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AFIN250 – Investments

2019 – S2 Evening

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff Unit Convenor and Sessional Lecturer
Thomas To
Refer to iLearn
Sessional Lecturer
Ognjen Kovacevic
Refer to iLearn
Thomas To
Angela Chow
Credit points Credit points
3
Prerequisites Prerequisites
((15cp at 100 level or above) including ((AFIN100 or AFIN102 or ACST152) and (ACCG100 or ACCG106) and (STAT150 or STAT170 or STAT171))) or ACST252
Corequisites Corequisites
Co-badged status Co-badged status
Unit description Unit description
This unit is designed to provide a sound foundation of fundamental concepts in investments. Students who master the unit material will acquire the analytical tools and financial theory necessary for making sound investment decisions and understanding the methodologies by which financial securities are valued. The unit provides an overview of the investment environment. Students learn to construct optimal portfolios using the principles of modern portfolio theory and to illustrate the theory and empirical applications of asset pricing models. The unit provides an introduction to debt securities and markets, equity valuation and how derivatives can be used as part of a well-designed portfolio strategy.

Important Academic Dates

Information about important academic dates including deadlines for withdrawing from units are available at https://students.mq.edu.au/important-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.

General Assessment Information

 

  • Assessment criteria for all assessment tasks will be provided on the unit iLearn site.

  • It is the responsibility of students to view their marks for each within-session assessment on iLearn within 20 working days of posting. If there are any discrepancies, students must contact the unit convenor immediately. Failure to do so will mean that queries received after the release of final results regarding assessment marks (not including the final exam mark) will not be addressed.

Assessment Tasks

Name Weighting Hurdle Due
Early Diagnostic Quiz 0% No 19 August 2019 at 11.59pm
Tutorial Quizzes 15% No Week 4, 6, 9, and 11
Mid-Semester Test 30% No Week 7
Final examination 55% No University examination period

Early Diagnostic Quiz

Due: 19 August 2019 at 11.59pm
Weighting: 0%

Task Description:  The online quiz will cover the topics studied during weeks 1 to 2.  Please use the quiz result as an indicator of whether you are progressing satisfactorily in the unit. If you are having difficulties, please see the Unit Convenor and consider withdrawing before the census date on end of week 4. This quiz is for practice only and counts for zero mark in the total assessment.  Type of Collaboration: Individual Submission:  on-line  Format: Refer to ilearn Length: Refer to ilearn Inherent Task Requirements: Refer to ilearn Late Submission:

Not applicable


On successful completion you will be able to:
  • Construct optimal portfolios applying the principles of modern portfolio theory.

Tutorial Quizzes

Due: Week 4, 6, 9, and 11
Weighting: 15%

 

Task Description: 

There are four quiz assessments in this semester. They will be held in the tutorials in Week 4, Week 6, Week 9 and Week 11.

Your best three out of four quiz results will be counted in your final results. The maximum mark is 15.

Type of Collaboration: Individual Submission:  In-class Format: Refer to ilearn Length: 10 mins Inherent Task Requirements: Refer to ilearn Late Submission:

No extensions will be granted.  Students who have not submitted the task prior to the deadline will be awarded a mark of 0 for the task, except for cases in which an application under Special Consideration Policy 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.
  • Analyse bond prices and yields.
  • Explain macroeconomic and industry analysis, equity valuation and financial statement analysis.

Mid-Semester Test

Due: Week 7
Weighting: 30%

Task Description: 

It will cover the topics studied during weeks 1 to 5. 

You are permitted ONE A4 page of paper containing reference material printed on both sides. The material may be handwritten or typed. The page will not be returned to you at the end of the final examination.

 

Type of Collaboration: Individual Submission:  In Class Format: Refer to iLearn Length: 1.5 hours Inherent Task Requirements: Refer to iLearn Late Submission:

No extensions will be granted. Students who have not attended the class test (or exam) on due date will be awarded a mark of 0 for the task, except for cases in which an application for special consideration 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: 55%

Task Description: 

It will cover all the topics studied throughout the session. 

You are permitted ONE A4 page of paper containing reference material printed on both sides. The material may be handwritten or typed. The page will not be returned to you at the end of the final examination.

Type of Collaboration: Individual Submission:  Not applicable Format: Refer to iLearn Length: 2.5-hour written paper with ten minutes reading time Inherent Task Requirements: Refer to iLearn Late Submission:

No extensions will be granted. Students who have not attended the class test (or exam) on due date will be awarded a mark of 0 for the task, except for cases in which an application for special consideration 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.
  • 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 Text:

The textbook for the unit is Bodie, Z., Kane, A. and Marcus, A.J. (2018), Essentials of Investments, 11th 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.

Unit Web Page: 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.
Technology Used and Required: Non-programmable calculator.
Delivery Format and Other Details:

Classes

The timetables for classes can be found on the University website at: http://www.timetables.mq.edu.au/. Tutorials commence in week 2 of the session.

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.

Recommended Readings:  
Other Course Materials:  The multiple choice quizzes available with the textbook are a useful revision resource.

Unit Schedule

Week Topic Readings
1 Introduction BKM chapters 1 and 2
2 Investment vehicles BKM chapters 3 and 4
3 Risk and return BKM chapter 5
4 Efficient diversification BKM chapter 6
5 Asset pricing BKM chapter 7
6 Market efficiency BKM chapters 8 and 9
7 Mid-semester Test  
  RECESS   
8 Fixed income securities BKM chapters 10 and 11
9 Industry analysis BKM chapter 12
10 Equity securities BKM chapters 13 and 14
11 Futures contracts BKM chapter 17
12 Options contracts BKM chapters 15 and 16
13 Review  

Policies and Procedures

Macquarie University policies and procedures are accessible from Policy Central (https://staff.mq.edu.au/work/strategy-planning-and-governance/university-policies-and-procedures/policy-central). Students should be aware of the following policies in particular with regard to Learning and Teaching:

Undergraduate students seeking more policy resources can visit the Student Policy Gateway (https://students.mq.edu.au/support/study/student-policy-gateway). It is your one-stop-shop for the key policies you need to know about throughout your undergraduate student journey.

If you would like to see all the policies relevant to Learning and Teaching visit Policy Central (https://staff.mq.edu.au/work/strategy-planning-and-governance/university-policies-and-procedures/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/study/getting-started/student-conduct​

Results

Results published on platform other than eStudent, (eg. iLearn, Coursera etc.) 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 or if you are a Global MBA student contact globalmba.support@mq.edu.au

Supplementary exams

Information regarding supplementary exams, including dates, is available at: 

http://www.businessandeconomics.mq.edu.au/current_students/undergraduate/how_do_i/special_consideration

 

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 Enquiry Service

For all student enquiries, visit Student Connect at ask.mq.edu.au

If you are a Global MBA student contact globalmba.support@mq.edu.au

Equity 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.

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

  • Early Diagnostic Quiz
  • Tutorial Quizzes
  • Mid-Semester Test
  • 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

  • Mid-Semester Test
  • 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.
  • 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

  • Mid-Semester Test
  • Final examination