Syllabus For Investment Analysis and Portfolio Management

July 24, 2012
INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT

UNIVERSITY OF GONDAR
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF ACCOUNTING AND FINANCE
M. SC IN ACCOUNTING AND FINANCE
Course Syllabus for Investment Analysis and Portfolio Management
Course Identification:
Course title:
Course code:
Credit hours:
Investment Analysis and Portfolio Management

ACFN 631
3
Course Description:
The course describes the process of analyzing decisions relating to modern investment
theories, behavioral finance, and securities valuation using both fundamental and technical
analysis of securities with reference to their markets, industries and companies. The course
will also deal with securities risk-return trade-off, analysis of modern portfolio theories like
the efficient market hypothesis CAPM, APT and other portfolio theories, and finally it
describes portfolio selection, performance evaluation and management.
Course objectives:
The objective of the course is to understand the various financial investment avenues and
efficient portfolio management techniques and to provide the skills required to take correct
investment decisions, selecting the best securities and efficient portfolio management.
Specific Course Objectives:

After completing the course, students are able to
1.
2.
3.
4.
5.
Describe investment environment

Obtain and interpret investment information from various sources
Describe the mechanics in financial markets.
Describe the Methods of valuation of financial instruments.
Describe procedure for assessing and measuring the risk and return of a single asset
and a portfolio.
6. Capital Allocation Across Risky And Risk-Free Portfolios
7. Discuss the selection of the optimal portfolio based on the Markowitz Model.
8. Explain the Capital Asset Pricing Model (CAPM) as a framework for basic risk return
trade-off.
9. Describe the Arbitrage Pricing Theory (APT) as a model of security/asset pricing as an
alternative to the CAPM.
10.Describe active and passive portfolio management strategies
11.Evaluate the performance of portfolio investments.
Course Schedule:
Contents
University of Gondar
Page 1
Time
Department of Accounting and Finance
Assessme
nt
Specific Reading
Material
July 24, 2012
Chapter 3:
Security Analysis
3.1. The Efficient Market Hypothesis

Random Walks and the Efficient Market Hypothesis
Implications of the Efficient Market Hypothesis
3.2. Fundamental Analysis
Macroeconomic Analysis
Industry Analysis
Company Analysis
Equity valuation and Equity Portfolio Management Bond
valuation and Bond Portfolio Management
3.3. Technical Analysis
Chapter 4: Risk, Return and Portfolio Theory

4.1.
4.2.
4.3.
4.4.
Individual Assignments Submission
2.1. Functions of Financial Markets

2.2. Where Securities are traded
The Primary Market
The Secondary Markets
The Over-the-Counter Market
The Third and Fourth Markets
2.3. Trading Systems/Trading on the Exchanges
The Participants
Types of Orders
2.4. Trading on the Over-the-Counter Market
2.5. Trading Costs
2.6. Buying on Margins
2.7. Short Sales
2.8. Market Indices
Individual Assignments
Submission
of
Historical Return and Risk for a Single Asset

Expected Return and Risk for a Single Asset
Portfolio Expected Return and Risk
Diversification and Portfolio Risk
Page 2
Term Paper
submission and
Presentation
Functioning
Week 2&3
and
Week 4,5, & 6,
Chapter 2 :
Organization
Securities Markets
Week 1
Definition of Investment
Investment Alternatives
Investment Objectives
The Investment Process
Clients of the Financial System
The Environment Responds to Clientele Demands
Ongoing Trends
Week 7,8,9,&10
1.1
1.2
1.3
1.4
1.5
1.6
1.7
Chapter 1: The Investment Environment
Bodie Z., Kane A.,

&
Marcus
A.,
(2005).
Investments. 6th
Edition, McGrawHill/Irwin,
New
York, U.S.A.
1. Bodie Z., Kane
A., & Marcus A.,
(2005).
Investments.
6th
New
York, U.S.A.
2. Reilly & Brown
(2007).
Investment
Analysis
and
Portfolio
Management. 7th
Edition. John Wiley
& Sons, Inc., New
Jersey,
U.S.A.
1.
Pandian
P.
(2001).
Security
analysis
and
Portfolio
Management.
Vikas
Publishing
House Pvt. Ltd.,
New Delhi, India.
2. Reilly & Brown
(2007).
Investment
Analysis
and
Portfolio
Management. 7th
Edition. John Wiley
& Sons, Inc., New
Jersey, U.S.A.
Ross,
S.
A.,
Westerfield, R. W.
& Jaffe, J. F. (2003)
Fundamentals of
Corporate
Finance.
7th
Edition, McGrawHill
Irwin,
5.1. Capital Allocation Across Risky And Risk-Free Portfolios

5.2. Portfolios Of Two Risky Assets
5.3. Risk Tolerance And Asset Allocation
5.4. Optimal Combination Of Risky And Risk-Free Portfolios
5.5. The Capital Market Line (CML) and the Security Market
Line
5.6. Equilibrium in Capital Markets
The Capital Asset Pricing Model
The Arbitrage Pricing Theory
Week 11,12,13,&14
Chapter 5: Capital Allocation
Chapter 6: Portfolio Management and Evaluation of

6.1. Overview of Portfolio Management
6.2. Active versus passive portfolio management
6.3. Strategic versus tactical asset allocation
6.4. Monitoring and revision of the portfolio
6.5. Portfolio performance measures
6.5.1.
Factors to Consider in Measuring
Portfolio Performance
6.5.2.
Risk-Adjusted Measures of Performance
The Sharpe Performance Measure
The Treynor Performance Measure
Performance Measurement using
Jensens Alpha
Measuring Portfolio Diversification
Week 15 & 16
Performance
Final ExamAnd Case presentations Final ExamAnd Case presentations
July 24, 2012
Bodie Z., Kane A.,

