GRA 6534 Investments
GRA 6534 Investments
In this course you will be introduced to major issues currently of concern to all investors. It will give you the skills to conduct a sophisticated assessment of debates on current issues covered by both the popular (especially digital) media as well as more specialized finance journals. The course will familiarize students with the financial markets and will provide an introduction to the theory and practices of investments for both individual investors as well as for funds. The course will emphasize the international dimension of the investment process and will introduce sustainable short-term and long-term investment strategies.
Provide students with an understanding of the structure of the global financial system, the role of finance for economic development, and how the money flows. Understand the importance of financial market efficiency, and learn the concepts of allocative and informational efficiency.
Internalize the principles of investments in bonds and stocks, and a profound understanding of the risk - expected return tradeoff and its implications for asset pricing. Emphasis will be given to understanding recent developments in the financial markets described in the digital financial press.
Among the skills students will acquire:
- Constructing the term structure of interest rates.
- Conducting portfolio immunization.
- Constructing optimal portfolios.
- Evaluating, quantitatively and qualitatively, the performance of mutual funds and hedge funds.
- Understanding the ethical issues that arise when making investment decisions, with a special focus on green bonds, hedging climate-change risks, and ESG factors.
- Critical reflection and thinking, together with developing deep insights regarding the dynamics of the financial markets.
- Ability to compare the historical performance of financial markets with their current dynamics and future prospects, in a rapidly-changing global economic situation.
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Understanding of the major issues that portfolio managers encounter.
The course will be organized as follows:
- Asset classes: markets, pricing and historical record
- Equity markets and historical record
- Fixed Income Securities: pricing, markets and historical record
- Alternative investments: real estate, commodities, venture, etc
- Fixed Income
- Bond pricing
- The term structure of interest rates
- Bond portfolio management
- Equity valuation
- The price-to-earnings ratio
- Macroeconomic and industry analysis
- The portfolio management process
- Mean-Variance theory and the CAPM
- Efficient markets and portfolio management
- Active portfolio management strategies
- Optimal portfolio rebalancing
- Factor models
- Measuring portfolio performance
- Hedge funds, mutual funds and exchange traded funds
- Presentations of the theories and their applications.
- Class discussions, including discussions of the research frontier in various topics.
- Pre-recorded videos that further develop the topics discussed in class.
- Digital drop-in sessions to support the students' active learning process throughout the semester.
- Discussions of current events in the markets described in the financial press (for example, The Wall Street Journal) and how they relate to the material covered in class.
- Real world examples of investment strategies.
- Two computer assignments to be done in groups of four to five students. The assignments will be a major tool in learning, as they will involve real world applications, and will include Excel modeling of portfolio choice. After doing the assignments the students will be able to construct the term structure of interest rates, to construct optimal portfolios, and more.
- A set of periodic and non-graded homework assignments, with the help of which the students can practice by solving exercises, and further develop their skills during the semester.
- To reinforce the learning process, the course includes the Bloomberg Market Concepts, a learning activity that allows students to integrate the knowledge acquired in class with state-of-the-art Bloomberg data and analytics.
- As a pre-requisite for the course, students are expected to possess basic knowledge of Microsoft Excel.
This course has a mandatory coursework requirement: Certification for the Bloomberg Market Concepts. The coursework requirement must be approved to be able to sit for the exams.
The exam for this course has been changed starting academic year 2023/2024. The course now has two ordinary exams (in addition to a mandatory coursework requirement). It is not possible to retake the old version of the exam. Please note new exam codes in the Exam section of the course description.
It is the student’s own responsibility to obtain any information provided in class.
Honour Code
Academic honesty and trust are important to all of us as individuals, and represent values that are encouraged and promoted by the honour code system. This is a most significant university tradition. Students are responsible for familiarizing themselves with the ideals of the honour code system, to which the faculty are also deeply committed. Any violation of the honour code will be dealt with in accordance with BI’s procedures for cheating. These issues are a serious matter to everyone associated with the programs at BI and are at the heart of the honour code and academic integrity. If you have any questions about your responsibilities under the honour code, please ask.
All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.
Disclaimer
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
Basic knowledge of Microsoft Excel.
| Mandatory coursework | Courseworks given | Courseworks required | Comment coursework |
|---|---|---|---|
| Mandatory | 1 | 1 | Students need to get the certification for the Bloomberg Market Concepts to be able to sit for the exams. |
| Assessments |
|---|
Exam category: Submission Form of assessment: Structured test Weight: 30 Grouping: Individual Duration: 24 Hour(s) Comment: Computer assignments that will involve group work in groups of 4-5, but individual assessment based on an individual structural test. Exam code: GRA 65344 Grading scale: ECTS Resit: Examination when next scheduled course |
Exam category: Submission Form of assessment: Written submission Invigilation Weight: 70 Grouping: Individual Support materials:
Duration: 3 Hour(s) Comment: Written examination under supervision Exam code: GRA 65345 Grading scale: ECTS Resit: Examination when next scheduled course |
All exams must be passed to get a grade in this course.
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.