FINANCE CLASS

INVESTMENT MANAGEMENT

Instructor: Dr. Dan Zhou

Office: BDC-A, Room 215

Phone: (661)654-2333;

E-mail: [email protected]

Office Hours: Tuesday & Thursday 3:00am ~ 5:00pm; 7:30pm ~ 8:00pm;

or by appointment

FIN 326, Section 01; Fall 2015

Course Materials:

1. Text: Charles P. Jones, Investments: Analysis and Management, 12th Edition

2. Other Readings & Materials:

a. Books: A Random Walk Down Wall Street (newest edition, B.G. Malkiel);

The Random Walk Guide to Investing (newest edition, B.G. Malkiel)

The Psychology of Investing (J.R. Nosinger)

b. Journals: The Wall Street Journal; Barrons; Business Week.

c. On the Money (CNBC, Sunday 7:30-8:00pm ET)

d. Recommended articles posted on Blackboard

3. A Financial Calculator is required. (Recommended: TI BA II PLUS)

Catalog Course Description:

This course involves the analysis of various types of securities, security markets, investment strategies, and methods of evaluating portfolio performance.  It also includes assessing the overall quality of portfolio management in the context of the financial plan.  Case analysis and student investment presentations are required.

Prerequisites: FIN 300

Course Policies:

1. PowerPoint Lecture notes will be available on the course website (Blackboard). It is highly recommended that students print out a copy of the chapter that will be discussed, and bring it to the class. (Suggestion: When you print the PowerPoint slides, choose to print as handouts with three slides per page. By doing so, you will have enough space to take notes in the class.)

2. Attendance and Participation – Finance is fundamentally a complex and difficult discipline. Regular class attendance and active participation are very important in assisting students to fully understand course material. Students are responsible at all times for lecture materials they miss due to non-attendance.

3. Homework Assignments – End-of Chapter Problems and/or questions will be assigned based on the materials covered in class. Solutions are available on the course website and will be discussed in class upon request. Other problems and/or questions (e.g. project related) will be assigned, collected and graded. The due dates of these assignments will be announced in the class and late assignments will not be accepted.

4. Exams – There are one mid-term exam and one final exam. Students are expected to be in class for all regularly schedule examinations. Students missing a schedule exam with a well-documented true emergency must notify the professor beforehand to receive an excused absence and a make-up date. The only exception to this policy is an urgent, unanticipated medical situation.

5. Article Report & Presentation – Each student is required to select one article pertaining to current Market/Economic conditions from the Wall Street Journal, Business Week or Barron during the quarter and submit a written report that summarize the article (with at least 1000 words). Presenting such article to the class is also required (Please schedule your presentation date with instructor during the first two weeks of the quarter; the presentation schedule will be posted on course website). A photocopy (with journal date, section and column number) of the article being summarized needs to be submitted when it is presented in class.

6. Book Report – A written report (with at least 1600 words) on “The Random Walk Guide to Investing” (see course outline for due date). The report is intended as forums for students to show an understanding of the concepts presented in the readings; it is not a summary of the book. If you write a book report (with at least 3000 words) on “A Random Walk Down Wall Street” instead, you will earn up to 5 bonus points (bonus points can only be earned based on the reading of entire book).

7. On the Money – Students are expected to submit a weekly report (with at least 600 words) summarizing the show and the report is due on Tuesday following the show. Late reports will not be accepted. The report is expected to clearly articulate the main topics, guest speakers with their titles and contents.

8. Portfolio Project – details see last page

9. Proper use of the English language will be considered in the grading process. All the written assignments should be typed and double spaced.

10. All written reports should be submitted on Blackboard through SafeAssign to check for plagiarism. When you upload your file, please name your file with the title “Your last name – Your first name – FIN326 ‘Assignment title’”.

