To be Filled By Accreditation Department [<Faculty code>/<Dep.

Code>/<Programme Code>/<Module Code>/<Change Track>]


Module Descriptor
FM-EDU-003 Rev. 001 Page 1 of 3 15-07-2013
Module Name Security Analysis and Portfolio Management
Module Code A7-SPM Version no. 01 Last Modified Date: NA
Level 7 Credits 20
Aim The aim of this module is to provide underlying theories and tools for security analysis and portfolio
management.
Rationale The module equips learners to understand and analyse various securities and thereby to create and
manage a portfolio aimed at meeting the clients’ stated goals.At the completion of this module,
learners will be able to effectively analyse varioussecurities and maintain a portfolio according to the
clients’ investment policy statement (IPS).
Pre-Requisites Business and Finance, Quantitative methods and Economics.
Delivery Approach Will be a combination of lectures, tutorials, online guided learning, case studies etc.
Notional Learning
Hours
Guided Learning Hours 100 Independent Learning Hours 100
Learning Outcomes A student who successfully completes this module should be able:
 To explain the steps in portfolio management and the reasons for an investment policy
statement;
 Describe the investment objectives (return and risk) and the investment constraints
(liquidity, time horizon, regulators, unique needs and tax constraints), that fall under the
investment policy statement;
 Identify the importance of asset allocation in terms of the percentage allocated to the
different asset classes and how the political and economic factors result in different asset
allocation decisions for investors in various countries;
 State the assumptions of the Markowitz model in relation to investor behaviour;
 Calculate and explain the Expected return, Standard Deviation, Variance, Covariance,
Coefficient Correlation concerning an individual investment and a portfolio as a whole;
 Understand the efficient frontier and the importance of an optimal portfolio;
 Identify the importance of the market portfolio in the formation of the Capital Market Line
(CML);
 Learn Capital Asset Pricing Model (CAPM);
 To understand Security Market Line (SML) for the proper valuation of securities;
 Contrast systematic and unsystematic risk;
 Specific Models like Risk and return optimization, Efficient frontier;
 Efficient portfolios, Leveraged portfolios, Corner portfolios;
 Portfolio evaluation measures like Sharpe’s Single Index model and Sharpe’s Performance
Index.
 To understand that behaviours and perceptions of investors is important in the market
place.
Assessment Assessment Heading Assessment Type Contribution

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Module Descriptor
FM-EDU-003 Rev. 001 Page 2 of 3 15-07-2013
Attendance Class Attendance Register 5%
Internal Assessment >=1 Short Test, >=1 Assignment 10%
Mid Assessment Written Examination 25%
End Assessment Written Examination 60%
Supplementary Assessment: will consist of an Examination and will be worth 100% of the total
supplementary mark.
Learning Resources Required reading:
Reilly F. K. and Brown K. C., (2011), “Investment Analysis and Portfolio Management”. 10th Ed.
South-Western College Pub; USA


Reference Material:
Bodie Z., Kane A., and Marcus A. J., (2009), “Investments”. 8th Ed. McGrawHill Irwin; USA

Bodie Z., Kane A., and Marcus A. J., (2010), “Investments and Portfolio Management”, 9th Ed.
McGraw-Hill ; USA

Open Education Resources: www.khanacademy.org, blackboard
Other Resources Notebooks, Calculator, Web based and electronic resources
Indicative Content  The asset allocation decision:
 Individual investor life cycle
 The portfolio management process
 Investor policy statement

 Portfolio management:
 Risk aversion
 Alternative measures of risk
 Expected return, variance, standard deviation of an individual asset and portfolio.

 Asset pricing models
 Capital market theory
 Capital asset pricing model

 • Behavioural finance

Meaning and objective of investment
Meaning and objectives of security analysis
Analysis and Measurement of various risks and return
Determinants of required rate of return
Risk free rate and Risk Premium
Valuation of Equity and Debt instruments
Portfolio Analysis – Selection and Evaluation
Meaning of portfolio – Reasons to hold portfolio
Diversification analysis – Markowitz’s Model – Assumptions
Specific model – Risk and return optimization – Efficient frontier – Efficient portfolios –
Leveraged portfolios – Corner portfolios – Sharpe’sSingle Index model –
Portfolio evaluation measures – Sharpe’s Performance Index
Behavioural finance.


To be Filled By Accreditation Department [<Faculty code>/<Dep. Code>/<Programme Code>/<Module Code>/<Change Track>]


Module Descriptor
FM-EDU-003 Rev. 001 Page 3 of 3 15-07-2013