FIN 360 - Investments and Portfolio Management

• Instructor: Dr: Manara Toukabri
• Email: manara.toukabri@yahoo.fr
• Pre-requisite:
  • Financial markets
• Program of study: Mandatory Course of Finance Major and Minor

Course Description

This course introduces students to the areas of investments and portfolio management. The course investigates in detail the investment environment in which different types of securities are traded, as well as the intricacies of the investment process itself. The course strikes a balance between theory and practice. It guides the students to respond to real-world challenges in their professional and/or personal lives. The pedagogical methods include both lectures and portfolio management project to be performed on group basis.

Course Learning Outcomes

General learning outcomes:

This course is required for finance major and minor students. The fundamental principle of investment is a tradeoff between risk and return because risk-averse investors require adequate risk premiums on risky investments. Students are expected to measure return on investment, risk of return, and to understand the relationship between the expected return and the associated risk according to different theoretical models (Markowitz selection, CAPM, APT). Students are expected to be initiated to concepts of technical analysis and behavioral finance. Students are expected to develop skills of risk management and performance measures by examining real financial data.

Specific learning outcomes:

Students should be able at the end of the course to:

• Calculate and interpret the mean, variance, and covariance of asset returns based on historical data.
• Explain risk aversion and its implications for portfolio selection.
• Describe and interpret the minimum- variance and efficient frontiers of risky assets and the global minimum- variance portfolio
• Explain the selection of an optimal portfolio, given an investor’s utility (or risk aversion) and the capital allocation line.
• Describe arbitrage pricing theory (APT), including its underlying assumptions and its relation to multifactor models.
• Define arbitrage opportunity and determine whether an arbitrage opportunity exists.
• Calculate the expected return on an asset given an asset’s factor sensitivities and the factor risk premiums.
• Describe uses of multifactor models and interpret the output of analyses based on multifactor models.
• Describe uses of technical analysis and describe the behavioural finance theory.

Course Materials

• Investments, Bodie, Kane, Marcus, Perrakis and Ryan, 5th Canadian edition, McGraw-Hill Ryerson, 2014.
• Investments Analysis & portfolio Management, Reilly and Brown. 10th Edition
• Modern portfolio Theory: Foundation, Analysis and new developments, Jack Clark Francis, Dongcheol Kim, Wiley

Course Content

• Portfolio theory
  • Concepts and issues : Return, Risk and diversification
  • Portfolio Selection : The Markowitz portfolio selection model
• Equilibrium in Capital Markets
  • Market Model (Sharpe Model)
  • Capital Asset Pricing Model (CAPM)
  • Capital Asset Pricing Model (CAPM)
  • Index Models & Arbitrage Pricing Theory (APT)
  • Index Models & Arbitrage Pricing Theory (APT)
• Technical analysis and Behavioral Finance
• Empirical Evidence on security
  • CAPM Excel Application

TBS Grading Scale