Al-Abbad University of Management Sciences

Department of Business Administration

Course Title: Security Analysis
Course Code:
Finance Elective

COURSE OBJECTIVES

This advanced level course is designed from the perspective of fund managers and brokers. It is a
core responsibility of a manager to maximize the return. This may be achieved if managers
correctly analyze the external / economic as well as industry. This course will enable students as
managers to enhance their ability to understand market conditions and perform company analysis
in order to gain optimized return. The course will explain several analytical methods and theories
used to understand security analysis.

COURSE DESCRIPTION
Fund managers are the agents on behalf of principals (investors). They are responsible to achieve
the objectives (maximum/optimized return) set by the principals. To achieve these objectives,
they always need to develop analytical skills and understand market movements. In this regard,
this course will help students to achieve these objectives in a better way.

COURSE PREREQUISITES
Financial Management
LEARNING OUTCOMES
This table lists the learning outcomes (LOs) for the subject.

IU’s Subject LO On completion of this subject participants should be able to:

categories

Remembering LOs LO1: Identify correct tools to aid decision making and articulate
information in an appropriate format.

Understanding LO2: illustrate sophisticated financial analysis with regard to security

LOs evaluation, market and industry and summarize information in an
appropriate format.

Applying Los LO3: Demonstrate appropriate communication and numerical skills,

including the ability to utilize quantitative and qualitative information,
together with analysis, argument and commentary, in a form which will
be understood by its intended audience.
 Analyzing LOs LO4: classify and execute the contemporary theories and empirical
evidence concerning security analysis to a range of securities in various
economic conditions.

Evaluating LOs LO5: judge and prioritize the potential impact of emerging issues on
market, industry and companies that ultimately leads to the security.

Creating Los LO6: perform analysis and select securities that can maximize the
investors funds.

TEACHING METHODOLOGY:

The teaching methodology for the assigned course is a blend of theoretical and practical
knowledge. Therefore the teaching methodology has been designed as per the requirements of
both of the aspects;

 Firstly in order to grasp the theoretical aspects; the class room lecture will be used alongwith
reading assignments from the designated course book as well as the other relevant
supplementary reading material will be provided.
 In order to ensure the better understanding of the concepts, productive class participation will
be encouraged as students will be giving small presentation of cases as well as theoretical
cases; this will further boost their confidence as well as interest.
 Furthermore assignments and quizzes will be taken in order to evaluate the ongoing learning
of the students; at the end of every class brief question and answer session will be conducted
regarding the discussed topic.
 All students will be given an equal chance to participate as well as ask or discuss any
relevant query the learning responsibility lies in the hand of students thus instructor plays the
role of coach or mentor.
 Advanced reading will be the most important element of the class discussion.
 Class participation in this category every student will be judged on the active participation in
class through quality question and good examples from real life, they will be also judged on
the oral quiz, submission of assignments on time, performance in class activities.

EVALUATION
You will be evaluated based on the following components according to the following weights:
Components and Weights
Mid-term examination 20%
Class participations (assignments, presentations, quizzes, projects and field work) 20%
Final Exam 60%
Total 100%

POTENTIAL MODIFICATIONS TO THE COURSE

The instructor and university reserve the right to modify elements of the course during the term.
The university may change the dates and deadlines for any or all courses in extreme
circumstances. If either type of modification becomes necessary, reasonable notice and
communication with the students will be given with explanation and the opportunity to comment
on changes

COURSE OUTLINE AND BREAK UP

Week COURSE CONTENTS

1ST Week Introduction to Security Analysis
2nd Week Relationship between risk and return
3rd Week Relationship between risk and return
4th Week Techniques of Security Analysis
5th Week Techniques of Security Analysis
6th Week Efficient Market Hypothesis
7th Week Security Valuation Process
8th Week MID TERM EXAMINATION
9th Week Free Cashflow Valuation Process
10th Week Earning Multiples Process
11th Week Capital market Theories
12th Week Capital market Theories
13th Week Fundamental and Technical Analysis
14th Week Fundamental and Technical Analysis
15th Week Economy, Industry and Company Analysis
16th Week Economy, Industry and Company Analysis
17th Week Project Presentations
18th Week FINAL EXAMINATION

