INVESTMENT MANAGEMENT THEORY

SHE Level 4
SCQF Credit Points 20.00
ECTS Credit Points 10.00
Module Code MHN325742
Module Leader Sanjukta Brahma
School Glasgow School for Business and Society
Subject Finance
Trimester
  • B (January start)

Summary of Content

This module develops the material covered in the Level 3 module Corporate Finance & Financial Strategies by examining Investment Management theory to an advanced level. It will make students familiar with investment methods used by fund managers and will discuss the application of investment management theory and methods of asset pricing.

Syllabus

1. Active/passive management & statement analysis. 2. CAPM / APT and other asset pricing methods. 3. Fixed income securities. 4. Bond duration and convexity 5. Macroeconomic industry sectoral analysis. 6. Equity valuation models 7. Options market 8. Options pricing 9. Futures market 10. Efficient market hypothesis 11. International diversification. 12. Portfolio management/statistical analysis/measuring portfolio performance.

Learning Outcomes

On successful completion of this module, the student should be able to:1. Comparative analysis of the different types of fund management highlighting advantages and disadvantages.2. Critically analyse the methods of asset pricing available.3. Understand how competition among analysts leads to market efficiency and the implications of efficient market hypothesis.4. Understand valuation principles, determinants of risk and return and portfolio strategies commonly used within and across bond and equity markets.5. Critically analyse derivatives market and option pricing theory in risk management.6. Critically analyse different portfolio performance evaluation techniques.

Teaching / Learning Strategy

The module provides a combination of lectures, seminars, practical and project based student activity. The learning outcomes are grounded in the delivery of a core set of lectures providing students with essential knowledge and discussion points. Thereafter, students are encouraged to develop their skills in critical analysis and data gathering as a means of reinforcing and supplementing the core material. These efforts are underpinned by tutorials, providing the opportunity to present and discuss data ideas and case study scenarios through GCU Learn discussion groups, and various other media, thus enhancing personal transferable skills. There will be two hours of lectures each week. The lectures will introduce the main theoretical points with a critical analysis of the topic to facilitate further exploration of the subject matter; where appropriate, suitable video or web-based material will be used to complement the lectures. There will also be one seminar per week. Students are expected to keep up-to date with the relevant reading and to attempt seminar questions prior to the seminar, where they will be asked to participate in group discussions and present solutions. Feedback Strategy Students will be provided with feedback on all forms of assessed work within three working weeks of submission. They will also receive feedback on all group or individual contributions to the module. The following strategies will be adopted: A: Facilitating the development of self-assessment. Students will be asked to identify the strengths and weaknesses in their work in relation to marking criteria before handing in their essay. Students will be asked to provide feedback on individual presentations. B: Encouraging dialogue. Seminars form the largest part of classroom activity. These are designed (among other things) to facilitate students entering into dialogue both with their peers and with the tutor. C: Clarifying good performance. Students will be provided with information about marking criteria and performance level definitions. D: Providing opportunities to close the gap between current and desired performance. The seminars provide the opportunity to constantly reflect on performance. In addition, students will be asked to identify action points based on the feedback they have received. E: Delivering high quality information about learning. Feedback will be provided within three working weeks of submission and will provide information on strengths, weaknesses and corrective advice. F: Encouraging positive motivational beliefs and self-esteem. Opportunities will be provided for students to receive individual feedback designed to encourage positive motivational beliefs and self-esteem. G: Providing information to teachers that can be used to help shape the teaching. The seminars provide the opportunity to constantly reflect on the module. In addition, students will be asked to identify where they are having difficulties when they make their presentations and when they hand in their assignment. GSBS will continue to use the advancement of GCU Learn as a blended learning tool through its teaching and learning as well as through engagement with students. GSBS will ensure that all modules are GCU Learn enabled and with the support of the Learning Technologists at the cutting edge of development of online materials. Academic staff and the Learning Technologists will continue to work together to develop and operate all modules on GCU Learn to ensure student support and information sharing. Students are provided with formative and summative feedback via a variety of mechanisms. Feedback on coursework is provided within 3 working weeks of submission.

Indicative Reading

Core text Bodie, Z., Kane, A. and Marcus, A., 2014. Investments (10th global ed.). Berkshire: McGraw-Hill Education . Other sources Haugen et al. (2001), Modern Investment Theory with Options - 5th Ed. - New Jersey, Prentice Hall. Fabozzi. F.J. (1998),Investment Management - 2nd Ed. - New Jersey, Prentice Hall. Hirschey. M, (2002), Investments Theory and Practice of Investment Management - Fort Worth - Harcourt. Lofthouse, S. (2001), Investment Management - Chichester - Wiley Damodarn, A., (2006), Security Analysis for Investment and Cash Finance - New York - Wiley Damodarn, A. (2001), Investments and Valuations - New York - Wiley Burnstein (2001), Investment Management and Security Analysis - New York - Wiley Fabozzi et al. (2006), Advanced Bond Portfolio Management - New York - Willey Websites: http://www.aaii.org http://www.bloomberg.com/ http://www.cob.ohio-state.edu/fin/overview.htm http://fisher.osu.edu/fin/journal/jofsites.htm#1nk http://www.investoraccess.com/ http://www.osfi_bsif.sc.ca http://www.sims.berkeley.edu/~hal/pages/finance.html http://www.ssrn.com/fen/index.html http://www.theeir.com/ http://wsrn.com/ <http://www.vanguard.com/> Journals: European Financial Management. Financial Management Financial Markets, Institutions in Markets Journal of Alternative Investments Journal of Corporate Finance Journal of Finance Journal of Financial Economics Journal of Financial Intermediation Journal of Financial Markets Journal of Financial and Quantitive Analysis Journal of Financial Research Journal of Fixed Income Journal of International Money and Finance Journal of Investing Journal of Portfolio Management Journal of Risk Finance The Review of Financial Studies Securities and Investment Review

Transferrable Skills

By the end of this module students will have gained competence in the following key areas: Knowledge specific skills Knowledge of the major theories of finance; their critique, relevance and application to theoretical and practical problems Ability to interpret financial data Understanding the relationship between financial theory and empirical testing Understanding the factors influencing financing of investment and investment behaviour Understanding financial statements and basic appreciation of the limitations of financial reporting practices and procedures Cognative abilities and generic skills Oral and written communication Ability to locate, extract and analyse data from multiple sources, including acknowledgement and referencing of sources Numeracy skills, including the ability to manipulate financial and other numerical data and to appreciate statistical concepts at an appropriate level Skills in the use of communication and information technology in acquiring, analysing and communicating information (these skills include the use of spreadsheets, word processing software, standard statistical packages; electronic financial databases; the internet and email) Capacities for independent and self-managed learning Critical and reflective thinking Research capability

Module Structure

Activity Total Hours
Assessment (FT) 18.00
Lectures (FT) 24.00
Independent Learning (FT) 146.00
Seminars (FT) 12.00

Assessment Methods

Component Duration Weighting Threshold Description
Course Work 01 n/a 30.00 35% Report 2000 words
Exam (Exams Office) 3.00 70.00 35% Exam (Exams Office)