June 2015
The Hong Kong Polytechnic University
Hong Kong Community College
Subject Description Form
Subject Code
CCN2132
Subject Title
Principles of Investments
Level
2
Credit Value
3
Medium of
Instruction
English
Pre-requisite /
Co-requisite/
Exclusion
Pre-requisite
CCN2113 Financial Management
Objectives
This subject equips students with analytical skills that are necessary for
the understanding of different types of financial securities, the analysis
and evaluation of these investment products, and the assessment of the
relationship between risk and return. It provides the conceptual
framework to analyse investment decisions and to appreciate how
derivatives can be used to hedge risks.
Intended Learning
Outcomes
Upon completion of the subject, students will be able to:

(a) distinguish different types of investment products, and explain their
risk and return profiles.
(b) recognise the investment techniques and analysis in light of riskreturn trade-off.
(c) illustrate the role of personal risk management and appraise the
effectiveness of using investment tools to control a client’s exposure
to financial risk.
(d) discuss the basics of derivatives.
Subject Synopsis/
Indicative Syllabus
Investment Environment and Instruments
Overview on financial markets and market structure; Financial
instruments; Stock market indexes; Hong Kong stock market.

Investment Diversification Concepts
Measures of returns and risks; Benefits of diversifications; Markowitz
portfolio theory; Capital Asset Pricing Model; Efficient Market
Hypothesis.

Equity Investments
Margin trading; Dividend-growth model; Earnings model.
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June 2015
Mutual Funds
Overview on mutual funds and its fee structure; Net asset value (NAV).

Derivative Securities
Features of equity forward contract, futures and options.
Teaching/Learning
Methodology
Lectures will focus on the introduction and explanation of concepts and
theories supported by hypothetical and real examples wherever
appropriate. Group discussions and activities may be arranged to
stimulate students’ interests or their awareness of practical implications
of some concepts. Worksheets may also be used to guide students
through the reasoning behind more complicated theories.
Tutorials will provide students with the opportunity to deepen their
understanding and to explore further the applications of theories taught.
Activities in the tutorials will normally include student presentations and
discussions of problem sets and case studies.
Assessment
Methods in
Alignment with
Intended Learning
Outcomes
A variety of assessment tools will be used to develop and assess
students’ achievement of the subject intended learning outcomes.
Specific assessment
methods/tasks
%
weighting
Intended subject learning
outcomes to be assessed
a
b
c
d




Continuous Assessment*
50

Test
25



Assignment 1
10



Assignment 2
10

Participation
5




Final Examination
50




Total
100
*Continuous assessment items and/or weighting may be adjusted by the subject
team subject to the approval of the College Programme Committee.
To pass this subject, students are required to obtain Grade D or above in
both the Continuous Assessment and Final Examination.
Student Study
Effort Expected
Class contact:
Hours

Lecture
26

Tutorial
13
Other student study effort:

Self-study
52
2
June 2015

Continuous Assessment
Total student study effort
Reading List and
References
39
130
Recommended Textbook
Jordan, Miller, & Dolvin. Fundamentals of Investments, Valuation and
Management. (7th ed.) (International ed.), McGraw Hill.
References
Bodie, Kane, & Marcus. Essentials of Investments. (9th ed.), McGraw
Hill.
Gitman, J., & Smart. (2013). Fundamentals of Investing. (12th ed.),
Prentice Hall.
Mayo. (2013). Investments: An Introduction. (11th ed.), Thomson/Course
Technology.
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