THE UNIVERSITY OF THE WEST INDIES, ST. AUGUSTINE
FACULTY OF SOCIAL SCIENCES
DEPARTMENT OF MANAGEMENT STUDIES
MGMT 3050 - INVESTMENT AND ANALYSIS
COURSE OUTLINE
No. of Credits: 3
Level: III
Pre-Requisite(s): MGMT 2023 – Financial Management I
Course Description
This course discusses investment functions and explains the nature of the decision-making process. It
provides a frame of reference in which the students can make a value judgement based upon returns and
risks of investment. The course is designed to bring the principles of investment and good theory into the
practical decision-making process. It is in this light that the present course has been designed with a view
to introduce concepts and issues in investment analysis and portfolio management.
Course Rationale
The world of investments has always intrigued the investors, academicians and practitioners alike. Unlike
yester years, when investing in securities was considered akin to gambling and greedy speculation, the
modern investment manager has come up with sophisticated financial tools which have made the field of
investments a specialized branch of study in the area of finance in general and financial investments in
particular. With time, guess work and slip shod methods gave given way to well defined investment
principles. Decisive methodologies for ascertaining investment values and constructing need based
portfolios to suit individual financial requirements have replace intuitions and superstitions.
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Content
S.
No.
Topic*
Self – Study
(and examinable)
Class Room
Discussion
Tutorial
Questions**
Learning Videos***
1. Downloading Videos for offline Viewing:
http://blip.tv/file/2902410
2. Using Texas Instruments BAII Plus Financial
Calculator:
http://blip.tv/file/2902440
1.
The Investment
Environment
(Ch.1)
-
Entire Chapter
2.
Security Markets
and Transactions
(Ch.2)
-
Entire Chapter
3.
Market Efficiency
(Selected parts
from Ch. 9)
-
Entire Topic
Concept Review
Questions,
Discussion
Questions and
Problems at the
End of Chapter
1. Introduction to Investments:
http://blip.tv/file/3052777
1. Return and Risk with Cash and Margin Accounts:
Concept Review
http://blip.tv/file/3107095
Questions,
2. Short Sales:
Discussion
http://blip.tv/file/3109895
Questions and
3. Short Sales on Margin:
Problems at the
http://blip.tv/file/3110236
End of Chapter
4. Margin Trading: Making a Margin Purchase:
http://blip.tv/file/3195001
Concept Review
Questions,
Discussion
Questions and
Problems at the
End of Chapter
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4.
Investment
Information and
Securities
Transactions
(ch.3)
Investment
Information (pp. 72
– 99)
Securities
Transactions
5.
Return and Risk
(Ch.4)
[(Pre-read to recall
parts from
Financial
Management I
(MGMT2023)]
-
Entire Chapter
6.
Modern Portfolio
Concepts (Ch.5)
-
Entire Chapter
Concept Review
Questions,
1. Size and Type of Orders in the Stock Market 1:
Discussion
http://blip.tv/file/3241390
Questions and
2. Size and Type of Orders in the Stock Market 2:
Problems at the
http://blip.tv/file/3241418
End of Chapter
1. Return of a Single Asset:
Concept Review
http://blip.tv/file/2885390
Questions,
2. Risk of a Single Asset:
Discussion
http://blip.tv/file/2885856
Questions and
3. Yield (IRR) of an Investment on Financial
Problems at the
Calculator:
End of Chapter
http://blip.tv/file/3320782
1. Return and Risk of a Portfolio:
http://blip.tv/file/2890264
2. Covariance and Correlation between Assets:
http://blip.tv/file/3091034
3. Portfolio Risk: The Double Summation
Concept Review
http://blip.tv/file/3076507
Questions,
4. Beta of a Portfolio:
Discussion
http://blip.tv/file/2968839
Questions and
5. Graphical Computation of Beta:
Problems at the
http://blip.tv/file/2961523
End of Chapter
6. Concavity of the Efficient Frontier:
http://blip.tv/file/3077306
7. The Security Market Line:
http://blip.tv/file/2895588
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7.
8.
9.
Managing your
own Portfolio
(Ch.13)
Common Stocks
(Ch.6)
Stock Valuation
(Ch.8)
-
Concept Review
Questions,
Discussion
Questions and
Problems at the
End of Chapter
Entire Chapter
Types of Stock
Remaining chapter
Read the chapter
before the class
(and realize that
most of it was
covered in the
Financial
Management I
(MGMT2023)
course
Class room work
consists of solving
selected problems
from the end of
chapter and
answering any
conceptual
questions from the
self-study part
Concept Review
Questions,
Discussion
Questions and
Problems at the
End of Chapter
Concept Review
Questions,
Discussion
Questions and
Problems at the
End of Chapter
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1. Portfolio Revision Formula Plans 1:
http://blip.tv/file/4620587
2. Portfolio Revision Formula Plans 1:
http://blip.tv/file/4623355
3. Portfolio Revision Formula Plans 3:
http://blip.tv/file/4623649
4. Portfolio Revision Formula Plans 4:
http://blip.tv/file/4623723
1. Voting Rights: The Cumulative Voting Method:
http://blip.tv/file/3092064
2. Valuation of Preemptive Rights 1:
http://blip.tv/file/3094305
3. Valuation of Preemptive Rights 2:
http://blip.tv/file/3098711
4. Stock Split and Stock Dividend:
http://blip.tv/file/3014912
1. Stock Valuation: The Variable Growth Case:
http://blip.tv/file/2865066
10.
