FIN 3523 Investments

FIN 3523 Investments

Course code: 
FIN 3523
Department: 
Finance
Credits: 
7.5
Course coordinator: 
Knut Sagmo
Product category: 
Bachelor
Portfolio: 
Bachelor of Finance - Programme Courses
Semester: 
2020 Autumn
Active status: 
Active
Teaching language: 
English
Course type: 
One semester
Introduction

This course provides a solid understanding of modern investment analysis by highlighting distinguishing features of financial securities such as stocks and bonds, where and how the securities are traded, and how they may be combined into portfolios of securites. While decision-making is emphasized in this course, it is preceeded by careful valuation of bonds and stocks, assessment of how much capital to allocate to each type of security, and how risk management instruments may be used to amend unhedged portfolios' exposure to market risk.

Learning outcomes - Knowledge

Acquired knowledge:

Having completed this course, students are expected to know that:

  • bonds' price sensitivity is determined by market rates of return (yields)
  • bonds' duration-parameter may be used to immunize against risk of changing market yields
  • valuation of stocks and estimates of expected returns and risk in investment analysis is meaningful only when assessed from some existing wealth-position
  • idiosyncratic risk is removed by diversifying a portfolio of financial securities
  • financial derivatives may be used to amend portfolio exposure to market risk
  • data extracted externally needs to be downloaded into Excel spreadsheets to be of practical use
  • the imperative of sustainability and focus on ESG-investments will profoundly impact the investment industry
Learning outcomes - Skills

Acquired skills:

Having completed the course, students are expected to master tasks such as;

  • estimating bonds' value and risk measured by price-sensitivity towards (the duration-measure of) market yields
  • valuing stocks and deriving estimates of expected return and risk based on assumptions of some existing asset-ownership position
  • identifying portfolio-exposure to market risk that may be offset by the proper use of financial derivatives
  • electronically managing and utilizing market data for analytical purposes
General Competence

Upon completion of the course, students shall be able to ask critical questions and reflect on crucial assumptions underlying the main theories on which financial investment analysis is founded.

Course content
  • Bond Valuation and Term Structure of Interest Rates
  • Bond Portfolio Management
  • Stock Valuation Models
  • Financial Data Analysis: Estimates of Stocks' Expected Rates of Return and Risk
  • Portfolio Theory and Capital Asset Pricing Models
  • Financial Derivatives Amending Portfolio Exposure to Market Risk
Teaching and learning activities

The course offers a combination of lectures and plenary tutorials (in-class) where solutions to exercises are reviewed and explained. Nine exercise sets (distributed in the course room on Its Learning) covering the respective course subjects are designed to allow students to test comprehension and skills as the semester progresses.  Problems from the exercise sets are used extensively in class to demonstrate important issues. Each set is accompanied by a detailed solutions manual.  

Specific information regarding student performance assessments is provided in class. Although attendance is not compulsory, it is students' responsibility to obtain this and any other relevant information pertaining to the conduct of the course. Information distributed in the course-room (on Its Learning) is not intended to substitute for non-attendance in class!

For most of the course-subjects, Excel will be used and demonstrated in class.

Software tools
Software defined under the section "Teaching and learning activities".
Qualifications

Higher Education Entrance Qualification.

Required prerequisite knowledge

BØK 3423 Finance, BØK 3521 Finansiering av bedrifter, and the basic courses in mathematics and statistics.

Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
FIN 35232
Grading scale:
ECTS
Grading rules:
Internal and external examiner
Resit:
Examination every semester
30Yes2 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Individual Midterm examination
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
FIN 35233
Grading scale:
ECTS
Grading rules:
Internal and external examiner
Resit:
Examination every semester
70Yes3 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
  • Interest table
Individual Comprehensive final exam covering all course subjects
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:30
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Duration:2 Hour(s)
Comment:Midterm examination
Exam code: FIN 35232
Grading scale:ECTS
Resit:Examination every semester
Exam category:Submission
Form of assessment:Written submission
Weight:70
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
  • Interest table
Duration:3 Hour(s)
Comment: Comprehensive final exam covering all course subjects
Exam code: FIN 35233
Grading scale:ECTS
Resit:Examination every semester
Type of Assessment: 
Ordinary examination
Total weight: 
100
Student workload
ActivityDurationComment
Teaching on Campus
45 Hour(s)
Prepare for teaching
45 Hour(s)
Student's own work with learning resources
60 Hour(s)
Preparation of home assignments
Examination
50 Hour(s)
Exam incl. preparations
Sum workload: 
200

A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 7,5 ECTS credit corresponds to a workload of at least 200 hours.