ADA University
School of Business
1. Course Information
Course Name:
Semester:
Instructor Name:
Email:
Office:
Office Hours:
FINC 3600 – Financial Investments (6 ECTS)
Spring 2022
Omar Farooq
ofarooq@ada.edu.az
D334
12:00 – 14:30 (Tuesdays)
14:00 – 16:00 (Wednesdays)
You can also send me an email to fix the time
Program:
BBA and BSF
Position in Curriculum: Major Core
Pre-requisite:
FINC 2400 – Principles of Finance
2. Course Description
The primary objective of the course is to study the theory and empirical evidence
relevant for investing from the perspective of a portfolio manager (rather than an
individual investor).
The course serves as an introduction to professional portfolio management. The
concepts of modern portfolio theory, asset pricing, efficient markets, security analysis,
and behavioral finance are introduced. The course also provides you with a structure
for thinking about investment theory and shows you how to address investment
problems in a systematic manner.
It is important to highlight that this course is not about the art of stock picking and it
also does not provide you with foolproof ways to make money in the stock market.
These issues lie outside the scope of this course.
3. Course Learning Objectives





Familiarity with the theory and practice of investment and portfolio management
Ability to construct an investment portfolio that is sound in terms of investment
principles and portfolio performance
Ability to efficiently use the available information on financial markets to make
investment decisions
Mastering the basic data analysis tools
Improving understanding of current issues in the field
4. Course Literature

BODIE, KANE, and MARCUS (BKM): Investments, 10th Edition, McGraw-Hill/Irwin.
5. Assessment
Assessment Tool
Exam 1
Exam 2
Group Project
Individual Assignments
Quizes
Weight
35%
35%
15%
5%
10%
Due Date
As Announced in Class
End of Semester
End of Semester
As Announced in Class
Unannounced
Type
Individual
Individual
Group
Individual
Individual
Exams: The midterm exam and the finanl exam will be held on campus. I will not accept
any excuse regarding not attending the exam. All exams will be closed book exams.
They will be held in the venue announced in the class.
Quizes: I will take random quizes. The quiz grade will be the average of those random
quizes.
Assignments: Late assignments will not be graded.
Project: The group project should be based on a detailed report on one of the following
topics. Discuss with me for further clarification.
1.
2.
3.
4.
5.
6.
Stock Screening Project
Define the Piotroski F-Score and
discuss the underlying arguments
behind it
Identify the variables/ratios used in
the computation of Piotroski F-Score
and highlight the arguments behind
including these variables/ratios
Choose the market and download the
data (from 2010 onwards) required to
compute the Piotroski F-Score for
every firm
Compute the Piotroski F-Score for
every firm (in every year)
At the start of every year, group the
firms into three portfolios based on
last year’s Piotroski F-Score
Compute the performance measures
for each portfolio and compare them
with the performance of market
2
1.
2.
3.
4.
5.
6.
Technical Analysis Project
Define stock price informativeness
and discuss how to compute it. Discuss
the underlying arguments behind the
informativness measure
Choose the market and download the
data (from 2010 onwards) required to
compute stock price informativeness
for every firm
Compute the stock price
informativeness for every firm (in
every year)
At the start of every year, group the
firms into three portfolios based on
last year’s stock price informativeness
Identify four technical indicators and
define them.
Use these technical indicators and
identify their performance in each
portfolio
Size of the Group: 4 to 5 students
First Report (1%): Before February 1, 2023, each group should decide about the topic
of their project. You must communicate this information to me. Inability to meet the
deadline will result in the penealty of entire 1% of total grade.
Second Report (3%): Before March 15, 2023, each group should submit an initial draft
of the project (5 pages in length without references). This report should discuss the
topic, provide some literature, and rationale behind doing the project. Inability to
meet the deadline will result in the penealty of entire 3% of total grade. I can put
the questions in midterm from this report.
Third Report (11%): This final report will be due on May 10, 2023. The final report
should enhance the initial report by doing the data analysis. Inability to meet the
deadline will result in the penealty of entire 11%.
6. Schedule
Themes
Introductory
Concepts
Investment
Analysis
Portfolio
Theory
Topics
Introduction to Financial Investments
and Portfolio Management
Index Construction
Risk and Return
Market Efficiency
Behavioral Finance
Technical Analysis
Macroeconomic Analysis
Industry Analysis
Company Analysis and Multiple Based
Valuation
Capital Allocation
Optimal Portfolio Selection
Index Models
Capital Asset Pricing Model
Multifactor Pricing Models
Miscellaneous Financial Assets
Topics (If
Financial Institutions
time permits) Market Microstructure
NOTE: I reserve the right to add or subtract any topic.
3
Recommended Readings
Chapter 1 (BKM)
Chapter 2 (BKM)
Chapter 5 (BKM)
Chapter 11 (BKM)
Chapter 12 (BKM)
Chapter 17 (BKM)
Notes
Chapter 6 (BKM)
Chapter 7 (BKM)
Chapter 8 / Chapter 27
(BKM)
Chapter 9 / Chapter 13
(BKM)
Professor’s Notes
Chapter 2 (BKM)
Chapter 4 (BKM)
Chapter 3 (BKM)
7. Student Code of Ethics
All students are required to uphold and embody the requirements and principles stated
in the ADA Honor Code. You are responsible for reading the Honor Code in detail and
obey it at all times during the course of your studies at ADA, as it is an institutional
document which applies to all classes and other activities at ADA University.
8. Grading Scale
The following scale will be used for assessing your work, as outlined by ADA
Regulations. Your final course grade is the sum of the points you score on each of the
assignments (grading components) multiplied by their relative weight.
Grade
A
AB+
B
BC+
C
CD+
D
F
Percentage
94 – 97%
90 – 93%
87 – 89%
83 – 86%
80 – 82%
77 – 79%
73 – 76%
70 - 72%
67 - 69 %
60- 66 %
0 - 59%
Description
Excellent to outstanding performance
Excellent performance in most respect
Very good performance
Good performance
Good performance overall, but with some weaknesses
Satisfactory to good performance
Satisfactory performance
Adequate evidence of learning
Evidence of learning
Some evidence of learning
Poor performance
4