ASSIST. PROF. DR. ADNAN HUSHMAT



-114300-1587500FIN 695: Investment Analysis and Portfolio ManagementCOURSE INSTRUCTOR INFORMATIONNameDr. Adnan HushmatEmail IDadnan.hushmat@Tel: 042-99233408 (Ext. 246)DEGREE INFORMATIONProgramBatchSection(s)Semester FallMBA2018AYear2019TEXT BOOK(s) INFORMATIONTitle of BookFundamentals of InvestingEdition13/eAuthor(s)S.B. Smart, L.J. Gitman, M.D. JoehnkPublisherPearsonReference book(s) and other material1.Title of BookThe Theory and Practice of Investment Management: Asset Allocation, Valuation, Portfolio Construction, and Strategies 2nd EditionAuthor (s)Farbozzi, F.J., & Markowitz, H.M.2.Title of BookAuthor (s)3.TitleAuthor (s)4.TitleAuthor (s)Course Description This course will help the student attain an understanding of investment strategies. Students will learn about portfolio management, techniques associated with risk management. The investment characteristics of classes of investments are examined. The mechanics of securities markets will be discussed and explained. Students learn to evaluate securities for inclusion in a portfolio. This course has both theoretical and practical components. Topics covered include the efficient market hypothesis, diversification, optimum portfolio, active and passive investing, stock valuation, bond valuation, active and passive investing, managing mutual funds and managing risk using derivative securities.Learning Objective:The objective of this course is to equip students with knowledge of financial markets, financial instruments, investment strategies, and portfolio management tools and techniques. Standard models of financial economics are related to problems of portfolio optimization, diversification and risk management.Upon completion of this course, successful students will be able to:a.Describe the structure of financial marketsb.Value financial instruments such as stocks and bondsc.Build a diversified portfoliodSelect the optimum portfolio from a selection of portfoliose.Assess the performance of a portfoliof.Manage risk in a portfolioCOURSE CONTENTS:WeeksContents/Topics**Courseware Events(MM/ IT Lab/Case Study/ Assignment/Presentation etc.)Comments (if any)1Introduction Course Contents and learning outcomesInvestment and its attributesTypes of investmentsInvestment Policy statement and investing over the life cycleTypes of short-term investmentsCareers in investmentsAction plan: Course, assignments, examsSlides, Class Discussion2Securities Markets and TransactionsTypes and characteristics of securities marketsIPO processBroker Markets vs Dealer MarketsGlobalization of securities marketsLong purchase, margin transactions and short salesSlides, Class Discussion, Practice Questions3The Time Value of Money – Single CashflowsCash flow timelinesCompounding and future value Discounting and present valueUse of financial calculatorEffective Annual RateSlides, Class Discussion, Practice Questions4The Time Value of Money – Annuities and other topicsOrdinary Annuity vs Annuity DuePresent Value vs Future ValueLoan Amortization SchedulePerpetuity: Level & GrowthQuiz 1Slides, Class Discussion, Practice Questions5Return and RiskReturn, its components and forces affecting the level of returnRole of TVM in measuring return and defining a satisfactory returnReal, risk-free, and required returns and the calculation and application of holding period return.Calculating of an internal rate of return and how to find growth rates.Risk and its sourcesCalculating a single asset risk Slides, Class Discussion, Practice Questions6Modern Portfolio ConceptsPortfolio and its objectivesPortfolio risk and returnCorrelation and DiversificationCAPM Traditional vs modern approaches to portfolio managementPortfolio betas, the risk-return tradeoff, and reconciliation of the two approaches to portfolio managementSlides, Class Discussion, Practice Questions 7Investing and Analyzing Common StocksInvestment appeal of common stocksStock returns from a historical perspectiveBasic features of common stocksCommon stock dividends, types of dividends, and dividend reinvestment plans.Security analysis processEconomic Analysis and Industry AnalysisFundamental AnalysisCalculation and uses of financial ratios to gauge the financial vitality of a companySlides, Class Discussion, Practice Questions 8Stock ValuationA company’s future and stock valuationForecasting a stock’s expected cash flowIntrinsic value and required rates of returnZero-growth, constant-growth, and variable growth dividend valuation models.Present value-based modelsValuing traditional dividend-paying shares to more growth-oriented stocksSlides, Class Discussion, Practice Questions 9Midterms10Market Efficiency, Behavioral Finance and Technical AnalysisEfficient market, market anomalies and challenges Evidence indicating market efficiencyDecision traps and systematic errors in investment decisionsBehavioural finance and investor’s cognitive biasesTechnical AnalysisTechnical trading rules for individual stocks and the market as a wholeSlides, Class Discussion, Practice Questions 11Fixed-Income SecuritiesBasic investment attributes of bonds and their use as investment vehiclesBond features and ratingsCall, refunding and sinking-fund provisionsBond price quotes and volatilityTypes of bondsDollar-denominated and non-dollar-denominated foreign bonds.Convertible securities and valuationSlides, Class Discussion, Practice Questions 12Bond ValuationBehavior of market interest rates and the forces that cause interest rates to changeTerm structure of interest rates and yield curves.Value bondsBonds duration and its use in the management of bond portfoliosBond investment strategiesSlides, Class Discussion, Practice Questions 13Mutual FundsFeatures of mutual fundsOpen- and closed-end funds, exchange-traded funds, and other types of professionally managed investment companiesTypes, uses and investment objectives of mutual fundsSources of return and compute the rate of return earned on a mutual fund investmentQuiz 2Slides, Class Discussion, Practice Questions 14Managing your own portfolioAsset allocation schemeMeasure and comparing investment performanceTechniques used to measure income, capital