annual report on degree program assessment of student learning university assessment ...€¦ ·...

Annual Report on Degree Program Assessment of Student Learning

University Assessment Committee Office of Academic Assessment Purpose: The purpose of the Annual Report on Degree Program Assessment of Student Learning is to provide information about student learning for each degree program within your academic unit. The report will be made available publicly at the Office of Academic Assessment website and will be available to appropriate accrediting agencies. Most important, it is recommended that your unit use your assessment report and results to highlight achievements of student learning as well as to identify potential areas for future curriculum improvement. The University Assessment Committee will review your report to provide constructive feedback and to nominate programs for the NAU Seal of Assessment Achievement or Excellence. CONTACT INFO FOR ANNUAL REPORT SUBMISSION Academic Unit: Finance (W.A. Franke College of Business) Date: 5/6/2011 Name(s): Lisa Majure Email: [email protected] Phone: 523-7400 Degree Program(s) reported here: Finance REPORT INSTRUCTIONS Please answer the following questions to provide your faculty and constituents with meaningful documentation throughout this assessment cycle, defined as the completion of all three phases described below. One or more phases can be completed each year, depending upon your own priorities and goals. This is a living document that encourages your program to add successive information from one phase to the next. Please email this completed form (one or more of the phases below) as an attachment to [email protected]. You will receive an acknowledgement that it has been received. Additional Assistance: How might the Office of Academic Assessment and/or University Assessment Committee assist you with the upcoming assessment cycle? Would you like to solicit ideas from your colleagues in other academic units? Please contact Tom Paradis, Director of Academic Assessment, with any inquiries, at [email protected] or 928-523-5853. Web resources are also available at www.nau.edu/assessment. PHASE 1: CONVERSATIONS AND ACTION PLAN REPORTING DATE 5/6/2011 COMPLETED BY (names): Lisa Majure

1. After discussing our existing assessment plan, which aspects of the plan have we (the faculty) decided to keep, and why? Which aspects did we revise, and why? Note: Please submit any revised assessment plans to the Office of Academic Assessment along with this report. Our faculty decided to keep all the elements of our existing assessment plan as we think the process is working well. Currently we have four Learning Outcomes that are assessed in various courses within our finance major. Due to changes in our curriculum (discussed in last year’s Phase 3

Office of Academic Assessment P.O. Box 4091, Flagstaff, AZ 86011-4091 Tel. (928) 523-8679 Fax (928) 523-1922

Copyright © 2009 Northern Arizona University

mailto:[email protected]


http://www.nau.edu/assessment

assessment report), we will be adding additional assessment questions for our two new courses (Finance 441 and Finance 442) that will address Learning Outcome #1 (Value Assets) and Learning Outcome #2 (Assess Risk). Please see attached document for the new assessment questions we will be adding.

2. In what ways did we include our own faculty, students, and/or other stakeholders in the

assessment planning process this year? Last year we offered a new course, Fin 499, on an experimental basis. Due to the popularity of the class among students (Fall 2010 enrollment =24, Spring 2011 enrollment = 28) and the success of the course (including huge student success and recognition with extra-curricular activities associated with the class), we have now formalized the class into two distinct courses, Finance 441 (Fall) and Finance 442 (Spring). These courses have been approved by our college curriculum committee and the university curriculum committee and are on the Fall 2011/Spring 2012 course schedules (Please see attached syllabi).

3. Describe how previous feedback, findings, and/or information helped to inform our action plan for

this coming assessment cycle. (e.g. assessment reports, program reviews, professional accreditation reports, interdisciplinary sharing, University Assessment Committee feedback, etc.) Since our previous assessment results indicated that we had much room for improvement with respect to Learning Outcomes #1 and #2, we are beefing up our curriculum in this area. Preliminarily, it appears that our new courses will indeed improve our students’ performance with respect to Learning Outcomes #1 & #2. In the Fall 2010 semester, a team of Fin 499 students competed in the regional CFA Global Research Challenge in Phoenix. NAU won the regional competition (beating a graduate student team from Univ. of AZ!), earning a $500 scholarship for our college and the right to compete in the Americas Regional competition held in April 2011 in Omaha, Nebraska (please see attachments). The student successes are highlighted on our college website (www.cba.nau.edu) including a full article (attached) and YouTube video. The student team also got to attend the CFA Market Forecast Dinner with 150 members of the CFA society, providing a wonderful networking opportunity for our students. Additionally, two of the five students on the team received interviews with Merrill Lynch (a subsidiary of Bank of America) for investment analyst positions locally in Flagstaff. During the Spring 2011 semester, our SMIF team (Student Managed Investment Fund) students enrolled in Fin 499, competed in the Global Asset Management Education Game Forum held at a university in Connecticut. For pictures of this event go to website: https://picasaweb.google.com/franke.nau.edu Also, please see attached e-mail from David Allen (course professor and student team advisor) to Betsy Mennell. Our SMIF team also presented to the NAU Foundation Investment Committee in Phoenix on 4/27/2011 (please see attached PowerPoint presentation).



http://www.cba.nau.edu/

https://picasaweb.google.com/franke.nau.edu

4. Describe our Action Plan for this assessment cycle, with respect to the following aspects (insert into table below):

Learning Outcomes: Specific outcomes prioritized for this cycle, considering existing resources and interests.

