FTX3044F 2023
Course Outline
1.
Introduction
Finance IIA (FTX3044F) and IIB (FTX3045S) comprise a full third year course in Investment theory
split between the first and second semesters, respectively. These two courses are designed to provide
students with a solid grounding in the theory of investment decision-making. Finance IIA builds on the
knowledge gained in Financial Management (FTX2024F/S) focusing on equity valuation, portfolio
theory and investment ethics.
2.
3.
Course Entry Requirements
• Pre-requisites: Passes in FTX2024F/S, ACC1012S or ACC2011S, MAM1012S (or equivalent),
ECO1010F/S or ECO1110F/S, and ECO1011F/S.
• Co-requisites: STA2020F/S or an approved equivalent.
Lecturing and Administrative Staff
Role
Course convenor and lecturer
Lecturer
Lecturer
Head Tutor
Programme Administrator
4.
Details
A/Prof Ailie Charteris
A/Prof Phillip de Jager
A/Prof Pradeep Brijlal
Yakeen Uddin
Thaania Lutta
Email
ailie.charteris@uct.ac.za
phillip.dejager@uct.ac.za
pradeep.brijlal@uct.ac.za
uddyak001@uct.ac.za
thaania.lutta@uct.ac.za
Class Representative
Students will be asked to elect a class representative in the first week of lectures. You are encouraged
to raise issues that may affect you and other members of the class with the class representative who will
then liaise with the department on your behalf.
5.
Course Structure
5.1 Lectures
Lectures will be held every day of the week except Thursday during the 4th period (11:00 – 11:45) in
James LT3A OR the 5th period (12:00 – 12:45) in LS2B. Students must choose one period (either the
4th or the 5th) to attend, guided by your timetable. Students must remain consistent with the period chosen
as consistency of pace between the two lectures cannot be guaranteed. Venues are subject to change,
and any changes will be communicated to you via a Vula announcement. Both lecture venues have
backup generators and so lectures should not be impacted by loadshedding.
The lectures will be recorded and are accessible via the lecture video tab on Vula. However, it is strongly
recommended that you attend the lectures and use the videos only as a back-up resource if you are
unable to attend due to illness or wish to revisit a concept that was explained during that lecture. In the
case of loadshedding, lecture videos may not be available as the switch over to backup power can
disrupt a recording. We will, however, record both sessions to try to avoid this.
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5.2 Tutorials
Each student is required to attend a weekly tutorial (there are eight in total). The schedule for the
tutorials is as follows:
Tutorial
Tutorial 1
Tutorial 2
Tutorial 3
Tutorial 4
Tutorial 5
Tutorial 6
Tutorial 7
Tutorial 8
•
•
•
•
•
•
Week
28 February – 3rd March
7th – 10th March
14th – 17th March
4th – 6th April
11th – 14th April
18th – 21st April
th
2nd – 5th May
9th – 12th May
Students must attend six of the eight tutorials although you are advised to attend all tutorials.
To allow for illness etc., you are only required to attend six tutorials. It is not necessary to
submit a medical note if you miss a tutorial, but please note that you cannot miss more than two
tutorials (a medical note will not excuse you from attendance if you have already missed two
tutorials).
Tutorials will take place on campus. The duration of the tutorial will be a maximum of two
periods (90 minutes). Sessions will be held at various times on Tuesdays to Fridays.
You may only attend the tutorial slot for which you are registered, and an attendance register
will be taken.
Tutorial sessions that fall on public holidays will be re-scheduled. Your tutor will discuss this
with you.
The tutorial questions will be released in advance on the lessons page. You are advised to
complete all tutorial questions prior to the session. The tutorial solutions will be loaded to
the relevant lessons page following the completion of the tutorial sessions. Additional
workshop questions to work through in your tutorial sessions may also be provided.
Signing up for tutorials will open on Wednesday 15th February at 9:00am on Vula. Please
sign-up by Friday 17th February at 9:00am. You may swap groups up until this deadline. If
you cannot make any of the available tutorial sessions, please contact the head tutor urgently
with a copy of your timetable from PeopleSoft. Please do not sign up for a tutorial slot that
clashes with your lecture time for FTX3044F. You can see the available tutorial slots before
the sign up opens by following the link on the first page of the Vula site.
5.3 Vula
Vula is a critical part of this course. All resources will be uploaded to Vula and any announcements will
be made via this site. For each section of the course, you will be provided with a lessons page outlining
the learning objectives for the section, learning activities and resources (e.g. readings, relevant slides to
work through to accompany the lectures, tutorials and solutions). This should help you to keep on track
as to what needs to be done each week and be able to access all the resources easily from one location
on Vula. The relevant content will be made available to you at the beginning of each week.
