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BUS 5446 Investment Management

Course Description

Investigates the concepts, theories and techniques underlying the development of investment policies and strategies.

Week 1

Lecture: Course Overview
Lecture: Stock-Trak Portfolio


  • Discuss the importance of financial assets in the economy
  • Explain the role of financial markets, investment bankers and financial intermediaries
  • Differentiate between asset classes
  • Demonstrate how to calculate rate of return on a market index

Week 2

Lecture: Trading on Margin and Selling Short


  • Define how financial markets operate
  • Differentiate between the types of orders
  • Demonstrate knowledge of margin accounts and short sales
  • Identify the different types of mutual funds and other investment companies

Week 3

Lecture: Risk-Return Tradeoff and Capital Allocation


  • Discuss the historical risk-return relationship in financial markets
  • Differentiate between arithmetic and geometric mean
  • Explain skewness, kurtosis and normal distribution
  • Discuss risk aversion
  • Demonstrate how to allocate portfolio assets and how to calculate portfolio expected return and standard deviation

Week 4

Lecture: Optimal Risky Portfolios


  • Understand diversifying portfolio risk
  • Learn Markowitz’s portfolio theory
  • Discuss the uses of a single-index model to construct a portfolio
  • Understand how portfolio optimization works

Week 5

Lecture: Technical Analysis


  • Define the limitations of CAPM
  • Explain Arbitrage Pricing Theory
  • Explore multi-factor models and reflect on what those factors should be
  • Discuss introductory concepts of behavioral finance and technical analysis
  • Calculate technical indicators

Week 6

Lecture: Term Structure of Interest Rates


  • Define the term structure of interest rates
  • Calculate yield to maturity (YTM) and forward rates
  • Discuss the uses of options to manage portfolio risk
  • Calculate the rate of return on investing in options
  • Explain the put-call parity relationship

Week 7

Lecture: Options and Futures Valuation


  • Use the Black-Scholes formula to value options
  • Apply the put-call parity relationship
  • Explain how futures trade in the market
  • Identify if an arbitrage opportunity exists for an asset
  • Calculate the profits of a futures transaction

Week 8

Lecture: International Diversification


  • Calculate performance measures
  • Calculate time-weighted and dollar-weighted average returns
  • Explain the risk-return tradeoffs of international investing
  • Discuss the impact of international diversification

The course description, objectives and learning outcomes are subject to change without notice based on enhancements made to the course. January 2012