FIN 3523 Investments
FIN 3523 Investments
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.
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
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
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.
- 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
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.
Higher Education Entrance Qualification
Covid-19
Due to the Covid-19 pandemic, there may be deviations in teaching and learning activities as well as exams, compared with what is described in this course description.
BØK 3423 Finance, BØK 3521 Finansiering av bedrifter, and the basic courses in mathematics and statistics.
| Assessments |
|---|
Exam category: Submission Form of assessment: Written submission Invigilation Weight: 30 Grouping: Individual Support materials:
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 Invigilation Weight: 70 Grouping: Individual Support materials:
Duration: 3 Hour(s) Comment: Comprehensive final exam covering all course subjects Exam code: FIN 35233 Grading scale: ECTS Resit: Examination every semester |
All exams must be passed to get a grade in this course.
| Activity | Duration | Comment |
|---|---|---|
Teaching | 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 |
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.