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Kuwait UniversityCollege of Business Administration

Department of Finance & Financial Institutions

Course SyllabusSpring 2018

Dr. Saud Asaad Al-ThaqebFIN 320 - Principles of Investments

Lecture Time and Location:FIN 320/ 51 : Su, Tu, Th TIME 12:00 – 12:50 Room # 310FIN 320/ 01 : Su, Tu, Th TIME 1:00 – 1:50 Room # 310

Contact Information:Location : Department of Finance & Financial Institutions – 2nd Floor Email : [email protected] Office Hours : Monday from 12:30 PM to 1:50 PM or by appointmentSocial Media : MyU – SAlthajeb (This is my preferred form of communication)Course Website : www.SAlthajeb.com

Teaching Assistant: TBA

Course Description:This course provides a rigorous treatment of the core concepts of investments for finance majors. Covers portfolio optimization, Concepts used to manage security portfolios and diversification, risk/return tradeoffs, examines the pricing of equity, and analyzes the degree of market efficiency.

Course Learning Outcomes:The learning outcomes for this course, listed below, relate to the learning goals of the College of Business Administration Undergraduate Program, which can be found in the appendix at the end of this syllabus. The numbers in parenthesis indicate to which specific learning goal the outcome relates.

Upon successful completion of the course, students will be able to:1. The students will understand the different types of valuation models and the

assumptions behind them and their applications. (LG2, LG3, LG5)2. The students will be able to use spreadsheet applications (i.e. Microsoft excel) to

create models to value assets. (LG3)3. The students will able to produce professional quality investment and financial

reports. (LG4)4. The students will able to deliver professional quality presentations. (LG4)5. The students will be to work effectively in a team setting and have the appropriate

interpersonal and leadership skills. (LG4)

Required Material: Textbook: Jordan, B. D., Miller, T. W., & Dolvin, S. D. (2012). Fundamentals of investments: Valuation and management (7th ed.). New York: McGraw-Hill Irwin. Additional Material : Standards of practice handbook (11th ed.). (2014). Charlottesville, VA: CFA Institute.

Other material, including course PPT Slides are available on my website. Financial Calculator

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http://www.SAlthajeb.com/

mailto:[email protected]



Expectations: I expect you to attend each class and participate in discussions. I expect you to do your project and assigned reports on time and attend the tutorials. Assignments: There will be various assignments throughout the semester. In addition, we will have several assignments using Excel, which will be done individually.Project: There will be a project done in groups of 5 students. The project involves an investment simulation using Stock-Trak in which you will have a certain amount of money to invest and manage as a portfolio in the US market. Each group is going to present their results. A separate handout with details on the requirements and guidelines of this project.The project and the assignments are here to help you understand the material and tie the concepts and expose you to real-world problems and situations.Financial Trading Center (FTC): I encourage each student to visit the FTC at the college of business. You can have free access to Thomson Reuters which is a valuable resource of financial data. It covers equity, fixed-income securities, derivatives and currencies. It has financial news related to countries and specific financial instruments. It also provides you with access to publications and research reports on several sectors/industries as well as companies.Quizzes: I will give some quizzes throughout the semester, so you should be prepared.Exams: There will be one midterm and a final; however, the instructor retains the right to change the dates. The dates of the exams are as follows:Important Dates

Event Notes

Sun 18/03/2018 Midterm (Ch 1, 2, 19, 4, 5 & 6)Thu 8/3/2018 Last day to drop a courseTue 8/5/2017 Last day of classes

Mon 14/5/2018 Final (comprehensive) 2:00 – 4:00 PM in a place TBAAttendance: Every student in this course must abide by the Kuwait University Policy on Attendance (published in the Student Guide, Chapter 3, Section 13). However, there is a bonus of 3 points for attendance. A copy of the student guide can be accessed online on:

http://www.kuniv.edu/cs/groups/ku/documents/ku_content/kuw055940.pdfThis course has a significant seminar component & class participation is critical to the learning experience. Your participation & attendance will contribute to your score of in-class performance.

Class Preparation – Readings & Videos: I expect that you will do any assigned work before the class and any additional possible readings I might assign later. This will significantly help you understand the material discussed during class. I also encourage you to re-read the material after the class to reinforce what was covered. Also you should put an effort to follow and read the business news in Kuwait and worldwide and try to connect it to what we do in class.Cheating and Plagiarism: Every student in this course must abide by the Kuwait University Policy on Cheating and Plagiarism (published in the Student Guide, Chapter 3, Section 2). A copy of the student guide can be accessed online on:

http://www.kuniv.edu/cs/groups/ku/documents/ku_content/kuw055940.pdf

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Please carefully note all sources and assistance when you turn in your work. Under no circumstances should you take credit for work that is not yours. You should neither receive nor give any unauthorized assistance on any deliverable. If you have any questions about what constitutes “unauthorized assistance” please email me before the deliverable is submitted. Writing Style: Students must refer to APA writing style for their assignments and report writing. Refer to the English Language Center for help.

