Course Syllabus

FINA 863  Portfolio Management

Spring 2020

Contact Information

Instructor

Richard DeFusco

Professor Richard A. DeFusco, Ph.D., CFA

rdefusco1@unl.edu

402-472-6763

Hawks Hall 425Z

TBA

Course Description

Finance uses economic theory and behavioral models to study the behavior of financial managers, investors and markets. The theory of investment is concerned primarily with investment decisions, portfolio strategies and the structure of capital markets. A proper discussion of the modern developments in investments and portfolio theory must be rigorous. The presentation of the material is intended to be rigorous and empirical.

I will attempt, as time permits, to present six topics.

  • organization of securities
  • markets portfolio theory
  • risk and return
  • bond valuation
  • efficient market theory
  • stock valuation

Course Prerequisites

The prerequisite for this course is GBA811 (Principles of Finance) or the equivalent. This course requires a working knowledge of calculus and statistics. If your statistics is rusty, you can read the review of statistics material in the Bodie, Kane and Marcus Quantitative Review.

Textbook & Reading Materials

Required

  • Investments, 11th edition, by Bodie, Kane, and Marcus. (BKM)
  • Microsoft Excel (be sure Solver and Data Analysis Tools are installed)

Recommended

  • Wall Street Journal
  • A Random Walk Down Wall Street, by Burton Malkiel

Course Schedule Details

General ground rules: During the 1st week you should read the material indicated under Module 1 (and so on for the other weeks). I have listed suggested problems for you to work in the BKM text. Solutions for the suggested end of chapter problems will be provided on Canvas in the Course Documents & Resources Module. Assigned homework that you will hand in for grade will be provided on Canvas. There will be 6 homework assignments (you can work in teams of 2 if you wish). The six assignments must be done in the Excel file that is provided.

Graded assigned homework will also include problems from BKM. Assigned homework for each Module is due on the Sunday that follows the 1st day of each module. Because we will have exams during weeks 4 and 8, there is no homework due (obviously the exam replaces the homework).  Exam 1 & 2 will be available from Thursday until 9:00 PM on Sunday of exam week.  This is a timed exam and the time limit is 4 hours.

All of the graded homework will be in Excel file format, so you must have access to this program. Please be sure that both Solver and Data Analysis Tools are installed. As part of Module 2, I have a narrated presentation on how to use Solver. Data Analysis Tools contains routines that will do Regression Analysis. I also have notes on Canvas (in Word format, not narrated) that will walk you through the basics of regressions. If you are not familiar with statistics you should review this material during the first week – there is a set of notes from BKM entitled “Quantitative Review.”

In all there are 6 homework assignments and 2 exams covering the 8 modules. I will schedule Zoom sessions via Canvas. These sessions are optional and I will archive each week’s live meeting so that you can listen in to that week’s discussion if you cannot make it.

Weekly details are in the corresponding module overview pages.

Weekly Overview
Module Topic
Week 1 Basic background reading on investments
Return and Risk from the Historical Record
Risk Aversion and Capital Allocation to Risky Assets
Week 2 Optimal Risky Portfolios
Week 3 Index Models
Week 4 The Capital Asset Pricing Model
Market Efficiency
Week 5 Bond Prices and Yields
Term Structure of Interest Rates
Week 6 Fixed Income Portfolio Management
Week 7 Equity Valuation Models
Week 8 Review

Canvas Information

Canvas is the where course content, grades, and communication will reside for this course.

 Course Policies

Grading Policies

Assignment Weighting

There will be two exams and 6 homework assignments during the semester (dates are in the class schedule section of the syllabus). Exam and homework weights are as follows:

  • Exam 1 - 35%
  • Exam 2 - 35%
  • Six Homework Assignments - 30% (5% each)

Exams and Homework will be submitted using the online assignment manager links in Canvas.

Grade Scheme

The following grading standards will be used in this class:

Grade Range
A+ 100 % to 98.0%
A < 98.0 % to 90.0%
A- < 90.0 % to 88.0%
B+ < 88.0 % to 85.0%
B < 85.0 % to 80.0%
B- < 80.0 % to 78.0%
C+ < 78.0 % to 75.0%
C < 75.0 % to 70.0%
C- < 70.0 % to 68.0%
D+ < 68.0 % to 65.0%
D < 65.0 % to 60.0%
D- < 60.0 % to 58.0%
F < 58.0 % to 0.0%

Expectations for Student Conduct

Recommended Practice

This course covers both the theory and practice of investments and touches on most of the areas of knowledge required by a professional security analyst or portfolio manager. You will find that many questions at the end of each chapter are from past Chartered Financial Analysts exams. I encourage you to try all these questions even if they are not assigned. The material is very quantitative and I would encourage you to “brush” up on your math and statistics. The presumption is that you are reasonably familiar with both math and statistics and Excel. While we will review some of the statistics needed for this course, we will, however, not be starting from scratch.

It is important that you read the material that is assigned from Bodie, Kane and Marcus. Each module of the course has PowerPoint notes that I have narrated. The PowerPoint notes, however, are not a substitute for the material in the text. Just as with an in-person type of class, my expectation is that you will read the material in the book before using the PowerPoint notes. If you find it more useful to follow the PowerPoint notes before you read the text, that will be OK too.

Classroom Roles and Responsibilities

In many ways, taking an online course is like taking a face-to-face course. Both may feature individual assignments and cooperative group projects, and both require you to take exams to show you are learning the course material. The instructor directs students through discussions, posting announcements, activities, responding to questions, and grading assignments and exams. The great benefit of being in an online course is that you can have direct, one-to-one communication via the Discussion folder on Canvas with your instructor and fellow students at any time, rather than only during class or office hours.

