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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, and portfolio performance evaluation.
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): Investments by Zvi Bodie, Alex Kane, and Alan Marcus, 11th edition, McGraw-Hill Education, 2018
- Lecture Notes - will be available on the web
- Recommended periodicals and newspapers: The Economist, The Wall Street Journal,
Bloomberg, etc.
- Books for fun:
- Movies for fun: Wall Street, The Big Short, Boiler Room,
Rogue Trader, Trading Places
There are assigned readings every week. I expect that students come to face-to-face 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, other reading materials will be posted
either as files or web links). 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 two points per person per lecture though.
Course Requirements
There will weekly individual assignments, one midterm, and a final exam.
Assignments are to be completed on McGraw-Hill Connect,
and are due one hour before the class on the due date. 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. The final exam is cumulative,
i.e. it covers the entire course. The final exam grade will replace your midterm grade if your final exam grade is higher than the midterm grade.
You can use 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 introductory finance class. Proficiency in EXCEL is a must. There will be assignments involving EXCEL.
Good basic knowledge of statistics 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 grade, 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 for every class. However, if you have to miss a class, you do not
have to ask for my permission (recorded lectures are available). Just remember that it would be increasingly
difficult to pass the course without a 100% commitment. Also remember that you can get a bonus of 1% for active class participation.
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/policy/. Violators will be sanctioned according to the
Academic Integrity Sanctions guidlines as described at http://honesty.uark.edu/sanction-rubric/.
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