Syllabus for FIN206 – Investments (Spring 2021)
Course Information
• Instructor: Giulio Trigilia, Assistant Professor of Finance.
• Office hours:
1. Will take place every week, 12pm-1pm at this clickable Zoom link
• Course Website: Blackboard
Course Overview
What should you expect from the course?
1. To acquire a good understanding of the fundamental ideas and formal tools
of modern investment theories;
2. To be capable of applying them to concrete portfolio management problems;
3. To become familiar with the financial concepts, jargon and definitions;
4. To actively manage financial data and use it to test investment theories.
What do I expect from you?
1. To attend class regularly and participate actively;
2. To do the required readings before class, so that you are well equipped to
follow and challenge the material;
3. To follow the financial press and relate it to the material covered in class.
Readings and material
1. (BKM) Bodie, Kane and Marcus “Investments” (10th edition or later);
2. Articles (links will be provided on Blackboard);
3. Data sources: Compustat, WRDS, CRSP.
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Grades
Your Final Grade (FG) will be computed as follows.
ME FE
1 1 X4
PSi +
+
Final Grade =
i=1
4 4
4
2
There will be 4 graded Problem Sets throughout the course, therefore Pr.Sets
gr. = Average Grade across all Problem Sets (same for Cases).
Plan of the Course
Introduction: BKM Chapters 1-4
Risk and return: BKM Chapter 5
Present Values: BKM Chapter 5
Fixed Income: BKM Chapters 14-16
Asset Allocation: BKM Chapter 6
Mean-Variance: BKM Chapters 7-8
CAPM: BKM Chapter 9
MIDTERM
SPRING RECESS WEEK
APT BKM Chapter 10
Market Efficiency: BKM Chapter 11
Money Management: BKM Chapter 20
Derivatives and Options: BKM Chapter 22
Black-Merton-Scholes: BKM Chapter 21
Revision
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Specifics about MidTerm: The mid-term will be a written exam. It will revise the
topics covered until at most 1 week earlier than the test date (i.e., provisionally
until Mean-Variance analysis).
Specifics about Final Exam: The final will be a written exam.
Optional material: Throughout the course, I encourage you to enrich the class
experience with additional, non-academics, readings and videos. Here I list some
of the recent books and movies I enjoyed, that are related to the material we shall
cover in class. In case of interest by a critical mass of students, I am happy to
organize additional meetings to go over a few of them together.
• (book) Lords of finance, Ahamed Liaquat, Random House, 2009
On the personal histories of the four heads of the Central Banks of the US, UK, France,
and Germany, in the aftermath of WW1, until the Great Depression – and their conflictual
relation with JM Keynes. About how to govern financial markets in turmoil.
• (book) More money than god, Mallaby Sebastian, A&C Black, 2010
A very well written and facts-founded narrative of individual players who founded and
shaped the growing US hedge fund industry. Strongly recommended, also just for reading
a few chapters. Some great stories covered: George Soros (ch. 4 and 9); Paul Tudor-Jones
(ch. 6); LTCM (ch. 10); The dot-com bubble (ch. 11).
• (book) Fault Lines, Raghuram Rajan, Princeton University Press, 2011
On the (also micro, but mosty macro) financial causes and effects of the 2008 crisis and
the ensuing depression. Complements our micro-centered approach in class.
• (book) Debt, the first 5,000 years, David Graeber, Melville House, 2014
On the historical relationship of debt with social institutions such as barter, slavery, law,
religion, war and government. It complements our economic interpretation of debt as a
financial contract, drawing on history and anthropology.
• (movie) Too big to fail, Curtis Hanson, HBO, 2011
A (part fictional, part factual) account of the 2008 meltdown, focusing on the actions of
Henry Paulson (then US Treasury Secretary) in attempting to save Lehman, but mostly
the entire US financial industry. Nexus politics-finance, akin to Lords of Finance.
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