gains, and total portfolio returnSharpe, Treynor, and Jensen measures to compare a portfolio’s return with a risk-adjusted, market-adjusted rate of return, and discuss portfolio revision.Dollar-cost averaging, constant-dollar plans, constant-ratio plans, and variable-ratio plans.Role of limit and stop-loss orders in investment timing, warehousing liquidity, and timing investment sales.Slides, Class Discussion, Practice Questions15Risk Management using Derivative Securities _ OptionsIntroduction to OptionsPut vs Call OptionsValuation of put and call optionsProfit potential of puts and calls and some popular put and call investment strategiesProfit potential and loss exposure from writing covered call optionsMarket index optionsSlides, Class Discussion, Practice Questions 16Risk Management using Derivative Securities _ Futures & ForwardsFeatures of a futures contract and how the futures market operatesRole of hedgers and speculators in the futures marketCommodity futures: characteristics and trading strategiesPhysical commodity and a financial futureFinancial futures: characteristics and trading strategiesSlides, Class Discussion, Practice Questions17Revision18Final ExamsExamCourseware Structure: (Mark X where applies)Lecture(Lect)Multimedia(MM)Exercise(Exer)IT Labs(Lab)Case Studies(CAS)Individual Assignment(Assign)Group Presentation(G-Pres)Any other MediumXXXXXMarks Distribution:Planned Courseware EventParticulars% Marks*Weight RangesQuizzes15Assignments/Project/Class Part.2010Mid Exam 2530Final Exam *4020Total:- =SUM(ABOVE) 100ParticularsPlanned (Qz/As/Labs)Remarks1. Quizzes2Surprise/Announced*Weight Ranges are subject to change as per instructor’s discretion but will be notified in the class at anytimeAPPROACH: Lecture, homework, in-class exercises, group discussion, presentations, exams and guest lecture will be used to aid in understanding and application of project management.Homework Assignments:Late homework will not be accepted. We will use official email to drop HW’s as soft copy submission (SC’s) and next day in class as hard copy submission (HC’s). Check the due dates in the course outline. Please name the files (one file per homework, please) with your last name and then HW1, HW2, etc. For example: Mr. John White will be, “White_HW1.doc.” Homework assignments are to be done individually, not as groups* all assignments are double space, Ariel 12(already discussed on requirement ppt. slide)Instructions/ Pledge for STUDENTS for satisfactory progress in this course:POLICIES: Bahria has a 75 percent attendance policy. However, students are allowed to sit in the final exam if they have at least some minimum percentage of attendance. Announcements/Notifications will be only through email (check official email). Other source will be TA(s), and in class announcements. Any one method may be opted. I adhere and accept, the instructor has the right to change the weightage(s) of any task or activity, like assignments, quiz(s), project(s) etc. without prior notice, but that will be affective to the whole class, not only meAssignment/ Make-up Tests/ Exams: There will be “NO” make-up assignments, tests, or exams if the student misses it. On medical grounds, student has to provide a medical certificate for instructor’s reviewDeadlines for assignments/project will be announced only by email to the class. It will be followed strictly. No late submission will be accepted at any circumstances. Write word count at the top. Format: Double spacing, Ariel, 12 font for Assignments. Check course-outline for Min.& Max words.Presentations: Students need to develop good speaking skills and this course is one of the fundamental parts of management and communication skills. Each student will give individual/group presentation in Formal attire, English as the only language acceptable. Switching languages can reduce your grades/scoresClass decorum & Warnings: I’ll neither make any disturbance in the class nor disturb my class fellows either by hitting, whistling or making nose. I’ll not even take Phone calls in the class. If I do, the TA is allowed to deduct 1% from the course on each warning. At 5th warning, TA will announce in the class for extra-care and caution. The student will not take the exam on the 7th warning and for this he or she needs the permission from HoD MS. At 8th warning, he or she needs the permission from the Director Lahore campus. On 9th, he or she will be awarded “F” in the program, no matter how good he or she proves in exam(s)Plagiarism in any part of the course can lead to “F” in the whole course. I will not share my work with other student(s)/friend(s) and will be sole responsible for my work’s protection in my system, USB’s etc. Similar work will lead, “F” to plagiarized parties, i.e. owner & copier. Referencing: If you use any source(s) of reference, inside or out-side campus or even by himself/ herself to influence instructor for grade revision or any extra-credit assignment/quiz or requests on late submission(s), it will result straight “F” in the course. HINT: Work hard and be honest & sincere with yourself.Honesty: You will receive a 0 on any item if you are dishonest in the current course requirements. Be sure to cite references properly and do your own work. Also make sure you are honest in everything you do relating to your team projects, assignments, quizzes, and exams. GOOD LUCK!*Student registered in the above course, affirms the course outline and the adheres the policies/ the pledge statement with full spirit. This is a computer-generated copy and needs no signature. For the use of instructors and administration only: Please comment briefly on whether the course outline was followed, particularly if any areas were not covered. Also suggest any changes in the course outline for future teaching.Please comments on the learning outcomes of this course i.e. describe the developments in the knowledge, behavior and skills of students on the basis of course objectivesSignatoriesNameSignatureDateTeaching FacultyDr. Adnan Hushmat09-24-2019HOD School of BusinessDr. Muhammad Ahmed09-25-2019 ................
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