Students
AFIN250 – Investments
2016 – S1 Day
General Information
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| Unit convenor and teaching staff |
Unit convenor and teaching staff
Lecturer
Dr James Cummings
Contact via email
Room 228, Building E4A
Friday, 2:00-4:00 pm
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| Credit points |
Credit points
3
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| Prerequisites |
Prerequisites
(15cp including ((AFIN100 or AFIN102 or ACST152) and (ACCG100 or ACCG106) and (STAT150 or STAT170 or STAT171))) or ACST252
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| Corequisites |
Corequisites
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| Co-badged status |
Co-badged status
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| Unit description |
Unit description
The investment industry has experienced rapid change over the past three decades. Many of these changes in the investment environment are discussed in this unit. An important theme of the unit is that developed markets are near-informational-efficient - that higher expected returns only come by bearing greater investment risk. Throughout the unit a modern portfolio theory approach is applied, focussing on the implications of efficient diversification, in providing a proper measurement of risk and the risk-return relationship. The asset allocation choice is also considered in depth, as it is a primary determinant of the risk-return profile of the investment portfolio. In summary, the unit introduces the principles of valuation as applied to a broad range of asset classes including models of equity valuation, debt valuation, commodities, private equity, and alternative investments such as distressed securities and real estate.
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Important Academic Dates
Information about important academic dates including deadlines for withdrawing from units are available at https://www.mq.edu.au/study/calendar-of-dates
Learning Outcomes
On successful completion of this unit, you will be able to:
- Construct optimal portfolios applying the principles of modern portfolio theory.
- Illustrate the theory and empirical applications of asset pricing models: the CAPM, APT and multi-factor models.
- Analyse bond prices and yields.
- Explain macroeconomic and industry analysis, equity valuation and financial statement analysis.
- Formulate derivatives strategies to modify portfolio risk-return attributes.
Assessment Tasks
| Name | Weighting | Due |
|---|---|---|
| Online quiz | 5% | 18 March 2016, 5:00 pm |
| Mid-semester test | 15% | Week 6 in lecture |
| Case study/report | 20% | 13 May 2016, 5:00 pm |
| Final examination | 60% | University examination period |
Online quiz
Due: 18 March 2016, 5:00 pm
Weighting: 5%
The online quiz will cover the topics studied during weeks 1 and 2.
Students who do not complete the online quiz will be awarded a mark of 0 for the online quiz, except for cases in which an application for disruption of studies is made and approved.
On successful completion you will be able to:
- Construct optimal portfolios applying the principles of modern portfolio theory.
- Illustrate the theory and empirical applications of asset pricing models: the CAPM, APT and multi-factor models.
Mid-semester test
Due: Week 6 in lecture
Weighting: 15%
The mid-semester test will cover the topics studied during weeks 1 to 4 inclusive.
Students who do not sit for the mid-semester test will be awarded a mark of 0 for the mid-semester test, except for cases in which an application for disruption of studies is made and approved.
On successful completion you will be able to:
- Construct optimal portfolios applying the principles of modern portfolio theory.
- Illustrate the theory and empirical applications of asset pricing models: the CAPM, APT and multi-factor models.
Case study/report
Due: 13 May 2016, 5:00 pm
Weighting: 20%
Students will work on a case study in groups of three or four and prepare a written report that addresses the issues raised in the case study. Details of the case study will be announced in class and posted on iLearn.
No extensions will be granted. There will be a deduction of 10% of the total available marks made from the total awarded mark for each 24 hour period or part thereof that the submission is late (for example, 25 hours late in submission – 20% penalty). This penalty does not apply for cases in which an application for disruption of studies is made and approved.
On successful completion you will be able to:
- Construct optimal portfolios applying the principles of modern portfolio theory.
- Illustrate the theory and empirical applications of asset pricing models: the CAPM, APT and multi-factor models.
Final examination
Due: University examination period
Weighting: 60%
The final exam will cover the topics studied throughout the semester. The final exam will be scheduled in the examination period.
On successful completion you will be able to:
- Construct optimal portfolios applying the principles of modern portfolio theory.
- Illustrate the theory and empirical applications of asset pricing models: the CAPM, APT and multi-factor models.
- Analyse bond prices and yields.
- Explain macroeconomic and industry analysis, equity valuation and financial statement analysis.
- Formulate derivatives strategies to modify portfolio risk-return attributes.
Delivery and Resources
Required technology
Non-programmable calculator
Tutorial and lecture times
Students are required to enrol in one two-hour lecture and one one-hour tutorial per week and attend the lecture and tutorial in which they are enrolled. See details from the timetable.
Learning and teaching strategy
Face-to-face
Lectures are used to set the scene and show how the topic fits into the overall unit of study aims. Tutorials are essential for helping you to further your understanding and apply concepts to more difficult problems. Participation is strongly encouraged for you to check your progress towards achieving the learning outcomes for the unit.
The textbook for the unit is Bodie, Z., Kane, A. and Marcus, A.J. (2013), Essentials of Investments, 9th edition, McGraw-Hill (denoted BKM on the reading list). Textbook material will be supplemented by articles and handouts. Chapters from the textbook and specified articles should be read prior to attending the scheduled lecture on that topic. Homework problems will be assigned at the end of lectures and these should be completed before coming to the tutorial the following week. Important handouts can be downloaded from the unit's iLearn site.
Online
iLearn (https://ilearn.mq.edu.au) provides the main online learning support. It is essential that you log in at least twice per week to keep abreast of unit-wide announcements and use the resources to supplement your learning. Lecture slides are available by the Friday before each lecture for you to download from iLearn. Solutions to homework problems are made available online after the problems are discussed in the tutorial.
