FINAN202-22A (HAM)

Investments 1

15 Points

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Division of Management
School of Accounting, Finance and Economics

Staff

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Convenor(s)

Peter Huang

Peter Huang
9407
MSB.3.29
See Moodle
peter.huang@waikato.ac.nz

Lecturer(s)

Administrator(s)

: denise.martin@waikato.ac.nz

Placement/WIL Coordinator(s)

Tutor(s)

Student Representative(s)

Lab Technician(s)

Librarian(s)

: yilan.chen@waikato.ac.nz

You can contact staff by:

  • Calling +64 7 838 4466 select option 1, then enter the extension.
  • Extensions starting with 4, 5, 9 or 3 can also be direct dialled:
    • For extensions starting with 4: dial +64 7 838 extension.
    • For extensions starting with 5: dial +64 7 858 extension.
    • For extensions starting with 9: dial +64 7 837 extension.
    • For extensions starting with 3: dial +64 7 2620 + the last 3 digits of the extension e.g. 3123 = +64 7 262 0123.
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Paper Description

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This paper introduces fundamental concepts related to portfolio decisions of individual and institutional investors. Based on the concept of risk-return trade-off, it discusses the techniques and implications of efficient portfolio diversification and the allocation of assets among different securities.
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Paper Structure

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This paper is taught through lectures and tutorials. It is a Flexi paper with all contents available online. The face-to-face lecture room is shown below. Face-to-face lectures may be cancelled if attendance is low or the number of Covid cases is high. Tutorials will only be online and the details will be available via Moodle. Lecture notes, announcements and other paper materials are provided through Moodle.
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Learning Outcomes

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Students who successfully complete the paper should be able to:

  • 1.
    Describe the overall investment process and the key elements involved in the investment process such as asset allocation and security selection. Label the various financial instruments available to the potential investor (e.g., debt, equity and derivatives securities) and address the differences and similarities among them.
    Linked to the following assessments:
  • 2.

    Illustrate the mechanics, risk, and calculations involved in both margin and short trading. Explain the implications, ambiguities, and complexities of insider trading and the regulations concerning these issues. Identify key differences between open-end and closed-end investment companies.

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  • 3.

    Compute returns and risk for various asset classes and address their relation. Construct portfolios of different risk levels, given information about risk-free rates and returns on risky assets and calculate the return and risk of these constructed portfolios.

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  • 4.

    Understand the concept and usage of the capital asset pricing model (CAPM) and the arbitrage pricing theory (APT). Employ these theories to identify mispriced securities. Address the similarities and differences between the two main theories and the limitations of each.

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  • 5.

    Label and illustrate typical analytical errors related to behavioralism or psychology. Apply the basic technical analysis techniques and address their theoretical problems in competitive markets that approach efficiency.

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Assessment

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The assessment includes an online test, an individual assignment, a group project and an exam. To be eligible to pass this paper, students must achieve an overall grade of at least 50% in the whole paper.

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Assessment Components

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The internal assessment/exam ratio (as stated in the University Calendar) is 100:0. There is no final exam. The final exam makes up 0% of the overall mark.

The internal assessment/exam ratio (as stated in the University Calendar) is 100:0 or 0:0, whichever is more favourable for the student. The final exam makes up either 0% or 0% of the overall mark.

Component DescriptionDue Date TimePercentage of overall markSubmission MethodCompulsory
1. Test 1
14 Apr 2022
11:00 AM
25
  • Online: Submit through Moodle
2. Individual Assignment
19 May 2022
5:00 PM
25
  • Online: Submit through Moodle
3. Test 2
9 Jun 2022
11:00 AM
25
  • Online: Submit through Moodle
4. Group Project
23 Jun 2022
11:00 AM
25
  • Online: Submit through Moodle
Assessment Total:     100    
Failing to complete a compulsory assessment component of a paper will result in an IC grade
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Required and Recommended Readings

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Required Readings

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The list of required readings, recommended readings and other resources can be accessed in Moodle (via the library, FINAN202 Investments 1)

https://rl.talis.com/3/waikato/lists/59F8A618-755F-ABB3-997A-73B9A899791D.html

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Online Support

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Moodle is the official communication platform for this paper. All relevant materials and documents will be uploaded to Moodle. Announcements will be posted on Moodle from time to time to inform you of important notices, updates and other development pertaining to this paper. It is your responsibility to check these Announcements and updates via Moodle regularly, as ignorance of these is NOT a valid excuse.
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Workload

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The course has 33 contact hours (22 hours for lectures and 11 hours for tutorials). The rest of the 200 hours expected workload in this 15-point paper is estimated to be distributed as follows. Assessments: 67 hours. Preparing for lectures, tutorials and final exam: ­100 hours.


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Linkages to Other Papers

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Note any linkages to other papers where the linkage is of importance.
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Prerequisite(s)

Prerequisite papers: FINA201 or FINAN101

Corequisite(s)

Equivalent(s)

Restriction(s)

Restricted papers: FINA312, FINA517

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