Finance 381

FINC 381: Investment Analysis

Prerequisite: FINC 331

Credit Hours: (3)

This course focuses on the theory and practice of investments, covering the topic areas of capital market structure, valuation, security analysis and portfolio management.  The course is designed to develop a theoretical framework for investing and to provide the student with practice in applying the framework to typical investment decision making.

Detailed Description of Course
• Financial Instruments
    o Direct versus Indirect Investing
    o Treasury and Federal Agency Securities
    o Corporate Securities
    o Municipal Securities
    o Mutual Funds
    o Closed-end Funds
    o Exchange Traded Funds
• Financial Markets
    o How Securities are Traded
    o Tax Environment
• Portfolio Theory and Management
    o Risk and Return
    o Diversification
    o Portfolio Optimization and Selection
• Asset Pricing
    o Capital Asset Pricing Model
    o Dividend Discount Model
    o Corporate Valuation Model
    o P/E Multiples
    o Other Asset Pricing Techniques
• Investment Strategies
    o Economic Analysis
    o Industry Analysis
    o Company Analysis
    o Technical Analysis
• Bond Analysis and Investment Strategies
    o Bond Valuation and Yield
    o Bond Price Volatility and Duration
    o Bond Investment Strategies
• Stock Options
    o Fundamentals of stock options
    o Advanced option strategies and considerations
    o Option Valuation

Detailed Description of Conduct of Course

This course is a combination of lecture, case presentation, and discussion.

Goals and Objectives of the Course

Having successfully completed the course the student will be able to:
• identify various investment instruments offered in the financial markets;
• identify various financial markets;
• describe strategies with long-, short-, and leveraged (margin)- investing;
• measure the risk/expected return of individual securities as well as a portfolio;
• construct an optimal portfolio given a set of financial assets;
• differentiate between technical and fundamental analyses in predicting the future performance of assets;
• apply fundamental analysis in predicting the future performance of assets; and
• recognize and implement option strategies for leveraged return and investment hedging applications.

Assessment Measures

Graded assignments may include in-class tests, a final examination, the assignment and presentation of problem exercises, papers, and class preparation and participation.

Other Course Information


Review and Approval
February 2010 Reviewed Dr. Dan Davidson, Chair