Please note that all materials are effectively the copyright of the creators and UCT, so any unauthorised
distribution thereof is illegal.
Students may post questions regarding the lecture or tutorial content (after the completion of the tutorial)
on the relevant Discussions page on Vula. The tutors and/or lecturers will respond to these within 24
2
hours Monday to Thursday. The questions and answers remain visible for all to see so you will be able
to refer back to your questions and those of others at any point in time.
5.4 Contact with the Lecturers
The lecturers can also be contacted directly via email. Lecturers will respond to emails as soon as
possible. Lecturers will also communicate their consultation hours to you.
6.
Assessment
6.1 Components
The assessment for this course will comprise:
Assessments
Class Mark
Final Examination
Form
Test 1
Test 2
Assignment
TOTAL
Weighting
20%
20%
10%
50%
100%
Date
23 March 2023
26th April 2023
See below
May/June
rd
Assessments will be invigilated on campus. The dates are subject to the availability of venues. Each
test will be 90 minutes plus 5 minutes reading time.
The pass mark for this course is 50%. Those intending to register for any fourth year finance course
are required to pass both FTX3044F and FTX3045S and achieve a minimum average of 60% between
FTX3044F and FTX3045S.*However, if you do not achieve a minimum average of 60% across these
two courses but pass both of them, then you will be able to write an entrance exam in January 2024 for
either FTX3044F or FTX3045S or both to improve your mark(s). If you qualify for a supplementary
exam for either course, then the supplementary exam will be considered your entrance exam.
6.2 Assignment
You will be required to complete a group assignment. This will be divided up into three parts (each part
with its own due date). The content covered in the assignment forms a core part of the course and is
examinable. The content of the assignment will also be covered in the tutorials. Further details about
the assignment will be provided. One member of each group must submit the relevant assignment
component via the Vula assignment tab.
Project Component
Part A
Part B
Part C
Submission deadline
10th March by 16:00
14th April by 16:00
8th May by 16:00
6.3 DP Requirements
In order to qualify to write the Final Examination in May/ June, you are required to fulfil all the DP
requirements. Please ensure you fully understand the implications of these requirements, as no
exceptions will be made. It is your responsibility to check with your tutor and to draw the head tutor’s
attention to any discrepancies as soon as possible. The requirements are:
• A minimum weighted average of 40% for the class mark.
• A minimum of six out of eight tutorial attendances.
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•
•
Attendance at both tests.
Submission of group assignment (all three parts).
Students who are unable to complete a scheduled class test must submit a medical certificate within 48
hours of the end of the test to the programme administrator via email. If the reasons for missing the
scheduled test are deemed reasonable, the weighting of the missed class test will be added to the
weighting of the final exam (i.e. if you miss test 1, test 2 will count 20%, the assignment will count
10% and the exam will count 70% or if you miss test 2, test 1 will count 20%, the assignment will
count 10% and the exam will count 70%. Note: you cannot miss both class tests).
7.
Prescribed Readings
The prescribed textbook is: Bodie, Z., Kane, A. and Marcus A.J. (2021). Investments (12th Global
edition), Irwin McGraw-Hill. The 11th edition can be utilised but please note that chapter references
refer to the 12th edition. This textbook is also used for FTX3045S.
In addition to the prescribed textbook, lecturers may provide supplementary material relating to their
respective modules. This material forms part of the compulsory reading for the course and is
examinable. The examinable material comprises the relevant textbook chapters, supplementary
readings, lecture notes, tutorials and other hand-outs. Students may consult other texts to obtain an
alternative presentation or a deeper understanding of certain concepts.
In addition to textbooks, students are strongly advised to keep up to date with financial news and general
affairs, as it will assist in understanding how the textbook theory relates to the real world of finance.
The following are recommended reading: Business Day; The Financial Times (available in the library);
The Financial Mail; The Economist; Forbes Magazine; Finance Week; Fortune Magazine.
8.