Methods & Indicators: Specific assessment methods or tools/instruments used to assess each outcome (see appendix below). A combination of methods is encouraged.

Goals & Standards: How is “good enough” defined, and by whom? Might include benchmarks, peer comparisons, faculty standards, etc.

Timeline & Tasks: Planned timeline and delegation of tasks throughout the assessment cycle: Who does what, and when?

Learning Outcomes #1 and #2

See attachment for assessment questions that will be used to assess Learning outcomes #1 and #2 in our new courses

See our existing Assessment Rubric for the finance area (also attached)

Our entire finance faculty is involved in performing the assessment of our learning outcomes. We intend to compile our assessment results during the Fall 2011 and Spring 2012 semesters so that we will have a complete new set of data to compare to our last full set of assessment data from Spring 2009.

(For additional rows, place cursor within last box and hit “Tab”.)

PHASE 2: COLLECTION AND ANALYSIS OF EVIDENCE REPORT DATE ________________ COMPLETED BY (name): __________________________

1. The table below is provided to summarize our program assessment findings, comparisons to our

own program-level standards/goals, and our recommendations.

Learning Outcomes Please list outcomes assessed during this cycle (from Phase 1 above).

Assessment Findings/Conclusions: What were the most meaningful findings/results for the learning outcomes assessed?

Comparisons to Our Standards or Goals: Generally, did the students perform: 1) Below expected, 2) At expected, or 3) Above expected levels?

Discussion and Recommendations: What curricular modifications for lessons, courses, and/or programs might we recommend based on these findings?



(For additional rows, place cursor within last box and hit “Tab”.)

2. How did student learning for certain outcomes compare to that of others? For which outcomes might we showcase student achievement, and conversely, target for future curricular improvements?

3. Which assessment methods and findings did we determine to be the most valuable for our own

curricular decision making? What was the least valuable, and why?

PHASE 3: IMPLEMENTATION OF FINDINGS REPORT DATE ________________ COMPLETED BY (name): __________________________

1. Given the recommendations from Phase 2 and any additional information, what specific changes did we make this year to 1) individual courses and/or lessons conducted internally, and/or 2) program or course changes submitted to the UCC/UGC for university approval?

Internal Changes: Lessons, Pedagogy, etc. UCC/UGC Submissions

2. How were our decisions to change or maintain curricular approaches specifically informed by our assessment findings, and any related inputs or information?

3. In what ways have we used assessment findings to showcase or highlight program-level

achievements related to student learning successes? How have faculty, students, staff, and/or other stakeholders been informed of these successes?

4. Describe any potential changes to our assessment plan, or any challenges or educational

experiences with the assessment process and activities during this past cycle that we would like to consider for the next assessment cycle.



5. In what ways did we consider constructive feedback provided during this assessment cycle from the University Assessment Committee and/or other external consultants or reviewers? Please summarize.



Exhibit 1. Assessment Rubric for the Finance Area Evaluation Item: Above Average Average Below Average Students should be able to: Exceeds Expectations Meets Expectations Below Expectations Value real and When valuing stocks, bonds The student makes some errors The student is confused financial assets in a projects or other assets, they but grasps many relevant about the valuation process. global market economy can identify and use the correct aspects of valuation. Their They do not use correct inputs and understand how they understanding of value is inputs and have little effect value and understand how good but needs improvement. understanding of how they value changes in an affect value either in a international setting. domestic or international setting Assess and incorporate Students fully understand the The student understands The student has a poor risk in financial decision causes of risk, how risk can many important aspects of grasp of risk fundamentals. making be measured in various ways risk but is confused on the They make many errors and how risk affects value and fine points they should know. when calculating risk and decision making. The connection between risk can not explain how it and value is good but could affects value or decision be improved. making. Analyze, forecast and Students can accurately analyze The student analyzes financial The student makes many interpret financial statements an income statement, balance sheet statements well but misses errors when analyzing and cash flow statement. They can some important details. Their financial statements. Their correctly forecast these statements forecasting is adequate, if not forecasts are poor and they and interpret them. They can use perfect and they can identify do not understand how to them to correctly identify strengths most but not all strengths and use financial statements to and weaknesses of a company. weaknesses of a company. find strengths and weaknesses of a company.





