Fin 383 Stocktrak Project

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UNIVERSITY OF MASSACHUSSETS DARTMOUTH College of Business Department of Accounting and Finance Fall 2011 COURSE: Investment Analysis, FIN 383-Section 01, TR 12:30-1:45 Class location: Science & Engr 118

PREREQUISITES: FIN 312 and junior standing INSTRUCTOR: Duong Nguyen, Ph.D. Office Room 220, College of Business Phone (508) 999 – 8070 Email Tuesday 3:30-5:00 pm Thursday 3:30-5:00 pm Wednesday 11:00-12:00 and 1-5pm and also by appointment


COURSE DESCRIPTION This course will mix both description and theory. On the descriptive side we will cover the purpose and operation of securities markets in the United States and around the world. On the theoretical side we will cover how we should evaluate investment opportunities to develop a portfolio that satisfies your risk-return objectives. The quantitative material will draw heavily on college level algebra and statistics. You will find this class quite challenging if your algebra and statistics skills are not up to par. COURSE OBJECTIVES The objective of this course is to discuss the material of practical use for students whether they plan to pursue a career of an investment professional or want to be a sophisticated individual investor. Here are some of the learning outcomes for the course: 1. To understand the organization and function of primary and secondary securities markets. 2. To analyze the characteristics of the major stock and bond market indices in the United States and internationally. 3. To calculate the expected and historical rates of return for an individual asset or a portfolio of assets. 4. To calculate the risk of an individual investment or a portfolio. 5. To understand the factors which determine the required rate of return for an investment. 6. To understand the role of asset allocation in investment planning, and to understand why investment goals change over a person’s lifetime and circumstances.

7. To understand the advantages of global diversification. 8. To understand the Markowitz portfolio theory. 9. To understand theoretical pricing models such as the Capital Asset Pricing Model (CAPM) and the Arbitrage Pricing Theory (APT) 10. To analyze the major determinants of an economy’s long term and short term growth and discuss indicators that can be used to forecast economic variables. 11. To understand the basic features of bonds which affect their risk, return and value. 12. To understand and compute the expected rates of return on bonds, and the value of bonds, and to and examine the characteristics that cause changes in a bond’s price. 13. To conduct industry and company analysis, and to estimate the intrinsic value of a company. COMPETENCIES AND CONTACT HOURS The student will be introduced to: The profession of investments and opportunities for investment personals The student will understand: Nature of investments and investment alternatives Relationship between risk and return from investments Portfolio selection and capital market theory Market efficiency Valuation of Bonds and Stocks and investment strategies Market and Industry analysis Fundamental and Technical analysis The student will be able to: Analyze stocks and bonds and make recommendation for investments Construct portfolios with desired risk and return characteristics Total

1 2 6 6 3 6 6 6 6 3 45

TEXTBOOK AND REQUIRED MATERIALS (1)Essentials of Investments, by Zvi Bodie, Alex Kane and Alan J. Marcus, 8th Edition, McGraw Hill Irwin, (Required). A customized version of this book is available in the UMD book store (2)Financial Calculator (Texas Instruments BA II Plus, recommended) (3) Stock Trak registration (4) Wall Street Journal (recommended) Financial calculator is a must in this class. You will not be able to do the assignments or the exams without one. I strongly recommend all of you get familiar with the calculator by reading the manuals posted on my website.

ATTENDANCE • • • • Regular attendance and participation is essential...
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