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School of Business mission Statement
The mission of the School of Business is to offer values oriented, intellectually stimulating educational
programs that prepare students for business careers and continuing intellectual and professional development.
The School of Business places paramount importance on teaching and learning in an atmosphere enriched by
business collaboration, professional activity, and scholarship. This is accomplished by integrating the College’s
liberal arts and Franciscan traditions with current business theory, skills, and practices.
FINC 432, Portfolio Management, 3 hours
Spring 2009
9:20-10:15 MWF— (Trading Room)
Instructor: Dr. Eric Girard
Office: Colbeth 112
Phone: (518) 783-4133
Office Hours: TTH, 10:00 AM to 12:30 AM.
Course Description
Advanced study in the area of global investment management with the emphasis on analysis of modern
portfolio theories and advanced investment strategies. This seminar also expands students' understanding of
derivative-related financial instruments (forwards, futures and options) and their use in portfolio management.
For instance, the course focuses on the usage of these instruments for hedging, speculation and tactical asset
allocation strategies. The course takes a quantitative approach in the decision-making process and requires an
oral and written presentation of computer-based research projects. Prerequisite: FINC 315
Course Educational Objectives
This course primary objective is to deal with the theory and practice of both portfolio management and the
valuation of securities, such as stocks and bonds. The emphasis is on the application of the theory to company
analysis and portfolio management.
Course Resources
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Textbook Investment Analysis and Portfolio Management, 7th edition, 2005, by Frank K. Reilly and Keith
C. Brown.The Dryden Press.
Class Web site (http://www.siena.edu/egirard)
Library Resources (journals, periodicals, databases, references...)
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Access to Stocktrak portfolio simulation at http://www.stocktrak.com
Course Objectives
The field of finance can be viewed from three perspectives:
1. Individual market agents making decisions to supply capital to markets;
2. Firms demanding capital from the market and deciding how to raise funds;
3. The capital market acting as a pricing mechanism to clear demand and supply.
A course in investments focuses on (1) and (3). We examine how individuals and their agents make choices
among investment alternatives which have uncertain payoffs over
multiple time periods. An understanding of risk and return for individual securities and
portfolios of securities is used to characterize these decisions. We then evaluate financial
decision making in aggregate, for the market as a whole, to describe the process of valuation for different
securities.
These fundamental "building blocks" are then applied to different financial instruments
including fixed income securities, common stocks, and mutual funds. As a required course for a finance
specialization, its primary objective is to offer a broad overview of investment issues. The course is designed to
combine some basic principles with practical and topical applications in the form problems and investment
reports.
Learning Outcomes
Upon successful completion of the course, the student will be able to:
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Define and apply the concept of portfolio policy.
Identify, distinguish, relate and interpret the various forms of investments in terms of risk, return, skewness,
kurtosis, and correlation.
Analyze the level of risk involved in global investment vehicles and define an inherent optimal allocation
mix in terms of unrestricted Markowitz efficient frontier analysis.
Relate risk to return using multifactor asset pricing models.
Use options and futures contracts for tactical portfolio strategies and portfolio risk management purposes
Determine the performance of a portfolio using simple and multistage performance measures.
Define Bond risk in terms of effective duration and convexity.
Use and analyze advanced bond portfolio management techniques.
Relate companies’ performance to market and industry effects.
Price equities.
Discuss, analyze and apply advanced portfolio management strategies to a virtual portfolio.
How Are Course Educational Objectives Measured?
The course educational objectives are measured by scores on assignments, Tests and course project associated
with portfolio simulations, and evaluation of activities such as lab exercises in the computer lab.
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Course Content
Content
Percentage of Time Allotted
Part 1 – Policy Statements, Allocation Strategies and Selection Strategies
20%
Part 2 – Derivatives and Portfolios: Protection and Speculation
20%
Part 3-- Specification and Evaluation of Asset Management
10%
Part 4—Asset Pricing Models
20%
Part 5—Analysis, pricing and Management of Equities
15%
Part 6 -- Analysis, pricing and Management of Bonds
15%
Perspectives Coverage
* Ethical issues are not covered in this mainly quantitative-oriented course and global issues are only covered
when appropriate for portfolio diversification and international purposes.
* The influence of political, social, legal and regulatory, environmental and technological issues are primarily
covered by the examination of financial markets and the use of portfolio management topics.
Communication Coverage
* Written communication activities - students are required to write a report about their investment activities
during the semester.
* Oral communication activities - class participation and oral report presentation are part of the grading
component for the students’ oral communication skills.
Instructional Resources
* Library Usage - students in this course are required to consult various publications in the investments area
available in the library.
* Computer Usage - Students are expected to work on assignments of portfolio management decisions and
securities valuation using Microsoft Excel.
