UNIVERSITY OF MANITOBA I. H. ASPER SCHOOL OF BUSINESS DEPARTMENT OF ACCOUNTING AND FINANCE
FIN 3410 - Investments Winter 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 104 Drake Centre 660 Drake Centre Wednesdays 3:00 pm-4:00 pm, OR by appointment (204) 474-8969
[email protected]
E-mail: For Students It is a university policy that e-mail communication between students and faculty is conducted solely with University of Manitoba e-mail accounts. Please include your full name and student number in every email.
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, financial tools and techniques, and their application to investment decisions.
PREREQUISITES The course prerequisite is FIN 2200 (C+). The course assignments will require 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, readings, and class discussions will focus on the application of financial concepts and tools to investment problems. Recent developments in investment theory and practice in international 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.
OTHER RESOURCES Additional readings and End-of-Chapter Solutions will be available through D2L. The students will also be required to use Bloomberg and Internet sources for articles and data collection for their assignments. The students should read the assigned material prior to its coverage in class. The Endof-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. McGraw-Hill Ryerson’s Online Learning Centre (OLC): The students are strongly advised to use McGraw-Hill Ryerson’s Online Learning Centre (OLC) for the textbook. For each chapter in the book, OLC provides a chapter overview, multiple-choice practice quizzes and other helpful material. The URL of the Online Learning Centre is: http://highered.mheducation.com/sites/007133887x/student_view0/index.html Articles: The following article will be used for class discussion and assignments, Bancel and Mittoo (2014): THE GAP BETWEEN THEORY AND PRACTICE OF FIRM VALUATION: SURVEY OF EUROPEAN VALUATION EXPERTS. Please download a copy of the article from the following web page: http://ssrn.com/abstract=2420380
EVALUATION Mid-term Examination Assignments Final Examination
30% 25% 45%
EXAMINATION The midterm exam will take place on Monday, February 23, 5:00 pm to 7:00 pm (Room 122 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 mid-term examination. Both midterm 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 midterm 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 Page 2 of 6
material is allowed on your formula sheet. Improper formula sheets will be confiscated. You can (and should) also bring a financial calculator. In the event that your calculator is programmable you may not enter any text, formulae, or data. The use of laptops and mobile phones is not permitted during the exams. Note: the final exam is cumulative.
ASSIGNMENTS Assignments will be done on a group basis with two to three students in a group. Only one assignment per group should be submitted. Assignments will involve application of financial concepts and techniques to investment decisions. The main objective of the assignments are to learn the application of Excel in estimating risk and return, and selecting optimal portfolios using real market data. SUMMARY OF IMPORTANT DATES Assignment 1 due: Mid-Term Break: Mid-Term exam: No class on February 23 February 23 Office Hours: Assignment 2 due:
February 11 at the beginning of class. February 16- 20 February 23, 5:00 pm to 7:00 pm (122 Drake) (In lieu of Mid-Term Exam.) 12:00pm—1:30pm March 25 at the beginning of class.
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TENTATIVE READING LIST ESTIMATED TIME PERIOD TOPIC AND TEXT BOOK CHAPTERS January 7 – 19 The Investment Environment, Financial Markets and Investments Bodie, Kane, Marcus, Perrakis and Ryan (BKMPR): Chapters 1 and 2 Trading in Securities Markets; Risk and Return BKMPR Chapters 3 and 4 January 21 – February 11
Capital Allocation to Risky Assets, Optimal Risky Portfolios BKMPR Chapters 5 and 6
Assignment 1 Due date: February 11, 2015
The Capital Asset Pricing Model; Index Models and the Arbitrage Pricing Theory BKMPR Chapters 7 and 8 Empirical Evidence on Security Returns BKMPR Chapter 11
February 16 – 20
MID-TERM BREAK
February 23, 2015 (Monday)
MID-TERM EXAM (30%) Drake Centre: Room 122 5:00 pm to 7:00 pm
NO CLASS OFFICE HOURS: 12:00pm-1:30 pm February 25 - March 19
Options and other Derivatives BKMPR Chapters 18 and 19
March 16 - March 23
Futures, Forward and Swap Markets BKMPR Chapter 19 International Investing BKMPR Chapter 24
March 25 – April 8 Assignment 2 Due date: March 25, 2015
Managed Funds BKMPR Chapter 23 Equity Valuation Models BKMPR Chapter 16 Market Efficiency BKMPR Chapter 9
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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
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duplicating a table, graph or diagram, in whole or in part, without referencing the source
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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
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copying the answers of another student in any test, examination, or take-home assignment
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providing answers to another student in any test, examination, or take-home assignment
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taking any unauthorized materials into an examination or term test (crib notes)
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impersonating another student or allowing another person to impersonate oneself for the purpose of submitting academic work or writing any test or examination
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stealing or mutilating library materials
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accessing tests prior to the time and date of the sitting
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changing name or answer(s) on a test after that test has been graded and returned
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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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UNIVERSITY OF MANITOBA Asper School of Business - Medical Absenteeism Form Student Identification: (please print clearly) ________________________ Last Name
_______________ First Name
______________ Middle Initial
_________________________ U of M Student Id. Number
I hereby authorize ________________________________ to verify with the attending (Name of Instructor/Administrator) physician or his/her staff or colleagues that the contents of this form are true. ________________________________ Student’s Signature
____________________________ Date
To be completed by the attending physician: (after the above section is completed) _______________________________ Physician’s Last Name
_________________________ Physician’s First Name
______________ Middle Initial
_______________________________ Street Address
_________________________ City, Province
______________ Postal Code
_______________________________ Telephone Number
_________________________ Fax Number
To the attention of the physician: Your evaluation of the student’s condition is being used for the purpose of determining whether or not the student has a valid reason to miss an important exam or assignment. Your professional evaluation is necessary to ensure that only valid cases are excused. I certify that the nature of the student’s condition is severe enough to prevent the student from taking an exam or completing an assignment. If requested, my associates or I will verify for the above-named instructor/administrator that this information is accurate. The student’s condition will likely span the following dates: _______________________ (indicate start date) until ________________________ (indicate end date) _________________________________ Physician’s Signature
_________________________________ Date
Notes to physician: Please make a note in the student/patient’s file indicating that the student has given the above-named instructor/administrator permission to verify with you, your staff, or your colleagues, that the information contained on this form is correct. Thank you for your professional evaluation of this student’s condition. PLEASE ATTACH THIS FORM TO YOUR REGULAR OFFICE STATIONERY THAT INDICATES THE STUDENT VISITED YOUR OFFICE. Note to student: The use of this form is at the option of the student. However, in order to obtain an excused absence for an assignment or exam, the student must obtain a doctor’s certification that the student’s condition is severe enough to prevent the student from taking the exam or completing the assignment.
It is NOT SUFFICIENT to provide a note that only indicates the student visited the doctor’s office.
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