Syllabus for FNCE 4030 Fall 2012
Investments and Portfolio Management
David M. Gross Ph.D.
After a brief survey of various types of financial instruments and the financial environment, we turn to building a
rigors foundation for portfolio analysis and asset pricing. Over this semester, you will develop a large vocabulary of
investment terms and will understand the foundations of assessing portfolio and security risk, measuring returns and
The goals of this course are:
Learn as much institutional detail and terminology as possible
Familiarize yourself with the historic record of risk and returns of different classes of securities
Develop a rigorous foundation in portfolio math in order to develop a deeper understanding of risk and return
Gain proficiency using Excel to model security and portfolio performance
Office: KOBL 402
Office hours: Monday through Thursday 2:00 to 3:00 or by appointment
Office phone: 303-735-6181
Web Page: http://leeds-faculty.colorado.edu/grossd/
Investments (9th edition), by Bodie, Kane, Marcus, McGraw Hill Irwin publishing.
Note on textbook editions: I will assign material from the 9th edition. You are responsible for the material assigned.
It is not possible for me to determine all the differences between the current edition, all the previous editions and
various alternative (international) editions. By not giving permission to use an earlier edition, the onus is on you to
determine difference between the current edition from which material will be assigned and the edition you select.
Throughout the term, homework that relates to the material covered in the lectures and text will be assigned but
NOT collected or graded. You will be provided with answers to these problems. Much of the material covered by
the exams will be from these homework problems.
I will assign multiple Excel-based projects that will require you to perform security and portfolio calculations and
analysis. The specifics of the projects will be assigned as the semester progresses.
There will be two midterm exams and a final exam. The majority of the material on the exams will be taken from
the homework and lectures. The rest will come from the text. The final exam WILL BE CUMULATIVE.
Midterm 1 Thursday, October 4, in class
Midterm 2 Thursday, November 8, in class
Final Exam Monday, December 17 at 7:30 pm in class
Midterm Exams 40%
Final Exam 40%
These are the only factors that will be used to determine your course grade. There will be no extra credit. Other
factors such as your major, graduation plans, extracurricular activities, family events, employment or your financial
situation cannot be considered in determining your course grade.
Brief Review of Terminology and Institutional Details:
The Investment Environment – Chapter 1
Asset Classes and Financial Institutions – Chapter 2
How Securities Are Traded – Chapter 3
Mutual Funds and Other Investments Companies – Chapter 4
Portfolio Risk and Return Math
Introduction to Risk, Return and the Historical Record – Chapter 5
Risk Aversion and Capital Allocation to Risky Assets – Chapter 6
Optimal Risk Portfolios – Chapter 7
Index Models – Chapter 8
Asset Pricing and Models Used to Measure Historic Risk and Return Performance
The Capital Asset Pricing Model – Chapter 9
Arbitrage Pricing Theory and Multifactor Models of Risk and Return – Chapter 10
The Efficient Market Hypothesis – Chapter 11
Behavioral Finance and Technical Analysis – Chapter 12
Empirical Evidence on Security Returns – Chapter 13
Components of Market Risk
Macro and Industry Analysis – Chapter 17
Additional Topics (as time allows):
Equity Valuation Models – Chapter 18
Financial Statement Analysis – Chapter 19
Students with disabilities who qualify for academic accommodations must provide a letter from Disability Services
(DS) and discuss specific needs with the professor (in person or by e-mail), preferably during the first two weeks of
class. DS determines accommodations based on documented disabilities (303-492-8671, Willard 322,
University Student Policies:
All University of Colorado and Leeds School of Business rules, policies, and procedures will be followed in the
course (including those related to drop/add requirements and the grade of “IF”). Academic dishonesty can result in
a failing grade for the course. University policies regarding academic and behavior issues should be reviewed at:
Campus policy regarding religious observances requires that faculty make every effort to reasonably and fairly deal
with all students who, because of religious obligations, have conflicts with scheduled exams, assignments, or require
attendance. Please contact your Instructor prior to any potential course conflict.
Student Honor Code: http://www.colorado.edu/academics/honorcode
The purpose of an Honor Code at the University of Colorado at Boulder is to secure an environment where academic
integrity, and the resulting behavior, can flourish. The Honor Code recognizes the importance of honesty, trust,
fairness, respect, and responsibility and wishes these principles to be a defining part of the CU-Boulder campus. The
Honor Code allows all students to have responsibility for, and the ability to attain, appropriate recognition for their
academic and personal achievements. Academic dishonesty can result in a failing grade for the course.
Students will be asked to include this pledge on exams: “On my honor, as a University of Colorado at Boulder
student, I have neither given nor received unauthorized assistance on this work.”