INVESTMENTS
FIN 6515
Syllabus – Fall 2012
INSTRUCTOR: Todd M. Shank, PhD
OFFICE:
102A Pianoman Bldg.
OFFICE PHONE 727.873.4894
FAX:
727.873.4291
EMAIL:
CLASSROOM
TIME
tshank@mail.usf.edu
STG 112
Wednesday, 6:008:50PM
OFFICE HOURS:
MONDAY:
TUESDAY:
WEDNESDAY: 3:30-5:30PM
THURSDAY: 11:00AM-12:00PM
and 1:00-2:00PM
FRIDAY:
or by appointment
Course Prerequisite:
Students should have knowledge of basic financial management (i.e. have completed
the MBA core course in Financial Management taught by Prof. Patterson).
Course Description:
The course is an examination of the risks and returns of alternative investment media
within the framework of various valuation models. Special attention is given to the
investment process and the criteria for investment decisions. Since the application of
financial theories requires extensive use of problem solving, the course involves a variety
of mathematical calculations and creating numerical solutions to common investment
decisions.
Course Objectives:
1. Identify investment asset classes and the risk, return, and pricing characteristics of each
class
2. Understand the trading mechanics of financial asset markets and the role of market
participants in these global markets
3. Learn and apply portfolio theory in the investment selection process
4. Learn to use major sources of investment information as a basis for evaluating the
risk/return characteristics of firms and other issuers of financial assets.
5. Learn how investment practitioners use financial analysis in making investment
(buy/sell) decisions
6. Understand the role that corporate social responsibility and ethics plays in financial
markets
Required Text:
Bodie, Kane, and Marcus: Essentials of Investments, 8th edition, McGraw Hill
ISBN 9780073382401
Required Tools:
Stock Trak Portfolio Simulation (www.stocktrak.com)
Recommended:
[1] Student Problem Manual:
Bodie, Kane, and Marcus: Essentials of Investment - Student Problem Manual, 8th
edition, McGraw-Hill Publishers, ISBN 9780077246020
[2] Wall Street Journal (cost is about two dollars a week for the Student Edition). Sign
up sheets are available from the Instructor.
DETERMINATION OF FINAL GRADE:
2 Exams at 100 points each
Semester Project
Attendance and Participation
TOTAL POSSIBLE POINTS
200
100
50
350
GRADING SCALE BASED ON TOTAL POINTS EARNED:
A: 315-350
B: 280-314
C: 245-279
D: 210-244
F: < 210
Course Policies:
[1] EXAMS:
There will be two, in-class, non-comprehensive exams given during the semester
which will consist of 50 multiple choice questions. These exams will cover the lectures, all
assigned chapters in the text, all assigned articles/readings, and all class discussions of
current topics. NO MAKEUP EXAMS WILL BE GIVEN. If a student misses an exam,
the weight of the missed exam will be added to that of the final exam. Students missing an
exam will take a modified final exam of the same length that includes material from that of
the missed exam. Any student that intends to miss the mid-term exam must notify the
instructor 24 hours prior to the day the exam is scheduled.
For each exam, you will be allowed to bring on 4X6 index card containing only
equations or formulae. Any person violating the card’s content restrictions will receive a
grade of zero for the exam.
[2] STOCK TRAK PORTFOLIO PROJECT:
The purpose of your semester project is to apply course concepts covered during the
term in making your own investment decisions. You will take on the role of a portfolio
manager. You will examine and analyze trends in stock and option prices, interest rates,
etc. over the course of the term and make buy/sell decisions based on your analysis (and
perhaps your intuition). You will be required to keep a journal of your trades and
communicate reasons for stock positions. A summary statement should also include your
personal insights gathered about these positions by reading the popular financial press (WSJ,
Barrons, Forbes, Fortune, and Business Week) during the term. You are in a much better
position to make an informed investment decision if you have read what the “experts” are
saying about capital markets. The Semester Project Instructions contain detailed guidelines
for both the “trading” and the “written” portion of the semester project. Students should
register for the “trading” portion of the project at Stock Trak’s web page at
www.stocktrak.com.
