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Course Objective
The primary objective is to provide an integrated framework for understanding the
mechanism of financial investments. The basic theme is the Efficient Market Hypothesis and
No Arbitrage Principle. The course emphasizes intuition and practical applications of investment
theory as well as some analytical analysis. Topics to be covered include financial markets,
portfolio theory and its applications, fixed-income securities.
The course best suits the following students (but not limited to):
- Those who aspire to pursue a career in investment banking.
- Those who would like to become a professional money manager.
Course Materials
- Textbook (recommended): Essentials of Investments by Zvi Bodie, Alex Kane, and Alan Marcus, 10th edition, McGraw-Hill/Irwin, 2016
- Lecture Notes - will be available on the web
- Recommended periodicals and newspapers: Economist, Wall Street Journal,
Business Week, Smart Money (most of the web editions are free, though you may need to register online)
- Books for fun:
- Movies for fun: Wall Street, Boiler Room,
Rogue Trader, Trading Places, The Big Short
There are assigned readings for each class. I expect that students come to class prepared for
the materials that will be covered that day (the required readings are identified as Lecture# for lecture notes
and BKM# for the chapter in the textbook). I may make cold calls on students to answer questions. I do not expect
perfect answers from you, the thought process is way more important. I also strongly encourage students to ask
questions - in many cases an insightful question is more valuable than a correct answer. You will also receive
an extra point to your score on the Final Exam for catching each of my mistakes (believe me, you will have many
chances). There is a limit of one point per person per lecture though.
Course Requirements
There will be four individual written assignments, one midterm, and a final exam.
Assignments are to be completed on McGraw-Hill Connect. Late assignments will not be accepted.
The lowest grade on your assignments will be dropped. The midterm and the final exam will be closed-book.
You can bring one standard size (8.5 x 11) cheat-sheet (both sides) for the midterm and two standard
size (8.5 x 11) cheat-sheets (both sides) for the final exam.
The course content builds on students' knowledge learned in the previous finance classes (prerequisites and corequisites - WCOB 2043 and FINN 3013).
Proficiency in EXCEL is a must. There will be assignments involving extensive use of EXCEL. Good basic knowledge of statistics
and some calculus is also required.
Grading
Your grade will be based on your class participation, assignments, the midterm and the final exam. The weights are given below:
Exam scores will be curved as a percentage of the highest score achieved among all students. If your Final Exam grade
is better than the midterm, I will replace your Midterm grade with the Final Exam grade. Don't hesitate letting me know
if you think that you were adversely affected by a grading error (you do not have to report any grading errors in your
favor).
Attendance
Attendance is expected (but not required) for every class. If you have to miss a class, you do not
have to ask for my permission. Just remember that class attendance may add up to 1% bonus to your grades.
Academic Integrity
Students have the responsibility to know and strictly observe the University of Arkansas Academic Integrity
regulations as described at
http://honesty.uark.edu/students/index.php. Violators will be sanctioned according to the
Academic Integrity Sanctions guidelines as described at http://honesty.uark.edu/sanction-rubric/.
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