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2019/2020  BA-BHAAI1066U  Principles of Investment Finance

English Title
Principles of Investment Finance

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration Summer
Start time of the course Summer
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 120
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Course instructor: Dr. Herwig Pilaj, Karl-Franzens-University Graz (AUT).
    Sven Bislev - Department of Management, Society and Communication (MSC)
For academic questions related to the course, please contact instructor Herwig Pilaj at herwig.pilaj@uni-graz.at
Other academic questions: contact academic director Sven Bislev at sb.msc@cbs.dk
Main academic disciplines
  • Finance
Teaching methods
  • Face-to-face teaching
Last updated on 12/11/2019

Relevant links

Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors:
  • Explain and employ the terms and tools used by investment professionals
  • Differentiate between the various financial instruments available to investors
  • Demonstrate understanding of fundamental finance concepts such as Portfolio Theory, Capital Asset Pricing Model, Efficient Markets Hypothesis
  • Distinguish Behavioral Finance from Standard Finance and assess their respective usefulness and limitations
  • Evaluate the performance of a portfolio using risk-adjusted return measures
  • Develop the ability to solve quantitative problems related to: risk and return, security valuation, portfolio optimization and hedging.
Course prerequisites
Basic Economics
Examination
Principles of Investment Finance:
Exam ECTS 7.5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Summer, Ordinary exam: 4 hour written exam in the period of 27–31 July 2020
Retake exam: 4 hour written exams in the period of 28 September–2 October 2020
3rd attempt (2nd retake) exam: 72-hour home assignment- 23-26 November 2020 – for all ISUP courses simultaneously

Exam schedules available on https:/​/​www.cbs.dk/​uddannelse/​international-summer-university-programme-isup/​courses-and-exams
Aids Closed book: no aids
However, at all written sit-in exams the student has access to the basic IT application package (Microsoft Office (minus Excel), digital pen and paper, 7-zip file manager, Adobe Acrobat, Texlive, VLC player, Windows Media Player), and the student is allowed to bring simple writing and drawing utensils (non-digital). PLEASE NOTE: Students are not allowed to communicate with others during the exam.
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Retake exam: 4 hour written sit-in exam, new exam question
Exam form for 3rd attempt (2nd retake): 72-hour home project assignment, max. 10 pages.
Course content, structure and pedagogical approach

The goal of this course is to introduce students to the fundamentals of finance and to the world of financial markets.

The major topics will include: how financial markets work, the relation between risk and return, optimal portfolio selection, performance evaluation, stocks and bonds and their valuation, an introduction to derivative markets and an introduction to behavioral finance. In addition we will explore the innovative world of Impact Finance which creatively combines the goals of financial returns with an emphasis on social and ecological impact.

 

Preliminary assignment: Start thinking about stock market investing.
Read chapter 1 of our textbook Essentials of Investments by Bodie, Kane and Markus (McGraw Hill, 10th or 11th ed.). Then log on to finance.yahoo.com. Search for a) Apple Computers and b) Carlsberg A/S. Click on Profile to read about their businesses. Go to Key Statistics: How many shares are outstanding? What are their total market values? Financials: What were their profits last year? Holders: Who are the biggest shareholders? Analysis: What were the average price target forcasts? Do you think they look like good buys at present levels? Why or why not? How do their sustainability performances affect your decision? Come to class (first session) to talk about these issues.
 
Class 1: Introduction to Finance and Financial Markets
Class 2: Overview of Asset Classes and Financial Instruments
Class 3: Risk and Return
Class 4: Portfolio Theory
Class 5: Capital Asset Pricing Model
Class 6: Investment Industry and Performance Evaluation
 
Feedback activity: Mid-term quiz (zero pionts value) covering classes 1-5
 
Class 7: Market Efficiency and Behavioral Finance
Class 8: Bond Valuation
Class 9: Stock Valuation
Class 10: Derivative Markets
Class 11: New Trends: Impact Finance

 

Description of the teaching methods
All teaching takes place on campus (notice that face-to-face teaching may include the use of online materials and tools.
Feedback during the teaching period
Mid-term quiz (0 points value) covering classes 1-5, including comprehensive review of quiz, FAQs and frequently made mistakes.
Student workload
Preliminary assignment 20 hours
Classroom attendance 33 hours
Preparation 126 hours
Feedback activity 7 hours
Examination 20 hours
Further Information

Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings or video clips to be read or viewed before the start of classes with a related task scheduled for class 1 in order to 'jump-start' the learning process.

 

Course timetable is available on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams

 

We reserve the right to cancel the course if we do not get enough applications. This will be communicated on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams end March 2020.

 

Expected literature

Mandatory readings:

 

Bodie, Kane, Marcus: Essentials of Investments, 11th edition 2018 (International Student Edition), McGraw Hill
ISBN-13: 978-1260288391; ISBN-10: 1260288390
(...10th edition 2016 is also fine)

 

Additional relevant readings:

 

Benninga, Mofkadi: Principles of Finance with Excel, 3rd edition 2018, Oxford University Press
ISBN-13: 978-0190296384
 

Last updated on 12/11/2019