BUSFIN4221
Spring 2016
Course Syllabus
Professors:
Prof. Xiaoji Lin (lin.1376@osu.edu )
Office: 846 Fisher Hall Phone: 614-292-4318
Office hours: TBD (will begin Feb. 29th)
Prof. Susan Clark (clark.238@osu.edu)
Office: 638 Fisher Hall Phone: 614-292-6436
Office hours: Tuesday, 2-4 p.m. or by appt.
Course Description: Skills for valuation and theories and applications of CAPM, APT, and efficient markets;
investment options, forwards and futures, interest rate parity, and relevant market regulation.
Prereq: 3220 (620), BusMgt 2320 (330), and 2321 (331). Not open to students with credit for 722, 4220 or
4222.
Course Outcomes: At the end of this course the learner should:
• Explain the different investment vehicles available in financial markets
• Explain how security markets work
• Explain the risk/return relationship in the context of efficient portfolios, CAPM
• Identify characteristics of efficient markets and describe anomalies that contradict EMH
• Determine the value of specific types of investments including stocks, bonds, options and futures
• Provide interpretations of various stock market “anomalies”
• Analyze choices to be made in actively managed bond portfolios
Course Structure:
The first seven weeks will be taught by Susan Clark and the second seven weeks will be taught by Xiaoji Lin.
Grades from both parts of the course will be combined to give you the grade for the semester.
Course Materials:
Textbooks (Required):
Bodie, Kane, & Marcus; Essentials of Investments (9th ed.), McGraw-Hill Irwin. ISBN: 978-0-07803469-5
Grading:
Midterm 1:
Final:
Homework:
Cases:
Paper/Project:
40% (100 points)
40% (100 points)
5%
5% (25 points each)
10% (100 points)
Grading Scale:
92.5-100
A
89.5-92.49
A86.5-89.49
B+
82.5-86.49
B
79.5-82.49
B76.5-79.49
C+
72.5-76.49
C
69.5-72.49
C66.5-69.49
D+
59.5-66.49
D
<59.5
E
Homework:
In the first seven weeks, the homework will be two cases. You can get copies of the cases from HBS. Click on
the link to access the materials. Details on the cases are given below. In the second seven weeks, homework
will be posted to Carmen and is more problem based.
Cases:
To prepare the two cases, you may work in groups of 4-5 students. Please email Susan your group members by
Monday of the second week of classes (January 18th). If you do not make your own group, you will be assigned
to one. The cases require knowledge of Excel modeling. You must purchase the cases through the following
link: https://cb.hbsp.harvard.edu/cbmp/access/38557114 Additional information to help you work the cases will
be provided in Carmen under the Content tab labeled Cases.
Trading Paper/Project:
At the beginning of the semester, you will also be given a Trading project. You will be using the ThinkorSwim
platform to invest $1,000,000 over a 10 week period. Please read the Trading & Portfolio Management
Project in Carmen. It is up to you to learn how to use the trading website.
Attendance:
Regular class attendance is expected, but we do not take attendance after the first week. If you miss a class, you
are responsible for the material. After obtaining the notes and reading the material, feel free to ask us questions.
Students With Disabilities:
If you would like to request academic accommodations based on the impact of a disability qualified under the
Americans with Disabilities Act and Section 504 of the Rehabilitation Act of 1973, contact your instructor
privately as soon as possible to discuss your specific needs. Discussions are confidential.
In addition to contacting the instructor, please contact the Student Life Disability Services at 614-2923307 or ods@osu.edu to register for services and/or to coordinate any accommodations you might need in your
courses at The Ohio State University. Go to http://ods.osu.edu for more information.
Academic Integrity:
Academic integrity is essential to maintaining an environment that fosters excellence in teaching, research, and
other educational and scholarly activities. Thus, The Ohio State University and the Committee on Academic
Misconduct (COAM) expect that all students have read and understand the University’s Code of Student
Conduct, and that all students will complete all academic and scholarly assignments with fairness and honesty.
