LaSalle University
Department of Finance
Spring, 2003
Dr. K. Rhoda
College Hall 415C
Phone: (215) 951-1033
E-Mail: rhoda@lasalle.edu
This course is an introduction to the world of investment analysis and involves a study of the investment environment and classical and modern security analysis. Topics include the investment environment; investment theory; security valuation; bond and stock analysis; and performance evaluation. An integral part of the course is a term project involving the selection and management of an investment fund.
The overall objective of this course is to produce a strong background in investment analysis. Specifically, at the completion of this course, you should:
1.
Be familiar with the microstructure of the securities
environment.
2.
Understand the benefits and risks of the financial securities
in which investors typically invest.
3.
Be able to conduct a fundamental analysis of securities and be
able to evaluate the strengths and weaknesses of this type of analysis.
4.
Understand and be capable of evaluating basic concepts in
technical analysis.
5.
Be able to construct utility maximizing portfolios of
securities and be able to manage those securities in both a passive and active
manner.
6.
Understand the uses of foreign securities and the possible
problems resulting from their employment.
7.
Be able to evaluate portfolio management performance.
8. Be aware of and be able to assess the current economic/political environment with respect to security investment.
The material of the course has been assembled into five sections. Each section contains a set of reading assignments from the text and, occasionally, from other sources which we will discuss in class. In addition, each section will include homework questions and problems, some of which will be discussed in class.
Portfolio Project
You will be assigned to complete a term project involving the selection and management of an investment portfolio using Stock-Trak, a portfolio simulator. You will be given a sum of virtual money and be asked to invest it utilizing the principles covered in the course. The details of this project will be outlined in a separate handout.
Current Financial Events
It is crucial for anyone involved in investment analysis to have a good understanding of the domestic and global economic/political environment within which decisions must be made. You are expected to read the Wall Street Journal on a regular basis and be ready to discuss what you read in class.
Group Work
From time to time I will break the class up into groups to analyze and discuss different aspects of the course material, including current financial events. Since the scheduling of this group activity will be somewhat random and since full participation by everyone is important, you should make every effort to attend all classes.
Exams/Grading
There will be a midterm and a final exam. Your course grade will be determined using the following weights:
|
Course Requirement |
Weight |
|
|
|
|
Midterm |
40% |
|
Final Exam |
40% |
|
Term Project and |
|
|
Class Participation |
20% |
Grades will be assigned on a “+ -“ basis
Reilly, Frank, K. and Keith C. Brown, Investment Analysis and Portfolio Management (Sixth ed.) (Seventh ed.): Thomson, Southwestern, 2000 (2003).
Stock-Trak, Stock-Trak, Inc., 2003.
Course Outline
1. Basics of Investment Management
2. Introduction to Stock Selection
Chapter 20 (7th
Chapters 15 through pg. 549, 17 through pg. 685)
3. Domestic and Global Security Markets and Indicators
II.
Developments in
Investment Theory (4 Weeks)
1. Efficient Markets
2. Introduction to Portfolio Management
3. Asset Pricing
4. Introduction to Derivatives
1. Analysis of Financial Statements
2. Security Valuation
IV.
Bond Analysis (2 Weeks)
1. Bond Basics
2. Pricing and Portfolio Management
1. Stock Market Analysis
2. Fundamental Industry Analysis
3. Technical Analysis
Chapter 27 (7th Chapter 26)