DEPARTMENT OF FINANCE, REAL ESTATE & LAW
Fall 2005
FINANCE
350: Investment Principles
CBA 235
Tuesday
and Thursday, 11:00 a.m. 12:15 p.m.
Instructor:
|
|
Peter A. Ammermann, Ph.D. CBA 328 (562) 985-7526 |
Office
Hours: Tuesdays and alternate
Thursdays, 2:00 3:15 p.m.; Tuesday evening, 7:00 7:30; Thursday evening, 6:20
6:50; or by appointment.
Course Website: http://www.csulb.edu/~pammerma/investment_principles.htm
Course Description: Finance
350 studies the capital markets and the myriad securities traded thereon from
both a theoretical and an applied perspective.
Basic theoretical models, such as Modern Portfolio Theory (MPT), the
Capital Asset Pricing Model (CAPM), and other asset-pricing models will be
thoroughly covered, together with more applied topics such as the institutional
background of financial markets, the term structure of interest rates, bond portfolio
management, the valuation of common stock, and the use of options and futures.
Required Text: Practical
Investment Management (3rd Ed.), by Robert A. Strong
(South-Western: 2001).
Additional
Recommended
Study Guide to Practical Investment
Management, 3rd Ed.,
by Robert A. Strong with Klein, Laatsch, & Tipton
The Wall Street Journal (note: a subscription gets you access to
the WSJ interactive website), Forbes, Fortune, and/or Business
Week, or their online equivalents.
Calculators and Computing:
The ownership of and ability to use a good financial calculator (such as
the Hewlett-Packard 17,10,
or 12 series, or the Texas
Instruments BA II), as well as the ability to use a spreadsheet software
package (such as Microsoft Excel or Lotus 1-2-3), will be beneficial for
this course. Please bring a calculator
to class each meeting, and use them frequently. You will be much happier on
exams.
Prerequisite
Course: FIN 300
Class
Procedures:
1. Your success in this class will have a
direct relationship with the amount of reading and preparation you do. The lectures (PowerPoint lecture notes that
provide outlines of the chapters covered are available on the course website)
and exercises will concentrate on the major and more difficult concepts
involved in the text. If you have read
over and familiarized yourself with the assigned chapter prior to lecture, your
understanding of the discussion will be greatly enhanced. Furthermore, you are responsible for all the
material in the chapters covered, not just what is covered in class or included
in the lecture notes.
2.
Knowledge of current
business news will be assumed and drawn upon frequently. Frequent reading of the Wall Street Journal
or reading of online financial news services (Bloomberg.com, cnnfn.com, Yahoo!Finance, etc.) as well as
viewing of financial news programs is strongly recommended.
3.
The course builds as it goes
along. Make sure you do not get lost
early, or you will have difficulty catching up.
If you dont understand the early material, please feel free to take
advantage of office hours, and ask!!
4.
To encourage regular
attendance, in-must be noted that, although the tests and final exam will focus
primarily on material from the textbook, you will also be responsible for any
other material covered in class.
5.
Apart from the tests and final
exam, the rest of the work in this class will be conducted on a group
basis. Learning to work as part of a
group and performing your fair share of the work (assessed partially via
intra-group assessments from yourself and your teammates) will have an impact
on your grade for the class. A major
portion of your group work will involve the construction and monitoring of a
simulated portfolio. The guidelines for
this project will be discussed in class.
6.
As part of the portfolio
project, problems from the textbook material will also be assigned to the
groups on a regular basis. Solutions to
these homework problems must be turned in as part of the final portfolio
project report, and, in some cases, must also be demonstrated/presented to the
class.
7.
Use of the Internet to
conduct research for the portfolio project is strongly encouraged. Moreover, a number of the class assignments
that will be given throughout the semester will require the use of various
financial websites.
8.
The university policy on
academic dishonesty will be strictly followed.
Performance
Evaluation (Tentative):
|
Component |
Percentage |
|
Mid-Term Tests (best 2 out of 3) |
50 |
|
Team Projects & Homework
Assignments |
20 |
|
Final Exam |
30 |
|
Total |
100 |
Grades will be assigned on the following
scale:
A = 4.0
B = 3.0
C = 2.0
D = 1.0
F = 0.0
Performance
Evaluation (Cont.):
1. Based upon the ranges of actual grade
outcomes, final grades may be curved by scaling the grades received by that of
the highest scoring student (e.g., if you received a numerical grade of 81,
while the highest scoring student received a numerical grade of 90, then your
grade would be scaled to a 90 (=100%*81/90)).
2. The mid-term tests will be
multiple-choice and will include both conceptual and problem-solving questions.
The lowest test will be dropped.
3. The material to be covered on a given
test will be discussed at least one week prior to the date of the test.
4. The three mid-term tests are tentatively
scheduled to be given on the first Tuesday class of October, November, and
December, respectively.
5. The
final exam will follow a format similar to the mid-term tests, and it will be
comprehensive.
Tentative
Course Schedule:
|
Week |
Chapters |
Topic |
|
1 |
|
Introduction
& Administrative Details |
|
1 |
1 |
The Concept
of Investing |
|
2 |
2 |
Understanding
Risk and Return |
|
3 |
3 |
The
Marketplace |
|
3 |
4 |
Bond
Fundamentals |
|
4 |
5 |
Common
Stock |
|
5 |
6 |
Market
Mechanics |
|
6 |
7 |
Fundamental
Stock Analysis |
|
|
|
Constructing
a Winning Portfolio: Lessons in Stock Analysis from Some Legendary Investors |
|
7 |
8 |
Valuation
Tools |
|
7 |
9 |
Technical
Analysis |
|
8 |
10 |
Market
Efficiency |
|
8 |
11 |
Behavioral
Finance (Videotape: Mind Over Markets) |
|
9 |
12 |
Gathering
Investment Information |
|
9 |
13 |
Market
Indexes |
|
10 |
14 |
Convertible
Securities |
|
10 |
15 |
Investing
Internationally |
|
11 |
16 |
Why
Diversify? |
|
12 |
17 |
Role of
Derivative Assets |
|
13 |
18 |
Managing
the Equity Portfolio |
|
14 |
19 |
Managing
the Fixed-Income Portfolio |
|
15 |
21 |
Investment
Companies |
|
16 |
|
Comprehensive
Final Exam |
Add-Drop Policy: Adding or dropping/withdrawing from a class
should comply with the University and
Note: The contents of this syllabus may be subject to change if circumstances require. If such changes do occur, they will be announced in class.