Programme: Bachelor of Commerce
Credit Value: 12
Module Tutor: Tirtha Raj Puri, Gagan Mongar, Ritu
Barna Adhikari,Madhav Verma, Kabita Chhetri
Module Coordinator: Tirtha Raj Puri
General
objective: This module
provides a brief overview of financial instruments and markets. The main aim of
this module is to provide students with ability to analyse the portfolio
management problems and processes associated with portfolio selection.
Learning outcomes – On
completion of the module, students will be able to:
1.
Explain the concept
of portfolio management and its role in investment decisions.
2.
Identify risk
associated with different assets and comprehend risk and return trade-off.
3.
Use mathematical
tools in determining the risk and return on different portfolios.
4.
Use the portfolio
analysis tools to set investment criteria, create and manage portfolios
consisting of different assets.
5.
Apply the concept of
diversification in risk reduction and return optimization.
6.
Analyse and assess
portfolio performance by Sharpe Index.
7.
Exercise various
empirical tests for pinpointing implications of EMH for security analysis and
portfolio management for rational judgement and strategic thinking.
8.
Evaluate company’s
performance and predict the stock prices in the financial markets by using EIC
framework.
Teaching and Learning
Approach:
|
Approach
|
Hours
per week
|
Total
credit hours
|
|
Lecture
|
2
|
30
|
|
Tutorials, case studies
and group work
|
1
|
15
|
|
Class Participation/
Quizzes/ Problem Solving Exercises/ Presentations
|
1
|
15
|
|
Independent study
|
4
|
60
|
|
Total
|
120
|
Assessment Approach:
A.
Problem solving
(In-class activities, in pairs and individual): Portion of Final Marks: 20%
Each student will solve 2 specific
problems inside the class (10% each, 45 min duration) by using mathematical
tools to determine risk and return on various portfolios.
B.
Project: Portion of
Final Mark: 30%
Students in groups of 5 will select a
company and will write an investment analysis paper of not than 3000 words. The
resulting report should be inclusive of problem definition, data, analysis,
conclusions and references. The group presentation will be approximately 15
minutes, and should include slides.
Written report (20%):
2% relevancy of the problem in
financial context
3% usage of appropriate investment
analysis techniques
2% usage of secondary sources
2% referencing (strict adherence
to APA guidelines)
3% analysis of the problem
3% conclusions and recommendations
5% individually assessed process
score (contribution to the group output)
Presentation (10%):
5% group presentation mark
(cohesiveness, organization, level of professional delivery)
5% individual presentation mark
(clarity, conciseness, ability to respond to questions, tone)
C.
Class Participation:
Portion of Final Marks: 5%
Students are expected to actively
participate in the class and other activities of the module. Every individuals
are encouraged to come prepared for the class and contribute meaningfully to
the class teaching and learning.
D.
Midterm Examination:
Portion of Final Mark: 15%
Students will take a written exam of 2
hours duration covering topics up to the mid-point of the semester.
E.
Semester-End Examination: Portion
of Final Marks: 30%
The module will have a semester-end exam for 2 hours covering the
entire syllabus. The question will be divided into two parts – Part A (carrying
40% of the exam weightage) will be mostly of short answer including objective
questions. Part-B (carrying almost 60% of the exam weightage) will be mostly of
essay type or an extended response to the given question. This part of the
question requires students to apply, analyse, and evaluate or construct
knowledge and skills. Cases will also be used to test the levels of knowledge.
|
Areas
of assignments
|
Quantity
|
Weighting
|
|
A.
Problem solving
|
2
|
20%
|
|
B.
Group project and
presentation
|
1
|
30%
|
|
C.
Class
participation
|
|
5%
|
|
D.
Mid-Term
|
|
15%
|
|
Total
Continuous Assessment (CA)
|
|
70%
|
|
Semester-End
Examination (SE)
|
|
30%
|
Pre-requisites: FIN202
Financial Markets and Services & FIN305 Financial Risk Management
Subject matter:
1.
Investments
and Portfolio
Management
1.1.
Financial and
Economic meaning
1.2.
Features
1.3.
Objectives
1.4.
Types of investors-
Investment Avenues
1.5.
What is portfolio
management?
1.6.
Why portfolios-
phases of portfolio management- Evolution
1.7.
Role of portfolio
management
2.
Fundamental
Analysis
2.1.
Macroeconomic
Analysis
2.2.
Economic
forecasting- techniques
2.3.
Anticipatory Surveys
2.4.
