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MGSM836 – Investment Management

2018 – Term 3 Hong Kong

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff
Andrew Macintosh
Credit points Credit points
4
Prerequisites Prerequisites
MGSM835 and MGSM840
Corequisites Corequisites
Co-badged status Co-badged status
Unit description Unit description
This unit develops a conceptual framework in the understanding of modern investments. MBA students learn about the investment industry, the risk-return relation, asset allocation between risky and risk-free assets, how optimal portfolios are constructed and why they are constructed the way they are. The unit also provides insights in terms of models that explain the cross-section of stock returns, articulating and considering the market efficiency debate, differences between behavioural finance and rational expectations, bond portfolio management, and portfolio insurance techniques (i.e. hedging with derivatives). The unit concludes by examining portfolio performance measurement as the final step in the investment process.

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

  1. Critically evaluate and assess how investment portfolios are constructed and their performance, using a conceptual framework for, and models that explain the structure, institutions and dynamics of modern investments
  2. Assess and synthesise the differences between behavioural finance and rational expectations in a global investment environment.
  3. Critically assess the impact of the ethical, social and environmental responsibilities of organisations on the construction of optimal portfolios and assessing their performance.
  4. Critically analyse stakeholder relationships involved in the construction of portfolios that create and deliver sustainable value across complex market interrelationships

Assessment Tasks

Name Weighting Hurdle Due
In-class test 1 20% No TBA
In-class Test 2 20% No TBA
Final Group Assignment 60% No TBA

In-class test 1

Due: TBA
Weighting: 20%

Each In-class test only tests the material covered in class for the preceding modules; that is, In-class test 1 only covers modules delivered prior to In-class test 1.


This Assessment Task relates to the following Learning Outcomes:
  • Critically evaluate and assess how investment portfolios are constructed and their performance, using a conceptual framework for, and models that explain the structure, institutions and dynamics of modern investments
  • Assess and synthesise the differences between behavioural finance and rational expectations in a global investment environment.
  • Critically assess the impact of the ethical, social and environmental responsibilities of organisations on the construction of optimal portfolios and assessing their performance.
  • Critically analyse stakeholder relationships involved in the construction of portfolios that create and deliver sustainable value across complex market interrelationships

In-class Test 2

Due: TBA
Weighting: 20%

Each In-class test only tests the material covered in class for the preceding modules; that is, In-class test 2 covers all modules delivered.


This Assessment Task relates to the following Learning Outcomes:
  • Critically evaluate and assess how investment portfolios are constructed and their performance, using a conceptual framework for, and models that explain the structure, institutions and dynamics of modern investments
  • Assess and synthesise the differences between behavioural finance and rational expectations in a global investment environment.
  • Critically assess the impact of the ethical, social and environmental responsibilities of organisations on the construction of optimal portfolios and assessing their performance.
  • Critically analyse stakeholder relationships involved in the construction of portfolios that create and deliver sustainable value across complex market interrelationships

Final Group Assignment

Due: TBA
Weighting: 60%

Length: 5,000 words maximum (excluding appendices)

Format: Final report in soft copy

Submission: Soft-copy should be uploaded in iLearn

The syndicate assignment covers the entire unit and prerequisite MBA courses. Please include email addresses of all syndicate group members on the title page.

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. No submission will be accepted after solutions have been posted.

Details of the individual assessment in the group work will be made available in class/iLearn.

Marking criteria will be made available in class/iLearn


This Assessment Task relates to the following Learning Outcomes:
  • Critically evaluate and assess how investment portfolios are constructed and their performance, using a conceptual framework for, and models that explain the structure, institutions and dynamics of modern investments
  • Assess and synthesise the differences between behavioural finance and rational expectations in a global investment environment.
  • Critically assess the impact of the ethical, social and environmental responsibilities of organisations on the construction of optimal portfolios and assessing their performance.
  • Critically analyse stakeholder relationships involved in the construction of portfolios that create and deliver sustainable value across complex market interrelationships

Delivery and Resources

Required Text Bodie, Z., Kane, A., & Marcus, A. (2017) Investments, 11th edition, McGraw Hill, ISBN: 9781259277177

Supplementary References and Additional Learning Materials

There are numerous investment texts and professional investment periodicals. You are encouraged to read widely.  Supplemental readings and periodical references, respectively, include:

  • Bogle, J. The Little Book of Common Sense Investing, John Riley & Sons, Inc., Hoboken, N.J., 2007.
  • Brailsford, T., Heaney, R., and Bilson, C. Investments: Concepts and Applications, 2nd ed., South Melbourne: Thomson, 2004.
  • Graham, B. with Zweig, J. The Intelligent Investor, Revised Ed., HarperCollins Publishers Inc., New York, 2003.
  • Greenwald, B., Kahn, J., Sonkin, P., and van Biema, M.  Value Investing: From Graham to Buffett and Beyond, Hoboken, NJ: John Riley & Sons, Inc.; 2001.
  • Jones, C., Shamsuddin, A; and Naumann, K.; Investments: Analysis and Management, 2nd ed., Milton, Qld: John Riley & Sons Australia, Ltd, 2007.
  • Viney, C. McGrath’s Financial Institutions, Instruments and Markets, 4th ed., Sydney: McGraw-Hill, 2003.

Professional Investor, Personal Investor, The Journal of Investing, Financial Services Review, Money Management, JASSA (The Journal of the Securities Institute of Australia), The Economist, The Australian Financial Review, Business Review Weekly.

