ADA University

School of Business
1. Course Information

Course Name: FINC 3600 – Financial Investments (6 ECTS)

Semester: Spring 2024
Instructor Name: Omar Farooq
Email: ofarooq@ada.edu.az
Office: D334
Office Hours: Monday and Wednesdays (14:30 to 16:00)
You can also email me to fix the online appointment.
Program: BBA and BSF
Position in Curriculum: Major Core
Pre-requisite: FINC 2400 – Principles of Finance
Class Timimg: Monday and Wednesday (16:00 – 17:15)
Class Location: D109

2. Course Description

The primary objective of this course is to study the theory and the empirical evidence
relevant for investing in financial markets. The course provides you with a structure for
thinking about investment theory and shows you how to address investment problems
in a systematic manner. It is important to highlight that this course is not about the art
of stock picking and it also does not provide you with foolproof ways to make money in
the stock market.

The course can be broadly divided into two parts. The first part deals with financial
investments. This part will introduce students to the background concepts, such as
market efficiency, behavioral fiannce, and importance of macroeconomic and industry
analysis. It will also introduce basics of trading in financial markets. The second part
will serve as an introduction to professional portfolio management. The concepts of
diversification, asset pricing, and modern portfolio theory, will be introduced.

3. Course Learning Objectives

Contribution to
# Course Objectives Assessment
Program Objectives
Apply quantitative
Understand basics of asset pricing Exams; Homework; reasoning and skills to
1
theories Quiz make data-driven
business decisions
2 Conduct basic data analysis Project; Homework Apply quantitative
reasoning and skills to
make data-driven
 business decisions
Demonstrate business
professionalism,
Evaluate issues relevant to financial
3 Project effectively present
investments
ideas orally, visually,
and in writing
Understand local and
4 Importance of market efficiency Exams; Quiz
regional market place

4. Course Literature

 BODIE, KANE, and MARCUS (BKM): Investments. 10th Edition, McGraw-Hill/Irwin.

 REILLY and BROWN (RB): Investment Analysis and Portfolio Management. 10 th
Edition, South-Western.

5. Assessment

The following scale will be used for assessing your work, as outlined by ADA
Regulations. Your final course grade is the sum of the points you score on each of the
assignments (grading components) multiplied by their relative weight.

Grade Percentage Description

A 94 – 100% Excellent to outstanding performance
A- 90 – 93% Excellent performance in most respect
B+ 87 – 89% Very good performance
B 83 – 86% Good performance
B- 80 – 82% Good performance overall, but with some weaknesses
C+ 77 – 79% Satisfactory to good performance
C 73 – 76% Satisfactory performance
C- 70 – 72% Adequate evidence of learning
D+ 67 – 69% Evidence of learning
D 60 – 66% Some evidence of learning
F 0 – 59% Poor performance

The assessment tools will be based on the following information.

Assessment Tool Weight Due Date Type

Exam 1 40% As Announced in Class Individual
Exam 2 40% End of Semester Individual
Project 10% April 20, 2024 Individual
Homework 5% As Announced in Class Individual
Quiz 5% Unannounced Individual

Exams: The midterm exam and the final exam will be held on campus. I will not accept
any excuse regarding not attending the exam. All exams will be closed book exams.
They will be held in the venue announced in the class.
Quiz: I will take random quizzes. The overall quiz grade will be the average of those
random quizzes. There will be no retake of quizzes.

Homework: The overall homeowrk grade will be the average of grades obtained in each
homework. Late homeworks will not be graded.

Project: The project should be based on a detailed report on one of the following topic.
Discuss with me for further clarification. Every student has to present the report to me
in my office. It is your responsibility to schedule the time for presentation. Late project
will not be graded.

1. Define the Piotroski F-Score and discuss the underlying arguments behind it
2. Identify the variables/ratios used in the computation of Piotroski F-Score and
highlight the intuition behind including these variables/ratios
3. Choose the country and download the data (from 2010 onwards) required to
compute the Piotroski F-Score for every firm in that country
4. Compute the Piotroski F-Score for every firm (in every year)
5. At the start of every year, group the firms into three portfolios based on last year’s
Piotroski F-Score
6. Compute the performance measures for each portfolio and compare them with the
performance of market
 ADA University
School of Business
6. Schedule

Themes Topics Chapters Recommended Readings

Introduction to Financial Investments and BKM 1.1; BKM 1.2; BKM 1.3; BKM 1.4;
Chapter 1 (BKM)
Portfolio Management BKM 1.5; BKM 1.6
Introductory Portfolio Management Strategies Chapter 16 (RB) RB 16.2; RB 16.3; RB 16.5
Concepts Financial Assets Chapter 2 (BKM) BKM 2.1; BKM 2.2; BKM 2.3; BKM 2.5
Market Microstructure Chapter 3 (BKM) BKM 3.3; BKM 3.7; BKM 3.8; BKM 3.9
Financial Institutions Chapter 4 (BKM) BKM 4.1; BKM 4.2; BKM 4.3; BKM 4.4
Index Construction Chapter 2 (BKM) BKM 2.4
BKM 5.1; BKM 5.2; BKM 5.4; BKM 5.5;
Risk and Return Chapter 5 (BKM)
BKM 5.6; BKM 5.7
BKM 6.1; BKM 6.2; BKM 6.3; BKM 6.4;
Capital Allocation Chapter 6 (BKM)
Portfolio BKM 6.5; BKM 6.6
Theory Optimal Portfolio Selection Chapter 7 (BKM) BKM 7.1; BKM 7.2; BKM 7.3; BKM 7.4
Index Models Chapter 8 (BKM) BKM 8.1; BKM 8.2; BKM 8.3; BKM 8.4
Chapter 9 (BKM) BKM 9.1; BKM 9.2
Capital Asset Pricing Model
Chapter 13 (BKM) BKM 13.3
Multifactor Pricing Models Notes
Market Efficiency Chapter 11 (BKM) BKM 11.1; BKM 11.2; BKM 11.4
Investment
Behavioral Finance Chapter 12 (BKM) BKM 12.1
Analysis
Technical Analysis Chapter 12 (BKM) BKM 12.2
Miscellaneous BKM 17.1; BKM 17.2; BKM 17.3; BKM
Macroeconomic Analysis Chapter 17 (BKM)
Topics 17.4; BKM 17.5
(If time Industry Analysis Chapter 17 (BKM) BKM 17.6
permits) Introduction to Multiple Based Valuation Notes
NOTE: I reserve the right to add or subtract any topic.
 ADA University
School of Business
7. Student Code of Ethics

All students are required to uphold and embody the requirements and principles stated
in the ADA Honor Code. You are responsible for reading the Honor Code in detail and
obey it at all times during the course of your studies at ADA, as it is an institutional
document which applies to all classes and other activities at ADA University.