Williams School of Business and Economics
BFN 352: Investment Analysis & Portfolio Management
Winter 2004
Instructor: Calin Valsan
Office: Hamilton 211
Phone: 822-9600/ext. 2448
E-mail: cvalsan@ubishops.ca
Internet: www.ubishops.ca/faculty/cvalsan/default.htm
Office hours: MW 4:30 – 6:00 p.m.
Course objectives
Learn how to analyze investment choices and manage portfolios of stocks and bonds.
Textbook
Investment analysis & Portfolio Management by Reilly & Brown, Seventh Edition, Thomson, 2003. Also
strongly recommended: The Globe and Mail, Canadian Business, Canadian Investor, Business Week,
Fortune, The Economist, Euromoney, and any other publication with finance-related content.
Mark allocation
Test 1 (Week 4)
25%
Test 2 (Week 9)
25%
Case study, as follows:
25%
Presentation (as scheduled)
5%
Final written submission (April 8)
20%
Final Exam
25%
Total
100%
The mid-term exams are closed book exam worth 25% of your final grade. The final exam is a closed
book exam as well worth 25% of your final grade. You can bring your own formula sheet at each and
every exam. Keep in mind that a formula sheet should contain only formulas. Each and every exam will
address topics covered by my class lectures, the material assigned for reading, and current events.
There will be no make-ups for failing to write a mid-term exam. However, my decision to accommodate
certain cases will be based on medical considerations and compassionate grounds. Approval from the
dean is required in all instances. Try to plan around exams dates. A supplemental exam is allowed.
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Course outline
(Note that this outline may be subject to changes)
Week 1 (Jan. 12 – 16)
Introduction and overview of financial topics
The asset allocation decision
(Read: Class notes and Chapter “The Asset Allocation Decision”)
Week 2
Valuation principles and practices
(Read: Class notes and Chapters “The Analysis of Financial Statements” and “An Introduction to Security
Valuation”)
Analysis of alternative economies, security markets, and industries
(Read: Class notes and Chapters “The Analysis of Alternative Economies and Security Markets,” “StockMarket Analysis,” and “Industry Analysis”)
Company analysis and stock selection
(Read: Class notes and Chapter “Company Analysis and Stock Selection”)
Week 3
On technical analysis
(Read: Class notes and Chapter “Technical Analysis”)
Week 4
Test 1 (Wednesday)
Week 5
Equity portfolio management strategies & evaluation
(Read: Class notes and Chapters “Equity Portfolio Management Strategies,” and “Evaluation of Portfolio
Performance”)
Week 6
A review of investor behavior & asset pricing models
(Read: Chapters “An Introduction to Portfolio Management,” and “An Introduction to Asset Pricing
Models”)
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Week 7
Market efficiency revisited: Recent tests on risk and return
(Read: Class notes)
Week 8
Reading week
Week 9
Test 2 (Wednesday)
Week 10
On bond duration and term structure of interest rates
(Read: Class notes and Chapters “Bond Fundamentals,” and “The Analysis and Valuation of Bonds”)
Week 11
Bond portfolio management strategies
(Read: Class notes and Chapter “Bond Portfolio Management Strategies”)
Week 12
Group assignment class presentation: Financial industry
Group assignment class presentation: Transportation
Group assignment class presentation: Retail
Week 13
Group assignment class presentation: Oil industry & Mining
Group assignment class presentation: Biotechnology & Pharmaceuticals
Group assignment class presentation: Computers & Telecommunications
Case study is due on Thursday, April 8, 2004 by 5:00 p.m.
Final examination as scheduled by the university
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Group assignment (25%)
Assume that you are a financial analyst with Bishop's Securities, Inc. You will conduct a comparative
analysis of two Canadian companies - from an industry assigned by the instructor. Your analysis is
necessary in order to make an investment decision. The report cannot exceed 10 pages of text (singlespaced) for each of the two companies (max. 20 pages of text in total). The attachments cannot exceed
more than 12 graphs, tables, and/or figures. Make sure you label and reference the tables & figures
properly. Your analysis will consist of the following sections:

Summary Review

Company Description including Business of Company

Analysis of the economy and security markets

Industry Trends

Company Overall Strategy

Management Assessment

Financial Performance

Capitalization and Market Ratios


Valuation
Conclusions and Recommendations
The report has to reflect your own analytical skills and personality; however, you will follow the headings
shown above. Your style has to be concise and articulate. The class presentation (as scheduled below) is
worth 5% and will precede the written report. The written report -worth 20% - is due on the last day of
class.
References: Read Class notes and chapters 12, 13, 14, 18, 19, and 20.
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