Investments Syllabus 2008 - Babson College



Course Objective

This course is designed for students interested in investment or portfolio management. Students explore the simultaneous management of multiple securities, using statistical and other mathematical tools. Topics covered include: risk and return, allocation of risky assets, setting portfolio objectives and strategy, portfolio optimization, risk crafting, and portfolio performance evaluation. Through investment tools, projects, and readings, students will explore investment and portfolio theory and practice. Prerequisites: IME2 or MCE and any 3000 level Finance course.

Required Texts

Essentials of Investments (7th Edition), by Zvi Bodie, Alex Kane, and Alan Marcus, McGraw-Hill/Irwin, copyright 2008. (Earlier editions are probably also OK, but I will be using this one.)

The Wall Street Journal Required reading EVERY DAY. (I am not kidding about this!)

You are expected to keep up with the readings at ALL times!

HIGHLY Recommended Reading

A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition (Paperback), by Burton G. Malkiel, W. W. Norton; 9 edition (December 24, 2007).

Course Work and Grades

Finance is not an easy subject, and this is not an easy class. You will need to think, study, practice the problems at the end of the chapters, and be prepared for class to do well in this course. On the other hand, if you are willing to put in some time and effort, you should find the class quite rewarding.

There will be a midterm and two projects, and probably a number of small assignments. The projects may be submitted to Turnitin or something equivalent. In addition, there will also be homework for you to do on your own. Thus, no one score will determine your overall grade in the class. All class members are expected to participate actively in the class.

The initial calculation for the course grade will use the weights below, although outstanding good (or bad) class participation may, at my option, be recognized by an increase (decrease) of a half grade or more, at my sole discretion. I also retain the complete right to change these weights at any time, or add a final if it seems necessary:

Assignments, Participation, Initiative, Professionalism, and Improvement (A-PIPI) 20%

Project 1 (Investment Portfolio) 20%

Project 2 (Value Security) 20%

Midterm 40%

All work and exams are cumulative. If an emergency or illness should force you to miss an examination or assignment/homework deadline, you must contact me before the test is given or the assignment is due.

Any student who is entitled to an academic accommodation based on the impact of a documented disAbility should contact me privately during office hours to discuss his or her specific needs.  Please also contact the coordinator of disAbility services, at 781-239-4075 or in Hollister Hall to coordinate reasonable accommodations.

NOTE: Dr. Goldstein reserves the right to change any aspect at any time, including, but not limited to, assignments, grading methods or relative grading weights, assignment or exam dates, or the course schedule.

Date READING ASSIGNMENT CHAPTERs

January 24 Introduction to Investments Ch 1

January 29 Risk and Return Ch 5

January 31 “” Ch 5

February 5 Efficient Diversification Ch 6

February 7 “ Ch 6

February 12 Efficient Diversification (Lincoln’s Birthday) Ch 6

February 14 CAPM (Valentine’s Day) Ch 7

February 19 CAPM Ch 6

February 21 CAPM Ch 7

February 25 GROUP PROJECT DAY

February 28 Macroeconomic and Industry Analysis Ch 12

March 4 The Efficient Market Hypothesis Ch 8

March 6 “”

March 11 Behavioral Finance and Technical Analysis Ch 9

March 13 “

March 18 SPRING BREAK

March 20 SPRING BREAK

March 25 Equity Valuation Ch 13

March 27 “”

April 1 Macroeconomic and Industry Analysis Ch 12

April 3 Equity Valuation Ch 13

April 8 Review for Midterm

April 10 MIDTERM

April 15 Managing Bond Portfolios Ch 11

April 17 Performance Evaluation and Active Portfolio Management Ch 18

April 22 GROUP PROJECT DAY

April 24 Globalization and International Investing Ch 19

April 29 LAST DAY OF CLASS / Course Review

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