DEPARTMENT OF FINANCE, INSURANCE, AND LAW
COLLEGE OF BUSINESS
ILLINOIS STATE UNIVERSITY
Fall 2005
College of Business Mission
The College of Business provides a student-centered learning environment to develop the business skills and appreciation for
continuous learning necessary to succeed in a dynamic global economy. Our high quality programs develop ethical,
knowledgeable, and technologically competent business professionals. We strive to do this to further the University mission
of providing a premier educational experience to undergraduates and to students in select graduate programs.
Academic Integrity
Students enrolled in College of Business classes are expected to maintain high standards of ethical conduct within the
classroom and when completing assignments, projects, and/or exams. Plagiarism and other forms of academic dishonesty
such as cheating will not be tolerated. Students are expected to provide appropriate citations for non-original writing even if
the original work is paraphrased. Penalties for plagiarism and other forms of academic dishonesty may be severe.
Professional Standards
All students in this course are expected to be familiar with the "College of Business Standards of Professional Behavior and
Ethical Conduct." (refer to http://www.cob.ilstu.edu/professionalstandards) Please note that only bottled water may be
consumed in the classroom wing of the College of Business Building and that all cell phones and other electronic devices
should be turned off and stored away during classes, unless permission is otherwise granted by the instructor.
COURSE INFORMATION
Course Number & Title: FIL 242 Investments
Prerequisite: C or better in FIL 240
and Location: TTh 9:35-10-50am, COBB 22H (in computer lab)
Credit Hours: 3
Time
INSTRUCTOR INFORMATION
Instructor: Edgar Norton, Ph.D., CFA
Phone: 438-2827
e-mail: eanorto@ilstu.edu
Office: 424 COBB
Office Hours: Monday through Thursday 8:30-9:30am or by appointment
RESOURCES/MATERIALS
Textbook: Frank K. Reilly and Edgar A. Norton Investments, 7th edition, South-western College Publishing,
2006; website: reilly.swlearning.com (includes downloadable course materials)
COURSE DESCRIPTION:
A survey of the field of investments, including the investment environment, risk management methods,
investment and portfolio management concepts and tools.
COURSE COMPETENCIES:
• Understand investment vehicles, principles and concepts;
• Explain influences on risk and return, both ex-ante and ex-post;
• Become familiar with the market environment in which securities are traded;
• Knowledgeable of the basic of investment analysis and portfolio theory and the role of derivative
securities;
• Describe the concept of market efficiency and its implications for investment analysis and portfolio
management;
• Learn to use investment-oriented software.
COURSE REQUIREMENTS
Projects
Three projects requiring some quantitative skills and/or analysis will be assigned during the semester. Tentative
due dates are: Thursday September 8, Thursday October 20, Thursday December 1.
Assignments/Homework
Homework assignments will be periodically collected and checked. No late homework will be accepted. You
must be in class to turn in your homework.
Exams
Three exams, Thursday September 22, Thursday October 27, and during Finals week (Monday December 12 at
10am). Though not cumulative on purpose, the content of the course does build on itself, both in theory and
application. I expect them to be mainly short answer/essay and problems.
Participation
Parts of the class will be “hands on” using the technology in the classroom. You can’t learn if you aren’t here.
GRADING POLICIES:
Projects: 150 points (50 points each)
Homework: 100 points (total)
Exams: 300 points possible (100 points each)
Total points: 550; grades will be assigned on the basis of the percentage of total points earned:
At least 90.0%: A; 80.0-89.9%: B; 70-79.9%: C; 60-69.9%: D; less than 60.0%: F
ADDITIONAL INFORMATION:
Course updates and other communications will be posted on the U drive in the appropriate folder or emailed to the
class. It is your responsibility to check your ISU email or have it forwarded to a preferred address.
No make-up exams are given unless the absence is valid (e.g., personal illness) and documented. Notification,
when feasible, should occur before the exam via email or phone contact. Make-up exams may be more difficult
than the regular exams.
No extra credit assignments will be given unless they are offered to all students. Your singular need for additional
points does not create a need for extra credit assignments for all.