Students must recognize that failure to follow the rules and guidelines established in the University’s Code of
Student Conduct and this syllabus may constitute “Academic Misconduct.”
The Ohio State University’s Code of Student Conduct (Section 3335-23-04) defines academic misconduct as:
“Any activity that tends to compromise the academic integrity of the University, or subvert the educational
process.” Examples of academic misconduct include (but are not limited to) plagiarism, collusion (unauthorized
collaboration), copying the work of another student, and possession of unauthorized materials during an
examination. Ignorance of the University’s Code of Student Conduct is never considered an “excuse” for
academic misconduct, so I recommend that you review the Code of Student Conduct and, specifically, the
sections dealing with academic misconduct. (You can find the full Code at
http://studentlife.osu.edu/pdfs/csc_12-31-07.pdf )
If I suspect that a student has committed academic misconduct in this course, I am obligated by
University Rules to report my suspicions to the Committee on Academic Misconduct. If COAM
determines that you have violated the University’s Code of Student Conduct (i.e., committed academic
misconduct), the sanctions for the misconduct could include a failing grade in this course and suspension or
dismissal from the University.
If you have any questions about the above policy or what constitutes academic misconduct in this course, please
contact me.
Other sources of information on academic misconduct (integrity) to which you can refer include:
•
•
•
The Committee on Academic Misconduct web pages (COAM Home)
Ten Suggestions for Preserving Academic Integrity (Ten Suggestions)
Eight Cardinal Rules of Academic Integrity (www.northwestern.edu/uacc/8cards.htm)
Disenrollment:
Fisher College of Business strongly enforces University attendance policies. As per University rule 3335-8-33,
any student may be disenrolled from a course for failure to attend by the first Friday of the term, or by the 3rd
instructional day of the term, or by the second class meeting, whichever occurs first.
Tentative Class Schedule
Day
Topic
Jan. 11
Jan. 13
Jan. 18
Jan. 20
Jan. 25
Jan. 27
Course Overview
Asset Classes
NO CLASS
Securities Markets
Mutual Funds/ETF’s
Mutual Funds/ETF’s
Readings/Class
Work
Ch. 1
Ch. 2
MLK Day
Ch. 3
Ch. 4
Ch. 4
Feb. 1
Risk/Return
Ch. 5
Feb. 3
Risk/Return
Ch. 5
Feb. 8
Feb. 10
Efficient Diversification
Efficient Diversification
Ch. 6
Ch. 6
Feb. 15
CAPM
Ch. 7
Feb. 17
Feb. 22
Feb. 24
Feb. 29
Mar. 2
Mar. 7
Mar. 9
Mar.
14-18
Mar. 21
Mar. 23
Mar. 28
Mar. 30
Apr. 4
CAPM
Review
Midterm Exam in class
Testing the CAPM
Value and Size
Value at Risk
Efficient Markets
Ch. 7
Spring Break
Spring Break
Efficient Markets
Behavioral Finance
Behavioral Finance
Limits to Arbitrage
Bond Prices and Yields
Ch. 8
Ch. 9
Ch. 9
Ch. 9
Ch. 10
Apr. 6
Bond Prices and Yields
Ch. 10
End Trading
Project, Friday 4/8
Apr. 11
Managing Bond
Portfolios
Ch. 11
HW 3
Apr. 13
Managing Bond
Portfolios
Ch. 11
Trading Project
Paper Due at
beginning of class
Apr. 18
Apr. 20
Apr. 25
Performance Evaluation
Review
Final Exam in class
Assignments
Suggested
Chapter Problems
#14,17,19
#14,17,18,19,20
#14,15,17,19,21
#13,15-17,21, 24
Begin Trading
Project
Case #1 due Sunday
2/7/15 11:59 pm.
#12-14,18,19
#8-12
Case #2 due Sunday
2/14/15 11:59 pm.
#9-11,13-19,24
Ch. 1-7
Ch. 7
Ch. 7
Ch. 5
Ch. 8
Ch. 18
HW 1
Spring Break
HW 2
Spring Break