Brock University
Goodman School of Business
Department of Finance, Operations, and Information Systems
FNCE 4P04: Investment Analysis & Portfolio Management
Fall 2019
Instructor: Mohamed A. Ayadi
Office: GSB 475N
Class Hours: M 7:00-10:00pm (SECTION 2)
Office Hours: R 3:30-5:00 pm
Tel.: 905-688-5550, ext. 3917
E-mail: mayadi@brocku.ca
Course Objectives
This course provides an introduction to equity investments, markets, and instruments. Its
main focus will be on common stocks by presenting financial theory and analytical tools
and techniques for making and analyzing investment decisions. First, we describe the
investment environment, financial markets, and instruments. Second, we examine the riskreturn tradeoff, optimal portfolio selection, asset pricing models, and market efficiency.
Third, we explore theoretical and applied methodologies for stock analysis and valuation.
Course Material
Required Text
Bodie, Z., A. Kane, A.J. Marcus, L.N. Switzer, D. Boyko, C. Panasian, and M. Stapleton,
Investments, McGraw-Hill Ryerson, 9th Canadian Edition, 2019.
Supplementary (but optional) Texts
Damodaran, Investment Valuation, University Edition, Wiley, 2012.
DeFusco, R.A., D.W McLeavey, J.E. Pinto, D.E. Runkle, and M.G.P. Anson, Quantitative
Investment Analysis, AIMR, 2015.
Higgins, R.C., Analysis for Financial Management, Irwin McGraw-Hill, Eighth Edition,
2015.
Nofsinger, J.R., The Psychology of Investing, Prentice-Hall, 2012.
Malkiel, B.C., A Random Walk Down Wall Street, W.W. Norton & Company, 2015.
Siegel, J.J., Stocks for the Long Run, McGraw-Hill, Third Edition, 2013.
An important complement to class work is following the financial news. There are several
sources of information: The National Post, The Globe and Mail, The Wall Street Journal,
and The Financial Times. The Internet offers substantial information resources (available
at the course web page).
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Format
This course is organized around the following modules:
1. Overview of Investment Environment, Financial Markets, and Instruments
2. Risk and Return, Asset Allocation, and Portfolio Theory
3. Asset Pricing Models and Market Efficiency
4. Security Analysis and Valuation
5. Fundamental and Technical Analyses
Course Requirements and Expectations
The course is quantitative and relies on analytical tools and economic theory. I will assume
that you have a basic understanding of accounting, economics, algebra, and statistics.
Students should prepare for class by completing all required readings in advance. This class
is not easy. It requires a lot of work. I expect everyone in class to pay attention to what is
going on in class, and to not distract others.
Course Grading
Your course grade will reflect your performance on two midterm exams, Connect
Assignments, and one presentation/report with weights determined as follows:
Group Presentation & Report
2 Midterm Exams (30% & 35%)
Connect Assignments
20%
65%
15%
The second midterm exam is cumulative. All exams are closed books but a sheet of
formulas will be provided to you during exams.
Each group of 3/4 students is required to make one presentation (maximum 20 minutes) on
a finance topic assigned by the instructor. The presentation should deepen your
understanding of the subject matter as well as help master the relevant methodologies. It is
closely related to learning objectives/curriculum of the CFA. All presentations are made
on the last week of classes. A detailed report that covers all discussed elements with a full
list of references must be submitted 10 days after the presentation.
Important Dates
Reading Week (no classes): October 15 - 18, 2019
Thanksgiving (Holiday/University Closure): October 14, 2019
Tuesday, November 5, 2019 / Last day for withdrawal without academic penalty
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Tentative Course Outline
Week
Topic
Week 1: September 9
Introduction and Overview of Investment Environment,
Financial Markets, and Instruments
Week 2: September 16
Important Concepts in Investments
Week 3: September 23
Market Structure, Security Trading, & IPOs
Week 4: September 30
The Asset Allocation Decision and Portfolio Theory 1
Week 5: October 7
Midterm Exam 1
Week 6: October 21
The Asset Allocation Decision and Portfolio Theory 2
Week 7: October 28
Asset Pricing Models 1
Week 8: November 4
Asset Pricing Models 2
Week 9: November 11
Introduction to Security Analysis and Valuation
Week 10: November 18
Midterm Exam 2
Week 11: November 25
Company Analysis, Stock Valuation, and Industry
Analysis & Presentations
Week 12: December 2
Presentations
Note: The above course outline is tentative and may be subject to change as class progresses. In
particular it is unlikely that we will have time to cover all of the above topics and so some deviation
from the proposed outline of topics can be expected.
