DEPARTMENT OF FINANCE, INSURANCE, & LAW
COLLEGE OF BUSINESS
ILLINOIS STATE UNIVERSITY
College of Business Mission
To be a highly respected college of business that develops professionals with the personal dedication, ethics
and lifelong learning capabilities needed to succeed professionally and to serve society. We work as a
diverse community promoting excellence in learning, teaching, scholarship, and service.
Students enrolled in College of Business classes are expected to maintain high standards of ethical conduct
within the classroom and when completing assignments, projects, and/or exams. Plagiarism and other
forms of academic dishonesty such as cheating will not be tolerated. Students are expected to provide
appropriate citations for non-original writing even if the original work is paraphrased. Penalties for
plagiarism and other forms of academic dishonesty may be severe.
All students in this course are expected to be familiar with the "College of Business Standards of
Professional Behavior and Ethical Conduct." (refer to http://www.cob.ilstu.edu/professionalstandards)
Please note that only bottled water may be consumed in the classroom wing of the College of Business
Building and that all cell phones and other electronic devices should be turned off and stored away during
Instructor: Dr. Kevin Ahlgrim
Course Number & Title: FIL 242 - Investments
Prerequisites: C or better in FIL 240
Class Time and Location: Section 02: MW 11-12:15, COB 22G
Section 05: MW 3:35-4:50, COB 22G
Office Phone: 438-2727
Cell Phone: 830-4304 - WARNING: I make absolutely no promises
whatsoever related to my availability by cell phone. It is always better to try me at the
office first, especially during business hours.
Office Location: COB 340
Office Hours: MW 2-3:15, W 5-6pm, or by appointment
Please make extensive use of office hours. These times are set aside for your benefit. If
you have any questions, comments, problems, concerns, etc., please stop by. If you
cannot make the times indicated, do NOT hesitate to set up an appointment - please do
not just stop by without first contacting me (either during class, by phone, or through e-
mail). I will make myself available at almost any time to talk to you. My biggest pet
peeve - unprepared students who make a "pop-in" right before a deadline (assignment due
date or exam). Note that saying you are unavailable during my office hours is NOT
possible, since you can make an appointment at virtually any time.
For many issues, I would prefer to talk with you face-to-face instead of through e-mail,
except for very simple questions (e.g., where's the exam?!). In my experience, there have
been many occasions where questions are unclear when asked through e-mail. In order to
avoid ambiguity, it is probably better to come see me (or schedule an appointment
through e-mail and/or phone), then to try to answer a question through e-mail.
Course web site: http://www2.cob.ilstu.edu/kahlgri/FIL242Spring2007/
On the course web site, I will post lecture notes (in Acrobat .pdf format). Please
download the notes, print them out, and bring them to class with you. I will also
post an updated schedule and cumulative performance standards that you can use
as a benchmark to prepare for exams. Also, please review the web site for
additional course policies.
Required Materials: Gitman and Joehnk, Fundamentals of Investing, 9th edition
A pretty good calculator
Practically Required: Subscription to Wall Street Journal
One common question I receive is whether the book is absolutely necessary for the class.
I view the book as an alternative voice for the material that we talk about in class. Often,
there is just not enough time in class to define terms and introduce the subject – these are
tasks that are easy to do on your own. Therefore, I will assign some introductory
readings from the book to provide an introduction to the subject while class time will be
used for problem solving and exploring the technology available in the computer
classroom, including Excel, Ibbotson software, and Baseline. The book also provides
numerical examples to further explore the subject. I will suggest several end-of-chapter
questions to help practice applying the concepts to problems.
We will talk about current events in the class and point to examples in the financial press
(e.g., the WSJ). I cannot stress enough the importance of being plugged in to business
and financial events. The definitive source for business news is the Wall Street Journal.
A survey of investment media, concepts, and techniques to provide an understanding of
the investment process in the economic and financial environment.
Students taking FIL 242 should leave the course with an understanding of the following
(at a minimum):
Characteristics of major investment vehicles including bonds, stocks, money
market securities, mutual funds, and derivatives
Introductory security analysis including valuation techniques for bonds and stocks
Basics of portfolio theory including risk-return tradeoff, diversification, and
Market structure including primary markets distribution, NYSE and Nasdaq
Interpret economic reports and predict market reactions to government releases
Exposure to financial software and research databases used in investing
More specific chapter objectives are included on the course web site. After we complete
a chapter, objectives will be posted.
BRIEF OVERVIEW OF COURSE REQUIREMENTS
NOTE: All homework, projects, etc. are due AT THE BEGINNING OF CLASS based
on the section in which you are enrolled. Late homework will be severely penalized, if
accepted at all.
There is one written project for the course, the details will follow on a separate handout.
In the project (called the market watch project), you will invest fictional dollars on behalf
of a client. We will use the web site www.stocksquest.com to track portfolio
There will be 5 short GROUP assignments given during the course of the semester, some
will involve significant use of Excel and financial databases. Due dates vary. Grades
will be based on √+ (30 points), √ (20 points), √– (10 points), or 0 for each assignment.
The maximum number of points for all homework assignments is 100.
There will be six quizzes throughout the semester, some of which will be unannounced.
These quizzes generally will be a practice problem of material recently covered in class.
The purpose of the quizzes is twofold: (1) to motivate people to keep up with the material
and (2) to informally take attendance. The top four of the six quizzes will count toward
your grade. This allows you flexibility in case you have an interview or other important
responsibility during class time. Since you can drop two quizzes, you cannot retake a
missed quiz so PLEASE DO NOT ASK ME TO MAKE UP A QUIZ.
