University of Massachusetts Boston College of Management AF 335: Investments Spring 2013 Lecturer: Kristen Callahan, MSF, CFP® E-­‐mail: kristen.callahan@umb.edu th
Office: McCormack Building, 5 Floor, Room 227 Office Hours: MW 2:00 to 3:00 and by appointment. Course Materials 1. Connect Plus: We will be using an online book and learning tool for this class. Follow the link below to purchase access to Connect Plus and register for the course: MW 12:30 class section: http://connect.mcgraw-hill.com/class/k_callahan_spring_2013 W 6PM class section: http://connect.mcgraw-hill.com/class/k_callahan_spring_2013_w6 Note: Connect Plus includes the e-­‐book and costs $109. Connect does not include the e-­‐book and costs $50. I recommend that you purchase Connect Plus so that you are able to read the chapters and do the practice problems. 2.
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Calculator: A financial calculator is required. I highly recommend the Texas Instrument BA II. It is a reliable and inexpensive choice and it is the one that I use so I can be most effective at teaching you how to use it. Class Slides: PowerPoint slides will be used to present course material. I will email you the slides so that you can print them and bring them with you to class. I will email you by noon on the day before class if there are materials that need to be printed. Check your email before class so that you can print required materials. If I do not email you by noon on the day before class, then you will not be expected to print anything. 4. StockTrak (optional – see “Final Project” section) – If you choose to participate in the Virtual Portfolio contest: Use this link to register for StockTrak: http://www.stocktrak.com/public/members/registrationstudents.aspx?p=UMB-AF335-Spring2013 You must register by February 6th if you want to participate. No exceptions. The cost is $30. You may work individually or in teams of 2 (No exceptions.) One account per team. Prerequisites AF301. When you begin this class, it is expected that you have a strong understanding of time value of money concepts and calculations and risk and return concepts. Course Objectives This course is an introduction to capital markets and financial instruments with an emphasis on both the theory and practice of investments. This course will provide students with a working knowledge of the valuation of investment assets, an understanding of portfolio theory and the measurement and theory of risk and return, and foundation for interpreting news and its impact on financial markets. This is not a course in personal money management. Course Structure All new material will be presented to you either during lectures or in the text assignments. PowerPoint slides may be used to present class material and problem solutions will be performed on the board. You are responsible for all material presented in class, in text assignments and otherwise assigned. Assignments and Exams 1.
Homework: Readings and concept questions and problems from the text will be assigned regularly. The assigned homework reflects material that is considered to be most important and will be emphasized on exams. These homework assignments will NOT be collected and graded. However, success in the course is much more easily achieved by those who attempt to complete homework assignments before solutions are given in class. 2.
Connect: Connect is an online tool which delivers and scores practice questions and exercises. Each week you will be given an assignment to be done with Connect. You have the option to re-­‐take your homework three times before the deadline. Each attempt should have the same questions, but with different numbers. This homework is automatically graded and your best grade will be recorded. With time and effort, you could receive a perfect score on every homework assignment and this practice will certainly help your understanding of the material and performance on exams. If you fail to do the Connect assignment before the deadline, you will receive a zero. You may not make up a Connect assignment. You can miss one Connect assignment without penalty. Due Date: The due date for Connect assignments may vary. Be sure to make note of due dates. I will not extend deadlines or make exceptions if you miss an assignment. If you miss an assignment, you will receive a zero. You can miss one assignment without penalty. 3.
Final Project: There are two options for your final project. The weights for final grade determination will depend on your choice (see Grade Determination section). Option 1 -­‐ Virtual Portfolio: You will create and manage a virtual portfolio of investments using the Stocktrak trading simulation application. You may work individually or in teams of NO MORE THAN two. The top performing group will receive extra credit (15 exam points!). All players will receive bonus points based on their performance ranking. At the end of the semester you will provide a detailed performance report. If you choose to participate in the Virtual Portfolio contest: Use this link to register for StockTrak: http://www.stocktrak.com/public/members/registrationstudents.aspx?p=UMB-­‐AF335-­‐Spring2013 You must register by February 6th if you want to participate. No exceptions. The cost is $30. You may work individually or in teams of 2 (No exceptions.) One account per team. Options 2 -­‐ Stock Valuation Project: You will perform an in-­‐depth stock analysis and provide a detailed report. 4.
Excel Exercises: There will be two mini-­‐projects that will help you build finance-­‐related Excel skills while reinforcing course material. 5.
In-­‐class assignments/group quizzes: At least once a week, you will have an in-­‐class assignment or group quiz. In most cases, you will need to complete the assignment correctly before you are allowed to leave class. If you fail to complete the assignment correctly before class is over, you will receive a zero for the assignment. These may be given at any time without advance notice. You may not make up a missed group quiz. You are allowed to miss one in-­‐class assignment/group quiz without penalty. 6.