Writing resources

Our MGSM Student Handbook contains Essay Writing Guidelines for students who may lack confidence in their writing skills to produce reports/essays to an academic/business standard. Please click on the link below to access the MGSM Student Handbook (you may need your Macquarie One ID to access this). The Essay Writing Guidelines can be found in

Section 3: Study Skills, starting page 39.

https://students.mgsm.edu.au/assets/PDF/Student-Website/mgsm-student-handbook.pdf

The Macquarie University Library also provides excellent resources covering writing skills, researching online: and a guide to citations and referencing. A Learning Adviser can also be contacted for further details:

http://www.students.mq.edu.au/support/learning_skills/

http://infoskills.mq.edu.au/

MGSM iLearn

The web page for this unit can be found at: https://ilearn.mq.edu.au/login/MGSM

Unit Schedule

Block class – Dates: 3-5 August, 10-12 August 2018

Session Date Topic Required Text Reading
1 3 Aug The Investment Environment Chapters 1 - 3
2 4 Aug Investment Return and Risk Chapters 4 - 5
3 4 Aug Individuals and Investing  
4 5 Aug Investing in Shares Chapters 6 - 8
5 5 Aug Value Investing Principles  
6 17 Aug Bond Investments; Bond Valuation; Investment Strategies Chapters 9 - 10
7 18 Aug Managed Funds Basics; Measuring Managed Funds Performance; Critiquing Managed Funds Chapters 13 - 14
8

18 Aug

Real Estate & Other Investments Chapter 12
9 19 Aug Other Investments: Preference Shares; Convertibles; Derivatives; Hedge Funds; Other Tangibles Chapters 11, 15 - 16
10 19 Aug Discussion Session on Project; Integration & 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 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.

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

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

PG - Discipline Knowledge and Skills

Our postgraduates will be able to demonstrate a significantly enhanced depth and breadth of knowledge, scholarly understanding, and specific subject content knowledge in their chosen fields.

This graduate capability is supported by:

Learning outcomes

  • Critically evaluate and assess how investment portfolios are constructed and their performance, using a conceptual framework for, and models that explain the structure, institutions and dynamics of modern investments
  • Assess and synthesise the differences between behavioural finance and rational expectations in a global investment environment.
  • Critically assess the impact of the ethical, social and environmental responsibilities of organisations on the construction of optimal portfolios and assessing their performance.
  • Critically analyse stakeholder relationships involved in the construction of portfolios that create and deliver sustainable value across complex market interrelationships

Assessment tasks

  • In-class test 1
  • In-class Test 2
  • Final Group Assignment

PG - Critical, Analytical and Integrative Thinking

Our postgraduates will be capable of utilising and reflecting on prior knowledge and experience, of applying higher level critical thinking skills, and of integrating and synthesising learning and knowledge from a range of sources and environments. A characteristic of this form of thinking is the generation of new, professionally oriented knowledge through personal or group-based critique of practice and theory.

This graduate capability is supported by:

Learning outcomes

  • Critically evaluate and assess how investment portfolios are constructed and their performance, using a conceptual framework for, and models that explain the structure, institutions and dynamics of modern investments
  • Assess and synthesise the differences between behavioural finance and rational expectations in a global investment environment.
  • Critically assess the impact of the ethical, social and environmental responsibilities of organisations on the construction of optimal portfolios and assessing their performance.
  • Critically analyse stakeholder relationships involved in the construction of portfolios that create and deliver sustainable value across complex market interrelationships

Assessment tasks

  • In-class test 1
  • In-class Test 2
  • Final Group Assignment

Alignment with MGSM’s mission-driven attributes

Leadership: Develop skills required of leaders with respect to the synthesis of a wide array of economics information in order to make well-informed and financially robust strategic decisions.

Global mindset: Assessment of the implications of global activity and strategic decisions from an entity perspective, across a wide spectrum of stakeholders.

Citizenship: Apply a true and fair view approach to matters of economic policy making and implementation related to business strategies through consideration of the wider stakeholder implications which may arise from such policies and the subsequent business decisions.

Creating sustainable value: Adoption of a forward-looking perspective on the impact of decisions on the financial position and performance of the entity.

Attendance Policy (MGSM)

The interactive environment of the classroom is central to the MGSM experience. Students are required to attend the full duration of all classes for the units in which they are enrolled. We recognise that exceptional circumstances may occur, such as unavoidable travel on behalf of your organization or the serious illness or injury of you or a close family member.

Special consideration may be given for a maximum of 20% non-attendance for such circumstances as long as lecturers are contacted in advance, and supporting documentation provided, to request exemption from attendance. Failure to abide by these conditions may result in automatic withdrawal, with academic and/or financial penalty. The full Student Attendance Policy is published in the MGSM Student Handbook at https://students.mgsm.edu.au/handbook.

Content Disclaimer

These unit materials and the content of this unit are provided for educational purposes only and no decision should be made based on the material without obtaining independent professional advice relating to the particular circumstances involved.

Changes since First Published

Date Description
18/07/2018 Textbook was updated to the 11th edition: Bodie, Z., Kane, A., & Marcus, A. (2017) Investments, 11th edition, McGraw Hill, ISBN: 9781259277177
12/07/2018 Second block schedule was changed from 10-12 August to 17-19 August.