Students

AFIN8013 – Alternative Securities

2024 – Session 1, In person-scheduled-weekday, North Ryde

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff
Keith Woodward
Hong Xie
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://www.mq.edu.au/study/calendar-of-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

Late Assessment Submission Penalty (written assessments) 

Unless a Special Consideration request has been submitted and approved, a 5% penalty (of the total possible mark) will be applied each day a written assessment is not submitted, up until the 7th day (including weekends). After the 7th day, a grade of ‘0’ will be awarded even if the assessment is submitted. Submission time for all written assessments is set at 11.55pm. A 1-hour grace period is provided to students who experience a technical concern.     

For any late submissions of time-sensitive tasks, such as scheduled tests, exams, performance assessments, presentations, or scheduled practical assessments, students need to submit an application for Special Consideration

Assessment Tasks

Name Weighting Hurdle Due
Mid-Session Test 20% No 18:00 to 19:30 Friday 3 May.
Assignment 30% No 23:55 Sydney time Sunday 12 May.
Final Examination 50% No See central exam timetable when available

Mid-Session Test

Assessment Type 1: Quiz/Test
Indicative Time on Task 2: 15 hours
Due: 18:00 to 19:30 Friday 3 May.
Weighting: 20%

 

A mid-session test will be held in class.

 


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: 25 hours
Due: 23:55 Sydney time Sunday 12 May.
Weighting: 30%

 

Students 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: 30 hours
Due: See central exam timetable when available
Weighting: 50%

A two hour exam 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 Writing Centre 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

Class 

Wednesday date 

Topic

1

21 Feb

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

2

28 Feb

Leverage: amplification of equity returns and interest tax shields.

3

6 Mar

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

4

13 Mar

Duration and Minsky's financial instability hypothesis.

5

20 Mar

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

6

27 Mar

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

7

3 Apr

General equilibrium models of asset pricing: Lucas' trees.

8

10 Apr

Assignment workshop and mid-sem test revision.

Mid-session break from Monday 15 April to Sunday 28 April

9

1 May

Assignment workshop and mid-sem test revision. Online mid-session test (20%) covering lecture topics 1 to 8 inclusive, from 18:00 to 19:30 Sydney time Friday 3 May.

10

8 May

The limits of arbitrage. Assignment (30%) due 23:55 Sydney time Sunday 12 May.

11

15 May

Latane, Peters, the Kelly criterion and ergodicity. 

12

22 May

Return forecasts based on historical data with sampling error.

13

29 May Revision.

Policies and Procedures

Macquarie University policies and procedures are accessible from Policy Central (https://policies.mq.edu.au). Students should be aware of the following policies in particular with regard to Learning and Teaching:

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

To find other policies relating to Teaching and Learning, visit Policy Central (https://policies.mq.edu.au) and use the search tool.

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

Academic Integrity

At Macquarie, we believe academic integrity – honesty, respect, trust, responsibility, fairness and courage – is at the core of learning, teaching and research. We recognise that meeting the expectations required to complete your assessments can be challenging. So, we offer you a range of resources and services to help you reach your potential, including free online writing and maths support, academic skills development and wellbeing consultations.

Student Support

Macquarie University provides a range of support services for students. For details, visit http://students.mq.edu.au/support/

The Writing Centre

The Writing Centre provides resources to develop your English language proficiency, academic writing, and communication skills.

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

Student Services and Support

Macquarie University offers a range of Student Support Services including:

Student Enquiries

Got a question? Ask us via AskMQ, or contact Service Connect.

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 since First Published

Date Description
19/02/2024 Updated unit schedule to better indicate assessment dates.
19/02/2024 .
18/02/2024 .

Unit information based on version 2024.02 of the Handbook