FIN 377: Investments

Larry Schrenk, Instructor

Schedule and Supplements

Topic Number

Date

Topics

Readings

(Available in D2L)
Part I: Financial Markets

1

(Top)

Week 1

8/26-9/1

The Investment Setting and Financial Ethics

Slides: Topic 0 and Topic 1

Course Videos (Required):

NOTE: Topic 0 slides will be covered in class.

1.1: What is an Investment? (S 1-10, 13:36)

1.2: Measures of Return and Risk I (S 11-26, 28:07)

1.3: Measures of Return and Risk II (S 27-35, 17:01)

Classroom: Slides

IMPORTANT NOTES

Captioning/Transcript: (By midsemester) Accurate captioning is available for all course videos and transcripts are available. To activate captioning, use the CC button at the bottom right of the video player. I STRONGLY RECOMMEND that you watch the videos with closed captioning on to increase your comprehension of the material.

Playback Speed: The video player allows playback at different speeds. I often listen to lectures or webinars at 1.25x or 1.5x, but this may not work well for more technical material. 

Solutions: All end-of-chapter problem solutions are available in D2L.

If you would like some review of probability and statistics, have a look at these (optional) videos:

Ethical and Professional Standards Readings (Download Link in Right Column)

  • Reading 1: Ethics and Trust in the Investment Profession by Parmar, Kelly, and Stevens

  • Reading 2: Code of Ethics and Standards of Professional Conduct Standards of Practice Handbook, Eleventh Edition

  • Reading 3: Guidance for Standards I–VII Standards of Practice Handbook, Eleventh Edition

  • Reading 4: Introduction to the Global Investment Performance Standards (GIPS)

  • Reading 5: Global Investment Performance Standards (GIPS)

NOTE: You are not expected to read all the ethics assignments. For the purpose of this course you should know the general principles and themes in them. I include the full readings because I am committed to the importance of ethics in finance and want all students who take my investment course to have access to them.

 

Chapter 1,

Ethics Readings

(See note on ethics readings under Week 1)
 

Week 2

9/2-9/8

The Investment Setting and Financial Ethics

Slides: Same  

Course Videos (Required):

1.4: Rates of Return I (S 36-43, 18:26)

1.5: Rates of Return II (S 44-54, 26:03)

1.6: Risk and Uncertainty I (S 55-60, 15:30)

1.7: Risk and Uncertainty II (S 61-70, 20:06)

Classroom: Slides

Labor Day, Monday 9/2, No Classes

  

Chapter 1,

Ethics Readings

(See note on ethics readings under Week 1)
 

 Week 3

9/9-9/15

 The Investment Setting and Financial Ethics

Slides: Same  

Course Videos (Required):

1.8: Determinants of Rates of Return (Inflation) I (S 71-89, 27:46)

1.9: Determinants of Rates of Return (Risk Premium) II (S 90-98, 20:17)

1.10: Relationship between Risk and Return (S 100-111, 24:26)

1.11: Financial Ethics (S 112-127, 19:36)

Classroom: Slides

MindTap Assignment: Due 9/29 (MindTap Assignments are in D2L.)

Group AI Assignment 1 (link): Due 9/29

 

Chapter 1,

Ethics Readings

(See note on ethics readings under Week 1)

 

 2

(Top)

Week 4

9/16-9/22

Organization and Functioning of Securities Markets

Slides: Topic 2

Course Videos (Required):

2.1: What is a Market? (S 1-7, 14:50)

2.2: Efficient Markets (S 8-12, 25:39)

2.3: Organization of the Securities Market (S 13-26, 27:23)

2.4: Primary and Secondary Markets (S 27-42, 18:37)

2.5: Market Orders (Buying on Margin and Short Sales) (S 43-46, 10:36)

Classroom: Slides

MindTap Assignment: Due 10/6

 

Project Information

Here are the instructions and examples for the project:

Project Instructions

In creating the Excel spreasheet, your group is required to follow certain guidlines:

Excel Guidelines

To complete the project, you will need to access data from S&P CapitalIQ. Here is a brief introduction to the database:

CapIQ Intro (mp4, 27:36)

For more information on using the database, see:

CapitalIQ Resource Page

Microsoft Teams

Your group should set up a Microsoft Teams Site for the project. It allows your group to communicate, post documents, and, probably most importantly, edit common documents, such as an Excel (:) xlsx. Information on setting up a Teams Site at WSU is here.

 

 Chapter 3, 5.1

 3

(Top)

Week 5

9/22-9/29

 Asset Allocation and Security Selection

  Slides: Topic 3

Course Videos (Required):

3.1: Investment Management I (S 1-16, 23:40)

3.2: Investment Management II (S 17-24, 15:42)

3.3: Investment Management III (S 25-33, 12:58)

3.4: Global and Alternative Investments (S 34-50, 20:35)  

Classroom: Slides

MindTap Assignment: Due 10/13

 

 Chapter 2
  Part II: Portfolio Management  

4

(Top)

Week 6

9/30-10/6

 Introduction to Portfolio Management I

Slides: Topic 4

Course Videos (Required):

4.1: Some Background Assumptions (S 1-8, 12:36)

4.2: Diversification (S 9-35, 22:43)

4.3: Markowitz Portfolio Theory I (S 36-59, 17:31)

4.4: Markowitz Portfolio Theory II (S 60-61, 20:45)

4.5: Markowitz Portfolio Theory III (S 62-67, 22:47)  

