North South University

School of Business and Economics

Department of Accounting & Finance

Course Name: Investment Theory

Course Code
& Section No:
FIN 435
Semester: Fall 2020

INSTRUCTOR & DEPARTMENT INFORMATION

1. Instructor Name: Sayba Kamal Athoi

2. Office Room: NAC 762
3. Office Hours: By appointment in Google Classroom
4. Office Phone: (02) 55 66 82 00 EXT. 1785
5. Email Address: sayba.athoi@northsouth.edu
6. Department: Accounting & Finance
North South University Website: http://www.northsouth.edu
7. Links: School of Business and Economics Website: http://www.northsouth.edu/academic/sbe/
Google classroom code: 9n0ibp6

COURSE & SECTION INFORMATION

Class Time & Location SEC: 6 [ST 09:40 AM 11:10 AM]

SEC: 7 [ST 11:20 AM 12:50 PM]
Course Prerequisite(s) FIN 254, FIN 433
Course Credit Hours 3.0
Course Description This is an introductory course in investments. It examines the investment environment and process. An
investment is the current commitment of money or other resources in the expectation of reaping future
benefits. The investment process involves identifying objectives and constraints, formulating and
implementing strategies, and monitoring and updating the portfolio as needed. Major topics include
investment alternatives, securities markets and trading mechanism, risk and return analysis, modern
investment theory, valuation, analysis and management of bonds, common stocks and derivative
securities, and investment performance evaluation.
Course Objectives 1. Understand the concepts pertaining to risk and return.
2. Analyze and evaluate portfolio performance, financial markets, security trading, mutual
funds, investment companies, and investor behavior.
3. Construct optimal portfolios and illustrate the theory and empirical applications of asset
pricing models.
4. Characterize the implications of the market efficiency evidence on active portfolio
management and get acquainted with both technical and fundamental analysis.
Student Learning Upon the successful completion of this course, a student will be able to:
Outcomes 1. Understand the relationship between risk and return
2. Understand theories of investment and relate investor decisions
3. Understand security market mechanisms and the instruments
4. Understand the valuation and strategy related to financial instruments
LEARNING RESOURCES AND TEXTBOOK(S)

Text Book(s)

Author Title Edition & Year Publisher ISBN

Zvi Bodie , Alex Kane , Alan 10th Edition ISBN-13: 978-
Investments McGraw-Hill
Marcus 0077641917

Others (Reference Books, CD ROMS, DVDs, e-Library, Internet, Articles …)

Resource Type Description Type Comments

1. Internet Business news and Market and Observing investment practices and
information investment news getting acquainted with market
and analysis mechanism

Academic, trade
2. Articles Issues related to and newspaper Getting familiar with application of
investment theories articles investment theories in real life

TEACHING STRATEGY (Online, classroom, blended)

The class will be conducted through various activities including presentation of concepts and situations, discussion and exchanges
of ideas, student initiative and active involvement and project. Students are expected to be actively involved and to take initiative
for their own learning experience.

ASSESSMENT STRATEGY AND GRADING SCHEME

Grading tool Percentage

Quiz 15%
Course Project 20%
Attendance 5%
Midterm 25%
Assignment 5%
Final 30%

Please Refer to NSU Student Handbook, Section: “Grading Policy”

CLASSROOM RULES OF CONDUCT

1. You may use your laptops in the class for class related work. Do not use your laptop for non-class related work or in any manner that will
be distracting to other students or the instructor.

2. Use of cell phones in class is not permitted

3. Students are advised to frequently refer to the Student Code of Conduct of North South University in the following link:
http://www.northsouth.edu/student-code-of-conduct.html

4. Academic Integrity Policy:

The School of Business and Economics does not tolerate academic dishonesty by its students. At minimum, students must not be
involved in cheating, copyright infringement, submitting the same work in multiple courses, significant collaboration with other
individuals outside of sanctioned group activities, and fabrications.

Students are advised that violations of the Student Integrity Code will be treated seriously, with special attention given to repeated
offences.

Please Refer to NSU Student Code of Conduct, Sections: “Disciplinary Sanctions.”

GROUP PROJECTS POLICY

Each group (between 4-5 students) will submit a final report consisting of 1000 words (hard copy and electronic copy). More details about
the structure, components, time and criteria for assessment of the project will be announced during the semester.

LATE ASSIGNMENT POLICY

Promptness is a highly valued attribute in the workplace. Employees are expected to plan ahead to meet deadlines. Managers reprimand or
terminate employees who are repeatedly late in submitting assignments. In this course, submitting assignments late will be penalized. For
each day late, 10 percent will be deducted from the value of the assignment.

EXAMS & MAKE UP POLICY

In order to complete the course, students must submit all the required assignments and sit for the exams. Make-up exams are not given
unless there is a major circumstance preventing the student from sitting in the exam (official material evidence is required). The timing of
the make-up is to be fixed with the instructor of the course if granted. Makeup exam will be a comprehensive exam.

Cell phones are prohibited in exam sessions.

ATTENDANCE POLICY

Students are required and expected to attend all classes and participate in class discussions. North South University mandates to fail
students who are absent 25% or more from their classes, even if such absences are excusable.

