INVESTMENTS
FIN 4432
Fall Semester 2010
Instructor: / Dr. Wilfred J. BibbinsCourse Prerequisites: / Managerial Finance 3332
Office Hours / 9:35 am to 11:25pm; 2:30pm to 4:00pm T/Th
Others by Appointment
Office Location: / 106 McCartha Hall
Office Telephone: / 334-670-3509
334-670-3143 Secretary
334-670-3599 FAX
Email: /
Time of Class: / 11:30 to 12:45 T/Th
Class Location: / 120 McCartha
Course Description: / Financial analysis of investments, including markets, institutions, and instruments with emphasis on security analysis, portfolio analysis, and financial planning. Prerequisite: FIN 3332.
Purpose / To provide a survey of investment concepts needed in the finance undergraduate program. BABA/BSBA Finance major requirement.
Course Objectives: / Upon completion of the course, the student should:
- Measure and analyze the relationship between risk and return.
- Compute and discuss the risk and return concepts from the perspective of an individual asset and a portfolio.
- Analyze portfolios using several multifactor models.
- Apply theories of valuation and relative-valuation techniques, including the mechanics of fundamental and technical analysis.
- Analyze a market, industry, and company using basic industry and economic-analysis (forecasting) techniques.
- Explain and value bonds, including portfolios, and duration.
- Evaluate portfolio performance using the Treynor, Jensen, and Sharpe performance measures.
- Discuss option trading strategies and the Black-Scholes option pricing model.
- Discuss the invest merits of derivatives.
- Be familiar with different investment securities.
- Know the types of stock market transactions available to individual investors.
- Be familiar with the tenants of the efficient market hypothesis.
- Understand the purpose and benefits of investment companies.
- Understand the advantages and disadvantages of international investing.
- Be able to develop a list of do and don'ts to assist in developing an investment strategy.
Text(s): / Fundamentals of Investing, 11h Edition, Gitman, Lawrence and Joehnk, Michael (Pearson-Addison Wesley) 2011.
Other Materials: / You are encouraged to read the Wall Street Journal, Barron’s and Business Week regularly (subscriptions are optional). We will discuss various articles from these sources throughout the semester. You are encouraged to bring to the attention of the class any information discovered from reading these publications. Please note that these are not the only sources of information available (e.g., Forbes or the Internet.).
Grading Methods: /
Exams
/ 60 % of final gradeCompany Report and Assignments
/ 40 % of final gradeA / 100 – 90%
B / 89 - 80%
C / 79 - 70%
D / 69 - 60%
F / 59 - 0%
Mid-term Grade Policy / In accordance with University policy, mid-term grades are not reported for each student.. Since there are several major tests and assignments, your mid-term grade only represents a percentage of your final grade. Therefore, you have ample time to either improve your mid-term grade or let it fall significantly.
Class Procedure and Requirements: / There are NO social promotions! You must earn a passing grade by meeting course objectives. Faithful attendance, a pure heart, noble intentions, curly hair, blue eyes, etc. -- without genuine achievement -- will not enable you to pass the course. Examinations, assignments, and quizzes will be the criteria for grades.
The approach used will be classroom lecture covering concepts and problem solving technique(s). Class participation and discussion is strongly encouraged. I believe participation is essential for this course to be interesting and for students to get the maximum benefit from the course. If you have a question, ask it! It will likely benefit us all.
End-of-chapter questions and problems are assigned for class discussion. Assigned questions and/or problems should be HAND written as you may be required to hand these in. You should complete them when assigned and be prepared to discuss them during class. Each student will be expected (required) to participate in the discussion.
Class Format / Any chapter reference material (chapter outline) should be prepared before class. You will be required to respond to questions on a daily basis. Your inability to respond to questions and/or problems will impact your class performance. Please be prepared for class discussion – This is your class!
Classroom Administration / Students are expected to:
1. Punctually attend all scheduled classes. Students who arrive after class begins will be counted absent. See attendance policy.
2. Be responsible for all instructions and assignments given in class as well as for the supporting textbook content.
3. Read the textbook material before the lecture. This leads to a better understanding of the lecture as well as the opportunity to ask questions about material(s) in the text that were unclear or that the student did not understand.
4. Hand in assignments on the assigned due date during class. See homework policy.
Not wear hats or sunglasses in the classroom.
Course Content: / Chapters Topics
1. The Investment Environment
2. Securities Market and Transactions
3. Investment Information and Securities Transactions
4. Risk and Return
4A The Time Value of Money
5. Modern Portfolio Concepts
6. Common Stocks
7. Analyzing Common Stock
8. Stock Valuation
9. Market Efficiency, Behavioral Finance, and Technical Analysis
10. Fixed-Income Securities
11. Bond Valuation
12. Mutual Funds: Professionally Managed Portfolios
13. Managing Your Own Portfolio
14. Options: Puts and Calls
15. Commodities and Financial Futures
Web Chapters
16. Investing in Preferred Stocks
17. Tax-Advantage investing
18. Real Estate and Other Tangible Investments
Assignments / Assignments will include:
1. Chapter questions and problems
2. Instructor assigned questions/and problems
3. Class presentations
4. Case Problems
5. Others
Additional Services: / AMERICANS WITH DISABILITIES ACT: Any student whose disabilities fall within ADA must inform the instructor at the beginning of the term of any special needs or equipment necessary to accomplish the requirements for this course.
Students who have or may be dealing with a disability or learning difficulty should speak with the instructor, contact the Office of Adaptive Needs Program (Wright 226), or call 670-3220/3221. Various accommodations are available through the Adaptive Needs Program. The faculty in the School of Business makes every effort to accommodate unique and special needs of students with respect to speech, hearing, vision, seating, or other possible disabling conditions. Please notify the instructor as soon as possible of requested accommodations or ways to help.