If discovered, instances of plagiarism (if you don’t know what it is, look it up) and cheating will be dealt with
severely and can result in automatic course failure. The instructor will determine the appropriate consequences.
Homework: can be done individually or in “study groups” but work turned in should represent your effort, not
copying someone else’s work. See above.
I will email the final course grade to you, if you desire, but you must give me written permission (via email is
acceptable) to do so. I will not post grades outside my office door.
ACCOMMODATION FOR STUDENTS WITH DISABILITIES
Any student in need of a special accommodation should contact the staff in the Office of Disability Concerns at
438-5853 (voice) or 438-8620 (TDD).
COURSE CALENDAR
TOPIC
WEEK
MO.
DATE
1
August
Tues. 23
Thur. 25
Tues. 30
Course introduction
Ch. 1 The Investment Setting
Ch. 2 Return and Risk Basics
Sept.
Thur. 1
Tues. 6
Ch. 2, continued
Ch. 3 Selecting Investments in a Global Market
Thur. 8
Project #1 due date
Ibbotson hands-on practice
Ch. 6 Organization and Functioning of
Securities Markets
Ch. 7 Securities Market Indexes
Ch. 7, continued
Test #1, Chapters 1-3, 6, 7
Ch. 4 Mutual Funds and other Managed
Investments
2
3
4
Tues. 13
Thur. 15
Tues. 20
Thur. 22
Tues. 27
5
6
Thur. 29
Tues. 4
Thur. 6
Ch. 5 Investment Policy Statements and Asset
Allocation Issues
Ch. 5, continued
Ch. 8 Introduction to Portfolio Management
8
Tues. 11
Thurs. 13
Ch. 8, continued
Ch. 9, An Introduction to Asset Pricing Models
9
Tues. 18
Ch. 10, Efficient Capital Markets
Thur. 20
Tues. 25
Project #2 due date
Ch. 11 Introduction to Valuation
Ch. 13 Economic and Industry Analysis
Thur. 27
Tues. 1
Test #2, Chapters 4, 5, 8-11, 13
Ch. 14 Analysis of Financial Statements
12
Thurs. 3
Tues. 8
Thurs. 10
Ch. 15 Company Analysis and Stock Valuation
Ch. 15, continued
Ch. 16 Technical Analysis
13
Tues. 15
Ch. 12 Analysis of Fixed Income Securities
Thur. 17
Tues. 22
Thur. 24
Tues. 29
Ch. 12, continued
THANKSGIVING BREAK
THANKSGIVING BREAK
Ch. 17, Introduction to Derivative Instruments
7
Oct.
10
11
Nov.
14
15
Project #3 due date
Ch. 17, continued
16
Tues. 6
Ch. 18 Derivatives: Analysis and Valuation
Thur. 8
Ch. 18, continued
FINAL EXAM: December 12, 10am; Test 3 covers all material from Test #2
Dec.
Thur. 1
PRELIMINARY
ASSIGNMENT
Prob.# 1, 2; Web# 1, 2, 3
Prob.# 1-6, 8, 9, 11
Web #2
Prob.# 2, 3, 6, 8, 9, 10
Spreadsheet #4, 5
Prob.# 1, 2, 3 Spreadsheet #1
Prob.# 1, 2, 6
Prob.# 4, 6, 7
Web #1
Spreadsheet #4
Prob.# 5
Spreadsheet # 6
Prob. # 3, 4, 5
Ibbotson exercises
Question # 15
Prob. 1, 2, 3, 13
Web #3
Prob.# 1, 2
Web #2, 3
Prob.#3, 5-12
Prob.# 2, 3, 14, 15
Web #5
Prob.# 1, 2, 3
Web #1
Prob.# 1-5
Web #2 (S&P 500, WAG,
MSFT)
Question # 6, 7
Prob.# 1, 2, 3, 5, 7a
Spreadsheet #4
Prob.# 1-9, 14-16
Web# 1, 3
Prob.# 1-5, 8
Prob.#1-4, 6, 9, 12, 14, 21, 23