&
Marcus
A.,
(2005).
Investments.
6th
New
York, U.S.A.
6.3.1.
Reilly & Brown

(2007).
Investment
Analysis
and
Portfolio
Management. 7th
Edition. John Wiley
& Sons, Inc., New
Jersey, U.S.A.
REFERENCES
1. Bodie Z., Kane A., & Marcus A., (2005). Investments. 6th Edition, McGraw-Hill/Irwin,
New York, U.S.A.
2. Brentani C. (2004). Portfolio Management in Practice. Elseviers Science and
Technology Rights Department in Oxford, UK.
3. Chandra P. (2005). Investment analysis and Portfolio Management. TATA McGraw-Hill,
New Delhi, India.
4. Fabozzi F. J. & Drake P. P., (2009). Capital Markets, Financial Management, and
Investment Management. 10th Edition, John Wiley & Sons, Inc., Hoboken, New Jersey,
U.S.A.
5. Fabozzi F. J. Fundamentals of Investing. John Wiley & Sons, Inc., New Jersey, U.S.A.
6. Fabozzi F. J. The Hand Book of Financial Instruments. John Wiley & Sons, Inc., New
Jersey, U.S.A.
7. Khan, M. Y. & Jain, G. K. (2008). Financial Management: Text and Problems. 5th
Edition, McGraw-Hill Publishing Company Limited, New Delhi, India.
8. Pandey, I. M. (1999). Financial Management. 9th Edition, Vikas Publishing House Pvt.
Ltd., New Delhi, India.
9. Pandian P. (2001). Security analysis and Portfolio Management. Vikas Publishing
House Pvt. Ltd., New Delhi, India.
Page 3
6.3.2.
July 24, 2012
10.Reilly & Brown (2007). Investment Analysis and Portfolio Management. 7th Edition.
John Wiley & Sons, Inc., New Jersey, U.S.A.
11.Ross, S. A., Westerfield, R. W. & Jaffe, J. F. (2003) Fundamentals of Corporate Finance.
7th Edition, McGraw-Hill Irwin, Boston.
12.Sharpe W. F., Alexander G. J., & Bailey J. V. Investments. 5th Edition, Prentice Hall, New
Jersey, U.S.A.
13.Winfield R. G., & Curry S. J. Success in Investment. 2nd Edition, John Murray Publishers
Ltd.
Course Policies
A. Classroom Policy
Students should switch off their mobile phone while attending classes and drop it at home
during exams. Students should make active participations in class and should forward ideas
to the class when they are allowed to do so.
B. Make-up Exam Policy

In the case of missing mid-exam, make-up exams will be arranged based up on the
agreement
between
the
student
and
the
faculty
(Instructor),
only
if
relevant
documents/evidences stating the reason for absence are submitted in not later than one
week after the test date. However, the student will assume the total mark loss during failure
to comply with this. Make-up exam for final exam will be arranged by the department
council after considering the relevance of reasons and documents attached therein. Hence,
the department head is your contact person in the case of missing final exam.
C. Make-up class Policy

The instructor could arrange make up classes in cases when regular classes are interrupted
for different reasons.
D. Attendance Policy
Regular attendance and punctuality to class are strongly advised. Irregular attendance
detracts the students learning and prevents participation in the important intellectual
exchanges that occur among students and the instructors. However, every student needs to
have a minimum of 80% classroom attendance to sit for final exam.
E. Assignment Policy
Students must submit assignments and term papers on or before the stipulated time
provided by the instructor. Overdue and copied submissions will not be acceptable and
eventually rewarded no marks.
F. Student assessments:
Page 4
July 24, 2012
Details of the assessment techniques that will be applied in the course progress are
summarized in the table below.
No
Mode of Assessment
Individual Assignments, term papers and

Presentations
Article Review
Final Exam
Total
2
3
Points to be
allotted(weight)
30
10
60
100
G. Disclaimer
This course outline will be followed as closely as possible. However, the faculties reserve
the right to modify, supplement, and make changes to this course outline as course needs
arise.
Page 5

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July 24, 2012

INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT

Course Syllabus for Investment Analysis and Portfolio Management

Investment Analysis and Portfolio Management

Specific Course Objectives:

Describe investment environment

Department of Accounting and Finance

July 24, 2012

INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT

3.1. The Efficient Market Hypothesis

Chapter 4: Risk, Return and Portfolio Theory

Individual Assignments Submission

2.1. Functions of Financial Markets

Historical Return and Risk for a Single Asset

Department of Accounting and Finance

Week 4,5, & 6,

Chapter 1: The Investment Environment

Bodie Z., Kane A.,

INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT

5.1. Capital Allocation Across Risky And Risk-Free Portfolios

Chapter 5: Capital Allocation

Chapter 6: Portfolio Management and Evaluation of

Final ExamAnd Case presentations Final ExamAnd Case presentations

July 24, 2012

Bodie Z., Kane A.,

Reilly & Brown

Department of Accounting and Finance

July 24, 2012

INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT

B. Make-up Exam Policy

C. Make-up class Policy

Department of Accounting and Finance

July 24, 2012

INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT

Individual Assignments, term papers and

Department of Accounting and Finance

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