The multiple choice quizzes available with the textbook are a useful revision resource.
Unit Schedule
Week |
Commencing |
Topic |
Readings |
| 1 | 29 February | Introduction | BKM chapters 1 and 2 |
| 2 | 7 March | Investment vehicles | BKM chapters 3 and 4 |
| 3 | 14 March | Risk and return | BKM chapter 5 |
| 4 | 21 March | Efficient diversification | BKM chapter 6 |
| 5 | 28 March | Asset pricing | BKM chapter 7 |
| 6 | 4 April | Mid-semester test | |
| Mid-semester break | |||
| 7 | 25 April | Market efficiency | BKM chapters 8 and 9 |
| 8 | 2 May | Fixed income securities | BKM chapters 10 and 11 |
| 9 | 9 May | Industry analysis | BKM chapter 12 |
| 10 | 16 May | Equity securities | BKM chapters 13 and 14 |
| 11 | 23 May | Options contracts | BKM chapters 15 and 16 |
| 12 | 30 May | Futures contracts | BKM chapter 17 |
| 13 | 6 June | Review |
Policies and Procedures
Macquarie University policies and procedures are accessible from Policy Central. Students should be aware of the following policies in particular with regard to Learning and Teaching:
Academic Honesty Policy http://mq.edu.au/policy/docs/academic_honesty/policy.html
New Assessment Policy in effect from Session 2 2016 http://mq.edu.au/policy/docs/assessment/policy_2016.html. For more information visit http://students.mq.edu.au/events/2016/07/19/new_assessment_policy_in_place_from_session_2/
Assessment Policy prior to Session 2 2016 http://mq.edu.au/policy/docs/assessment/policy.html
Grading Policy prior to Session 2 2016 http://mq.edu.au/policy/docs/grading/policy.html
Grade Appeal Policy http://mq.edu.au/policy/docs/gradeappeal/policy.html
Complaint Management Procedure for Students and Members of the Public http://www.mq.edu.au/policy/docs/complaint_management/procedure.html
Disruption to Studies Policy http://www.mq.edu.au/policy/docs/disruption_studies/policy.html The Disruption to Studies Policy is effective from March 3 2014 and replaces the Special Consideration Policy.
In addition, a number of other policies can be found in the Learning and Teaching Category of Policy Central.
Student Code of Conduct
Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/support/student_conduct/
Results
Results shown in iLearn, or released directly by your Unit Convenor, are not confirmed as they are subject to final approval by the University. Once approved, final results will be sent to your student email address and will be made available in eStudent. For more information visit ask.mq.edu.au.
Supplementary Exams
Further information regarding supplementary exams, including dates, is available here
Student Support
Macquarie University provides a range of support services for students. For details, visit http://students.mq.edu.au/support/
Learning Skills
Learning Skills (mq.edu.au/learningskills) provides academic writing resources and study strategies to improve your marks and take control of your study.
Student Services and Support
Students with a disability are encouraged to contact the Disability Service who can provide appropriate help with any issues that arise during their studies.
Student Enquiries
For all student enquiries, visit Student Connect at ask.mq.edu.au
IT Help
For help with University computer systems and technology, visit http://www.mq.edu.au/about_us/offices_and_units/information_technology/help/.
When using the University's IT, you must adhere to the Acceptable Use of IT Resources Policy. The policy applies to all who connect to the MQ network including students.
Graduate Capabilities
Discipline Specific Knowledge and Skills
Our graduates will take with them the intellectual development, depth and breadth of knowledge, scholarly understanding, and specific subject content in their chosen fields to make them competent and confident in their subject or profession. They will be able to demonstrate, where relevant, professional technical competence and meet professional standards. They will be able to articulate the structure of knowledge of their discipline, be able to adapt discipline-specific knowledge to novel situations, and be able to contribute from their discipline to inter-disciplinary solutions to problems.
This graduate capability is supported by:
Learning outcomes
- Construct optimal portfolios applying the principles of modern portfolio theory.
- Illustrate the theory and empirical applications of asset pricing models: the CAPM, APT and multi-factor models.
- Analyse bond prices and yields.
- Explain macroeconomic and industry analysis, equity valuation and financial statement analysis.
- Formulate derivatives strategies to modify portfolio risk-return attributes.
Assessment tasks
- Online quiz
- Mid-semester test
- Case study/report
- Final examination
Critical, Analytical and Integrative Thinking
We want our graduates to be capable of reasoning, questioning and analysing, and to integrate and synthesise learning and knowledge from a range of sources and environments; to be able to critique constraints, assumptions and limitations; to be able to think independently and systemically in relation to scholarly activity, in the workplace, and in the world. We want them to have a level of scientific and information technology literacy.
This graduate capability is supported by:
Learning outcomes
- Construct optimal portfolios applying the principles of modern portfolio theory.
- Illustrate the theory and empirical applications of asset pricing models: the CAPM, APT and multi-factor models.
- Analyse bond prices and yields.
- Explain macroeconomic and industry analysis, equity valuation and financial statement analysis.
- Formulate derivatives strategies to modify portfolio risk-return attributes.
Assessment tasks
- Case study/report
- Final examination
Problem Solving and Research Capability
Our graduates should be capable of researching; of analysing, and interpreting and assessing data and information in various forms; of drawing connections across fields of knowledge; and they should be able to relate their knowledge to complex situations at work or in the world, in order to diagnose and solve problems. We want them to have the confidence to take the initiative in doing so, within an awareness of their own limitations.
This graduate capability is supported by:
Learning outcomes
- Construct optimal portfolios applying the principles of modern portfolio theory.
- Illustrate the theory and empirical applications of asset pricing models: the CAPM, APT and multi-factor models.
Assessment task
- Case study/report