Course Content and Calendar
This course comprises the following lectures and tutorials:
Introduction (all)
Equities Part I (PDJ)
Equities Part II (PB)
Portfolio Theory (AC)
Ethics (AC)
Revision (all)
Dates
13 February
th
14 February – 1st March
3rd - 20th March
22nd March – 3rd May
5th May – 17th May
19th May
No. of tutorials
th
2
2
4
The course calendar is as follows:
4
DAY
SAT
FEB
MAR
APR
JUN
MAY
1
SUN
2
MO N
3
PT AC
TUES
WED
1
1
4
5
PT AC
PT AC
THUR
2
2
FRI
3
3
SAT
4
4
SUN
5
5
MO N
6
6
TUES
7
7
WED
8
8
THUR
9
9
FRI
10
10
Tut 1
(Equitie s PDJ)
Equitie s PDJ
6
Equitie s PB
Tut 4
(Equitie s PB)
7
4
Good Friday
8
Tut 2
(Equitie s PDJ)
5
9
7
Equitie s PB
10
8
Equitie s PB
11
Equitie s PB
12
Equitie s PB
Tut 7
(PT AC )
Worke r's Day
PT AC
PT AC
Ethics AC
6
Family Day
PT AC
Tut 5
(PT AC )
PT AC
13
*Assigme nt A
Due
1
2
3
9
10
11
14 *Assignme nt B
Due
PT AC
1
EXAM DAY 4
2
EXAM DAY 5
3
4
*Assignme nt C
Due
Tut 8
(PT AC )
12
Ethics AC
5
EXAM DAY 6
Ethics AC
6
EXAM DAY 7
Ethics AC
7
EXAM DAY 8
Ethics AC
8
EXAM DAY 9
9
EXAM DAY 10
SAT
11
11
15
13
SUN
12
12
16
14
MO N
13
INTRO
13
Equitie s PB
17
PT AC
15
Ethics AC
12
EXAM DAY 11
TUES
14
Equitie s PDJ
14
Equitie s PB
18
PT AC
16
Ethics AC
13
EXAM DAY 12
Equitie s PDJ
15
Equitie s PB
19
PT AC
17
Ethics AC
14
EXAM DAY 13
15
EXAM DAY 14
16
Youth Day
WED
15
THUR
16
FRI
17
SAT
18
16
Equitie s PDJ
17
Tut 3
(Equitie s PB)
20
Equitie s PB
18
21
Tut 6
(PT AC )
11
18
PT AC
22
19
REVISIO N
20
SUN
19
20
Equitie s PDJ
20
Equitie s PB
24
PT AC
22
C onsolidation
TUES
21
Equitie s PDJ
PT AC
23
C onsolidation
20
22
Equitie s PDJ
Human Rights
PT AC
25
WED
21
22
26
TEST 2
24
C onsolidation
21
23
TEST 1
27
C onsolidation
22
24
PT AC
28
Fre e dom Day
PT AC
25
Equitie s PDJ
26
C onsolidation
23
23
FRI
24
23
17
MO N
THUR
19
10
21
18
19
SAT
25
25
29
27
SUN
26
26
30
28
MO N
27
Equitie s PDJ
27
Vacation
29
EXAM DAY 1
TUES
28
Equitie s PDJ
28
Vacation
30
EXAM DAY 2
27
29
Vacation
31
EXAM DAY 3
28
WED
24
25
26
THUR
30
Vacation
29
FRI
31
Vacation
30
*Note: PDJ refers to Phillip de Jager, PB refers to Pradeep Brijlal and AC refers to Ailie Charteris
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9.
Course Overview
A brief outline of each section is given below:
Module 1: Equities
Purpose: This module aims to give students a practical understanding of issues in the valuation and
trading of equities, and to enable the student to perform basic equity valuations and analysis. This
module is closely modelled on parts of the CFA curriculum, and will therefore also be highly beneficial
to students who are considering pursuing this qualification.
Module Content and Structure: The module will cover the following:
1.
2.
Equities in South Africa: This part of the course will briefly consider how equities are issued
and how they are traded in South Africa.
The valuation of equities from a fundamental perspective: We will investigate the analysis of
financial statements, as well as methods for the absolute and relative valuations of equities.
The Equities module relies in part on prior knowledge of basic accounting, as this is the basis of many
forms of equity valuation. It is therefore assumed that the student has a basic understanding of
Accounting 1, with specific reference to the basics of Income Statements, Balance Sheets and Cash
Flow Statements.
Prescribed Reading: The above topics are covered in chapters 1 - 3, 11, & 17 – 19 of the prescribed
textbook. A portion of the work discussed in class will not be based on the above textbook, and some
additional readings may be introduced when appropriate.
Module 2: Portfolio Theory (PT)
Module Purpose: This module focuses on the investment decision-making framework and the notions
of risk and return. The module presents an overview of the foundational theories of efficiency and
equilibrium.
Module Content and Structure: The module will cover the following: Capital allocation to risky assets,
optimal risky portfolios, index models, asset pricing (the CAPM and APT), and market efficiency and
behavioural finance.
Prescribed Reading: The above topics are covered in chapters 6 – 12 of the prescribed textbook.
Module 3: Ethics
Purpose: The purpose of this module is to expose students to some of the ethical dilemmas of the
investment profession, and to provide a set of investment ethics guidelines within which these ethical
issues can be considered.
Module Content and Structure: This module will be largely based on the CFA Institute’s Code of Ethics
and Standards of Professional Conduct and will draw extensively on mini-case studies to illustrate the
application of the above code in real life situations.
Prescribed Reading: Summary of CFA Code of Ethics and Standards of Practice
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