EASTERN MEDITERRANEAN UNIVERSITY
FACULTY OF BUSINESS AND ECONOMICS
DEPARTMENT OF BANKING AND FINANCE
FALL 2013-2014
COURSE CODE
COURSE TITLE
COURSE TYPE
CREDIT VALUE
PREREQUISITES
COREQUISITES
DURATION OF COURSE
LECTURER
LECTURE HOURS
OFFICE HOURS
OFFICE NO
E-MAIL
TUTORIAL ASSISTANT
TUTORIAL HOUR
WEB LINKS
FINA425
COURSE LEVEL:7st Semester/4th Year-Undergraduate
Investments
Area Core
3
FINA 301 (Financial Management)
None
One Semester
Korhan GOKMENOGLU
Wednesday, 8.30-10.20 and Friday 10.30-11.20
Wednesday, 11:30-12:20
BE 185
korhan.gokmenoglu@emu.edu.tr
Bezhan RUSTAMOV (PhD Candidate)
Office: BE 145, Tel: 2494, bezhan.rustamov@emu.edu.tr
Friday 11.30-12.20
Instructor Web Link→ http://fbemoodle.emu.edu.tr→ Spring 2012 link→
Department of Banking & Finance→ FINA 425
Textbook Web Link→ htttp://www.mhhe.com/bkm
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
1
-
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
PREREQUISITES
This is a course that assumes no prior background in finance. However, you are expected to have an
understanding of basic statistical concepts. The basic statistical concepts that you should be familiar with
include means, variances, standard deviations, correlations, the normal cumulative distribution functions etc.
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.
I will not distribute copies of lecture notes or assignments in class. You are responsible for printing them and
bringing them to class.
METHOD OF ASSESSMENT
Your grade will be based on in-class review problems (short quizzes), class participation, problem sets,
creative assignment, the midterm, and the final exam. Questions in the exams will be short and long answer
format. On the structure of the exams, 80% of it will be pulled out directly from the previous examples from
class, lecture presentations, assignments, quizzes, or suggested exercises. The other 20 % will be used to see if
you can apply the course concepts to more advanced problems. All exams are closed book.
Class Participation and One Presentation
Creativity Assignment
Quizzes and In-Class Review Problems
Mid Term Exam
Final Exam
: 10%
: 10%
: 20%
: 25%
: 35%
You will have an exam almost every week (quizzes, in-class review problems etc.) which means that you have
to study every week. Don’t wait until the end of the semester to study.
WHAT IS CREATIVITY ASSIGNMENT
Each student will be asked to submit a “creativity” assignment in the form of a poster which they put together
themselves creatively describing their thoughts on
 Finance
 Investment
 Portfolio management
 Globalization of financial markets
 International investing
 Money managers
 Financial crisis
 Effect of these topics on our lives
 .......
You will be expected to provide the creativity!!! The posters will be hung in an open space in the school and
people will vote on the posters in order to determine the allocation of fabulous prizes to be awarded at the end
of the semester ceremony.
MAKE-UPS
Please note that in case of emergency, you may take the midterm and final exams at an earlier date by prior
2
arrangement. Please inform me at least a week IN ADVANCE if you need to take the exam earlier. If you get
sick on the day of the exam, I need to see the doctor’s report to verify your condition. In that case, I will work
out an alternative arrangement with you.
No make-up for quizzes.
ATTENDANCE
It is mandatory to attend the sessions. Students are strongly advised not to miss lecture hours since success is
closely related with attendance. If you miss a session for valid reason, make sure you catch up on all the
missed material. In general, you are responsible for class lectures, as well as any announcements (including
due dates and exam dates), discussions, or remarks.
Warning: A nontrivial fraction of the final exam questions could be based on class discussions, assigned
readings, and examples which are uncovered in the lecture notes.
Also attendance is compulsory by the university regulation. Absence over 20% will be penalized with an NG.
TEXTBOOK/S
Bodie, Z., A. Kane, & A. J. Marcus. Essentials of Investments, 8th edition, Irwin McGraw-Hill, 2010.
