PHILADELPHIA UNIVERSITY
SYLLABUS
iMBA -772
INVESTMENTS AND PORTFOLIO MANAGEMENT
Fall 2015
Course Title
Course Number
Semester
Instructor
Office Phone
Email
Office
Office Hours
appointment.
Web Site
Credits
Course Type
: Investments and Portfolio Management
: iMBA-772
: Fall 2015
: Dr. D.K. Malhotra
: (215) 951-2813
: MalhotraD@philau.edu
: 104B Tuttleman
: 11:00 a.m. - 12:30 a.m. Monday and Wednesday or by
: http://faculty.philau.edu/MalhotraD
: 3.0
: 3-0-3
Prerequisite:
All students must have completed iMBA 629 Financial Policy and Planning.
It is the students' responsibility to make certain that they have successfully completed
these courses. If at any time during the semester it is learned that a student has not
successfully completed these prerequisites, he/she will be dropped from the course
receiving, neither credit nor tuition refund.
Course Description:
This course will provide an overall view of the investment decision process. Areas
covered will be risk measures, stock price valuation models, and portfolio
management. Emphasis will be on determination of asset prices including capital
asset pricing model, futures and options, and swaps.
Course Objective:
The objective of this course is to acquaint the student with the tools essential for
sound money management. Much of what the students will learn currently is in use
in firms across the nation and other countries. Projects and case studies will be
included to ensure better understanding of the subject matter.
Required Text(s) and/or Supplies:
Investments Analysis and Portfolio Management by Reilly and Brown, 10th Edition,
Cengage Learning, ISBN-13: 978-1-133-62703-6.
Additional Recommended Readings:
The Wall Street Journal
Barron's
Business Week
The Economist
Additional readings outside the textbook will be assigned during the semester.
Attendance:
Attendance is mandatory. You are responsible for what is covered in the class and
any absence on your part leaves you responsible for finding out what was presented
in class. You will benefit a lot from the course by doing problems and reviewing
concepts, which are covered in the class.
Requirements:
I. Attend class regularly
2. Do Class Assignments.
3. Study class notes prior to next class and come prepared to the class to
participate actively in discussions.
4. Be able to take time pressure tests.
5. Be able to perform basic statistics.
Course Outcomes:
Upon course completion, students will be able to:
1. Demonstrate proficiency in analyzing the relationship between risk and
return and its impact on investment decision making
2. Demonstrate proficiency in analyzing portfolio theory and asset pricing
models.
3. Demonstrate the ability to analyze and value stocks
4. Demonstrate the ability to analyze and value options payoffs
Overview of expectations for the course, including major assignments or
projects:
Assignments
Weight
Evaluates which Course
Outcomes?
HW Assignments (Each
16%
assignment will be equally
weighted)
HW 1
Outcome 1
HW 2
Outcome 2
HW 3
Outcome 3
HW 4
Outcome 4
Mid-term Exam
25%
Outcomes 1 and 2
Final Exam
30%
Outcomes 3 and 4
Security Analysis Project
9%
Outcomes 1, 2, 3, and 4
Portfolio Management
10%
Outcomes 1, 2, 3, and 4
Class Participation
10%
Outcomes 1, 2, 3, and 4
No makeup exams will be given. If you miss an exam due to an unavoidable reason,
the grade on the missed exam will be transferred to the final exam. THE FINAL
EXAM IS COMPULSORY AND COMPREHENSIVE. DO NOT EXPECT ANY SCALING
ON THE GRADES.
Security Analysis Project: The project must be completed and submitted to me by
the due date. There will be no extension of the deadline for submission of the
project. If you do not submit the project, you will not be assigned any grade for the
course. If you submit the project late, you will be assigned one letter grade lower
than the grade on the project.
Academic Honesty:
Students are expected to perform according to a code of academic honesty that
prohibits cheating on tests and plagiarizing others' work. Violation of this code may
result in failure of the course.
Grading Policy:
Letter Grade
A
AB+
B
BC+
C
CF
Grade
Points
4.00
3.67
3.33
3.00
2.67
2.33
2.00
1.67
0.00
Percent Allocated
93% or higher
90% to < 93%
87% to < 90%
83% to < 87%
80% to <83%
77% to <80%
73% to <77%
70% to <73%
<70%
Academic Integrity
Academic integrity is a policy about ethical behavior at Philadelphia University
regarding one’s intentions, decisions, and actions while conducting academic work.