Criteria to Evaluate Students Ability to Analyze and Interpret Financial Statements: Exceeds Expectation: Students can accurately prepare analytical statements such as Statement of Cash Flows, Common-Size statements and Ratios with no mistakes. They can use these statements to correctly identify strengths and weaknesses and identify problems. Meets Expectations: Students can prepare analytical statements such as Statement of Cash Flows, Common-Size statements and Ratios with few mistakes. They can use these statements to identify some, but not all strengths and weaknesses. Below Expectations: Students make many mistakes in preparing analytical statements. They have difficulty interpreting the data and do not correctly identify the strengths and weaknesses.

Criteria for Evaluating Students Ability to Forecast Financial Statements:

Exceeds Expectations: Student can accurately forecast a cash budget, income statement and balance sheet with no errors (i.e. cash budget and balance sheet identify the same cash surplus of deficit. Meets Expectations: Student follows appropriate procedure for forecasting statements, but makes a few mistakes. Thus, their cash budget and balance sheet do not forecast the same cash surplus of deficit. Below Expectations: Student is confused about proper methodology for forecasting statements and has difficulty preparing forecasted statements.

Finance 441 Assessment Questions Fixed Income Questions: Valuation:

A 4-year 5.8% coupon bond is selling to yield 7%. The bond pays interest annually. One year later interest rates decrease from 7% to 6.2%.

a) What is the price of the 4-year 5.8% coupon bond selling to yield 7%? b) What is the price of this bond one year later assuming the yield is unchanged at 7%?

c) What is the price of this bond one year later if instead of the yield being unchanged, the yield

decreases to 6.2%? Risk Analysis:

Sam Stevens is the trustee for the Hole Punchers Labor Union (HPLU). He has approached the investment management firm of IM Associates (IMA) to manage its $200 million bond portfolio. IMA assigned Carol Peters as the portfolio manager for the HPLU account. In their first meeting, Mr. Stevens told Ms. Peters:

“We are an extremely conservative pension fund. We believe in investing in only investment grade bonds so that there will be minimal risk that the principal invested will be lost. We want at least 40% of the portfolio to be held in bonds that will mature within the next three years. I would like your thoughts on this proposed structure for the portfolio.”

How should Ms. Peters respond?



Finance 442 Assessment Questions

Equity Questions: Valuation:

Gentry Can Company’s (GCC) latest annual dividend of $1.25 a share was paid yesterday and maintained its historic 7 percent annual rate of growth. You plan to purchase the stock today because you believe that the dividend growth rate will increase to 8 percent for the next three years and the selling price of the stock will be $40 per share at the end of that time.

a) How much would you be willing to pay for the GCC stock if you require a 12 percent return?

b) What is the maximum price you should be willing to pay for the GCC stock if you believe that the 8

percent growth rate can be maintained indefinitely and you require a 12 percent return?

c) If the 8 percent growth rate is achieved what will the price be at the end of Year 3, assuming the conditions in Part B?

Risk Analysis: Carl Karl, a portfolio manager for the Alpine Trust Company, has been responsible since 2010 for the City of Alpine’s Employee Retirement Plan, a municipal pension fund. Alpine is a growing community, and city services and employee payrolls have expanded in each of the past 10 years. Contributions to the plan in fiscal 2015 exceeded benefit payments by a three-to-one ratio. The plan’s Board of Trustees directed Karl five years ago to invest for total return over the long term. However, as trustees of this highly visible public fund, they cautioned him that volatile or erratic results could cause them embarrassment. They also noted a state statue that mandated that not more than 25% of the plan’s assets (at cost) be invested in common stocks. At the annual meeting of trustees in November 2015, Karl presented the following portfolio and performance to the Board.

