Investments

Introduces information about investing in securities, commodities, and options; and methods and techniques for analyzing investment opportunities and assessing financial conditions for investment purposes.

PREREQUISITES

• FINC 3210: Principles of Finance
• BUSN 2750: Introduction to Statistics

READINGS

Bodie, Z., Kane, A., & Marcus, A. J. (2014). Investments. 10th Edition. New York: McGraw-Hill.

LEARNING OUTCOMES

• Students can discuss money market instruments, equity, debt and derivatives. They can describe the major features of each and their risk-return characteristics. Students can also identify investment goals for which each would be appropriate.
• Given a series of historical returns students can compute arithmetic and geometric averages and standard deviation. Students can also compute average expected return and standard deviation based on a probability distribution of expected returns.
• Students can describe major market structures and their functioning. Students can discuss the difference between primary and secondary markets. They can also differentiate between auction and over-the-counter markets. They can relate current developments in the markets and appraise the ability of different market structures to provide price discovery and liquidity.
• Students can collect financial data on a corporation and its competitors. They can conduct comparative financial analysis using ratio analysis, including extended DuPont analysis. Students can discuss the limitations of financial statement analysis. They can define “quality of earnings” and discuss a few methods of measuring.
• Students can collect financial data on a corporation and its competitors. They can conduct comparative financial analysis using ratio analysis, including extended DuPont analysis. Students can discuss the limitations of financial statement analysis. They can define “quality of earnings” and discuss a few methods of measuring.
• Students can develop and support future growth projections. They can utilize these to compute firm value using the discounted cash flow model.
• Students can discuss the difference between systematic and unsystematic risk. They can explain why diversification reduces total risk and can compute the standard deviation of a two-asset portfolio. Students can compute beta given correlation with market and standard deviation of an asset and the market. They can compute the required return of a security or a portfolio using beta estimates.
• Students can discuss how mutual fund investments differ from other managed investments. They can describe major categories of funds and discuss the benefits and drawbacks of using mutual funds.
• Students can discuss provisions of bond indenture and relate these features to bond risk. Students can also discuss the importance of bond ratings on return.

COURSE POLICIES / ADDITIONAL INFORMATION

• Attendance is recorded. Unexcused absence lowers the grade accordingly.
• It is the students' responsibility to check Canvas and their Webster email regularly.
• For every hour spent in class it is expected of the students to invest 3 hours per week outside of class in homework, reviewing material, assignments, etc.

UNIVERSITY POLICIES

Students are required to inform themselves of WUV academic policies.

A full list of these policies is available on the WUV website: http://webster.ac.at/academic-policies