Students should complete the project following carefully the “SEMESTER PROJECT
INSTRUCTIONS” handout (the instructions are also on the course Blackboard).
The project is worth the equivalent of one exam (100 points) and will be due by the
end of class on November 28. You will receive a more detailed sheet of instructions on
September 5 when we will also discuss the project in class.
[3] ATTENDANCE AND PARTICIPATION:
Students are also expected to read assigned chapters and readings BEFORE coming
to class on the day that they are assigned so that they are prepared to discuss the material in
class. You will also find that developing solutions to the "Problems" at the end of each
chapter will help not only in your preparation for class, but also in your preparation for
exams. The solutions to each of these will be available on Blackboard under “Solutions to
End-of-Chapter Problems”. If you find that you do not understand any of the material or
need help, please feel free to stop by my office so that I can help you or answer any
questions.
Weekly class attendance and preparation for class is expected. This makes your
participation in class discussions easier and also makes for a more interesting class meeting.
Attendance will be taken at each class meeting and your participation will be noted.
I will use your participation and attendance in helping determine your final grade as noted in
the “Determination of Final Grade” section above. I will be submitting a grading rubric on
the first day of class to better illustrate my expectations for your performance in this regard.
[4] PROFESSIONAL BEHAVIOR:
Professional behavior is expected at all times. During our class meetings, all cell
phones, pagers, and electronic devices must be turned off or muted. Laptops may be used
only for taking notes. Disruptive behaviors will not be tolerated and include excessive
talking and continuously arriving late/leaving early. A warning will be given for the first
offense. Students may be expelled from a course for continued disruptive behavior (see
USF website: www.ugs.usf.edu/catalogs/0304/adadap.htm under “Academic Dishonesty
and Disruption of Academic Process”.
[5] TENTATIVE COURSE OUTLINE:
AUG 29
Course Overview and Syllabus
Chapter 1 (Investments: Background and Issues)
SEP 5
Chapter 2 (Asset Classes and Financial Instruments)
Chapter 18 (Portfolio Performance Evaluation) and
Special Topics Discussion: Stock Trak Trading Project
SEP 12
Chapter 3 (Securities Markets)
SEP 19
Chapter 5 (Risk and Return: Past and Prologue)
Special Topics Discussion: Career Focus: CFA and CFP Designations
and the Role of Investment Ethics
SEP 26
Finish Discussion of Chapter 5 and
Chapter 6 (Efficient Diversification)
OCT 3
Chapter 7 (Capital Asset Pricing and Arbitrage Pricing Theory)
OCT 10
Finish Discussion of Chapter 7 and
Special Topics Discussion: Issues in Financial Sustainability
OCT 17
MID-TERM EXAM: (CHAPTERS 1,2,3,5,6,7 and ANY ASSIGNED
READINGS)
OCT 24
Chapter 8 (Efficient Markets Hypothesis) and
Special Topics Discussion: “Mind Over Money” – the controversy over
efficient markets caused by the recent financial crisis.
OCT 31
Chapter 10 (Bond Prices and Yields)
Chapter 13 (Equity Valuation)
NOV 3
Course Withdrawal Deadline
NOV 7
Online Video class only today (I am attending a professional meeting):
Finish Discussion of Chapter 13 and “Trillion Dollar Bet: A Case Study of
the LTCM Hedge Fund Collapse”
NOV 14
Chapter 15 (Options Markets) and Trillion Dollar Bet Discussion
NOV 21
NO CLASS: THANKSGIVING HOLIDAY (This is a good time to
complete your Stock-Trak written report and analysis)
NOV 28
Chapter 17 (Futures Markets and Risk Management)
STOCK-TRAK SEMESTER PROJECT DUE TODAY
DEC 5
Chapter 19 (Globalization and International Investing) and
Special Topics Presentation: The Current Global Financial
Crisis: Causes, Impacts, and Solutions
DEC 12
FINAL EXAM: (CHAPTERS 8, 10, 13, 15, 17, 19 and ANY
READINGS)
*** The individual chapters above are found in your text and the readings (when assigned)
will be in the form of either class handouts or material on reserve in the library.
