Unit Guide

Topics: Capital asset pricing model, Asset, The Unit Pages: 14 (2750 words) Published: July 11, 2013
1

BUS311

Investment Analysis

Unit Information and Learning Guide

Trimester 1, 2013

This information should be read in conjunction with the online learning materials which can be found on your MyUnits page.

Unit coordinator

Name: Muammer Wali
School: School of Management and Governance
Contact details: M.Wali@murdoch.edu.au

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© Published by Murdoch University, Perth, Western Australia, April 2013.

This publication is copyright. Except as permitted by the Copyright Act no part of it may in any form or by any electronic, mechanical, photocopying, recording or any other means be reproduced, stored in a retrieval system or be broadcast or transmitted without the prior written permission of the publisher.

Contents

Unit information

Information about the unit4
Contact details6
How to study this unit7
Resources for the unit8
Study schedule11
Assessment12

Learning guide

Introduction16
Chapter 1The Investment Environment17
Chapter 2Asset Classes and Financial Instruments18
Chapter 3How Securities Are Traded19
Chapter 4Mutual funds and other investment companies20
Chapter 5Introduction to Risk, Return, and the historical record21 Chapter 6Risk Aversion and Capital Allocation to Risky Assets22 Chapter 7Optimal Risky Portfolios23
Chapter 9The capital asset pricing Model24
Chapter 11The Efficient Market Hypothesis25
Chapter 12Behavioural Finance and Technical Analysis26
Chapter 17Macroeconomic and Industry Analysis27
Chapter 18Equity Valuation Models28
Chapter 19Financial Statement Analysis29
Chapter 24Portfolio Performance evaluation30
Chapter 27The Theory of Active Portfolio Management31

Information about the unit

Welcome to:

BUS311
Investment Analysis

Unit description

In today’s world, investors are more concerned with the issue of how to generate additional income through their investment activities. They hope to do so with the lowest level of risk. To achieve this goal investors have to make good investment decisions.

In this unit, we provide an introduction to the complex environment facing the Australian investment community today as well as the valuation of various financial assets. We also look at the selection of financial assets that will be included in a portfolio. These two tasks are known as security analysis and portfolio management. They are two major components of the investment decision-making process.

The discussion of the above process includes topics such as the determination of risk and return for individual assets, the role of utility theory in investor choice, macroeconomic and industry analysis, fundamental and technical analysis, portfolio theory and the selection of ex ante optimal portfolios. The determination of equilibrium in capital market will also be explained using different asset pricing models. We also discuss the issue of market efficiency which is at the heart of all modern financial theories. Finally, we also look at how portfolio performance is evaluated using different performance evaluation measures.

Prerequisites

You will need to have completed BUS224 Corporate Finance as a pre-requisite for this unit.

Aims of the unit

The broad aims of this unit are to:
1. Examine and understand the trading environment for equity securities; 2. Explore the factors which determine equity value and to apply equity valuation techniques; 3. Understand the underlying theories of investment; and 4. Examine and evaluate portfolio strategies.

Learning outcomes for the unit

On successful completion of the unit you should be able to:

1. Read the financial pages of most newspapers and understand the importance of each piece of information; 2. Communicate financial concepts utilising...
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