11. Late reports will not be accepted

12. Grading - the grade for the course will be calculated based on the following formula

2 Term examinations (see course schedule)

Highest exam score = 35%

Lowest exam score = 30%

Portfolio Project (Including related assignments) 20%

Book Report 5%

On the Money 1% × 5 = 5%

Article Report & Presentation 5%

13. Assignment is only accepted with proper class attendance.

14. Academic Integrity – Plagiarism: Plagiarism is a specific form of academic dishonesty (cheating) which consists of the misuse of published or unpublished works of another by claiming them as one’s own. Plagiarism may consist of handing in someone else’s work as one’s own, copying or purchasing a pre-written

composition and claiming it as one’s own, using paragraphs, sentences, phrases, words or ideas written by another without giving appropriate citation, or using data and/or statistics compiled by another without giving appropriate citation. Another example of academic dishonesty (cheating) is the submission of the same, or essentially the same paper or other assignment for credit in two different courses without receiving prior approval from the instructors of the affected courses. When a faculty member discovers a violation of the university’s policy of academic integrity, the faculty member is required to notify the Office of Student Rights and Responsibilities and the student(s) involved. A course grade of ‘F’ may be assigned or another grade penalty may be applied at the discretion of the course instructor. Additional disciplinary sanctions are determined by the Director of the Office of Student Rights and Responsibilities. Disciplinary sanctions may include disciplinary probation, suspension, permanent expulsion from the university or from the California State University system, administrative hold on the release of records, and withholding a degree. Disciplinary probation shall be noted on the student’s formal academic record only for the duration of the probationary period. Disciplinary suspension of more than one academic year and expulsion are a part of the student’s permanent record.

15. Student with Disabilities – Students with legitimate disabilities who might need special accommodations should contact the Services for Students with Disabilities Office, 654-3360, SA 140. No accommodations will be made without documentation from that office.

Tentative Course Schedule

Sessions	Date	Chapters	Topics
1	09/15	1	Course Introduction Understanding Investments
2	09/17	2 3	Investment Alternatives Indirect Investing
3	09/22	4	Securities Markets and Market Indices
4	09/24	5	How Securities Are Traded
5	09/29	6	The Returns and Risks from Investing
6	10/01	7	Portfolio Theory
7	10/06	8 9	Portfolio Selection and Asset Allocation Capital Market Theory and Asset Pricing Models
8	10/08	21	Portfolio Management

9	10/13	22	Evaluation of Investment Performance
10	10/15		Mid-term Exam
11	10/20	10	Common Stock Valuation
12	10/22	11	Common Stocks: Analysis and Strategy
13	10/27	12	Market Efficiency Book report due
14	10/29	13 14	Economy/Market Analysis Sector/Industry Analysis
15	11/03	15	Company Analysis
16	11/05	17	Bond Yield and Prices
17	11/10	18	Bonds: Analysis and Strategy
18	11/12	19 20	Options Futures Contract
19 20	11/17 11/19		Portfolio Project Presentation Portfolio Project Final Report Due
	11/24		Final Exam (5:00pm – 7:30pm)

This outline is only tentative and subject to changes by the instructor.

PORTFOLIO PROJECT

$500,000

Futures Contracts: SP500 Index (December Contract) Euro (December Contract)	$ 18,000 $ 2,500
Individual Stocks: Individual Bonds Mutual Funds/ETFs Cash	$250,000 $100,000 $100,000 $29,500
TOTAL	$500,000

Time Line

Form your portfolio on: September 21, 2015

Begin to modify your portfolio on: October 5, 2015

Keep on modifying your portfolio till it becomes consistent with your long-term goals, objectives and constraints. Update your portfolio on daily basis till the end of the quarter. Analyze and compare your portfolio’s performance with an appropriate market index consistent with your final portfolio. Prepare a five page report for your class presentation indicating your goals, objectives and constraints for forming your portfolio. You may use two tables and two graphs in the five page report. All other data and graphs should be in the appendix.

Use Excel for keeping your daily data. Use internet to obtain your daily data.

http://finance.yahoo.com

http://www.cmegroup.com/ (Chicago Mercantile Exchange)