Alpine Employee Retirement Plan Asset Mix as of 9/30/15 At Cost

(millions)

At Market (millions)

Fixed-income assets: Short-term securities $4.5 11.0% $4.5 11.4% Long-term bonds and mortgages 26.5 64.7 23.5 59.5 Common Stocks 10.0 24.3 11.5 29.1 $41.0 100.0

% $39.5 100.0%

Investment Performance Annual Rates of Return for



Periods Ending 9/30/15 5 Years 1 Year Total Alpine Fund: Time-weighted 8.2% 5.2% Dollar-weighted (internal) 7.7% 4.8% Assumed actuarial return 6.0% 6.0% US Treasury bills 7.5% 11.3% Large sample of pension funds (average 60% equities, 40% fixed income)

10.1% 14.3%

Common stocks – Alpine Fund 13.3% 14.3% Average portfolio beta coefficient 0.90 0.89 S&P 500 stock index 13.8% 21.1% Fixed-income securities – Alpine Fund 6.7% 1.0% Salomon Brothers’ bond index 4.0% -11.4%

Karl was proud of his performance and was chagrined when a trustee made the following critical observations:

a) “Our one-year results were terrible, and it’s what you’ve done for us lately that counts the most.”

b) “Our total fund performance was clearly inferior compared to the large sample of other pension funds for the last five years. What else could this reflect except poor management judgment?”

c) “Our common stock performance was especially poor for the five-year period.” d) “Why bother to compare your returns to the return from the Treasury bills and the actuarial

assumption rate? What your competition could have earned for us or how we would have fared if invested in a passive index (which doesn’t charge a fee) are the only relevant measure of performance.”

Appraise the merits of each of these statements and give counterarguments that Mr. Karl can use.



2/17/2011 - CFA Takes 1st Place in Global IRC FCB's CFA Team took first place in the Global Investment Research Challenge at the Ritz Carlton in Phoenix, Arizona. In the fall semester, the students enrolled in FIN 499 wrote a security analyst's "initiation of coverage" report on an Arizona based company, PetSmart. The students did extensive research on the firm, including a meeting with the firm's Investor Relations department. They also met Michael Manson, co-founder of PetSmart, in Flagstaff to gain insight into the firm's philosophy and management style. On Thursday, Feb. 17 a group of five students (Jakub Bijak, Yangyang Fan, Amber McMahon, Justin Rivera, and Dylan Taylor, a fall 2010 grad) from FIN 499, traveled to Phoenix to attend the Phoenix CFA (Chartered Financial Analyst) Society's sixth annual Market Forecast Dinner. While there, the students competed in the Arizona/Nevada Investment Research Challenge. The other teams were representing the University of Arizona, Arizona State University, and the University of Nevada, Las Vegas. Each team made a ten minute presentation, culminating in a buy/sell/hold recommendation on the company's stock. Each presentation was followed by a ten minute question and answer session from the panel of judges, all members of the CFA Society. Each team was scored on a common set of factors related to the quality of their research and presentation. When the scores were tallied, NAU was named the winner of the competition.

After the competition, the students, faculty advisors David Allen and Matt Haertzen, Dean March Chopin, and David Franke attended the Market Forecast Dinner along with about 150 members of the CFA Society. This was a great networking opportunity for the students. The panelists were Vincent Catalano, CFA, President of Blue Marble Research; David Tice, CFA, Chief Portfolio Strategist of David W. Tice & Associates; David Goerz, Senior Vice President and Chief Investment Officer of Highmark Capital; Jason Trennert, Chief Investment Strategist of Strategus Research Partners; and Komal Sri-Kumar, Group Managing Director of TWC. The students will now travel to Omaha to compete in the Americas Regional competition on April 6-7, with the winner moving on to the Global Finale, held on April 8. Marc Chopin, dean, congratulated the team: "The team of students competing last week in the Investment Research Challenge in Phoenix represented the FCB extremely well, winning the Arizona/Nevada leg of the Challenge. Next, our students will compete in the Americas competition in Omaha in April, followed by the World Wide competition. Please congratulate Jakub Bijak, Amber McMahon, Justin Rivera, Yangyang Fan, and Dylan Taylor, along with Matt Haertzen and David Allen who worked with the students to prepare them for competition."

Office of Academic Assessment P.O. Box 4091, Flagstaff, AZ 86011-4091

Tel. (928) 523-8679 Fax (928) 523-1922 Copyright © 2009 Northern Arizona University

CFA Team Bios Yang Yang Fan || Major: Applied Math || Graduated December 2010 || Hometown: Zhengzhou, China Jake Bijak || Major: Finance || Year: Senior || Hometown: Gdansk, Poland Jake has developed close relationships with the professors during his time at the University which helped him prepare for a challenging and successful career path. Over the last year, Jake helped actively manage Northern Arizona University's endowment fund and competed in a Student Managed Portfolio competition in Hamden, CT. Most recently, he competed in the Americas finals of the CFA Global Investment Research Challenge, presenting a sell-side financial analysis of a local company. While completing his studies, Jake also attended the Global Asset Management Forum where he met some of the nations brightest financial minds as well as completed Continuing Education programs in financial market dynamics with The American College. His future goals are to become a financial analyst and he was sponsored by The W.A. Franke College of Business to take the CFA Level 1 exam in June 2011. Justin Rivera || Major: Fin || Year: Senior || Hometown: Flagstaff, AZ Justin Rivera moved to Arizona to be near family. After working in human resource outsourcing, customer service, sales, and as a correctional officer, he returned to college. NAU was chosen for its location, personal attention to student success, and growing business reputation. He graduates in May and is applying for a federal officer position. Justin Rivera plans to continue his education by attending law school.