It includes values such as avoidance of the following: cheating; plagiarism; copying;
the fabrication of information; and facilitating, or denying others access to
information. It expects honesty and rigor in research, course work, writing and
publishing. Academic Integrity is taken seriously in this course. Any student
violating the University’s academic integrity policy will be subject to appropriate
sanctions. The University’s complete academic integrity policy is available in the
Academic Catalog and University’s Student Handbook. Academic resources,
including information on citation and documentation for all written work, projects,
and presentations, are also available on the Learning and Advising Center’s website:
http://www.philau.edu/learning/writingguidelines.html.
Policy on Lateness, Absences, Makeup Work
In accordance with University policy, students are expected to attend class every
day with all relevant required course materials and work. If you are absent from
class, contact your faculty as soon as possible, preferably before the next class
meeting. Students remain responsible for any missed work, for work completed in
class and for work due and must arrange for that work to be delivered to the faculty
on time.
Serious illness, family emergencies, or other crises mean that students should
contact the Dean of Students Office as soon as possible (215-951-2740) and follow
up with a direct explanation to the faculty. Students are responsible for all work
related to this class; however, faculty may (but are not required to) make some
accommodation in terms of time of delivery and/or make-up exams for major tests.
Please consult with your faculty and your academic advisor to determine whether
you should withdraw from the course or request an incomplete grade in the case of
serious illness or crises.
Collection of Student Work for Assessment
Philadelphia University is committed to providing excellent and innovative
educational opportunities to its students. To help us maintain quality academic
offerings and to conform to professional accreditation requirements where relevant,
the University and its programs regularly examine the effectiveness of the curricula,
teaching, services, and programs the University provides. As Philadelphia University
sees appropriate, it may retain representative examples or copies of student work
from all courses. This might include papers, exams, creative works, or portfolios
developed and submitted in courses or to satisfy the requirements for degree
programs as well as surveys, focus group information, and reflective exercises.
Information on Digital Resources
This course is available on blackboard at http://bb.philau.edu
Academic Support Services: Gutman Library (www.philau.edu/library)
Gutman Library is a gateway to a variety of information resources. The homepage of
the library provides 24/7 access to online databases of articles, e-journal
collections, e-books, and specialized information to support this course. The library
building is wireless, has 80 available workstations (PCs and Macs), printers,
scanners, and copiers; as well as individual and group study spaces.
The following databases available in the library will be useful in this course:
Standard and Poor’s NetAdvantage
ABI/Inform and Business Source Premier
Wall Street Journal
Wall Street Journal – Asia, Financial Times
New York Times
Students can also contact the Reference Desk directly Reference@philau.edu for
more specialized help in identifying sources, or stop by the Reference Desk when
the library is open.
The Learning and Advising Center (www.philau.edu/learning)
The Learning and Advising Center provides one-on-one tutoring assistance for
writing, study strategies, test taking, and specific Philadelphia University courses*.
To make a tutoring appointment, students should stop by the Learning and Advising
Center in Haggar Hall or call (215) 951-2799. Academic resources, including
information on citation and documentation, note taking, and study strategies are
available on the Center’s website.
Technology Resources (http://www.philau.edu/OIT/)
The campus is wireless. If you need a computer, Gutman Library and Search Hall
have open access computers. For assistance with technology issues, students should
contact the Technology Help Desk at (215) 951-4648 or send an email to
helpdesk@philau.edu.
.
Disability Services (http://www.philau.edu/disabilityservices/index.html)
Philadelphia University does not discriminate on the basis of disability, in
accordance with the Americans with Disabilities Act and Section 504 of the
Rehabilitation Act of 1973. The University makes accommodations for students
with disabilities who seek accommodations in the classroom. All students
interested in receiving accommodations must contact the Office of Disability
Services by email at DisabilityServices@philau.edu, phone at (215.951.6830) or
office visit. The office is located in Kanbar 102D. Students requesting
accommodations in the classroom must present a current accommodation letter
from the Office of Disability Services to the instructor, before accommodations may
be made. Philadelphia University works with students with disabilities regarding
equal access to all services and programs. Requests for accommodations may be
made at any time (although accommodations are not retroactive). The University
encourages all students who have any inquiries to contact Disability Services.
