Investment and Risk Management FMGT 2820

Learning Outcomes

Upon successful completion of this course, the student will be able to:

• Explain why risk and return are the two critical components of all investing decisions.
• Describe the major types of financial assets and how they are organized.
• Examine the major types of investment funds.
• Describe how the equity markets are organized and how they operate.
• Explain the role of brokerage firms and stockbrokers, and how orders to buy and sell securities are executed.
• Explain the relationship between return and risk, and how returns and risk are measured.
• Explain how expected return and risk for securities and portfolios are determined.
• Apply the Markowitz efficient portfolio selection model to building a portfolio.
• Explain capital market theory and the Capital Asset Pricing Model.
• Explain the concept of efficient markets and the Efficient Market Hypothesis.
• Explain the bond valuation process and calculate bond yields.
• Describe how both conservative and aggressive investors build and maintain a fixed-income portfolio.
• Use the dividend discount model and P/E ratios to estimate stock prices.
• Describe the bottom-up and top-down approaches in fundamental analysis for stock selection.
• Describe the relationship between the stock market and the economy.
• State the importance of business cycle and industry analysis in helping to identify favorable conditions for investing.
• Use financial statements and ratio analysis to determine if a company?s common stock is under or over valued.
• Describe the major techniques used in technical analysis.
• Describe how put and call options work and give some basic strategies.
• Outline how the futures market works and how financial futures are used
• Describe the steps involved in portfolio management.
• Outline a framework for evaluating portfolio performance.

Effective as of Winter 2010

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