Hong Kong University of Science and Technology
School of Business and Management
FINA 3103 Intermediate Investments
Fall 2024
1. GENERAL INFORMATION
Instructor:
Email:
Phone:
Office & office hours:
Teaching Assistant:
Email:
Office & office hours:
Class Dates and Venue:
Course Prerequisite(s):
Course Exclusion(s):
Course Add/drop deadline:
Canvas course site:
2.
Jun AOYAGI, Assistant Professor, Department of Finance
junaoyagi@ust.hk
+852 2358 5052
LSK 5005, by appointment
L3: Zexin ZHENG, Department of Finance
L4: Jing YOU, Department of Finance
Zexin ZHENG: zzhengaq@connect.ust.hk, LSK 4063, Wed 16:00-17:00
Jing YOU: jyouaf@connect.ust.hk, LSK 5067, Wed 16:00-17:00
L3: Tu and Th, 12:00-13:20, 2304
L4: Tu and Th, 13:30-14:50, 2304
FINA 2203/2303
Not applicable
Please check the school calendar (Any late add/drop will not be considered, please
contact your program office)
L3: https://canvas.ust.hk/courses/58562
L4: https://canvas.ust.hk/courses/58567
COURSE DESCRIPTION
This course develops the concepts and analytical skills needed to build and analyze investment portfolios and solve real‐
world problems. This course first introduces the background for investments, e.g., financial markets and investment
instruments. Then it explores the risk and return characteristics that lead to diversification benefits by combining
different assets into optimal portfolios, i.e., modern portfolio theory. Next, it discusses how asset prices are determined
in equilibrium or via the no‐arbitrage condition, e.g., the capital asset pricing model (CAPM) and the arbitrage pricing
theory (APT). Then it extends to the multi‐factor models and factor investing. The course also investigates how asset
prices reflect information under different market structures, i.e., the informational efficiency of financial markets. This
course also explores bond pricing. Last, this course discusses the recent development of financial technologies (FinTech)
and their applications to investments, such as high-frequency trading and blockchain technologies.
3. COURSE OBJECTIVES
This course aims to equip you with analytical skills and tools for investments and related real‐world problems; and prepare
you for future careers in financial industry or corporate sector. Students are expected to
(1) be familiar with financial markets and investment instruments, and the concepts of market efficiency;
(2) understand the modern portfolio theory and various asset pricing models;
(3) be familiar with bond pricing;
(4) be familiar with recent development in FinTech with applications to investments;
(5) develop problem‐solving and decision‐making skills necessary to investment management.
4. COURSE LEARNING OUTCOMES
On successful completion of the course, students are expected to be able to
Course Intended Learning Outcomes (CILOs)
Aligned Program Intended Learning
Outcomes (PILOs)
CLO1: Allocate money across different asset classes in a scientific manner;
P3, P4
CLO2: Price financial securities on the basis of fundamental financial principles;
P1, P4
CLO3: Determine whether a portfolio manager is doing a good job;
P3
CLO4: Understand various investment strategies, financial markets structures,
and trading mechanism;
P4, P7
CLO5: Perform financial analysis using Microsoft Office Excel and the REUTERS
financial database;
P4, P7
CLO6: Understand the concepts of information efficiency in financial markets;
P1, P4, P7
CLO7: Understand the cutting-edge investment technologies like FinTech.
P1, P4, P7
5. COURSE TEACHING AND LEARNING ACTIVITIES
Expected
contact hours
Study Load
(% of study)
Lecture
40
40%
Class assignments and quizzes
20
20%
Self-study and review
40
40%
100
100%
Weight (%)
20%
Aligned Course Learning
Outcomes
(CLO no in section 4)
CLO 1, 2, 3, 4, 6
Course Teaching and Learning Activities
Total
Assessment Methods
Brief Description (Optional)
(Homework assignment, Exam,
Quiz, Class participation etc.)
A. Assignments
3 or 4 homework will be assigned
B.
Mid-Term Exam
25%
CLO 1, 2, 3, 4, 5, 6
C.
Final Exam
55%
CLO 1, 2, 3, 4, 5, 6
Total
6.
STANDARDS FOR ASSESSMENT
A+, A, AB+, B, BC+, C, CD
F
Assessment Rubrics For Each Assessment
Assignments
Excellent Performance
Good Performance
Satisfactory Performance
Marginal Pass
Failure
TBD
Mid-Term Exam
Final Exam
7.
COURSE CONTENT AND TENTATIVE TEACHING SCHEDULE
100%
No
1
2
3-5
6,7
8-10
Readings
Slides, Syllabus, BKM 2-12
Slides, BKM 28-47, 71-77
Slides, BKM 111-137
Slides, BKM 147-166
Slides, BKM 194-213
14
15
16
17,18
19-21
22,23
Course Content
Introduction
Trading Securities
Risk, Return, Capital Allocation
Portfolio Theory
Capital Asset Pricing Model (CAPM), ATP,
Multifactor Models
Efficient Market Hypothesis, Information in
Financial Markets
Portfolio Performance Evaluation
Midterm Exam
Behavioral Finance
Fixed-Income Securities, Term Structure
Derivatives
Market Structure
24
25
26
FinTech
Final Revision
Final Exam
Slides
11-13
Slides, BKM 226-251
Slides, BKM 86-96, 111-115, 581-591
Slides, BKM 258-274
Slides, BKM 283-317
Slides, BKM 475-497, 509-529, 547-565
Slides
8. TEACHING MATERIALS (e.g. journals, textbooks, website addresses etc.)
Required Materials:
Bodie, A. Kane and A.J. Marcus (BKM), Essentials of Investments, Evergreen Edition (2024)*, Mc-Graw Hill Education.