Examinations: There will be two exams and a final. The dates for each exam are specified in the syllabus and it is expected that all students will be at each exam AS SCHEDULED. If a student fails to take an exam at the pre-­‐
arranged time, the student will receive a score of zero on that exam. Make-­‐up exams will only be given under extreme circumstances and only if previously arranged with me. Exam Notes, Materials and Policies I will provide a formula sheet for you to use while taking the exam. No other notes are permitted during the exam. You may bring pencils and your financial calculator. No books, cell phones, computers, translators, or programmable calculators will be permitted. If you do not bring an approved calculator to the test you will end up having to do all calculations by hand. I will not supply students with calculators and calculators cannot be shared under any circumstances. Students will not be permitted to leave the classroom for any reasons once a test has begun. Please plan accordingly. Namecards and Attendance Namecards will be used to help me learn all of your names and so that you can learn the names of your classmates. They will also provide a convenient way of taking attendance. When you enter class, take your namecard which will be on the corner of my desk in alphabetical order. Approximately 10 minutes after class begins, I will record as absent those students for whom a namecard remains. When you exit class, return your namecard to me/my desk. If you are found to have taken a namecard that does not belong to you, this will be treated as a violation of Academic Honesty and ALL INVOLVED PARTIES will be penalized accordingly. Exam schedule: Exam 1 Exam 2 Final Exam Wednesday ,February 27th Wednesday, April 10th According to University Schedule: week of May 20th to 24th Grade Determination Course grades will be determined according to the following: Option 1: Virtual Portfolio Connect and In-­‐class Quizzes: 15% Virtual Portfolio/Project: 15% Excel Exercises: 10% Exams during semester: 30% Final Exam: 30% Option 2: Stock Valuation 15% 10% 10% 35% 30% Final grades will be assigned on the basis of total points earned during the semester. Class participation: Class participation will be evaluated based on attendance and level of class preparation as indicated by your ability to respond to questions and participate in discussions. I will also deduct points for any disruptive behavior during class time. I consider class participation when I assign final grades. Disruptive behavior includes: consistently arriving late and/or leaving the class during class time; talking amongst yourselves during lecture or class discussion; phone ringing; text messaging; any disrespectful comments, questions or gestures toward me or your fellow students. Final Grade Schedule The following is the grade scale for assignment of your final letter grade. 92%+ A 70-­‐74% C+ 89-­‐91% A-­‐ 65-­‐69% C 85-­‐88% B+ 60-­‐64% C-­‐ 80-­‐84% B 56-­‐59% D 75-­‐79% B-­‐ Less than 55% F Any student not fulfilling his/her academic obligations for this course will receive a failing grade for the semester. Exams and projects are designed to provide a measure of your understanding of the course material. If you do not demonstrate that you understand the course material, then you will fail the class. Incompletes will only be granted under the most extreme of circumstances and only if agreed upon by the instructor before the completion of the semester. Any issues regarding such a situation will be referred to the Dean's office. There will be no extra credit offered in this class and I do NOT drop your lowest exam grade. Academic Honesty It is expected that all students will uphold the UMass policy on academic integrity. All work submitted for this course should be completed only by the student being evaluated. Students caught cheating or plagiarizing will, at the discretion of the instructor, fail either the assignment in question or the course and will have a description of the incident attached to his or her academic records. Disabilities If you have a disability and feel you will need accommodations in order to complete course requirements, please contact the Ross Center for Disability Services (M-­‐1-­‐401) at (617) 287-­‐7430. For more information see: http://www.rosscenter.umb.edu/ AF335 Investments: Spring 2013 Tentative Course Schedule ***Subject to change as semester progresses Week 1 Introduction Investments: Securities and Stock Indexes Week 2 Equity Valuation & Financial Statement Analysis Chapters 13 & 14 Week 3 Chapters 13 & 14 Week 4 Equity Valuation & Financial Statement Analysis Equity Valuation, Financial Statement Analysis & Macro-­‐Economic Analysis Week 5 Exam 1: Feb 27th Week 6 Risk and Return Chapter 5 (selected sections) Week 7 Efficient Diversification Chapter 6 (selected sections) Week 8 Efficient Diversification Chapter 6 (selected sections) Week 9 CAPM Chapter 7 (selected sections) Week 10 Performance Evaluation Chapters 1, 2, 3 (selected sections) Chapters 12 (selected sections), 13 & 14 Chapter 18 (selected sections) Week 11 Exam 2: April 10th Week 12 Fixed Income/Debt Securities Chapter 10 Week 13 Fixed Income/Debt Securities Chapter 10 Week 14 Interest Rate Risk Chapter 11 (selected sections) Review