David S. Allen Associate Professor of Finance The W. A. Franke College of Business P.O. Box 15066 Northern Arizona University Flagstaff, AZ 86011 Phone: (928) 523-7378 Web: http://www.cba.nau.edu/allen-d -----Original Message----- From: Matthew J Haertzen Sent: Tuesday, February 22, 2011 3:45 PM To: Andrew Broderick; [email protected]; Jenna Masterson; [email protected]; [email protected]; [email protected]; [email protected]; Tom Barrett Cc: David S Allen; Marc C Chopin; Theresa M Stacy-Ryan; Christopher Michael Studenka Subject: Regional CFA Global Investment Research Challenge The regional competition for the CFA Global Investment Research Challenge was last Thursday (the 17th) in Phoenix. The NAU team competed against teams from the University of Nevada Las Vegas, the University of Arizona (team of graduate students), and Arizona State University. The great news is that thanks to all of your help, the NAU team was the winning team. Clearly I may have been a bit biased, but I believe it is reasonably fair to say that the financial modeling work in particular, completed by the NAU students was outstanding relative to that of the other teams. In addition, they were reasonably relaxed and had a strong presentation. The even better news is that they will now have the opportunity to compete in the Americas Regional Final which takes place April 6-7 in Omaha Nebraska. That gives the team another six weeks to work on improving their presentation. The competition at this point switches entirely to the oral presentation, with no additional review of the written research report they finished this fall. As such, they will spend the next 6 weeks striving to make their presentation as strong as they possibly can with the goal of winning the regional final and getting to compete in the global final (also in Omaha, on the 8th). The final piece of good news was that by winning, the team also earned a $500 scholarship for the Franke College. If you would like to see several pictures of the students from the regional, here is a link: https://picasaweb.google.com/lh/sredir?uname=franke.nau.edu&target=ALBUM&id=55 76164141718948113&authkey=Gv1sRgCNbziN-ey4GH6gE&invite=CIqIyNAO&feat=email If you are interested in reviewing their final presentation at the competition, here is a link for that: http://www.youtube.com/user/FCBtmsr?feature=mhum#p/u/0/DCHxKbPdgbM



If you do review the presentation and have any feedback or suggestions for improvement, we of course welcome that and will work hard to incorporate that into the improvements they make over the next several weeks. Thanks again to all of you for your support which was critical to the team’s success. We will keep you posted as to how they do in Omaha. Matt Haertzen and David Allen



FINANCE 441 (3 credit hours) Student Managed Investment Fund

Fall 20XX Professors: David S. Allen, Ph.D. and Matthew J. Haertzen, CFA Offices: Room 418 and Room 327 Office Phones: Allen: (928) 523‐7378

Haertzen: (928) 523‐7306 Office Hours: Allen: Monday and Wednesday 9:00 a.m. – 10:30 a.m.

Haertzen: Monday and Wednesday 1:00 p.m. – 3:00 p.m. Emails: [email protected] and [email protected]

I. Course Prerequisites: Course: FIN 311 – Principles of Finance.

• Justification: This course covers basic finance terminology, theory and concepts. • Instructor permission through an application process. • Declared finance major, pursuing the investments certificate.

II. Course Description:

The course has two primary education objectives for students. The first is to provide a practical, hands‐on learning experience in portfolio management by being responsible for the day‐to‐day investment decisions for the Student Managed Investment Fund (SMIF). This includes specific responsibility for an assigned industry sector, and the companies within that particular sector. The second objective seeks to enhance student’s ability to perform the necessary portfolio construction and risk management through the incorporation of portfolio management curriculum from the Chartered Financial Analyst (CFA) program. Within the class, students will have the opportunity to prepare a detailed research report on a publicly traded company, and if successful compete in the CFA Institute Global Research Challenge. In addition, the top students from the class will be offered scholarships to participate in the CFA Level I Exam. Finally, students will be expected to prepare presentation material for the NAU Foundation Board and present to them at their semi‐annual update meeting.

III. Student Learning Expectations: Upon completion of the course students will be able to:

1. Prepare a written Statement of Investment Policy appropriate for the client, including: a. Investment objectives, constraints (liquidity, taxation, investment horizon), asset allocation

guidelines, permitted assets, prohibited assets, diversification constraints, and reporting frequency.