Grading: The scores in this course will be the weighted average of the following items: Weight Description25% Projects– (Written Report, Presentation, market updates & Peer evaluation)15% Assignments (Equity Reports), Participation & Quizzes20% Midterm40% Final100% TOTALGrade Distribution:Grade Range Grade RangeA ≥ 95 C+ ≥ 77 and < 80A- ≥ 90 and < 95 C ≥ 73 and < 77B+ ≥ 87 and < 90 C- ≥ 70 and < 73B ≥ 83 and < 87 D+ ≥ 65 and < 70B- ≥ 80 and < 83 D ≥ 60 and < 65

F < 60Course Outline:Title TopicsInvestments: Background & Issues

Real Assets vs. Financial Assets Financial Assets Financial Markets & the Economy The Investment Process Markets Are Competitive The Players

Asset Classes & Financial Instruments

Stock & Bond Market Indexes(CFA TOPIC)

Risk and Return(CFA TOPIC)

Rates of Return Risk & Risk Premiums Inflation & Real Rates of Return Asset Allocation across Risky & Risky-Free Portfolios Passive Strategies & the Capital Market

Equity valuation Valuation by Comparables Intrinsic Value vs Market Price Dividend Discount Models Price-Earnings Ratios Free Cash Flow Valuation Approaches (CFA TOPIC)

Efficient Diversification Diversification and Portfolio Risk Asset Allocation with Two Risky Assets The Optimal Risky Portfolio with a Risk-free Asset Efficient Diversification with Many Risky Assets

Capital asset pricing and arbitrage pricing theory

The Capital Asset Pricing Model Multifactor Models and the CAPM The Arbitrage Theory (CFA TOPIC)

The efficient market hypothesis

Random Walks and the Efficient Market Implications of EMH

Portfolio performance evaluation

Risk-Adjusted Returns Market Timing

CFA Code of Ethics(CFA TOPIC)

CFA Institute Code of Ethics and Standards of Professional ConductNOTE: Standards of practice handbook (11th ed.)

Tentative Course Schedule:

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Sun 28/1/2018 Introduction to the courseTue 30/1/2018 Chapters 1: A Brief History of Risk and ReturnThu 1/2/2018 Chapters 1: A Brief History of Risk and ReturnSun 4/2/2018 Chapter 2: The Investment ProcessTue 6/2/2018 Chapter 2: The Investment ProcessThu 8/2/2018 Chapter 19: Global Economic Activity and Industry AnalysisSun 11/2/2018 Chapter 19: Global Economic Activity and Industry AnalysisTue 13/2/2018 Chapter 19: Global Economic Activity and Industry AnalysisThu 15/2/2018 Chapter 4: Mutual Funds and Other Investment CompaniesSun 18/2/2018 Chapter 4: Mutual Funds and Other Investment CompaniesTue 20/2/2018 Chapter 4: Mutual Funds and Other Investment CompaniesThu 22/2/2018 Chapter 5: The Stock MarketSun 25/2/2018 No classTue 27/2/2018 Chapter 5: The Stock MarketThu 1/3/2018 Chapter 6: Common Stock ValuationSun 4/3/2018 Chapter 6: Common Stock ValuationTue 6/3/2018 Chapter 6: Common Stock ValuationThu 8/3/2018 Chapter 6: Common Stock ValuationSun 11/3/2018 Chapter 17: Projecting Cash Flow and EarningsTue 13/3/2018 Chapter 17: Projecting Cash Flow and EarningsThu 15/3/2018 Chapter 17: Projecting Cash Flow and EarningsSun 18/3/2018 Midterm 1Tue 20/3/2018 Chapter 7: Stock Price Behavior and Market EfficiencyThu 22/3/2018 Chapter 7: Stock Price Behavior and Market EfficiencySun 25/3/2018 Chapter 7: Stock Price Behavior and Market EfficiencyTue 27/3/2018 Chapter 8: Behavioral Finance and the Psychology of InvestingThu 29/3/2018 Chapter 8: Behavioral Finance and the Psychology of InvestingSun 1/4/2018 Chapter 8: Behavioral Finance and the Psychology of InvestingTue 3/4/2018 Chapter 11: Diversification and Risky Asset AllocationThu 5/4/2018 Chapter 11: Diversification and Risky Asset AllocationSun 8/4/2018 Chapter 11: Diversification and Risky Asset AllocationTue 10/4/2018 Chapter 11: Diversification and Risky Asset AllocationThu 12/4/2018 Chapter 11: Diversification and Risky Asset AllocationSun 15/4/2018 Chapter 12: Return, Risk, and the Security Market LineTue 17/4/2018 Chapter 12: Return, Risk, and the Security Market LineThu 19/4/2018 Chapter 12: Return, Risk, and the Security Market LineSun 22/4/2018 Chapter 12: Return, Risk, and the Security Market LineTue 24/4/2018 Chapter 12: Return, Risk, and the Security Market LineThu 26/4/2018 Chapter 12: Return, Risk, and the Security Market LineSun 29/4/2018 Chapter 13: Performance Evaluation and Risk ManagementTue 1/5/2018 Chapter 13: Performance Evaluation and Risk ManagementThu 3/5/2018 Chapter 13: Performance Evaluation and Risk ManagementSun 6/5/2018 Chapter 13: Performance Evaluation and Risk ManagementTue 8/5/2018 Project PresentationsMon 14/5/2018 Final Exam (2-4 PM in a place TBA)

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