Investments

Finance/Business

Course Code (Undergraduate): 071175

Course Code (Postgraduate): 2071175

48 Contact Hours

7.5 ECTS points Credit Points

Course Description

This unit exposes students to the theories and concepts found within the investments and financial markets. It focuses on portfolio theories and security valuation. Some key topics include an overview of the financial markets, portfolio selection theory, asset pricing theories, bond valuation, yield curve, stock analysis and valuation, the introduction of options and futures as well as portfolio performance analysis.

Students will be engaging in team projects which foster cooperation and the exchange of ideas. Students will also be gaining an understanding of how vital it is to employ business ethics in the financial industry through analysing the implications associated with providing false or misleading information.

Timetable

Schedule and Topics

Session 1: Overview of financial markets, trading mechanisms and stock indexes
Session 2: Theory of Risk and Return
1) The portfolio selection theory
2) CAPM theory
3) APT theory
Session 3: Market efficiency & Behavioral finance
Session 4: Theory of Term; Structure and Fixed-Income Securities Bond characteristics;
Corporate Bonds (callable, convertible, puttable, floating rate, preferred stock);
Securitization; Bond pricing; Term structure of Interest rate; Managing bond portfolio
Session 5: Valuation Models: Approaches to valuation; Discount Cash Flow (DCF) Valuation;
Economic Value Added (EVA); Relative valuation; Option valuation;
Macro analysis and financial statement analysis
Session 6: Mutual Fund Asset Management
(Asset management institutions, structure in the industry, Forms, models in China);
Mutual Fund (Organization, Advantage and disadvantages, open-ended & close-ended fund, ETF, LOF, frequently used terms )
Session 8: Futures and options Introductions to derivatives, valuation,
trading strategies for futures and options
Session 9: Overview of Chinese capital market

Assessments

Team and individual assignments (30%);
Attendance and Engagement (10%);
Exam (60%).

Prerequisite

Sound knowledge of topics covered in Finance is a necessary basis for satisfactory completion of this course.

Reference Books

Bodie, Zvi, Alex Kane, and Alan J. Marcus, 2011. Investments (McGraw-Hill/Irwin, New York).
With online supporting materials
http://highered.mcgraw-hill.com/sites/0073530700/information_center_view0/

Holden, Craig W., 2012. Excel modeling in investments (Pearson, Boston).
A Chinese translation is available from China Machine Press, 2010, ISBN 9787111305873

Damodaran, Aswath, 2012. Investment valuation: Tools and techniques for determining the value of any asset (Wiley, Hoboken, N.J.).
with Online supporting materialshttp://pages.stern.nyu.edu/~adamodar/New_Home_Page/Inv2ed.htm
Cochrane, John H., 2005. Asset pricing (Princeton University Press, Princeton, N.J.).