Inclement Weather Policy
To ensure the continuation of student learning in time of emergencies, including
severe weather, it is the policy of Philadelphia University not to cancel classes.
However, if on campus sessions are not possible, students are responsible for
checking their university email and/or Blackboard for information regarding
holding of classes through online adobeconnect.
TENTATIVE COURSE OUTLINE:
08/25
Introduction to Investments
o Meaning of Investment
o Why people invest?
o Why study investment and portfolio management?
o Expected Return and Risk
09/01
Introduction to Investments
o Dominant Investments
o Selecting Investments in a Global Market
09/01
Types of Securities
o Introduction to Investments and Security-Market Indicator Series
09/08
Securities Markets
o How to trade securities?
o Margin Trading
o Short selling and Margin Trading
09/15
Introduction to Diversification and Portfolio Analysis
o Meaning of Diversification
o Significance of Diversification
o Markowitz Diversification in mean-variance framework
09/22
Introduction to Diversification and Portfolio Analysis
o Expected Return of a Portfolio
o Risk of a Portfolio
o The Concept of Portfolio Efficiency and Efficiency Frontier
09/29
Asset Pricing Models
o The Characteristic Line and the CAPM
o The concept of Systematic and Unsystematic Risk
o The Characteristic Line
o Capital Asset Pricing Model
10/06
Asset Pricing Models
o How Characteristic Line leads to CAPM
o Systematic Risk and the Concept of Beta
o Characteristics of Beta
MID-TERM EXAM
10/13
Arbitrage Pricing Theory
10/20
How to analyze common stocks?
o Market Analysis
o Industry Analysis
10/27
Analysis of Common Stocks
o Company Analysis
11/03
Introduction to Valuation
11/10
Valuation of Common Stocks
o Valuation of Common Stocks
o Dividend Discount Models
o Free Cash Flow Valuation Models
11/17
Introduction to Stock Options
o Meaning of Options
o Types of Options
o Payoff of Options
o Futures
11/24
Stock Options and Futures
12/01
Student Presentations
Final Exam
NOTE: This is only a tentative schedule.
SECURITY ANALYSIS ASSIGNMENT
MBA 772
INVESTMENTS AND PORTFOLIO MANAGEMENT
FALL 2015
Due Date: November 24, 2015
You work as a junior analyst in the security analysis division of a major brokerage
firm. Your boss in the security analysis division has asked you to conduct a detailed
analysis of a company and prepare a detailed report on undertaking investment in
that company’s shares. You should provide a recommendation that “YOU” think is
correct and not what other “experts” think is correct.




You must provide the name of the company that you want to analyze by
September 1, 2015.
You may not be able to change your company for your project after the initial
selection.
You must submit the project by the due date. If you do not submit the report by
the due date, you will lose three points from the score for your project.
If you choose not to do the project, you will receive an “F” in this course.
You report should be organized along the following lines:
FORMAT:
1. Your report should start with a clear-cut recommendation as to whether one
should or should not buy the shares of the company.
2. Discuss each and every reason in detail.
3. Attach a copy of all your sources of information to substantiate your arguments.
You must footnote and reference your sources of information in the report.
Consult a Business Communications book for business report writing styles.
Your report should not exceed ten pages (excluding supporting documents).
Stock Portfolio Management
One Million Dollar Philadelphia University Chair of Investments
Objective:
The objective of this $1 million portfolio is to be able to attract a senior faculty
member with research and teaching expertise in the area of investments.
Specifically, the fund must provide a $20,000 salary supplement, $20,000 secretarial
assistant, and $10,000 travel budget per year. The fund also requires preservation
of initial capital.
Ground Rules:
1. Your portfolio shall not include more than 20 percent investment in bonds.
2. You are responsible for keeping track of all buying and selling. You may find it
beneficial to store this information on a spreadsheet.
3. There is a $7 per trade transaction fee charged for both buying and selling for
bonds and stocks. Assume no trading costs for U.S. Treasury bills.
4. Idle cash earns 0.5 percent per annum (compounded daily, 365 days a year).
5. Take over managing this portfolio on September 1, 2015.
6. Your report on the portfolio is due on every week and the final report is due on
December 1, 2015
You may not trade on margin or short sell.