2. Construct security portfolios with appropriate risk‐return characteristics given the Statement of Investment Policy.

a. Screen equity securities on relevant variables such as: firm size, valuation measures (price/earnings, price/cash flow, etc.), industry, profitability, and indebtedness.

b. Screen debt securities on relevant variables such as: default risk, interest rate risk, and reinvestment rate risk.

c. Select from the list of screened securities to construct a portfolio that is properly diversified and meets the asset allocation guidelines.





d. Make a formal presentation to the class to recommend buying/selling a specific security, and execute trades under the guidance of the faculty advisor.

3. Monitor the portfolio over time. a. Assigned stocks and/or bonds: Use stop orders to protect gains and limit potential losses. b. Assigned market sector. c. Overall portfolio performance using a Web‐based portfolio tracking tool. d. Site visits to firms in which we own securities.

4. Prepare and present to the NAU Foundation Investment Committee the required semi‐annual reports on the portfolio’s performance.

IV. Course Structure/Approach: The primary teaching methods for this course include class lectures and active day‐to‐day management of the Student Managed Investment Fund. Class lectures are used to present portfolio models and theories, and to discuss portfolio construction. Class projects are practically focused and serve to provide students with specific exercises that are required from investment professionals in their jobs.

V. Textbook and Required Materials:

a. Managing Investment Portfolios by Maginn, Tuttle, McLeavey, and Pinto. Third Edition, CFA Investment Series published by Wiley Publishing. ISBN # 978‐0‐470‐08014‐6.

b. A financial calculator.

VI. Course Outline: A. Course Topics:

1. Portfolio Management and the Investment Policy Statement 2. Managing Portfolios 3. Capital Markets 4. Asset Allocation 5. Equity Portfolio Management 6. Portfolio Rebalancing 7. Performance Measurement

VII. Assessment of Student Learning Outcomes:

Feedback to students is provided through written comments on assignments, feedback on assigned presentations, and maintenance of office hours.



VIII. Grading System:

Evaluation of student performance will be measured as indicated below: INDIVIDUAL ACTIVITIES POINT ALLOTMENT TOTAL Class Attendance 30 @ 5 points each 150 Chapter Quizzes 4 @ 25 points each 100 Investment Policy Statement 1 @ 50 points 50 Final Exam 1 @ 200 points 200 Total Individual: 500 GROUP ACTIVITIES Group Equity Sector Presentation 1 @ 100 points 100 Preparation of Presentation for NAU Foundation

1 @ 100 points 100

Presentation to NAU Foundation 1 @ 100 points 100 CFA Research Challenge: Written Research Report

1 @ 100 points 100

CFA Research Challenge: Company Presentation to Judging Team

1 @ 100 points 100

Total Group: 500 TOTAL points possible 1,000

IX. Use of Technology and Information Systems

Extensive use of Excel is required to complete projects.

X. University Policy Statements: The university takes an extremely serious view of violations of academic integrity. As members of the academic community, NAU’s administration, faculty, staff and students are dedicated to promoting an atmosphere of honesty and are committed to maintaining the academic integrity essential to the education process. Inherent in this commitment is the belief that academic dishonesty in all forms violates the basic principles of integrity and impedes learning. Students are therefore responsible for conducting themselves in an academically honest manner. Individual students and faculty members are responsible for identifying instances of academic dishonesty. Faculty members then recommend penalties to the department chair or college dean in keeping with the severity of the violation. The complete policy on academic integrity is in Appendix G of NAU’s Student Handbook http://www4.nau.edu/stulife/handbookdishonesty.htm. Cheating is a particularly egregious offense, and will not be taken lightly. The first time a student is caught cheating, that student will receive a zero for that particular assignment. Subsequent cheating will result in immediate dismissal from the class, and an “F” for the course.



http://www4.nau.edu/stulife/handbookdishonesty.htm

A copy of the University Policy Statements on Safe Working and Learning Environment, Students with Disabilities, Institutional Review Board, and Academic Integrity Policies can be found at the following website: http://www2.nau.edu/academicadmin/UCCPolicy/plcystmt.html



http://www2.nau.edu/academicadmin/UCCPolicy/plcystmt.html

SCHEDULE (SUBJECT TO CHANGE AS NEEDED)

FINANCE 441

Week Areas of Study Reading Assignment Due Date: 1 Course Overview & Introduction

Portfolio Management & the Investment Policy Statement

Syllabus Investment Policy Ch. 1

Team Assignments Sector Assignments

2 Managing Individual Investor Portfolios

Ch. 2 Homework: Personal Investment Policy Statement

3 Financial Statement Forecasting Handout

Sector Presentations: Consumer Discretionary & Consumer Staples CFA: Financial Statements

