FIN 3523 Investments

FIN 3523 Investments

Course code: 
FIN 3523
Department: 
Finance
Credits: 
7.5
Course coordinator: 
Patrick Konermann
Course name in Norwegian: 
Investments
Product category: 
Bachelor
Portfolio: 
Bachelor of Finance - Programme Courses
Semester: 
2024 Autumn
Active status: 
Active
Level of study: 
Bachelor
Teaching language: 
English
Course type: 
One semester
Introduction

The analysis of investments pervades virtually every financial decision made, e.g., by private investors, professional fund managers, and corporations. What is the price of securities such as stock and bonds? How can you combine them to construct a satisfactory investment portfolio? How do you evaluate the performance of a trading strategy?

This course provides students with the centerpieces of modern investment analysis, e.g., Markowitz’s methodology to construct mean-variance optimal portfolios, the capital asset pricing model (CAPM), multifactor models, the efficient market hypothesis, and standard metrics of performance evaluation.

Learning outcomes - Knowledge

By the end of the course, students shall know

  • How the risk-return trade-off and sustainability considerations affect investment decisions.
  • The basic theories behind the pricing of stocks or bonds.
  • The concept of diversification and the efficient market hypothesis.
Learning outcomes - Skills

By the end of the course, students are required to

  • Construct optimal portfolios.
  • Calculate risks and expected returns based on various asset pricing models.
  • Evaluate the past performance of a trading strategy.
  • Use digital tools such as Excel or R, e.g., to perform the tasks listed above.
General Competence

Upon completion of the course, students should be able to apply the theories taught throughout the course to price stocks and bonds. They should have a critical attitude towards the realism of the underlying assumptions and understand the implications for their practical applicability.

Course content
  • Risk vs. Return
  • Asset Allocation with Mean-Variance
  • Socially Responsible Investing
  • Capital Asset Pricing Model, Arbitrage Pricing Theory, and Multifactor Models
  • The Efficient Market Hypothesis and its empirical evidence
  • Evaluating Investment Performance
  • Macroeconomic and Industry Analysis
  • Equity Valuation using Price-Earnings Ratios
  • Bond Valuation and the Term Structure of Interest Rates
  • Managing Bond Portfolios
Teaching and learning activities

The course includes lectures, in-class exercises, and an assignment. A class will typically start with a review of the last class or a discussion of in-class exercises students prepared in advance. Then, we will introduce new concepts, explain the intuition behind them, and discuss their practical application in Excel or R. To strengthen the students’ understanding of these concepts, they have to submit an assignment (group work). It requires them to import real-world data into R, perform analyses, and produce tables and graphs summarizing their findings in their solution paper. Here, strong emphasis will be placed on the interpretation of the results from an economic point of view.

Software tools
Software defined under the section "Teaching and learning activities".
R/R-Studio
Qualifications

Higher Education Entrance Qualification

Disclaimer

Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.

Required prerequisite knowledge

Introductory courses in finance (equivalent to BØK3423 Finans), mathematics and statistics.

Assessments
Assessments
Exam category: 
School Exam
Form of assessment: 
Structured Test
Exam/hand-in semester: 
First Semester
Weight: 
30
Grouping: 
Individual
Support materials: 
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Duration: 
3 Hour(s)
Comment: 
Mid-term. Individual structured test under supervision based on group work during the semester.
Exam code: 
FIN 35232
Grading scale: 
ECTS
Resit: 
Examination every semester
Exam category: 
School Exam
Form of assessment: 
Written School Exam - pen and paper
Exam/hand-in semester: 
First Semester
Weight: 
70
Grouping: 
Individual
Support materials: 
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Duration: 
3 Hour(s)
Exam code: 
FIN 35233
Grading scale: 
ECTS
Resit: 
Examination every semester
Type of Assessment: 
Ordinary examination
All exams must be passed to get a grade in this course.
Total weight: 
100
Student workload
ActivityDurationComment
Teaching
30 Hour(s)
Feedback activities and counselling
6 Hour(s)
Guidance and review of home assignments problems. 3 sessions in auditorium, each 2 hours, by learning assistants.
Student's own work with learning resources
27 Hour(s)
Prepare for teaching
70 Hour(s)
Reading textbook-chapter (as marked on the syllabus) prior to attending class, including viewing videos.
Digital resources
15 Hour(s)
Group work / Assignments
26 Hour(s)
Students are given a group work during the semester than will end up with an individual (structured) test.
Examination
30 Hour(s)
Exam including preparations
Sum workload: 
204

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.