Key Leadership Skill(s) and Perspectives Addressed in This Course:
Interpersonal
and
Communication
Skills
Analytical and
Critical
Thinking Skills
Information
Technology
Skills
Reflective
Thinking
and
Experiential
Learning
Ethical and
Social
Consciousness
Multicultural
Competence
5
5
3
5
4
3
INTERPERSONAL AND COMMUNICATION: An integral part of being finance
professional is being able to understand and communicate the results of financial analysis.
The semester project in this course allows you to practice this vital skill by researching,
analyzing, and summarizing financial market information obtained from the Internet and
business periodicals.
ANALYTICAL AND CRITICAL THINKING: Learning about investments requires a
great deal of financial problem solving. Many of the quantitative techniques and financial
theories used by investment professionals will be covered in this course. Investment
decisions often require investors to analyze and evaluate market information, which then
served as the basis for purchases and sales. Examples include evaluating portfolio risk and
return in Chapters 5 and 6; calculation of bond returns in Chapter 10; pricing of Forward and
option contracts in Chapters 15 and 17; and risk adjusted returns in Chapter 18.
INFORMATION TECHNOLOGY: The use of Excel spreadsheets will be used illustrate
the financial models of many theories covered in the course. Examples of the use of
spreadsheets include buying on the margin and short sales in Chapter 3, portfolio
performance analysis in Chapter 6, CAPM in Chapter 7, and bond analysis in Chapter 10,
among others. Of course, spreadsheets may often be used in solving End-of-Chapter
problems. In addition, there will be demonstrations of course concepts using real-time data
downloaded from the Internet and analyzed during class.
REFLECTIVE THINKING AND EXPERIENTIAL LEARNING: The focus of the
course will be the practice of investment management. The primary emphasis of the StockTrak Portfolio Project is the management of your own (cyber) $500,000 portfolio.
Therefore, the course should help prepare you to make investment decisions, whether for
yourself, or for an employer. Especially for many students taking this course who will seek
employment in the financial services industry, this preparation is essential.
ETHICAL AND SOCIAL CONSCIOUSNESS: Ethical dilemmas that exist for financial
managers will be discussed in detail in Chapter 1 and periodically in class. For example,
many of the recent "financial scandals" that have occurred in world markets (Barings, Ltd.,
Long Term Capital Management, WorldCom, and Enron) involve many ethical dimensions.
We will analyze the ethical dimensions of some of these scandals in our Special Topics
discussions in class (see course schedule).
MULTICULTURAL COMPETENCE: We will discuss the similarities and differences in
investment regulations and practices among various countries and regions of the world
throughout the semester as well as discussing several outside readings on topics related to
international finance. The entire focus on Chapter 19 is global investing and the topic of
market globalization will be discussed throughout the semester.
UNIVERSITY POLICIES AND INFORMATION
Academic Dishonesty:
Academic dishonesty will not be tolerated and includes, but is not necessarily
limited to the following: [1] Copying another student’s work on an exam, [2] using
unauthorized materials during an exam (e.g. cheat sheets, open books), [3] Copying
another student’s outside assignments, and [4] Failure to give proper credit to another
individual’s ideas or published works.
Because of the University’s commitment to academic integrity, plagiarism or
cheating on course work or on examinations will result in penalties that may include a
grade of “F” for the specific exam or course work and a grade of “F” or “FF” for the
course. Any incident of academic dishonesty will be reported to the dean of the college.
Definitions and punishment guidelines for Plagiarism, Cheating, and Student Disruption
of the Academic Process may be found at the USF website: (Academic Dishonesty and
Disruption of Academic Process) www.ugs.usf.edu/catalogs/0304/adadap.htm.
Students with Disabilities:
Please notify your instructor during the first two weeks of class if you have a
learning disability or require special assistance with this course. Confidential personal
and learning assistance counseling are made available to students through the Division of
Student Affairs. Contact R. Barry McDowell (mcdowell@stpt.usf.edu) for more
information.
Religious Holidays:
Students who must miss an examination due to a religious holiday should notify
the instructor during the first two weeks of class.