4 Managing Institutional Investor Portfolios

Ch. 3 Sector Presentations: Energy & Financials CFA: DDV & FCF Valuation

5 Capital Market Expectations Ch. 4 Sector Presentations: Health Care, & Industrials CFA: Company Meeting Written Report Draft #1

6 Asset Allocation Ch. 5 Sector Presentations: Information Technology CFA: Presentation Draft #1

7 Equity Portfolio Management Ch. 7 Sector Presentations: Materials, Telecomm, & Utilities Sector Weighting Proposals CFA: Presentation & Written Report Draft #2

8 Monitoring and Rebalancing Rehearsal Presentations (schedule TBD)

Ch. 11 CFA: Stock Presentations: Consumer Disc & Staples, Energy & Financials CFA: Final Written Report & Presentation

9 Final Presentation Preparation Rehearsal as Scheduled

CFA Research Challenge: Final Presentations to Alumni Judging Team

10 Evaluating Portfolio Performance Foundation Annual Meeting Preparation

Ch. 12 Handout

Stock Presentations: Health Care, & Industrials, & Materials Foundation: Presentation Draft #1

11 Stock Presentations Stock Presentations: Telecomm, Utilities, & IT Material for New Potential Positions Due Foundation: Final Version Due Presentation to Board

12 New Idea Presentations Stock Presentations: New Positions

13 Issue Response – New Positions Thanksgiving Break – No Class

14 Portfolio Construction Handout Sector Team Presentations: Sector Construction for Spring Semester

15 Final Trading Super Bowl of Indexing Conference



FINANCE 442 (3 credit hours) Student Managed Investment Fund

Spring 20XX Professors: David S. Allen, Ph.D. and Matthew J. Haertzen, CFA Offices: Room 418 and Room 327 Office Phones: Allen: (928) 523‐7378

Haertzen: (928) 523‐7306 Office Hours: Allen: Monday and Wednesday 9:00 a.m. – 10:30 a.m.

Haertzen: Monday and Wednesday 1:00 p.m. – 3:00 p.m. Emails: [email protected] and [email protected]

XI. Course Prerequisites: Course: FIN 311 – Principles of Finance.

• Justification: This course covers basic finance terminology, theory and concepts. • Instructor permission through an application process. • Declared finance major, pursuing the investments certificate.

XII. Course Description:

The course has two primary education objectives for students. The first is to provide a practical, hands‐on learning experience in portfolio management by being responsible for the day‐to‐day investment decisions for the Student Managed Investment Fund (SMIF). This includes specific responsibility for an assigned industry sector, and the companies within that particular sector. The second objective seeks to enhance student’s ability to perform the necessary portfolio construction and risk management through the incorporation of portfolio management curriculum from the Chartered Financial Analyst (CFA) program. Within the class, students will have the opportunity to participate in an investment conference (two that have been attended in the past include the Dayton RISE and the Global Asset Management in Education conferences), and begin preparation for Level I of the CFA Exam. Finally, students will be expected to prepare presentation material for the NAU Foundation Board and present to them at their semi‐annual update meeting.

XIII. Student Learning Expectations: Upon completion of the course students will be able to:

5. Prepare a written Statement of Investment Policy appropriate for the client, including: a. Investment objectives, constraints (liquidity, taxation, investment horizon), asset allocation

guidelines, permitted assets, prohibited assets, diversification constraints, and reporting frequency.

6. Construct security portfolios with appropriate risk‐return characteristics given the Statement of Investment Policy.

a. Screen equity securities on relevant variables such as: firm size, valuation measures (price/earnings, price/cash flow, etc.), industry, profitability, and indebtedness.

b. Screen debt securities on relevant variables such as: default risk, interest rate risk, and reinvestment rate risk.

c. Select from the list of screened securities to construct a portfolio that is properly diversified and meets the asset allocation guidelines.





d. Make a formal presentation to the class to recommend buying/selling a specific security, and execute trades under the guidance of the faculty advisor.

7. Monitor the portfolio over time. a. Assigned stocks and/or bonds: Use stop orders to protect gains and limit potential losses. b. Assigned market sector. c. Overall portfolio performance using a Web‐based portfolio tracking tool. d. Site visits to firms in which we own securities.

8. Prepare and present to the NAU Foundation Investment Committee the required semi‐annual reports on the portfolio’s performance.

XIV. Course Structure/Approach: The primary teaching methods for this course include class lectures and active day‐to‐day management of the Student Managed Investment Fund. Class lectures are used to present portfolio models and theories, and to discuss portfolio construction. Class projects are practically focused and serve to provide students with specific exercises that are required from investment professionals in their jobs.