Questions about homework, the PowerPoint slides, or any of the course material need to be posted to the Discussion folder on Canvas for the week of the material. Another expectation I have is for you all to keep up to date on the Discussion folder on Canvas and help out fellow students when you can address a problem for them. E-mail (from your personal account or Canvas email) to me should be reserved for personal issues such as travel conflicts over scheduled exam dates or other issues.

Attendance

You will be expected to do the same amount of homework you might do in a face-to-face class. You must be responsible for keeping up with the workload. You will be asked to spend time generating and participating in discussions with the instructor and the other students. The Discussion folder on Canvas and Zoom live meetings are optional, but these discussions can play a central role in the learning experience.

Netiquette

In an online learning environment it's also valuable to include Netiquette guidelines. Feel free to use the ones listed below, adapt them, or replace them with your own. If you use the ones listed below please include the CC attribution.

  • Participate: This is a shared learning environment. No lurking in the cyberspace background. It is not enough to login and read the discussion thread of others. For the maximum benefit to all, everyone must contribute.
  • Report Glitches: Discussion forums are electronic. They break. If for any reason you experience difficulty participating, please call, email, or otherwise inform me of the issue. Chances are others are having the same problem.
  • Help Others: You may have more experience with online discussion forums than the person next to you. Give them a hand. Show them it’s not so hard. They’re really going to appreciate it!
  • Be Patient: Read everything in the discussion thread before replying. This will help you avoid repeating something someone else has already contributed. Acknowledge the points made with which you agree and suggest alternatives for those with which you don’t.
  • Be Brief: You want to be clear—and to articulate your point—without being preachy or pompous. Be direct. Stay on point. Don’t lose yourself, or your readers, in overly wordy sentences or paragraphs.
  • Use Proper Writing Style: This is a must. Write as if you were writing a term paper. Correct spelling, grammatical construction and sentence structure are expected in every other writing activity associated with scholarship and academic engagement. Online discussions are no different.
  • Cite Your Sources: Another big must! If your contribution to the conversation includes the intellectual property (authored material) of others, e.g., books, newspaper, magazine, or journal articles—online or in print—they must be given proper attribution.
  • Emoticons and Texting: Social networking and text messaging has spawned a body of linguistic shortcuts that are not part of the academic dialogue. Please refrain from :-) faces and c u l8r’s.
  • Respect Diversity: It’s an ethnically rich and diverse, multi-cultural world in which we live. Use no language that is—or that could be construed to be—offensive toward others. Racists, sexist, and heterosexist comments and jokes are unacceptable, as are derogatory and/or sarcastic comments and jokes directed at religious beliefs, disabilities, and age.
  • No YELLING! Step carefully. Beware the electronic footprint you leave behind. Using bold upper-case letters is bad form, like stomping around and yelling at somebody (NOT TO MENTION BEING HARD ON THE EYE).
  • No Flaming! Criticism must be constructive, well-meaning, and well-articulated. Please, no tantrums. Rants directed at any other contributor are simply unacceptable and will not be tolerated. The same goes for profanity. The academic environment expects higher-order language.
  • You Can't Un-Ring the Bell: Language is your only tool in an online environment. Be mindful. How others perceive you will be largely—as always—up to you. Once you've hit the send button, you've rung the bell.

Creative Commons License Netiquette: Ground Rules for Online Discussions by Peter Connor is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

 College and University Policies

Accessibility Support

The University strives to make all learning experiences as accessible as possible. If you anticipate or experience barriers based on your disability (including mental health, chronic or temporary medical conditions), please let me know immediately so that we can discuss options privately. To establish reasonable accommodations, I may request that you register with Services for Students with Disabilities (SSD). If you are eligible for services and register with their office, make arrangements with me as soon as possible to discuss your accommodations so they can be implemented in a timely manner. SSD contact information: 232 Canfield Admin Bldg.; 402-472-3787.

Academic Honesty

Academic honesty is essential to the existence and integrity of an academic institution. The responsibility for maintaining that integrity is shared by all members of the academic community. The University's Student Code of Conduct addresses academic dishonesty. Students who commit acts of academic dishonesty are subject to disciplinary action and are granted due process and the right to appeal any decision.

College of Business students are held to the standards set by the UNL Student Code of Conduct. In the Student Code of Conduct, acts of dishonesty are specified as, but not limited to: cheating, fabrication or falsification, plagiarism, abuse of academic materials, complicity in academic dishonesty, falsifying grade reports, impermissible collaboration, or misrepresentation to avoid academic work. The penalties for academic dishonesty will be severe and may range from receiving a failing grade on the test or assignment, failing the course in which academic dishonesty took place, or the possibility of expulsion from the university.

Writing Support

The UNL Writing Center can provide you with meaningful support as you write for this class as well as for every course in which you enroll. Trained peer consultants are available to talk with you about all forms of communication, including lab reports, presentations, research papers, cover letters, and application essays. You can visit at any stage of the process, from brainstorming and organizing ideas through polishing a final draft.  The UNL Writing Center is located in 102 Andrews Hall, with evening hours in the Adele Hall Learning Commons and other satellite locations. You can schedule 25- and 50-minute appointments any time by visiting unl.mywconline.com. For more information about the Writing Center, including hours and other locations, please visit unl.edu/writing.

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Course Summary:

Date Details Due