Bonds: Types,
Valuation,
Duration and
Immunization
(Selected parts of
Ch. 10 and 11)
Types of Bonds,
Recall Valuation of
Bonds from
MGMT2023
Bond Valuation
practice, Duration,
Immunization
Concept Review
Questions,
Discussion
Questions and
Problems at the
End of Chapter
1. Bond Valuation:
http://blip.tv/file/2856391
2. YTM:
http://blip.tv/file/2857472
3. Bond Price and YTM on Financial Calculator:
http://blip.tv/file/3186323
4. Duration of a Bond: An Introduction:
http://blip.tv/file/3101139
5. Duration of a Bond: The Calculation:
http://blip.tv/file/3022151
6. Factors affecting a Bond’s Duration:
http://blip.tv/file/3025778
7. Duration and Interest Rate Risk:
http://blip.tv/file/3029819
8. Calculating Duration on Financial Calculator:
http://blip.tv/file/3164977
1. Continuous compounding and Discounting:
http://blip.tv/file/2943563
2. Options as decaying assets:
11.
Derivative
Securities
(if time permits)
[examinable only
if covered in class]
(Ch. 14 and 15)
Entire Chapters
Concept Review
Questions,
Discussion
Questions and
Problems at the
End of Chapter
http://blip.tv/file/3012311
3. Put-Call Parity:
http://blip.tv/file/2911891
4. Black and Scholes Model 1: Finding N(d1) and N
(d2):
http://www.youtube.com/watch?v=qZEeYylkpuY
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5. Black and Scholes Model 2: Call and Put Values:
http://www.youtube.com/watch?v=3lMonK5x1QU
Topic Details:
*
Some material will be added to the topics from sources other than the recommended text book. Use class notes to access such material.
**
Some additional tutorial questions will be announced for some topics in the class. They will cover the additional material covered beyond
the text book.
***
Since accessing the videos will require clicking on the web-links, it is suggested that you work with a soft copy of the course outline and
click from there directly rather than typing the whole web address manually in your browser.
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Goals/Aims
By the end of the course, the students should:
1. Be able to describe the financial instruments and markets
2. Be able to apply models for valuing financial instruments
3. Be able to explain and apply the investment principles for decision making
Learning Outcomes
At the end of the course, the students should have learned:
1.
2.
3.
4.
5.
6.
About the general investment environment
About security markets and transactions therin
About return and risk
To understand and apply basic portfolio formulation and management tools
To ascertain the value of equity and debt instruments
To understand basic derivative instruments
Evaluation
The assessment of the students will be along the following lines:
Mid Term Exam: 25 marks
Final Exam:
75 marks
TOTAL 100 marks
Teaching Strategies
The presentation of course material will take the form of class lectures and tutorials. Many issues that are
to be discussed have their origin in the Pre-requisite o this course, viz.; Financial Management I
(MGMT2023) and therefore, students are expected to take the onus of recalling and assimilating that
knowledge into this course.
In addition, 1 hour per week will be specifically dedicated as office hours for discussing and resolving
individual problems of the students.
The students are required to register themselves for a group website, from where they can download the
lecture notes and other relevant material and information. The group website can also be used as a
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communication means amongst the students and between the students and the lecturer outside of office
hours. To register for the website, the students need to visit the homepage of the site and complete a one
time registration process after which they can have access to all the features of the site.
In addition, short videos on various topics are available on http://csbhatnagar.blip.tv where the students
can browse through the episode archive and select a topic of interest to view. This serves as a 24 / 7
virtual teacher as the videos can be replayed any number of times and can also be downloaded for offline
viewing.
Resources
Required Text:
“Fundamentals of Investing” by Lawrence J. Gitman and Michael D. Joehnk, Eleventh Edition,
Pearson Addison Wesley.
Additional Information
UNIVERSITY ACADEMIC INTEGRITY POLICY/EXAMINATION REGULATIONS
Please consult Section V (especially sub section B which deals with cheating) of the University of
the West Indies, Examination Regulations for First Degrees, Diplomas and Certificates for details
of this policy.
Students are asked to pay special attention to Examination Regulation 19 which states that:
‘Any candidate who has been absent from the university for a prolonged period during the year
for any reason other than illness or whose attendance at prescribed lecturers, classes, practical
classes, tutorial or clinical instructions has been unsatisfactory or who has failed to submit essays
or other exercises set by his teachers may be debarred by the relevant Academic Board, on the
recommendation of relevant Faculty Board, from taking any University examinations’
Code of Conduct during Class
The following guidelines facilitate the creation and maintenance of an effective learning environment. All
students are expected to adhere to the guidelines throughout the semester.
Switch off all cellular phones and beepers before the start of each class session
Be civil at all times. We can disagree without being disagreeable
Read all assigned materials and attempt all assigned problems before the start of each class
Participate in class discussions. Question on the subject matter are welcomed at any time
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Grading System
Grade A+
A
AB+
B
BC+
C
CD+
D
F
Mark 86 + 70-85 67-69 63-66 60-62 57-59 53-56 50-52 47-49 43-46 40-42 < 40
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