Classroom: Slides

Group AI Assignment 2 (link): Due 10/20

 

Chapter 6

 

Week 7

10/7-10/13

Introduction to Portfolio Management II

Slides: Same

Course Videos (Required):

4.6: The Efficient Frontier I (S 68-75, 19:45)

4.7: The Efficient Frontier II (S 76-78, 15:17)

4.8: Capital Market Theory I (S 79-83, 20:39)

4.9: Capital Market Theory II (S 84-99,24:13)  

Classroom: Slides

MindTap Assignment: Due 10/27

Improvement Day, Tuesday 10/8, No Classes  

 

 Chapter 6

5

(Top)

 Week 8

10/14-10/20

 Asset Pricing Models I

        Slides: Topic 5

Course Videos (Required):

5.1: The Capital Asset Pricing Model I (S 1-11, 20:55)

5.2: The Capital Asset Pricing Model II (S 12-27, 25:19)

5.3: Empirical Tests of the CAPM (S 28-38, 1847)

5.4: The Market Portfolio: Theory versus Practice (S 39-43, 7:02)

        Classroom: Slides

        Exam 1, Friday 10/18 (through CAPM) Exam 1 Review Slides

 

 Chapter 7

 

Week 9

10/21-10/27

Asset Pricing Models II

        Slides: Same        

Course Videos (Required):

5.5: Arbitrage Pricing Theory (S 44-60, 28:48)

5.6: Multifactor Models and Risk Estimation (S 61-79, 23:36)

5.7: Appendix: Multiple Regression in Excel (S 80-90, 13:43)   

Classroom: Slides

MindTap Assignment: Due 11/10

Group AI Assignment 3 (link): Due 11/3

 

Chapter 7
  Part III: Investment Vehicles  

6

(Top)

Week 10

10/28-11/3

Bond Fundamentals and Valuation I

         Slides: Topic 6

 Course Videos (Required):

6.1: Basic Features of a Bond (S 1-13, 25:51)

6.2: The Global Bond Market Structure (S 14-21, 20:40)

6.3: Survey of Bond Issues (S 22-33, 21:28)

6.4: Bond Yield Curves (S 34-42, 19:08)

6.5: Implied Future Interest Rates (S 43-52, 28:35)

Classroom: Slides

    

 Chapter 12, 13.1
 

Week 11

11/4-11/10

Bond Fundamentals and Valuation II

Slides: Same 

Course Videos (Required):

6.6: Bond Valuation and Yields (S 53-67, 26:56)

6.7: Bond Analysis Tools (S 68-88, 30:17)

Classroom: Slides

MindTap Assignment: Due 11/24

Spring Summer Registration, Monday 11/4

 

 Chapter 12, 13.1

 7

(Top)

Week 12

11/11-11/17

 Equity Valuation I

Slides: Topic 7

Course Videos (Required):

7.1: Important Distinctions (S 1-13, 16:56)

7.2: Discounted Cash Flow, Introduction (S 14-27, 27:24)

7.3: Discounted Cash Flow, No Growth and Constant Growth Models (S 28-50, 31:51)

7.4: Discounted Cash Flow, Mixed Models (S 51-65, 26:54)

Classroom: Slides

Veteran's Day, Monday 11/112, No Classes

Group AI Assignment 4 (link): Due 11/24

  

 Chapter 8
   Week 13

 11/18-11/24

 Equity Valuation II

Slides: Same

Course Videos (Required):

7.5: Free Cash Flow to Equity (FCFE) (S 66-81, 31:12)

7.6: Free Cash Flow to Firm (FCFF) (S 82-94, 22:43)

7.7: Relative Valuation (S 95-110, 25:25)

7.8: Ratio Analysis and Financial Statements (S 111-126, 23:07)

Classroom: Slides

MindTap Assignment: Due 12/6

  

Chapter 8

8

(Top)

 Week 14

11/25-12/1

 An Introduction to Derivative Markets and Securities I

Slides: Topic 8

Course Videos (Required):

8.1 Overview of Derivative Markets I (Futures/Forwards) (S 1-13, 17:56)

8.2 Overview of Derivative Markets II (Futures/Forwards) (S 14-17, 10:31)

8.3 Overview of Derivative Markets III (Options) (S 18-28, 18:22)

8.4 Investing with Derivative Securities I (Futures/Forwards) (S 29-35, 12:45)

         Classroom: Slides     

Fall Break/Thanksgiving, 11/27-11/29, No Classes

  

Chapter 14

 

 Week 15

12/2-12/6

An Introduction to Derivative Markets and Securities II

Slides: Same

Course Videos (Required):

8.5 Investing with Derivative Securities II (Options) (S 36-37, 19:21)

8.6 Investing with Derivative Securities III (Options) (S 38-46, 16:14)

8.7 Relationship between Forward and Option Contracts I (S 47-60, 14:44)

8.8 Relationship between Forward and Option Contracts II (S 47-60, 11:35

8.9 Introduction to Derivatives in Portfolio Management (S 61-73, 19:27)

Classroom: Slides

MindTap Assignment:  Due 12/6

Group AI Assignment 5 (link): Due 12/6

     NOTE: The MindTap and AI assignments due date are earlier than usual.

Project:  Due 12/6 (To aviod penalties, please follow the submission instructions in D2L exactly.)

 

 Chapter 14

 

 

Exam 2/Final Exam

  Date: See Registrar's Website Exam 2 Review Slides