EASTERN MEDITERRANEAN UNIVERSITY
FACULTY OF BUSINESS AND ECONOMICS
DEPARTMENT OF BANKING AND FINANCE
SPRING 2011-2012
FINA425
Investments
Area Core
LECTURER
CREDIT VALUE
Bezhan Rustamov
3 Credit Hrs.
PREREQUISITES
COREQUISITES
I expect that everybody is familiar with basic financial concepts (FINA301)
None
DURATION OF COURSE
ROOM AND TEL. NO.
One Semester (15 weeks)
BEA 144 (FBE Building II), 630 2494 or 630 1475 (Secretary)
OFFICE HOURS
Tuesdays, 10:30-12:20 – Thursdays, 09:30-11:20 or feel free to contact for an appointment at other
times e-mail: bezhan.rustamov@cc.emu.edu.tr
TUTORIAL ASSISTANT
COURSE LEVEL
1st Semester / 4th Year (Undergraduate Course)
COURSE CODE
COURSE TITLE
COURSE TYPE
ECTS VALUE
6
Bariş M. Eren, Office: BEA135, Tel:2113
http://fbemoodle.emu.edu.tr (Select Department of Banking and Finance)
Visit htttp://www.mhhe.com/bkm and click on Essentials of Investments 7th edition (Textbook Web
Link)
WEB LINKS
CATALOGUE DESCRIPTION /AIMS & OBJECTIVES
The last decade has been one of rapid, profound, and ongoing change in the investment industry. The main objective of the course is to give
students an introductory understanding of capital markets and financial instruments. We will focus on three modules which are equity markets,
fixed income markets, and derivative markets (options and futures).
GENERAL LEARNING OUTCOMES (COMPETENCES)
On successful completion of this course, all students will have developed knowledge and understanding of:
Elements of Investments
Security Analysis
Fixed-Income Securities
Derivative Assets
On successful completion of this course, all students will have developed their skills in:
Identifying major participants in financial markets and global financial instruments with recent trends
How securities are traded
Understanding the risk-return tradeoff
Investment analysis using the practical applications of investment theory
Equity Valuation and Bond pricing
The use of options and futures
On successful completion of this course, all students will have developed their appreciation of and respect for values and attitudes regarding
the issues of:
Investment analysis and security valuation
The complexities and required skills in finance
The importance of investments as a core personal skill in their future careers
RELATIONSHIP WITH OTHER COURSES
This course lays the foundation for all other finance related courses and must be taken by students interested in finance
LEARNING / TEACHING METHOD AND ASSIGNMENTS
Class sessions will be devoted to the discussion of readings, chapter assignments and video presentations. In order for everyone to derive the
maximum benefit from the classes, it is important to do the assigned reading and chapter problems before the class. The only way to master this
material is by solving problems. Written work for the course will consist of chapter problems, a midterm and a final exam.
METHOD OF ASSESSMENT
Midterm exam
Final exam
Quizzes
Participation
35%
40%
20%
5%
If you do experience difficulty in this course, please contact me as soon as you sense you are having trouble. I will be glad to help you.
ATTENDANCE
Attendance is compulsory. Students are strongly advised not to miss lecture hours since success is closely related with attendance. Unexcused
absence for more than twelve lecture hours will result in grade "F." If the unexcused absence is on a continual basis, the ‘NG’ grade will be
given.
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TEXTBOOK/S
Bodie, Z., A. Kane, & A. J. Marcus. Essentials of Investments, 7th edition, Irwin McGraw-Hill, 2008.
INDICATIVE BASIC READING LIST
I strongly recommend that you regularly follow daily financial newspapers such as Dünya (in Turkish) and The Wall Street Journal Europe or
The Financial Times.
EXTENDED READING LIST
NONE
SEMESTER(S) OFFERRED
Fall & Spring Semesters
CONTENT & SCHEDULE
Lectures will be held on Mondays (14:30-16:20/RD106) and Thursdays (14:30–15:20/RD104).
The tutorial hour is on Thursdays (15:30-16:20/RD104).
The lecture and tutorial topics within the semester are as in the following schedule and the quiz dates will be announced in class:
Week
1
2
3
4
5
6
7
8-9
10
11
12
13
14
15
16-17-18
Subject
Investments: Background and Issues (Chp. 1)
Chp. 1 con’td
Tutorial:Chp.1 Problems:1,2,3,6,9,10
Asset Classes and Financial Instruments cont’d
(Chp. 2)
Asset Classes and Financial Instruments cont’d
(Chp. 2) con’td
Tutorial:Chp.2 All Concept Checks
Problems:1,2,4,6,10,11,12,13
Securities Markets (Chp. 3)
Securities Markets (Chp. 3)
Tutorial:Chp.3 All Concept Checks
Problems:1,2,3,7,8,9
Bond Prices and Yields (Chp. 10) cont.
Bond Prices and Yields (Chp. 10) cont.
Tutorial:Chp.3 All Concept Checks
Problems:1,2,4,13,14,16
Revision
Midterm Examinations
Macroeconomic & Industry Analysis (Chp. 12)
Tutorial: Chp.12 Assignments
Equity Valuation (Chp. 13)
Tutorial: Chp.13 Assignments
Equity Valuation (Chp. 13) cont.
Tutorial: Chp.13 Assignments
Equity Valuation (Chp. 13)
Tutorial: Chp.13 Assignments
Options Markets (Chp. 15)
Tutorial: Chp.15 Assignments
Futures Markets & Risk Management (Chp. 17)
Tutorial: Chp.17 Assignments
Final Exams
Topics
Real Assets; Financial Assets; A Taxonomy of Financial
Assets; Financial Markets and the Economy; Investment
Process
The Players; Financial Intermediaries; Recent Trends
Money Market; Bond Market; Equity Securities;
Stock and Bond Market Indexes; Derivative Markets
Security Offerings; Security Trading ; Exchanges;
Mechanism of Trading
Buying on Margin; Short Sales
Bond Characteristics; Pricing & Yields; Prices over Time;
Default Risk; Yield Curve
Security Analysis; Global and Domestic Economy Business
Cycles and Industry Analysis
Intrinsic Value; Balance Sheet Valuation
Balance Sheet Valuation
Dividend Discount Methods; Price-Earnings Ratios; The
Aggregate Stock Market
Option Contract, Values of Options at Expiration
Futures Contract; Mechanics of Trading Futures Market
Strategies; Financial Futures
PLAGIARISM
This is intentionally failing to give credit to sources used in writing regardless of whether they are published or unpublished. Plagiarism (which
also includes any kind of cheating in exams) is a disciplinary offence and will be dealt with accordingly.
MAKE-UPS
Students who have valid excuses will be allowed to take make-up examinations for all exams. There are no make-ups for quizzes.
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