ISBN 9781260288391
McGraw-Hill also offers a website you might find useful: https://www.mheducation.com/highered/contact.html
*12th (or older) edition would be also fine. Please check the McGraw-Hill webpage for the update details.
Suggested /supplementary Materials:
There are some very good web sites covering finance, investments and financial markets. Here are some of the best:
http://finance.yahoo.com Good source for historical financial data.
http://www.ft.com Site of the Financial Times. Good for news and weekly surveys on investments, banking, finance, etc.
http://www.ftmarketwatch.com Web site from the Financial Times; more focused on finance and investments.
The Wall Street Journal Site of Journal to keep abreast of daily events.
http://www.afajof.org Journal of Finance home page.
http://nber.org National Bureau of Economic Research. Links to many useful economics web sites along with useful historical
statistics.
http://www.finweb.com This site has a comprehensive set of links to many useful sites in finance.
http://www.jpmorgan.com This site is the J. P. Morgan site.
http://www.nyse.com Web site of the New York Stock Exchange
http://www.londonstockexchange.com Site of the London Stock Exchange, one of the leading international markets
I will distribute additional readings throughout the course.
9. MEANS/PROCESSES FOR STUDENT FEEDBACK ON COURSE
Complete online Student Feedback Questionnaires (SFQ) Survey during two weeks before the course end at:
Canvas website (https://canvas.ust.hk) or
SFQ Mobile website (http://sfq.ust.hk/mobile/) or
HKUST iLearn app at smartphones / tablets
10. COURSE POLICY (e.g. plagiarism, academic honesty, attendance, class recording, etc.)
Class Recording: I will NOT provide class recording except for the following occasions:
1) Students could not attend the class during the add/drop period due to the schedule conflict with other classes;
2) Students need to take sick leave or school-related leave, such as participating in a conference/competition as an official
representative of the school. In such a case, students are requested to submit a formal document (i.e., doctor’s letter, a
letter from a school) as a proof. I do not take job interviews or internship-related matters as valid reasons for class
absence, so please arrange your schedule accordingly;
3) Recording will be made available for one week before the midterm and final exams for your reference (i.e., from day T7 to T, where T = exam date).
Email policy: Please follow the email policy below.
1) If your inquiries are not directly related to the class contents (e.g., a request for class recording; questions about
logistics; arrangements of exams and assignments), please contact our TAs;
2) Please contact the Student Office if you have questions/requests related to the class quota, special assistance, and
enrollment (I do not have discretion over these issues).
Generative AI: The use of generative AI is not restricted. However, students should be aware that generative AI is not a tool
for financial analysis and may often provide incorrect answers for the level of analysis required in this class.
Attendance: Though 100% attendance is not required, absences will cost you because you will miss the class exercises that
prep you for the exam.
Make-ups: Except for students who have time conflicts with other exams, there will be no make-up exams offered. (If you
have time conflicts with other exams, please let TAs or me know a month before the exam.) If students must take sick leave
and miss the final exam, the case must be reported to the Student Office and get approval to take a makeup. Absence from
the exam will not be excused except under circumstances described in the University Regulations. These cases must be
substantiated by the appropriate documentation within one week of the missed exam.
Professionalism: Late arrivals, early departures, chatter, ring tones, unwarranted laptop or smart phone usage, eating,
chewing, or drinking are rude and disruptive to the quality of the learning environment in the classroom. Any such behavior
will be noted and count against you if you are on the cusp between two possible grades.
Academic integrity: Academic integrity and honesty are critical values in upholding HKUST's reputation as a community of
scholars and its claim to the "intellectual property" created by staff and students. As a student of HKUST, you must commit
to the Academic Honor Code. Cheating will not be tolerated. If you are caught cheating during the exams, at a minimum you
will receive zero credit and will face further disciplinary action.
Course website: You should visit the website on Canvas regularly because a lot of important information will be available on
the course website including Announcements, Syllabus, Lecture Notes and Grades. Please download the slides before each
class and bring it to class.
Students are advised to check the additional course rules and policy stipulated in Class note #1.
11. ADDITIONAL COURSE INFORMATION (e.g. e-learning platforms & materials, penalty for late assignments, etc.)
Assignment: There are homework assignments: they should be submitted via Canvas. Homework assignments will be
available on the course website once I have prepared them. You will have 7-10 days to complete the assignment. Completed
assignments are to be uploaded before 23:59 on the due dates to receive full credit. Any late assignment will earn zero
credit – no exceptions. You will have the opportunity to ask questions and discuss any problems with TAs after requesting an
appointment.
Examinations: There will be two comprehensive exams: a midterm and a cumulative final. The exams are closed-book. An
A4 sheet of paper (both sides) with formulas and other notes that have been prepared by you will be allowed. You may type
your cheat sheet, but copying/pasting class materials (e.g., figures; class slides) and other students’ papers is prohibited. The
exam will cover all assigned textbook and supplementary readings, problems and exercises, handouts, and anything
mentioned in class.
Appendix
BBA FINA Program Learning Outcomes
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Graduates will be critical and creative thinkers who make effective decisions supported by analytical and
quantitative techniques.
Graduates will be effective communicators in oral and written English for general business applications.
Graduates will have broad understanding of the core business functions and integrate these functions to solve
business problems.
Graduates will have in-depth grasp of their area of business concentration or major.
Graduates will be effective team members and leaders.
Graduates will be effective in multi-cultural and international settings.
Graduates will be effective users of information technology and sources of information in business
applications.
Graduates will understand their professional and ethical responsibility.