Course Syllabus

JOHN CABOT UNIVERSITY

COURSE CODE: "FIN 312"
COURSE NAME: "Investment Analysis"
SEMESTER & YEAR: Summer Session I 2013

SYLLABUS

INSTRUCTOR: LeClair Robert
EMAIL: [email protected]
HOURS: MTWTH 11:00-13:00
TOTAL NO. OF CONTACT HOURS: 45
CREDITS:
PREREQUISITES: Prerequisite: FIN 301
OFFICE HOURS:

COURSE DESCRIPTION:
This course is a survey of the wide range of investment media, which includes stocks, bonds, options, convertible securities, and mutual funds. It also covers the operation of securities markets, investment transactions, and a number of essential investment calculations.

SUMMARY OF COURSE CONTENT:
-

LEARNING OUTCOMES:
-

TEXTBOOK:

Book Title	Author	Publisher	ISBN number	Library Call Number	Comments	Format	Local Bookstore	Online Purchase
Fundamentals of Investments, 6th Edition	Bradford D. Jordan, Thomas Miller, and Steven D. Dolvin	McGraw-Hill Irwin, 2012.	N/A

REQUIRED RESERVED READING:

NONE

RECOMMENDED RESERVED READING:

NONE

GRADING POLICY
-ASSESSMENT METHODS:

Assignment	Guidelines	Weight
Weekly quizzes (12% each)	Your final grade in the course will be based on a series of five weekly quizzes covering the chapters assigned for the week. Each quiz will be equally weighted at 12% of the final grade and the total weight of the quizzes will make up 60% of your overall score.	60%
Individual company report	The remaining 40% of the final grade will be based on the individual company report.	40%

-ASSESSMENT CRITERIA:
AWork of this quality directly addresses the question or problem raised and provides a coherent argument displaying an extensive knowledge of relevant information or content. This type of work demonstrates the ability to critically evaluate concepts and theory and has an element of novelty and originality. There is clear evidence of a significant amount of reading beyond that required for the co
BThis is highly competent level of performance and directly addresses the question or problem raised.There is a demonstration of some ability to critically evaluatetheory and concepts and relate them to practice. Discussions reflect the student’s own arguments and are not simply a repetition of standard lecture andreference material. The work does not suffer from any major errors or omissions and provides evidence of reading beyond the required assignments.
CThis is an acceptable level of performance and provides answers that are clear but limited, reflecting the information offered in the lectures and reference readings.
DThis level of performances demonstrates that the student lacks a coherent grasp of the material.Important information is omitted and irrelevant points included.In effect, the student has barely done enough to persuade the instructor that s/he should not fail.
FThis work fails to show any knowledge or understanding of the issues raised in the question. Most of the material in the answer is irrelevant.

-ATTENDANCE REQUIREMENTS:
-

ACADEMIC HONESTY
As stated in the university catalog, any student who commits an act of academic dishonesty will receive a failing grade on the work in which the dishonesty occurred. In addition, acts of academic dishonesty, irrespective of the weight of the assignment, may result in the student receiving a failing grade in the course. Instances of academic dishonesty will be reported to the Dean of Academic Affairs. A student who is reported twice for academic dishonesty is subject to summary dismissal from the University. In such a case, the Academic Council will then make a recommendation to the President, who will make the final decision.

STUDENTS WITH LEARNING OR OTHER DISABILITIES
John Cabot University does not discriminate on the basis of disability or handicap. Students with approved accommodations must inform their professors at the beginning of the term. Please see the website for the complete policy.

SCHEDULE

Individual Company Report

Put yourself in the role of a security analyst for a major commercial bank, mutual fund, pension fund, or other institutional investor. You will typically follow a number of companies in one or more industry sectors. You are to develop a report on one of the companies you follow regularly, and be prepared to present this report to our firm’s Investment Committee. You may select any company you wish, but it should: (1) pay a regular quarterly dividend, and (2) have a significant amount of its revenues derived from international sales.

The Investment Committee will have the responsibility of deciding whether or not to take an initial position in the stock, which would represent an investment of several million Euros (€) or US$. Keep in mind that you are not “promoting” the company, or the stock, only presenting a balanced and unbiased report on its prospects and intrinsic value. The most useful type of report may be one that recommends not investing in a particular company.

You may structure the report in any way that you wish, but it should include some discussion of the following topics:

· Company background, products, markets, management, current events, etc.

· Financial analysis and evaluation of the company:

o Ratio analysis (two years minimum)

o DuPont Analysis of ROE

o Common-size (%) financial statements

o Sources and uses of funds analysis

· Calculation of the company’s intrinsic value per share

· Overall recommendation to the Investment Committee

The text portion of your report should not exceed five double-spaced, typed pages (font size not less than 12). You may attach an appendix of any length that includes financial statements, charts, graphs, printouts, calculations, etc. However, only materials that are referenced in the paper should be included in the appendix.

Due Date: The papers and presentations are due on 19 June and will be penalized if not submitted on time.

This report will represent 40% of your final grade in the course.

Week of:

Textbook Chapters

Topics

20 – 23 May

Chapter 1

History of Risk and Return:

· Historical returns, 1926 to the present

· Mean-variance analysis of risk

· Geometric versus arithmetic returns

Chapter 2

The Investment Process:

· Investment policies and constraints

· Margin versus cash accounts

· Short sales

· Asset allocation

Chapter 3

Overview of Security Types:

· The money market

· Fixed-Income securities

· Equity securities

· Derivatives and futures

· Options (puts and calls)

Chapter 4

Mutual Funds:

· Advantages & disadvantages of funds

· Fund fees and expenses

· Mutual fund performance

· Exchange-traded funds (ETFs)

27 – 30 May

Chapter 5

Lecture: Preparing the Company Report;

The Stock Market:

· Private equity funds

· Primary versus secondary markets

· Stock exchanges and NASDAQ

· Stock market averages and indexes

Chapter 6

Common Stock Valuation:

· Dividend discount model

· Constant and perpetual growth models

· Two-stage growth model

· Price ratio analysis

3 - 6

June

Chapter 17

Projecting Cash Flow and Earnings:

· Sources of financial information

· Financial statement analysis

· Projecting financial statements

Chapter 7

Stock Price Behavior and Market Efficiency:

· Efficient market hypothesis

· Forms of market efficiency

· Implications of market efficiency

· Informed and insider trading

· Anomalies, bubbles and crashes

10 – 13

June

Chapter 9

Interest Rates:

· Money market prices and yields

· Fixed-Income yields

· U. S. Treasury yield curve

· Term structure of interest rates

· STRIPS and TIPS

Chapter 10

Bond Prices and Yields:

· Calculating bond yields

· Malkiel’s Theorems

· Dedicated portfolios

· Duration and immunization

Chapter 18

Corporate Bonds:

· Bond terms and features

· Sinking funds and covenants

· Convertible bonds

· Preferred stock

· Variable-rate bonds

· Bond ratings

17 - 20 June

Chapter 15

Stock Options:

· Option terms and features

· Option exchanges

· Option Clearing Corporation (OCC)

· Index options

· Option trading strategies

· Black-Scholes option pricing model

Investment Reports and Presentations Due