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AFIN8013 – Alternative Securities

2021 – Session 1, Special circumstances

Notice

As part of Phase 3 of our return to campus plan, most units will now run tutorials, seminars and other small group activities on campus, and most will keep an online version available to those students unable to return or those who choose to continue their studies online.

To check the availability of face-to-face and online activities for your unit, please go to timetable viewer. To check detailed information on unit assessments visit your unit's iLearn space or consult your unit convenor.

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff Unit Convenor
Keith Woodward
Contact via ilearn discussion board for subject related questions, email for personal matters
522-4EaR
Credit points Credit points
10
Prerequisites Prerequisites
AFIN6012 or ACST603 or ACST6003 or Admission to MFin
Corequisites Corequisites
Co-badged status Co-badged status
Unit description Unit description

In the era of significant market turmoil, institutional, as well as individual investors look beyond traditional investment vehicles such as bonds and shares. Alternative investments are the fastest growing, and probably the least understood, sector of the investment industry. The purpose of this unit is to explore the world of alternative investments such as investments in hedge funds, private equity / venture capital funds, real estate, and commodities, either directly or through funds of funds. The unit gives students a solid understanding of the industry knowledge and techniques that should be part of the toolkit of any money manager who advises private and institutional clients on the inclusion of alternative investments in their portfolio.

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:

  • ULO1: Examine the common features of alternative investments and their markets and distinguish among the principal classes of alternative investments.
  • ULO2: Apply valuation techniques to price alternative investments.
  • ULO3: Assess the benefits, such as return enhancement and/or risk diversification.
  • ULO4: Construct and evaluate a portfolio with alternative investments.

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 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 tasks (not including the final exam mark) will not be addressed.

Late submissions and extensions

Tasks 10% or less – 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 for special consideration is made and approved.

Tasks above 10% - 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 special consideration is made and approved. No submission will be accepted after solutions have been posted.

Assessment Tasks

Name Weighting Hurdle Due
Mid Session Test 20% No From 18:00 to 19:30 AEST Friday 30 April
Assignment 20% No Midnight Sunday 16 May
Final Examination 60% No See central exam timetable

Mid Session Test

Assessment Type 1: Quiz/Test
Indicative Time on Task 2: 15 hours
Due: From 18:00 to 19:30 AEST Friday 30 April
Weighting: 20%

 

An online mid session test of 90 minutes will be held to give students practice on a summative task and to provide feedback on their progress midway through the session.

 


On successful completion you will be able to:
  • Examine the common features of alternative investments and their markets and distinguish among the principal classes of alternative investments.
  • Apply valuation techniques to price alternative investments.
  • Assess the benefits, such as return enhancement and/or risk diversification.
  • Construct and evaluate a portfolio with alternative investments.

Assignment

Assessment Type 1: Report
Indicative Time on Task 2: 20 hours
Due: Midnight Sunday 16 May
Weighting: 20%

 

Student will conduct quantitative and qualitative analysis and write a report of 1,500 - 2,500 words.

 


On successful completion you will be able to:
  • Apply valuation techniques to price alternative investments.
  • Assess the benefits, such as return enhancement and/or risk diversification.
  • Construct and evaluate a portfolio with alternative investments.

Final Examination

Assessment Type 1: Examination
Indicative Time on Task 2: 20 hours
Due: See central exam timetable
Weighting: 60%

 

An online open book two hour examination will be held during University Examination Period.

 


On successful completion you will be able to:
  • Examine the common features of alternative investments and their markets and distinguish among the principal classes of alternative investments.
  • Apply valuation techniques to price alternative investments.
  • Assess the benefits, such as return enhancement and/or risk diversification.
  • Construct and evaluate a portfolio with alternative investments.

1 If you need help with your assignment, please contact:

  • the academic teaching staff in your unit for guidance in understanding or completing this type of assessment
  • the Learning Skills Unit for academic skills support.

2 Indicative time-on-task is an estimate of the time required for completion of the assessment task and is subject to individual variation

Delivery and Resources

Please refer to iLearn

Unit Schedule

Lecture

Monday date

Topic

1

22 Feb

Private equity, venture capital and hedge funds: Strategies and examples.

2

1 Mar

Leverage: amplification of equity returns and interest tax shields.

3

8 Mar

Leverage and the CAPM: how debt funding affects the systematic and diversifiable risk of equity.

4

15 Mar

Duration and Minsky's financial instability hypothesis.

5

22 Mar

Equity as a call option on the firm's assets: Merton model.

6

29 Mar

Distributions of prices and returns: normal versus log-normal distributions. 

Recess from Monday 5 April to Friday 16 April.

7 19 Apr General equilibrium models of asset pricing: Lucas' trees.

8

26 Apr

Online mid-session test (20%) covering lecture topics 1 to 7 inclusive. From 18:00 to 19:30 AEST Friday 30 April.

9

3 May

Assignment workshop.

10

10 May

The limits of arbitrage. Assignment (20%) due midnight Sunday 16 May.

11

17 May

Latane, Peters, the Kelly criterion and ergodicity. 

12

24 May

Return forecasts based on historical data with sampling error.

13

31 May Revision.

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:

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/admin/other-resources/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/disruption_to_studies

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 help you improve your marks and take control of your study.

The Library provides online and face to face support to help you find and use relevant information resources. 

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.

Changes from Previous Offering

Forage virtual internships will be used in the assignment.