Please Refer to NSU Student Handbook, Section: “Study Principles and Policies”

COMMUNICATION POLICY

All communications should take place using the instructor’s email. Announcements in Google Classroom will override any statement made
here or in any other handouts. It is the student’s responsibility to be aware of any announcements made via Google Classroom.

APPROPRIATE USE POLICY

All members of the North South University community must use electronic communications in a responsible manner. The University may
restrict the use of its computers and network systems for electronic communications subject to violations of university policies/codes or
local laws or national laws. Also, the university reserves the right to limit access to its networks through university-owned or other
computers, and to remove or limit access to material posted on university-owned computers.
STUDENTS WITH SPECIAL NEEDS

North South University will provide educational opportunities that ensure fair, appropriate and reasonable accommodation to students
who have disabilities/special needs that may affect their ability to participate in course activities or meet course requirements. Students
with disabilities are encouraged to contact their instructors to ensure that their needs are met. The University through its Special Need
section will exert all efforts to accommodate special needs.

STUDENTS SUPPORT AND LEARNING RESOURCES

A. SBE-Learning Center:
B. The University Student Learning Support Center (SLSC): These centers provide academic support services to students at NSU.
The SLSC is a supportive environment where students can seek assistance with academic coursework, writing assignments,
transitioning to college academic life, and other academic issues. SLSC programs include: Peer Tutoring, the Writing Lab,
Writing Workshops, and Academic Success Workshops. Students may also seek confidential academic counseling from the
professional staff at the Center.

STUDENTS COMPLAINTS POLICY

Students at North South University have the right to pursue complaints related to faculty, staff, and other students.   The nature of the
complaints may be either academic or non-academic.  For more information about the policy and processes related to this policy, you
may refer to the Student Handbook. 
COURSE CONTENTS & SCHEDULE

Lectur Chapters Topics

e The Investment Environment (Chapter 1) 1.1 Real Assets versus Financial
Assets
1.2 Financial Assets
1.3 Financial Markets and the
1
Economy
1.4 The Investment Process
1.5 Markets Are Competitive
1.6 The Players
Asset Classes and Financial Instruments 2.4 Stock and Bond Market Indexes
2
(Chapter 2) 2.5 Derivative Markets
How Securities Are Traded (Chapter 3) 3.2 How Securities Are Traded
3
3.8 Buying on Margin
4 Cont. 3.9 Short Sales

Introduction to Risk, Return, and the 5.2 Comparing Rates of Return for
Historical Record (Chapter 5) Different Holding Periods
5
5.4 Risk and Risk Premiums

Cont. 5.5 Time Series Analysis of Past

6 Rates of Return
5.6 The Normal Distribution

Risk Aversion and Capital Allocation 6.1 Risk and Risk Aversion
to Risky Assets (Chapter 6) 6.2 Capital Allocation across Risky
8
and Risk-Free Portfolios
6.3 The Risk-Free Asset
Cont. 6.4 Portfolios of One Risky Asset and
9 a Risk-Free Asset

Cont. 6.5 Risk Tolerance and Asset

Allocation
10
6.6 Passive Strategies: The Capital
Market Line
Optimal Risky Portfolios (Chapter 7) 7.1 Diversification and Portfolio Risk
11 7.2 Portfolios of Two Risky Assets

Cont. 7.3 Asset Allocation with Stocks,

Bonds, and Bills
12
7.4 The Markowitz Portfolio
Optimization Model
Index Models (Chapter 8) 8.1 A Single-Factor Security Market
13
8.2 The Single-Index Model
14 The Capital Asset Pricing Model (Chapter 9.1 The Capital Asset Pricing Model
9) 9.2 Assumptions and Extensions of
the CAPM
 Lectur Chapters Topics
e (up to Challenges and Extensions to
the CAPM)
Arbitrage Pricing Theory and Multifactor 10.1 Multifactor Models: An
15 Models of Risk and Return (Chapter 10) Overview
10.2 Arbitrage Pricing Theory
16
The Efficient Market Hypothesis (Chapter 11.1 Random Walks and the Efficient
11) Market Hypothesis
Behavioral Finance and Technical Analysis 12.1 The Behavioral Critique
17 (Chapter 12) 12.2 Technical Analysis – different
price and non-price based trend and
correction indicators.

Equity Valuation Models (Chapter 18) 18.1 Valuation by Comparables

18.2 Intrinsic Value versus Market
18
Price
18.3 Dividend Discount Models
Cont. 18.4 Price–Earnings Ratio
18.5 Free Cash Flow Valuation
19
Approaches
18.6 The Aggregate Stock Market
20 Project Lab Class
Portfolio Performance Evaluation (Chapter 24.1 The Conventional Theory of
21
24) Performance Evaluation
Managing Bond Portfolios (Chapter 16) 16.1 Interest Rate Risk
22
16.2 Convexity
Cont. 16.3 Passive Bond Management
23
16.4 Active Bond Management
24 Revision

Note: The instructor reserves the right to make changes to the syllabus if necessary.

Syllabus for Midterm and Final will be discussed in detail in the class.
Guidelines for project and assignment will be discussed in the class and will be posted on google
classroom