Material on this syllabus, such as the following learning objectives, are subject to change during the course. You are responsible for attending class to receive these changes.

FIN 320 - Investments

Learning Objectives

Chapter 1 - The Investment Setting

1.         Understand the difference between financial and real assets.

2.         Describe the relationship of risk and return.

3.         Explain the three factors that comprise the required rate of return for an investor.

4.         Understand the career opportunities that are open to students in the field of investments.

5.         Distinguish between investing and speculating.

6.         Know how to calculate various rates of return. 

Chapter 2 - Security Markets:  Present and Future

1.         Understand the functions of the financial markets.

2.         Explain the role that the investment banker plays in the distribution of securities.

3.         Discuss the differences between organized exchanges and over-the-counter markets.

4.         Discuss the future outlook for the capital markets.

5.         Understand the important legislation that affects the operations of the capital markets.

Chapter 3 - Participating in the Market

 1.         Understand how to measure the performance of securities in various markets through the use of market indexes.

2.         Describe how an investor goes through the process of buying and selling securities.

3.         Explain the difference between cash and margin accounts.

4.         Describe the types of trading orders that can be executed.

5.         Explain the tax implications of various investing strategies.

6.         Understand short selling.

Chapter 4 - Sources of Investment Information

 1.         Explain the major categories of financial information that are available to investors.

2.         Discuss the major products that the investment advisory services provide.

3.         Understand the key role of the Internet in providing an enormous amount of information.

4.         Identify important financially oriented web sites on the Internet.

5.         Explain significant filings that are made with the SEC.

6.               Discuss key categories of information in The Wall Street Journal and in Barron’s.

7.               Explore www.improveyourfinances.com.

 
Chapter 11 - Bond and Fixed-Income Fundamentals

1.         Explain the fundamental characteristics of a bond issue.

2.         Describe the differences among bonds offered by the U. S. government, state and local governments, and corporations.

3.         Explain the meaning and impact of bond ratings.

4.         Describe the characteristics of other forms of fixed-income securities such as preferred stock, money market funds, etc.

Chapter 12 - Principles of Bond Valuation and Investment

1.         Describe how the valuation of a bond is based on present value techniques.

2.         Explain the differences among various concepts of yield such as yield to maturity and yield to call.

3.         Describe the techniques for anticipating changes in interest rates.

4.         Understand investment strategies for investing in bonds.

5.         Be able to calculate present value and rates of return.

Chapter 13 - Duration and Reinvestment Concepts

1.         Understand that duration is a better measure of interest rate risk of a bond than maturity.

2.         Be able to use present value techniques to compute duration.

3.         Explain the effect that duration has on a bond price sensitivity to interest rates changes.

4.         Describe the uses of duration in protecting the value of a portfolio.

5.         Relate zero-coupon bonds to the concept of duration.

6.         Explain how immunization can affect interest rate risk and reinvestment risk.

7.         Understand the concept of convexity.

8.         Know what is meant by modified duration.

Chapter 6 - Industry Analysis

1.         Explain the phases of the industry life cycle.

2.         Relate dividend policy to the life cycle.

3.         Describe the various economic structures of industries.

4.         Explain the effect that government regulation can have on an industry.

5.         Understand how to compare the performance of many companies within the same industry.

6.               Explain the concept of rotational investing in which the investor shifts emphasis among industries during various phases of the business cycle.

7.               What roll should ethics play in investing?

8.               Explain the concept of a top-down and bottom-up valuation process.

Chapter 7 - Valuation of the Individual Firm

1.         Understand the basic valuation process as it relates to earnings and dividends.

2.         Explain the related concepts of risk and return.

3.         Be able to use various present value models.

4.         Describe the role of the price-earnings ratio in determining value.

5.         Explain how an individual stock’s price-earnings ratio is related to the market.

6.               Explain techniques for forecasting earnings per share.

Chapter 8 – Financial Analysis 

1.               Explain the problems of using earnings in E.P.S. in valuing securities.

2.               Understand why many money managers use cash flow in valuation models.

3.               How does the DuPont model aid in security analysis?

Chapter 9 - A Basic View of Technical Analysis and Market Efficiency 

1.         Understand the difference between fundamental and technical analysis.

2.         Appreciate how technical analysis is related to patterns of stock price movement.

3.         Explain the types of charting that are used in technical analysis.

4.         Describe the use of key indicator series in attempting to track the direction of the market.

5.         Explain the efficient market hypothesis and the various forms it can take.

6.         Relate the efficient market hypothesis to fundamental and technical analysis.

Chapter 15 - Put and Call Options 

1.         Understand the basic concept of an option.

2.         Distinguish between put and call options.

3.         Define strike price, intrinsic value, and speculative premium.

4.         Describe speculative and hedging strategies with options.

5.         Understand the basic elements of option pricing.

Chapter 21 - A Basic Look at Portfolio Management and Capital Market Theory 

1.         Understand the basic statistical techniques for measuring risk and return.

2.         Explain how the portfolio effect works to reduce the risk of an individual security.

3.         Discuss the concept of an efficient portfolio.

4.         Explain the importance of the capital asset pricing model.

5.         Understand the concept of the beta coefficient.

6.         Discuss the required return on an individual stock and how it relates to its beta.

Chapter 22 - Measuring Risks and Returns of Portfolio Managers 

1.         Explain how return is measured against risk for portfolio managers.

2.         Discuss the adequacy of performance for professional money managers.

3.         Describe the success of portfolio managers in diversifying their portfolios.

4.         Explain the process of asset allocation.

5.         Show how results can be measured against benchmarks.

6.               Describe the makeup of institutional investors.