Three hourly exams: dates are posted on the course web site. Exams are not specifically
cumulative, but some later topics require an understanding of earlier subjects. The exams
will consist of a mix of true/false, multiple choice, and short answer questions/problems.
A WORD OF CAUTION: DO NOT MISS AN EXAM. If you know of a valid conflict
for these scheduled exams, you should let me know AT LEAST THREE BUSINESS
DAYS before the exam date. Only under these conditions will a makeup exam be
My exams tend to reward those who are most familiar with the material. The questions
provide new applications of the material in ways that you have not seen before in other
practice problems. However, those who understand the underlying principles have less
difficulty in applying the concept to a new situation. In this way, my exams tend to be
somewhat time constrained, especially for those who waited until the night before the
exam to study. If you have done many practice problems over the course of the semester,
most questions will be straight forward and this will save you time on the questions that
require more thought.
You are expected to participate in class, mentally and physically. This means that you
show up on time each day and actively engage in the material. Class participation may
be rewarded in your final grade but can only help your grade, not hurt it.
Class attendance and participation is expected. Note that any type of classroom
participation may be rewarded through your final grade. If you come across any issues
that you would like to discuss in class, please do so. The course material is not
constrained to items in the syllabus or in the text. You are encouraged to bring news
articles, book reviews, or any other issues that you feel illustrate some of the principles
discussed in class. (Of course, it is hoped that your comments can be applied in some way
You are expected to keep up with major financial events in the news. The best source of
this information is the WSJ. We will talk about major financial events and provide
illustrations from the WSJ of topics covered in class.
I also have other responsibilities (other classes, research, service, family, etc.) and I
guarantee that I will arrive – prepared – on every scheduled day of class. Since we are in
this class together, I hope you will show me and others in the class the same courtesy.
Presumably, you would not show up late to a business meeting; therefore, you are
expected to show up to class on time. Of course, there may be situations that are beyond
your control (such as interviews, doctor's appointments, etc.), but it is hoped that you will
keep these issues to a minimum as a courtesy to myself and the other students in the
There is no need to inform me of every absence that you will have, so please don't
feel the need to contact me to let me know that you will not be here. In particular,
do not ask if we will do anything "important" in class on the day that you missed.
This implies that I spend time on unimportant issues.
The projects and the homework should be a way for you to improve your grade
since you will have time to ask me questions before turning in the final product.
This implies that you start these assignments early enough so that you can ask
questions before they are due. The project (and some homework problems)
cannot be done in a weekend. If you start early, you have the opportunity to ask
me (or other classmates) some questions in case you get stuck. Take advantage of
these points in your final grade.
I attempt to reduce the amount of "regurgitation" in this class. What this means is
that you must really learn the material and apply it, not just memorize it. "C"
students tend to regurgitate problems that we did in class. "A" students tend to
understand the point of the illustration and can apply the underlying concept to a
variety of different problems. The more practice problems you solve, the more
you are learning about the underlying concepts.
Due to University policy, I am forbidden to communicate any information about
grades through e-mail or over the phone. If you'd like to talk to me about grades,
please come see me during office hours or make an appointment.
Course Requirement Weighting:
Market Watch Project 100 points
Quizzes (top 4 scores) 100
Exams (100 points each) 300
Total 600 points
Calculation of Final Course Grade:
A 90% (540-600 points)
B 80% (480-539)
C 70% (420-479)
D 60% (360-419)
F Below 60% (<360 points)
Plus class participation
To give you an idea of the exam scores achieved in the past, I have put together an
example. NOTE: THIS EXAMPLE MAKES SEVERAL SPECIFIC ASSUMPTIONS
AND MAY NOT APPLY TO YOU.
Homework (no reason not to get full credit) 100
Market Watch Project 90
Quizzes (remember you get to drop worst 2) 85
Total Points 275 + exams
Points needed for Exams Average Exam
A (540) 265 88.3 (83.3 if 100 on quizzes)
B (480) 205 68.3
C (420) 145 48.3
D (360) 85 28.3
The example is meant to show two things: (1) you do not need to average 85 on the
exams to get a B in the class and (2) the exams are difficult and it is likely that the
average scores are lower than other courses.
RECIPE FOR SUCCESS
My recipe for a good grade in the course is a 3-step review program.
o Attend class every day – I give lots of hints and highly recommend that students
present don’t share these hints with their absent friends. Then, as soon as possible
after each and every class, review the notes. If you have some uncertainty about a
concept or problem, ask me the next class or better yet, come to my office hours (or
set an appointment). This becomes significantly more important as the class
progresses since often the course will build on itself quickly. (If you have problems
with day number 3, you probably had problems with the concepts from day 2 which
also depended on day 1 – i.e., you are now three days behind). In addition,
unannounced quizzes tend to cover the material that was covered in the previous class
or two. Reviewing every day is necessary to perform adequately on these quizzes.
o Chapter problems – After I finish a chapter, I will post suggested practice problems.
Make sure you can do all the problems suggested. This helps reinforce what you
have been learning over several days and helps you integrate the material across
different days. If you have difficultly with any of the problems on the review sheet,
come see me during office hours (or make an appointment).
o Review for the exam – As the exam approaches, use the review sheet to remind
yourself of the chapter topics. At this point, since you’ve been reviewing each day
and can do the problems that were assigned for each chapter, you are simply
reviewing for the exam. Those students who have not kept up will have too much to
learn in too short of a period.
ACCOMMODATION FOR STUDENTS WITH DISABILITIES
Any student in need of a special accommodation should contact the staff in the Office of
Disability Concerns at 438-5853 (voice) or 438-8620 (TDD) by the end of the first week