CALIFORNIA STATE UNIVERSITY
College of Business
Department of Finance and Marketing

Finance 151                                                                              Office: 466 Tehama

Fall 2004                                                                                   Phone: 898-6242

Richard PonArul                                                                       Fax: 898-4584

E-mail: rponarul@csuchico.edu                                                 


INVESTMENTS

Scope: This course introduces the basics of investing in financial assets.  The focus will be on stocks and bonds.  Derivatives will be covered in Finance 257.  We will learn the analytical framework of asset valuation as well as portfolio management..  We will also study the organization and functioning of securities markets.

 

Prerequisites: Finance 150 (not being taken concurrently)

 

Required text: INVESTMENTS by Bodie, Kane and Marcus.  Sixth Edition.

 

Format: Lecture/discussion with opportunities for questions and clarifications. The students are expected to have read the assigned chapters in advance.  .

 

Certain number of questions and problems will be assigned each week.  Students are expected to work on these on a timely manner. 

 

Students will participate in a group project.  The project involves forming investment portfolios and tracking their performance over time.  The maximum group size is four students.

 

There will be three exams and several quizzes.  There will be no opportunity to make up missed quizzes or exams.

 

The overall grade will be based on the following scheme.

 

Total points:   250

Mid terms  150 points Quizzes 40 points

Project  60 points

90% and above     A and A minus
75% to 90%           B plus, B and B minus
60% to 75%         C plus, C and C minus
50% to 60%           D plus and D

 

                               

 

 

Schedule

 

Week 1

Introduction.

Chapter 1

Week 2

Financial instruments

Chapter 2

Week 3

Securities markets

Chapter 3

Week 4

Investment companies

Chapter 4

Week 5

Exam 1 on September 22

 

Week 6

Interest rates and risk premiums

Chapter 5

Week 7

Risk aversion

Chapter 6

Week 8

Portfolio theory

Chapters 7 and 8

Week 9

Capital Asset Pricing Model

Chapter 9

Week 10

Exam 2 on October 27

 

Week 11

Index models and APT

Chapters 10 and 11

Week 12

Market efficiency

Chapter 12

Week 13

Empirical evidence on returns

Chapter 13

Week 14

Bonds

Chapter 14

Finals Week

Exam 3 as per university schedule