REQUIRED COURSE MATERIALS AND READINGS

Damodaran, Aswath, 2012, Investment Valuation (University Edition), 3rd edition, John Wiley
& Sons
Pinto, J.E., E. Henry, T.R. Robinson and J.D. Stowe, Equity Asset Valuation, CFA Investment
Institute Series, 2nd edition, John Wiley & Sons (ISBN 978-0-470-57143-9)
 Koller, T., M. Goedhart and D. Wessels, Valuation – Measuring and Managing the Value of
Companies (University Edition), 5th edition, McKinsey & Company (ISBN 978-0-470-42470-4)
Koller, T., M. Goedhart, D. Wessels and E Benrud, Valuation Workbook – Step-by-Step
Exercises and Tests to Help You Master Valuation, 5th edition, McKinsey & Company (ISBN
978-0-470-42464-3)
Assessment
Assessment Brief Weighting Due date Related
item description learning
outcomes

Quizzes Multiple Choice 5% Week 5, Week LO1

and numerical 7, Week 9
questions (n-1)
Assignments Topic related 5% Week 4, Week LO4
case studies to 8, Week 10.
solve
Project 10% Week 13 LO5
Midterm Exam 1 test of two 20% Week 8 LO2
hours
Final Exam 2.5 hours 60% As per exam LO3
time table

Assignment
Assignment submission

Students are required to submit all assignments on time. No extra time will be given in this regard.

Appendix 1 Assessment grading criteria

Criteria Fail C C+ B B+ A
Poor 1-6 1-7 1-8 1-9 10
Remembering No evidence Recall some Classify some Identifies most of Identifies most of Identifies
for knowledge concepts of concepts into the the concepts with the concepts significant
of the topic the topic desired difficulty accurately accurately definitions,
principles,
methodologies
and theories
accurately
Understanding No evidence Use wrong Explains/ Explains Explains Explains/
for terminologies demonstrates /demonstrates /demonstrates demonstrates
Understanding financial ideas, financial ideas, financial ideas, financial ideas,
concepts and concepts and concepts and concepts and
principles with principles with principles with principles
limited accuracy some accuracy and middle level accurately and
and irrelevant relevant accuracy and relevant
examples Examples relevant examples
Examples

Applying No evidence Apply some Constructs and Constructs and Constructs and Constructs and
for application correct applies financial applies financial applies financial applies financial
concepts knowledge, knowledge, knowledge, knowledge,
technology, and technology, and technology, and technology, and
concepts with little concepts with some concepts with reasoning with
consistency or degree of greater degree of consistently and
accuracy consistently and consistently and accuracy
accuracy accuracy

Analyzing No evidence Analyze some Compares and Compares and Compares and Compares and
for analysis correct breaks down breaks down breaks down breaks down
concepts security analysis, security analysis, security analysis, security analysis,
theories, models, theories, models, theories, models, theories, models,
graphs, graphs, graphs, graphs,
calculations, and calculations, and calculations, and calculations, and
arguments into their arguments into their arguments into their arguments into
elements with elements with elements with their elements
difficulty minimal difficulty difficulty with accuracy

Evaluating No evidence Evaluate some Integrates relevant Integrates relevant Integrates relevant Integrates
for evaluating correct knowledge and knowledge and knowledge and relevant
concept concepts from concepts from concepts from knowledge and
diverse perspectives diverse perspectives diverse perspectives concepts from
with little depth and with some depth with higher depth diverse
breadth and breadth and breadth perspectives with
depth and
breadth
Creating no evidence Create some Formulates relevant Formulates relevant Formulates relevant Formulates
for creating correct knowledge and knowledge and knowledge and relevant
concept concepts from concepts from concepts from knowledge and
diverse perspectives diverse perspectives diverse perspectives concepts from
with little depth and with some depth with higher depth diverse
breadth and breadth and breadth perspectives with
depth and
breadth