XV. Textbook and Required Materials:

c. Managing Investment Portfolios by Maginn, Tuttle, McLeavey, and Pinto. Third Edition, CFA Investment Series published by Wiley Publishing. ISBN # 978‐0‐470‐08014‐6.

d. A financial calculator.

XVI. Course Outline: B. Course Topics:

8. Fixed Income Portfolio Management 9. Alternative Investments 10. Risk Management 11. Portfolio Trading 12. Performance Attribution 13. Global Investment Performance Standards

XVII. Assessment of Student Learning Outcomes:

Feedback to students is provided through written comments on assignments, feedback on assigned presentations, and maintenance of office hours.



XVIII. Grading System:

Evaluation of student performance will be measured as indicated below: INDIVIDUAL ACTIVITIES POINT ALLOTMENT TOTAL Class Attendance 25 @ 4 points each 100 Chapter Quizzes 4 @ 25 points each 100 Performance Attribution Analysis 3 @ 100 points 300 Final Exam 1 @ 200 points 200 Total Individual: 700 GROUP ACTIVITIES Group Fixed Income Sector Presentation 1 @ 100 points 100 Preparation of Presentation for NAU Foundation

1 @ 100 points 100

Presentation to NAU Foundation 1 @ 100 points 100 Total Group: 300 TOTAL points possible 1,000

XIX. Use of Technology and Information Systems

Extensive use of Excel is required to complete projects.

XX. University Policy Statements: The university takes an extremely serious view of violations of academic integrity. As members of the academic community, NAU’s administration, faculty, staff and students are dedicated to promoting an atmosphere of honesty and are committed to maintaining the academic integrity essential to the education process. Inherent in this commitment is the belief that academic dishonesty in all forms violates the basic principles of integrity and impedes learning. Students are therefore responsible for conducting themselves in an academically honest manner. Individual students and faculty members are responsible for identifying instances of academic dishonesty. Faculty members then recommend penalties to the department chair or college dean in keeping with the severity of the violation. The complete policy on academic integrity is in Appendix G of NAU’s Student Handbook http://www4.nau.edu/stulife/handbookdishonesty.htm. Cheating is a particularly egregious offense, and will not be taken lightly. The first time a student is caught cheating, that student will receive a zero for that particular assignment. Subsequent cheating will result in immediate dismissal from the class, and an “F” for the course. A copy of the University Policy Statements on Safe Working and Learning Environment, Students with Disabilities, Institutional Review Board, and Academic Integrity Policies can be found at the following website: http://www2.nau.edu/academicadmin/UCCPolicy/plcystmt.html



http://www4.nau.edu/stulife/handbookdishonesty.htm

http://www2.nau.edu/academicadmin/UCCPolicy/plcystmt.html

SCHEDULE (SUBJECT TO CHANGE AS NEEDED)

FINANCE 442

Week Areas of Study Reading Assignment Due Date: 1 Course Overview & Introduction

Portfolio Management & the Investment Policy Statement

Syllabus Investment Policy Ch. 1

Team Assignments Sector Assignments

2 Fixed‐Income Portfolio Management

Ch. 6

3 Alternative Investments Ch. 8 Bond Sector Presentations: Consumer Discretionary & Consumer Staples

4 Alternative Investment Cont.

Ch. 8 Bond Sector Presentations: Energy & Financials

5 Risk Management Ch. 9 Bond Sector Presentations: Health Care, & Industrials

6 Risk Management Cont. Ch. 9 Bond Sector Presentations: Information Technology

7 Execution of Portfolio Decisions Ch. 9 Bond Sector Presentations: Materials, Telecomm, & Utilities Sector Weighting Proposals

8 Evaluating Portfolio Performance Ch. 12 Bond Presentations: Consumer Disc & Staples, Energy & Financials Homework: Portfolio Performance Attribution

9 Evaluating Portfolio Performance Cont.

Ch. 12

10 RISE Conference Preparation Homework: Portfolio Performance Attribution

11 RISE Conference Attendance 12 Global Investment Performance

Standards Ch. 13 Bond Presentations:

Health Care, & Industrials, & Materials Foundation: Presentation Draft #1

13 Global Investment Performance Standards Cont.

Ch. 13 Bond Presentations: Telecomm, Utilities, & IT Material for New Potential Positions Due

14 Portfolio Construction Handout Bond Sector Team Presentations: Sector Construction for Next Semester

15 Foundation Annual Meeting Preparation

Handout Presentation to the Board Homework: Portfolio Performance Attribution



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