Barometric or
Indicator Approach (Basic concepts)
2.5.
Econometric model
Building (Basic concepts)
2.6.
Opportunistic Model
building (Basic concepts) and Industry Analysis
2.7.
Concept of Industry-
2.7.1.
Industry Life Cycle
2.7.2.
Company Analysis
2.7.3.
In Depth Financial
Statement Analysis including certain important Ratios
2.8.
Establishing a value
benchmark: Introduction to security valuation.
3.
Technical
Analysis and Efficient Market Hypothesis
3.1.
Meaning
3.2.
DOW Theory
3.3.
Principles of
Technical Analysis
3.4.
Mathematical
Indicators- (RSI, MACD, MFI, etc)
3.5.
Market
Indicators-Technical Analysis Vs Fundamental Analysis
3.6.
Random Walk Theory
3.7.
Forms of Market
Efficiency
3.7.1.
Weak Form
3.7.2.
Semi-Strong Form
3.7.3.
Strong Form.
4.
Modern
Portfolio Theory
4.1.
Determination of
portfolio return
4.2.
Implication of real
and nominal rates of returns
4.3.
Mean-Variance Model
and determination of portfolio risk (standard deviation)
4.4.
Deriving the
efficient frontier
4.4.1.
Capital Market Line
4.4.2.
Efficient Frontier
with risk less lending and borrowing
4.5.
Brief discussion
about single index model.
5.
Capital Asset
Pricing Model
(CAPM)
5.1.
Fundamental Notions
of Portfolio theory
5.2.
Assumptions of CAPM
5.3.
Security Market Line
5.4.
Pricing of securities
with CAPM.
6.
Portfolio
Analysis and Evaluation
6.1.
Expected return of a
portfolio
6.2.
Efficient set of
portfolios
6.3.
Selecting the best
portfolio
6.4.
Sharpe Portfolio
Optimization
6.5.
Significance of Beta
in the Portfolio
6.6.
Traditional
portfolio selection
6.7.
Need for Evaluation
6.7.1.
Evaluation
Perspective
6.7.2.
Meaning of Portfolio
Evaluation
6.7.3.
Evaluation of
Portfolio return
6.7.4.
Risk Adjusted return
6.7.5.
Differential return.
Reading List:
1.
Essential Reading
1.1.
Kevin, S. (2015).
Security Analysis and Portfolio Management (2nd ed.). New Delhi: Prentice-Hall
of India Pvt.Ltd.
1.2.
Frank, K. R. &
Keith C. B. (n.d.). Investment Analysis & Portfolio Management (11th ed.)
1.3.
Edwin, J. E., Martin
J. Gruber (2001). Modern Portfolio Theory and Investment Analysis (5th
ed.), John Wiley & Sons, 2001.
2.
Additional
Reading
2.1.
Chandra, P. (2012). Investment
Analysis and Portfolio Management (4th ed.). Noida: McGraw Hill Education.
2.2.
Chandra, P. (2003
Investment Analysis and Portfolio Management, (4th ed.). Tata
McGraw-Hill Publishing Co. Ltd. New Delhi, 2003.
2.3.
Charles, P. Jones, Investments
Analysis and Management, (8th ed.). John Wiley & Sons, 2001.
2.4.
Cottle, S., Roger,
F. M., Frank, E. B., Graham & Dodd (2002). Security Analysis, (5th
ed.). Tata McGraw-Hill, New Delhi, 2002.
2.5.
Donald, E. F. &
Ronald J.J. (2004). Security Analysis and Portfolio Management, Pearson
Education, 2004.
2.6.
Frank, K. R. &
Keith C. B. (n.d.). Investment Analysis & Portfolio Management (11th
ed.)
2.7.
Fisher, D.E.
& Jordan, R.J. (n.d.). Security Analysis and Portfolio Management.
2.8.
Kishore, R. M.
(2016). Financial Management. New Delhi: Taxmann.
2.9.
Pandey, I. M.
(2015). Financial Management (11thed.). Noida: Vikas
Publishing House Pvt. Ltd.
2.10.
Pandian, P. (2012). Security
Analysis and Portfolio Management (2nd ed.). New Delhi: S.Chand (G/L) &
Company Ltd.
2.11.
Ranganatham (n.d.). Investment
Analysis and Portfolio Management Pearson Education.
2.12.
William, F. Sharpe,
Gordon J.Alexander & Jeffery V.Bailey (2002). Investments, Prentice Hall,
2002.
Date: July, 2017