relevant to
these Goals
and Objectives
Quantitative Reasoning
A.
2
Goals and
Objectives
Addressed
in this
Course
Identify ethical issues in a problem or case situation
Identify the stakeholders in the situation.
Analyze the consequences of alternatives from an ethical
standpoint.
Discuss the ethical implications of the decision.
Core Business Knowledge
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Academic Integrity
It is critical to the reputation of the Asper School of Business and of our degrees that everyone associated with our faculty
behave with the highest academic integrity. As the faculty that helps create business and government leaders, we have a
special obligation to ensure that our ethical standards are beyond reproach. Any dishonesty in our academic transactions
violates this trust. The University of Manitoba General Calendar addresses the issue of academic dishonesty under the
heading "Plagiarism and Cheating". Specifically, acts of academic dishonesty include, but are not limited to:
-
using the exact words of a published or unpublished author without quotation marks and without referencing the
source of these words
-
duplicating a table, graph or diagram, in whole or in part, without referencing the source
-
paraphrasing the conceptual framework, research design, interpretation, or any other ideas of another person,
whether written or verbal (e.g., personal communications, ideas from a verbal presentation) without referencing the
source
-
copying the answers of another student in any test, examination, or take-home assignment
-
providing answers to another student in any test, examination, or take-home assignment
-
taking any unauthorized materials into an examination or term test (crib notes)
-
impersonating another student or allowing another person to impersonate oneself for the purpose of submitting
academic work or writing any test or examination
-
stealing or mutilating library materials
-
accessing tests prior to the time and date of the sitting
-
changing name or answer(s) on a test after that test has been graded and returned
-
submitting the same paper or portions thereof for more than one assignment, without discussions with the
instructors involved.
Group Projects and Group Work
Many courses in the Asper School of Business require group projects. Students should be aware that group projects are
subject to the same rules regarding academic dishonesty. Because of the unique nature of group projects, all group
members should exercise special care to insure that the group project does not violate the policy on Academic Integrity.
Should a violation occur, group members are jointly accountable unless the violation can be attributed to a specific
individual(s).
Some courses, while not requiring group projects, encourage students to work together in groups (or at least do not
prohibit it) before submitting individual assignments. Students are encouraged to discuss this issue as it relates to
academic integrity with their instructor to avoid violating this policy.
In the Asper School of Business all suspected cases of academic dishonesty are passed to the Dean's office in order to
ensure consistency of treatment.
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