FIN450 – Portfolio Analysis

Summer, 2021

Course Description
Portfolio analysis and management is the center of modern investment. This course provides
and in-depth discussion of various investment vehicles, different measure of return and risk,
and the risk-return trade-off one faces when it comes to portfolio management. Specifically,
this course will cover the following topics: introduction and brief reviews; portfolio theory;
asset pricing models (Capital Asset Pricing Model, Arbitrage Pricing Theory, among others);
efficient market theories; and investment management and performance evaluation.

Course Materials
Investments by Zvi Bodie, Alex Kane and Alan Marcus, 9 th/10th Edition, McGraw-Hill/Irwin.

Suggested Materials
While there are countless number of books, movies, videos and articles on
Investments, I would like you to watch the following documentaries and movies:

Required Equipment

Laptop
Calculator

Laptop with MS Excel and Tableau installed.

We will have several sessions of empirical analysis in which you will you Excel and
Tableau to analyze stock and portfolio performance.

Performance Evaluation

Quiz:
4-8 quizzes will be given during regular class time. They are designed to give you an
opportunity to review and familiarize yourself with the material covered in class or to enhance
your understanding about important portfolio management issues.

Exams:
There will be 1 final exam that is close-book, close-notes. The final exam will be comprehensive.
There will be no “make-up” test.
You will receive 0 for the quiz you miss unless you can provide appropriate documents.

Grade:
Your weighted average grade will be based on the following schedule:
Final Exam 50%
Quiz 40%

1
 Attendance 10%

Grade Scale: Please note that grades/percentages will not be ‘rounded up’

A ≥ 90.0% B ≥ 80.0% C ≥ 70.0% D ≥ 60.0% F < 60.0%

Class attendance:
- Regular class attendance is required. I will not provide any information about previous
classes outside class or via email. In other words, come to class on time, listen, and ask
pertinent questions when appropriate. If you have to miss a class, it is your responsibility
to determine what you missed by communicating with your classmates.

Testing policy:
- All tests are closed-book/note
- No smart phone is allowed in the test.

Classroom code of conduct:

There is code of conduct that is expected of all students in this class. Violations and
nonprofessional behavior will result in deductions from your in-class grade.
- Class begins at the stated start time. Each student is expected to be in the classroom,
seated and ready to begin at the specified class starting time. It is understandable that a
student may be a few minutes late on rare occasions, but this should never be a habit.
Habitual late offenders will not only lose points for their in-class grade but will lose the
respect of your classmates and me.
- Turn off any electronic device is that might distract you, the instructor, or your
classmates. Cell phones should not be visible to you or to others.
- Text messaging, reading newspapers and magazines, playing on your computer and
working on other classes during class time are not permitted.

Academic Integrity
Any student caught in an act of academic dishonesty or cheating will immediately be assigned a
grade of “F” for the entire course.

TENTATIVE SCHEDULE

Readings
Session Topic BKM 9th
edition
Review of Investment Basics
The Investment Environment
1 Video: High frequency trading Chapter 1
Flash crash 2010
2 Financial Instruments and Market Indexes Chapter 2
How securities are traded
3 Chapter 3
Video: Dark Pool

2
 Securities Analysis
Equity Valuation Model
4 Chapter 18
Target Valuation

5 Financial Statement Analysis Chapter 19

Financial Statement.xls
Portfolio Theory

6 Historical Rates and Risk Premiums (laptop required) Chapter 5

7 Risk Aversion and Capital Allocation to Risky Assets Chapter 6
8 Index Model Chapter 8
9 Index Model (cont.) Chapter 8
10 Optimal Risky Portfolios Chapter 7
Optimal Risky Portfolios
11 Chapter 7
Financial Modeling 1 (laptop required)
Asset Pricing Models
The Capital Asset Pricing Model
12 Chapter 9
Financial Modeling 2 (laptop required)
The Capital Asset Pricing Model
13 Chapter 9
Financial Modeling 2 (laptop required)
14 Efficient Market: - Theory and Evidence Chapter 11, 13
Derivatives Market
Introduction to Options Markets
15 Chapter 20
Hedge ratio
TEST 2