If a midterm exam is not completed, the mark assigned to the exam will be zero except in the case
of a valid excuse (illness, death of a close family member, etc.). In the case of a valid excuse the
mark associated with the midterm exam will be re-assigned to the second midterm exam.
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Connect (Online) Assignments:
Approximately each week you will be assigned online lab sessions. You will complete and submit
your lab assignments in Connect (http://connect.mheducation.com). When you enter Connect, you
will find the beginning and due dates for current lab assignments. Be sure to check Connect often
in order to keep up to date with your Connect assignments.
Each time you submit a lab, you will immediately receive your mark for the lab and explanations
for incorrect answers. You may retry the lab as often as you wish prior to the due date. The
questions will be different each time. The highest grade that you receive (not necessarily your last
lab attempt) will count toward your lab grade. Each lab will be equally weighted, and your average
lab mark overall will count for 15% of your course grade. No late submissions will be accepted.
After the due dates, labs will be available to you for practicing without affecting your grade.
Academic Integrity:
“Because academic integrity is important to the well-being of the academic community, Brock
University takes academic misconduct very seriously. Academic misconduct includes plagiarism,
which involves presenting the words and ideas of another person as if they were your own, and
other forms of cheating such as copying answers or using crib notes during a test. The penalties for
academic misconduct can be very severe. A grade of 0 may be given on the assignment or on the
course, and a second offence may result in suspension from the University. Students are urged to
read the section of the Brock University calendar that pertains to academic misconduct.”
Academic Accommodation for Students with Disabilities:
“As part of Brock University's commitment to a respectful work and learning environment, the
University will make every reasonable effort to accommodate all members of the university
community with disabilities. If you require academic accommodations related to a documented
disability to participate in this course, you are encouraged to contact Services for Students with
Disabilities in the Student Development Centre (4th floor Schmon Tower, ext. 3240). You are also
encouraged to discuss any accommodations with the instructor well in advance of due dates and
scheduled assessments.”
Academic Accommodation due to Religious Obligations:
“Brock University acknowledges the pluralistic nature of the undergraduate and graduate
communities such that accommodations will be made for students who, by reason of religious
obligation, must miss an examination, test, assignment deadline, laboratory or other compulsory
academic event. Students requesting academic accommodation on the basis of religious obligation
should make a formal, written request to their instructor(s) for alternative dates and/or means of
satisfying requirements.”
Medical Exemption Policy:
“The University requires that a student be medically examined in Health Services, or by an offcampus physician prior to an absence due to medical reasons from an exam, lab, test, quiz, seminar,
assignment, etc. Student Health Services will provide medical documentation only if:
Medically warranted (i.e., a simple cold is not medically warranted).
The student presents him/herself to Health Services before the exam.
The student is seen in our office the day of the exam, lab, etc.
If your medical condition requires special consideration for academic activity (e.g., missed
seminars or labs, assignment extensions, or examination/test rescheduling) and is on a day or at a
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time when Health Services is not open, then you must go to another medical facility to obtain the
necessary written medical documentation, which is the completion of Brock University's Medical
Certificate.”
The Medical Certificate can be found at
http://www.brocku.ca/health-services/policies/exemption
Rules for Classroom Conduct:
● Plan to arrive to class on time and to stay for the entire class period. If you must leave early,
advise the instructor ahead of time.
● All cell phones and other electronic devices (e.g., mp3 players, iPods, iPads) must be turned off
and hidden from view during class time.
● Laptop computers are allowed for (quiet) note taking only: i.e., other activities such as checking
personal e-mail or browsing the Internet are prohibited.
● Chatting is not allowed during class. If you are confused, ask questions to your instructor, not
your classmate.
● Food is not permitted in the classroom.
● Respect the feelings of your fellow students and refrain from any actions which could reasonably
be expected to offend them. Use good manners and common sense.
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