Attendance Policy: / 1. Class Roll: Class roll will be taken at the beginning of the class session. Students who arrive after their name is called will be marked absent.
2. Attendance is mandatory. If a student misses a class it is his/her responsibility to obtain all information and materials presented (including materials covered, handouts, skills learned, and homework assignments) during his/her absence.
I do not repeat lectures nor perform the tutoring function for students who are absent. Each absence will make the successful completion of this course more difficult, since finance courses are cumulative in nature and days missed from class are lost knowledge. Exams will include not only the material from the assigned chapters in the text, but also from any other materials covered in class lectures.
3. Written documentation (on letterhead) must be provided.
Excused Absences
/ Excused absences have the following characteristics:a. Professor was informed prior to the absence.
b. Professor determines that the absence is excused.
c. Absence is of the following type:
1. Participation in a documented official university function that does not permit the student’s class attendance (e.g., participation in athletic events, field trips, etc.)
2. Severe illness: A hospital stay, or a doctor's excuse saying that it is impossible for student to attend class(es). Please note, this does not include scheduled medical appointments nor driving someone else to doctor.
3. Death of immediate family member (grandparent, parent, sibling, or child)
4. Appearance in court
5. Personal situations that are approved by the professor in advance of the time the student will be absent.
Homework (Assignment) Policy / 1. You are required to complete homework and quizzes on MyFinLab as assigned. You will be notified when the items are assigned and their due date.
2. Announced required assignments will count toward your final grade. To be considered on time they must be posted beforet the beginning of class. Any point after class begins the assignment is considered late. The penalty for a late assignment is 15 points per day for the first two days. A score of zero will be assigned after the second day
Quiz Policy: / Quizzes administered during the course may or may NOT be announced and there will be no make-ups. Usually the unannounced quizzes are the result of students not participating or preparing for class.
Test Policy: / There will be at least 3 exams during the semester and a comprehensive final examination. The material covered on the exams is indicated in the course content section. The exams are given during regular class periods and may consist of problems, essay and multiple-choice questions. Make-up exams will be given only for documented (on letterhead), approved absences. See ATTENDANCE POLICY. Make up exams are administered only to students who have received approval from the professor prior to the test date. The make-up exam must be taken within one week of the student's return to class. Make-ups may be different from exams given in class. A grade of zero will be assigned for an exam missed due to an unexcused absence.
Exams will not be returned in class. You may come by the office to review the exam. You have one week from the date the exam results are announced to review and/or questioning the grading the exam.
Test dates will be announced at least one week prior to the exam date.
Comprehensive final examination chapters will be announced.
MyFinLab / You are required to complete homework and quizzes on MyFinLab as assigned. You will be notified when the items are assigned and their due date.
Otis – Stock Simulation: / The course will employ a stock simulation tool (Otis). Criteria for the simulation activity will be discussed in class. Requirements will include:
1. Trading - You are expected to trade securities. This is an opportunity for you to experiencing the trading the process. Hopefully, you will try and develop a trading approach (technique) that will be successful. You limitation to developing a strategy is your imagination.
2. You are required to blog your investment activity. Please indicate what you purchased (sold) and why.
Research Project / You will analyze and make a decision as to how you would invest in a company. I will assign several short papers that will eventually lead to your final decision. The three sections of the paper will include:
A. An overview of the economic environment.
B. An overview of the Industry and identifying the industry metrics.
C. A company qualitative, quantitative and technical analysis
Please note that you may add any additional information to the project that you feel will improve your analysis. If you are uncertain, you may want t as..
Dates to Remember: / First day of class: August 11
Last day to drop without Financial Penalty August 16
Last Day to Add a Course August 16
Holiday - Labor Day September 6
Last day to Drop without academic penalty October 15
Last Day to Withdraw (University) Without Academic Penalty October 15
Holiday - Veteran’s Day November 11
Homecoming - No Classes after 11:50 a.m. November 12
Holiday – Fall / Thanksgiving Break November 22 - 28
Classes end November 30
Dead Day December 1
Last Day to Drop or Withdraw from a course with December 1
Academic and Financial Penalty
Final Examination December 7 (2:00pm – 4:00pm)
Additional Services / AMERICANS WITH DISABILITIES ACT: Any student whose disabilities fall within ADA must inform the instructor at the beginning of the term of any special needs or equipment necessary to accomplish the requirements for this course.
Students who have or may be dealing with a disability or learning difficulty should speak with the instructor, contact the Office of Adaptive Needs Program (Wright 226), or call 670-3220/3221. Various accommodations are available through the Adaptive Needs Program. The faculty in the School of Business makes every effort to accommodate unique and special needs of students with respect to speech, hearing, vision, seating, or other possible disabling conditions. Please notify the instructor as soon as possible of requested accommodations or ways to help.
Cheating Policy: / If you are caught cheating, you will receive a course grade of "F".
See ORACLE: Student Handbook
Plagiarism is the act of stealing and passing off (the ideas or words of another) as one’s own or to commit literary theft: present as new and original an idea or product derived from an existing source (Webster’s New Collegiate Dictionary). Plagiarism will cause a student to get a course grade of “F”. According to the TSU ORACLE: Student Handbook one definition of misconduct is: “Dishonesty, such as cheating, plagiarism...”. The ORACLE states under the Academic Code sub-heading that: “A student is subject to disciplinary action: #3. Where the work affects or might affect a student’s grade, credit, or status in the university, a student represents to be his or her own any work which is not the product of his or her own study and efforts”. The penalty for such misconduct may be “A student’s grade in the course or on the examination affected by the misconduct may be reduced to any extent, including a reduction to failure.” A student may be suspended from the university for a specific or an indefinite period.