Course Outline & Course Evaluation Form

Session: 2014-2016
Term: V
Course Name: Investment Analysis & Portfolio Management
Name of Course Coordinator/Instructor(s): Prof. P.Saravanan
Course Objectives:
This course is designed with the following objectives:
To make the students understand and apply the basic theory, tools, and terminology of
investment management, portfolio construction and evaluation;
To familiarize the students with the security valuation including that of analysis and management of
common stocks, bonds and other assets and evaluation of portfolio performance.
To make the students a complete Professional for the asset management industry.
Learning Outcomes:
By the end of the course, participants will understand the language, concepts, vehicles and strategies for
investing and portfolio management
Pedagogy:
The pedagogy to be followed in the course will be mix of case based lecture, class discussion, and
students presentation. The majority of the learning will happen off the classroom, and the classroom
sessions will be used for discussing what has been learnt outside the classroom. Very heavy
importance will be given for students preparation for the sessions. Most of the sessions will be
based on case, which has to be first tried / discussed by the students as a group on their own. The
Facilitators effort will be focused in providing a learning environment for the student rather than
spoon feeding the student.
Prescribed Text:
Bodie, Kane, Marcus and Mohanty, Investments, 8th edition Tata McGraw Hill). Here after
referred as B&K.
Additional References if any:
Prasanna Chandra, Investment Analysis and Portfolio Management, 3 rd Edition, Tata McGraw Hill.
Here after referred as PC
Reilly and Brown, Investment Analysis and Portfolio Management, 9 th Edition,
Cengage Publishers.

Evaluation Method:
(* Kindly see the instructions as mentioned below)

Sr. No.

Component

Weightage (%)

Open Book /Closed

NA

Duration Of
Exam
NA

Mid Term Examination

40%

120 Minutes

Closed Book

15%
(3 quizzes of 5%
each )
10%

15 minutes each

Closed Book

NA

(not more than 40% of the total

weightage)

End Term Examination

(not less than 30 % & more
than 40 percent of the total
weightage)

Quiz (announced)
(not more than 40% of the total
weightage)

Portfolio Game
(not more than 40% of the total
weightage)

Class Participation

NA
NA

15%

NA

NA

10%

NA

NA

10%

NA

NA

(not more than 20% of the total

weightage)

Case Submission
(not more than 20% of the total
weightage)

Equity Research Report

(not more than 40% of the total
weightage)

Sessions Wise Plani

Session 1:
Focus: Introduction to the Course Understanding the Investment Environment Asset Classes and
Financial Instruments
Readings: Chapter 1 and 2 (B & K) and refer the websites of BSE, NSE and SEBI. Familiarize yourself with
any direct stock trading website.
Session 2:
Focus:
Readings:

Understanding Risk and return- Asset Allocation Decisions

Chapter 5 and 6 of B & K.

Session 3:
Focus:
Readings:
Case:

Asset Allocation Decision-Value Vs Growth

Chapter 7 of B & K
GMO: the Value Versus Growth; Dilemma

Session 4:
Focus:
Readings:

Capital Markets Equilibrium CAPM and APT Models

Chapter 8 and 10 of B & K

Session 5:
Focus: Efficient Market Hypothesis and its relevance and How to use EMH for investments?
Readings:
Chapter 11 of B & K
Case:
Follow the insider or follow the news: the case of pacific Century cyber works
Ltd.
Session 6
Focus: Empirical Evidence on Security Returns- Single Factor, Multifactor and Fama-French Model
Readings:
Chapter 13 of B&K
EIC Framework:
Session 7
Focus: Macro Analysis and Micro-valuation of the Stocks
Readings:
(i) Chapter No.17 of B&K
(ii) Note on Macroeconomics and Investment Returns
Session 8
Focus: Industry Analysis
Readings:
(i) Chapter No.13 of Reilly and Brown
(ii) Finding Information for Industry Analysis HBS No.9-708-481
Case: American Fast Food in Korea
1

Indicative session planning based on the class room progress it could be modified

Session 9
Focus:
Readings:
Case:

Analysis of Financial Statement

Chapter No.19 of B&K
Dell Inc Investment Strategy

Session 10
Focus: Stock Valuation Methods
Readings:
Chapter No.17 of B&K
Session 11
Focus: Security Valuation Models
Readings:
Chapter No.18 of B&K
Session 12
Focus: Understanding Technical Analysis
Readings:
Chapter No.15 of Reilly and Brown
Understanding Fixed Income Securities
Session 13
Focus: Bond Fundamentals, Analysis and valuation of Bonds
Readings:
(i) Chapter No.14 and 15 of B&K
(ii) Note on Bond Valuation and Returns
Case: Will be provided later
Session 14
Focus: Bond Portfolio Management Strategies
Readings:
Chapter No.16 of B & K
Case: Will be provided later
Portfolio Performance Evaluation
Session 15:
Focus:
Portfolio Performance
Readings:
Chapter No.24 of B & K
Session 16
Focus:
Case:

Portfolio Manager Evaluation

Will be provided later

Session 17
Focus:
Readings:
Case:

Portfolio Manager Evaluation

Chapter No.27 of B&K
Will be provided later

Session 18

Project Presentation

Session 19

Project Presentation

Session 20

Spill over and wrap up

OTHER RELEVANT INFORMATION:

Quiz Schedule:
Quizzes will be given periodically throughout the course for the student to determine if the theory
presentations are fully comprehended and can be applied. Three quizzes will be held during the
course. The exact timing and scope of the quizzes are as follows:

First quiz
Second quiz
Third quiz

Timing
After 5th Session
After 10 h session
After 15th session

Topics to be covered
Up to Session 5
Session 5 -10
Session 10-15

What is class participation and how it will be measured?

This course requires the full participation of all the students. The facilitator will keep track of class
participation in order to determine the portion of your grade. The participation in real terms refers to
preparation to the class, concentration in learning the self-learning topics, and getting the solution
to the exercises. The students are expected to give their critical comments on the concepts and
theories discussed in the class. Contradicting and criticizing the developed investment
concepts will be the right way of understanding the subject. Certain set of questions from the prereads will be asked to randomly selected students for the sake of assessment.
What is expected out of case submission?
Cases are to be discussed in class. Most cases do not have "right" answers. Being "right" or
"wrong" should not be your concern, when participating - or deciding whether to make a
comment. The class is interested in your point of view and if there is a consensus that differs from
your viewpoint, that in no way diminishes the value of your contribution. Dont be afraid to
disagree with comments by your fellow students (or facilitators comments, for that matter). If
there is complete agreement on case solutions, than something is wrong! Critical discussion and
disagreement are to be expected and encouraged. A case brief (as word document) by each group
has to be prepared. A concise, well-organized, insightful analysis is expected. Case submission should
not be more than two pages. A suggested organization of a case b r i e f : (a) case back ground (b)
various levels of problem identified in the case (c) details of your analysis and your interpretations
(d) specific recommendations and implementation ( e ) final conclusion. While case solving, you are
expected to apply the tools and principles of Investment Management, as well as all your other skills,
to decide how to resolve the problem identified in the case. You can use necessary assumptions in
solving the case. The assumptions have to be strongly supported by logical explanations. Be
specific and assertive. Do not hedge your bets. Make a decision! The prepared case brief (word file),
workings (spread sheet file), should be sent to the instructor by before the commencement of the class.

Company Analysis- Equity Research Report:

This above task provides an opportunity to get some hands-on experience applying the investment
theory into practice. In the process, participants will get a chance to (a) evaluate the applicability of
the textbook theories in real time situations and (b) to analyze the performance of entities and
markets using statistical and analytical methods. The members of the group can share the tasks
among themselves, but a member of the group cannot be ignorant of the work done by other
members. This component will be done through various phases; (1) Choosing of an Industry, (2)
Specific company within that industry (3) Framework of analysis (4) Recommendations with reasoning
In each phase, student group needs to discuss with the instructor to take it forward .
The final presentation will take place towards the end of the course.
Portfolio Game
Hypothetically, each group of students need to construct a portfolio by selecting a bunch of stocks
which are part of NSE / BSE. The available capital for investment is Rs. 10,00,000. The amount is
available to you for investment from Day 1. The first round of portfolio construction has to be
completed (First Round) and mailed to me on the next trading day. All the revision has to be made
after the market hours (based on the closing price of the stock) and has to be submitted to the
facilitators on every week end (Friday). On any revision made in the portfolio, the closing price
existing on the day of revision will be counted as the traded price. The price @ which buy/sell takes
place is only on the closing price of every day. Use excel sheet Portfolio Construction for portfolio
construction and Portfolio Revision. The students are expected to rename the files with
appropriate section, group, and revision details before submitting the file. The evaluation will be
based on rationality adopted in portfolio construction and revision, strategy used in portfolio
construction, and returns earned during the period. All the groups have to maintain the spirit of the
game and try to maximize the return. Keep your investment strategy very confidential and do not
discuss with any of the other group members. The students are also expected to fill the
spreadsheet Investment Rational. While filling the spreadsheets do not change the format, font,
and alignment. While computing the buy / sell transactions you should deduct 0.7% transaction cost.
The unused fund will fetch an interest @ rate of 4% p.a. Your portfolio game template w i l l b e
m a i l e d t o y o u . Name the file to be submitted as Portfolio Game Construction or Revision Group no. Plz Note that NO SHORT SELLING, DAY TRADING AND POSITIONS IN DERIVATIVES, ONLY
CASH MARKET TRANSACTIONS.
*****