Course’s relationship to School of Business’ Shared Values:
* Lifelong learning skills - The most important one stressed through this course is how to relate the concept of
financial investment and risk, and the importance of diversification.
* Workplace knowledge and skills - Emphasis is placed on the following specific knowledge and skills: (1)
how to apply theory to company analysis and portfolio management, (2) how to use PC evaluation security
models.
* Integration of technology - This important aspect is stressed through the uses of (1) Excel-based financial
models, and (2) financial calculator.
* Teamwork - Students are required to joint teams for the purpose of making investment decisions, preparing
presentations, and writing reports.
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Grading
 6 Tests/Quiz (cumulative), 30%
 Final (cumulative), 40%
 Weekly “CGFS” Consulting Reports, 30%
 Important Note: each report is submitted to “TURNITIN.COM” and evidence of plagiarism will lead to an F
in the course.
 Attendance Policy: There are 39 class meetings (15 weeks); this is a difficult course and your attendance is
of utmost importance!
 If you miss more than 4 sessions, you will graded out of 85
 If you miss more than 8 sessions, you will be graded out of 75
 If you miss more than 12 sessions, you will automatically get an F in the class
Students are encouraged to independently raise any questions or make observations whenever they wish. The
quantity and especially the quality of participation will be taken into account in possibly enhancing those
students’ semester grades, which may be at the margin. Obviously, your attendance is required to participate.
Please minimize any lateness.
Grading Matrix
93%
90 and <93
87 and <90
83 and <87
80 and <83
77 and <80
A
AB+
B
BC+
73 and <77
70 and <73
67 and <70
63 and <67
60 and <63
<60
C
CD+
D
DF
Students with Disabilities
Siena College is committed to ensuring that all qualified students with disabilities are afforded an equal
opportunity to participate in and benefit from its programs and services. To receive accommodations, a student
must have a documented disability (physical, psychiatric, and/or learning disabilities) as defined by Section 504
of the Rehabilitation Act of 1973, and the Americans with Disabilities Act of 1990 (ADA), and provide current
documentation of the disability. Eligibility for reasonable accommodations will be based on the documentation
provided. If you are a student with a documented disability, or feel that you may have a disability, please
contact the Director of Services for Students with Disabilities at 518.783.4239.
Pandemic Crisis
Students will bring all texts and a copy of the syllabus/course schedule home with them in the event of a
College closure. They should attempt to prepare for reopening with an adjusted academic calendar. If their
situations permit, students should continue with readings and assignments (preparation assignments, papers,
projects, etc.) to the best of their ability and according to the course schedule. Students will be given
instructions regarding how to deal with paper assignments requiring library or other required research either
before a closure or by electronic means after an event. After closure of the college, all communications with the
students will take place by phone and email when necessary. All study material and assignments will be posted
on my website (http://lw.siena.edu/egirard). If such communication is not possible, students will proceed to the
best of their ability to complete the assignments in a manner that demonstrates understanding of the course
material.
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CGFS Consulting Reports
We will be working with Eastshore partners and provide them with weekly macro and micro Industry/company
reports.
Each Monday Eastshore would like a presentation – two stocks, one or two industries. Each Sunday, the
Eastshore wants to receive a PowerPoint, a formal report and any excel (Siena Lines) supporting documents.
Each presentation will be conducted via teleconferencing. The audience will consist of 3 to 4 Eastshore
analysts and strategists (other people from the office might also pop their heads in). The presentation will be
presented within one hour and should be very organized, clear and easy to follow.
Eastshore is expecting a full fundamental analysis and VALID arguments for each stock. They want to know
everything about these companies and expect that the analysts will be listening to calls, and going through
previous conference calls.
The companies covered are: AEO, ARO , ANF, URBN, PSUN, ZUMZ, and GPS. The industries, you will be
focusing on are Apparel Stores, Dept Stores, Jewelry Stores, Specialty Retailers, Discount Variety Stores,
Footwear and Electronic Stores.
The first product will be expected on Feb 2nd. We hope to receive a report on AEO and Discount Variety
Stores. Going forward, they will expect two companies and one/two industries. Important: Store Sales
numbers are announced the first Thursday of EVERY month and AEO, ARO, ANF, URBN, PSUN, GPS are
ALL announcing their quarterly sales.
Emails and Contact info for those involved:
Vincent Esposito vinny.esposito@consumerrecon.com 631-622-3119
Jarid Colucci jarid.colucci@consumerrecon.com 631-622-3102
Jimmy Rao, CFA jrao@eastshorepartners.com 631-622-3118
Glen O’Connor glenoconnor@eastshorepartners.com 631-622-3120
Fritz Garrecht fritz@eastshorepartners.com 631-622-3104
If you have any questions, please contact any of the above participants.