FINAN302-19A (HAM)

Investments 2

15 Points

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Division of Management
School of Accounting, Finance and Economics


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Paper Description

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This paper introduces theory and practice related to portfolio decisions of individual and institutional investors. Based on the concept of asset pricing, portfolio construction, risk-return trade-off, it discusses the techniques and implications of security analysis, efficient portfolio diversification and the allocation of assets among different investable assets. The fundamentals of major financial markets and basic time series analysis are introduced.

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Paper Structure

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5.Mid-term test

6.Final exam

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Learning Outcomes

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Students who successfully complete the course should be able to:

  • Students who successfully complete the course should be able to:
    1.Explain how investors interact with financial markets.

    2.Compute returns, identify measures of risk and apply the principle of risk/return trade/off.

    3.Explain the concept of efficient portfolio diversification, optimal asset allocations and the mechanisms of asset pricing models.

    4.Explain the implications of market efficient hypothesis.

    5.Demonstrate the concepts and valuation models of securities markets such as bond and equity markets.

    6.Evaluate performance of investment portfolios.
    Linked to the following assessments:
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The internal assessment for this paper includes one mid-term test, one assignment and one presentation.

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Assessment Components

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The internal assessment/exam ratio (as stated in the University Calendar) is 50:50. There is no final exam. The final exam makes up 50% of the overall mark.

The internal assessment/exam ratio (as stated in the University Calendar) is 50:50 or 0:0, whichever is more favourable for the student. The final exam makes up either 50% or 0% of the overall mark.

Component DescriptionDue Date TimePercentage of overall markSubmission MethodCompulsory
1. Mid-term test
12 Apr 2019
5:00 PM
  • In Class: In Test
2. Assignment
17 May 2019
5:00 PM
  • Online: Submit through Moodle
3. Presentation
24 May 2019
5:00 PM
  • Presentation: In Class
4. Exam
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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Bodie, Kane, and Marcus, Investments, 11th Edition. McGraw-Hill Education, 2019.

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Recommended Readings

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Black, F., (1972). Capital market equilibrium with restricted borrowing. Journal of Business. 45, 444–454.

Fama, E.F., French, K.R., (1992). The cross-section of expected stock returns. Journal of Finance 47, 427–465.

Fama, E.F., French, K.R., (1993). Common risk factors in the returns on stocks and bonds. Journal of Financial and Economics 33, 3–56.

Fama, E.F., French, K.R., (1996). Multifactor explanations of asset pricing anomalies. Journal of Finance51, 55–84.

Fama, E.F., MacBeth, J., (1973). Risk, return, and equilibrium: empirical tests. Journal of Political Economics 81, 607–636.

Koop, G. (2013) Analysis of Economic Data, 4th Edition, John Wiley & Sons, Ltd.

Sharp, W.F., (1964). Capital Asset Prices: A Theory of Market Equilibrium under Conditions of Risk. Journal of Finance 19, 425-442.

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Other Resources

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Please contact the Paper Convenor or Administrator for further details.

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Online Support

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All the available resources about this paper will be available in Moodle. The online resources may be updated where necessary.

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There are 150 learning hours for this paper.

The time is devoted to the following activities:

Attend lectures and tutorials

Read teaching materials

Prepare for and sit the mid-term test

Complete on assignment

Delivery of one presentation

Prepare for and sit the final exam

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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 papers: FINA201 or FINAN202




Restricted papers: FINA312 and FINA517

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