A variety of supplementary materials to this textbook such as self-assessment quizzes and interactive graphs
be accessed online at the publisher’s website.
INDICATIVE BASIC READING LIST
I strongly recommend that you regularly follow daily financial newspapers such as The Wall Street Journal
Europe, The Financial Times and journals such as The Economist.
EXTENDED READING LIST
 Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long Term Investment
Strategies, by Jeremy J. Siegel
 A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton G.
Malkiel.
CONTENT & SCHEDULE
Lectures and tutorials will be held on Wednesday, 8.30-10.20 in RD203 and Friday 10.30-11.20 in RD104.
The quiz dates will be announced in class.
The lecture and tutorial topics within the semester are as in the following schedule.
Lectures
#
1
2
3
4
5
6-7
8-9
10
Subject
Topics
Investments: Background and Issues (Chp. 1)
Tutorial: Introduction
Chp. 1 con’td and Asset Classes and Financial
Instruments (Chp. 2) Tutorial: Chp.1 Assignments
Asset Classes and Financial Instruments cont’d
(Chp. 2) Tutorial: Chp.2 Assignments
Securities Markets (Chp. 3) Tutorial: Chp.3
Assignments
Securities Markets (Chp. 3) cont. Tutorial: Chp.3
Assignments
Bond Prices and Yields (Chp. 10) Tutorial: Video
Show
Real Assets; Financial Assets; Securities;
Investment Process; Recent Trends
Money Market; Bond Market
Equity Securities; Indexes
Security Offerings; Security Trading
Exchanges; Mechanism of Trading
Bond Characteristics; Pricing & Yields
Midterm Examinations
Macroeconomic & Industry Analysis (Chp. 12)
Tutorial: Chp.12 Assignments
Security Analysis; Global and Domestic
Economy Business Cycles and Industry
3
Analysis
11
12
13
14
15
16-17-18
Equity Valuation (Chp. 13) Tutorial: Chp.13
Assignments
Equity Valuation (Chp. 13) Tutorial: Chp.13
Assignments
Options Markets (Chp. 15) Tutorial: Chp.15
Assignments
Options Markets (Chp. 15) Tutorial: Chp.15
Assignments
Futures Markets & Risk Management (Chp. 17)
Tutorial: Chp.17 Assignments
Intrinsic Value; 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
Final Exams
OFFICE HOURS AND COMMUNICATION
I will usually be available for quick questions in the classroom during the several minutes before and
after the class session begins. I strongly prefer that you come to my office hours, but if you cannot
make it, I will arrange an alternative time to meet. E mail is an excellent way to contact me if you
need to set an appointment. Also, please check your e-mails frequently for course announcements.
TUTORIAL SESSION
Mr. Bezhan RUSTAMOV will be holding tutorial sessions once a week. Attendance is
COMPULSARY for TS as well. TS will give you an additional resource to gain the ability to use and
apply the concepts and tools developed in the course. These sessions will give you a chance to ask
questions about the material that has been covered in class, and solve additional practice questions.
ONE-MINUTE MEMOS
As part of your class participation, you will be asked to complete a 1-minute memo at the end of
every class. The purpose of the 1-minute memo is to establish a direct line of communication from
you to me so that I can assess your grasp of the main topics of the day, identify unclear points, and
address other concerns. I want students to feel that they can be open and honest in these memos, so
your grade is not affected by what you communicate to me on these memos. If you are not present,
there will be no 1-minute memo from you, and an absence will be recorded. After each class I will
return to my office to digest your memos. I will then answer the major questions that were raised
during the next class. In this manner you can get replies to your questions and learn from all the
questions your classmates have raised as well.
PLAGIARISM
You are expected to be familiar with and to follow the policies on academic integrity. Your exams
and assignments must be solely your own work. Plagiarism is intentionally failing to give credit to
sources used in writing regardless of whether they are published or unpublished. Any attempt to
represent the work of others as your own will be considered plagiarism. PLAGIARISM (WHICH
ALSO INCLUDES ANY KIND OF CHEATING IN EXAMS) IS A DISCIPLINARY OFFENCE AND
WILL BE DEALT WITH ACCORDINGLY.)
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.
4