Course Outline FIN 425 by SabeerAli1


									                     Investment Management (Instructor: Md. Al-Mamun)

Investment Management
Subject Code: FIN 425

     Syllabus & Subject Guide
       Semester: Summer 2009

 D epa rt men t o f B us ine ss Adm in is t ra t io n

East West University

                                          Investment Management (Instructor: Md. Al-Mamun)

                                 01      INTRODUCTION

1.01 Objective of an Investor!

With the advent of today‟s multidimensional business activities, the avenues of making money
have increased tremendously. Moreover, the advertisements like Yeh Dil Mangey More!, adds
to the desire for having more and more money. People say, „money’, the second God is flying
in the air and only the smart people can have a grasp of it. However, the recent global
financial crisis around the world, especially in the west has shown that the higher one‟s greed
is, the bigger the crash in waiting. The world infamous gambler George Soars has lost his
wealth out of his greed and gambling. Therefore, the techniques of acquiring & properly
managing money and wealth are becoming immensely important. Since your parents are
making a huge amount of monetary investment as your tuition fees and you are investing your
vigorous youthfulness for studying, this course should tell you how you can get return out of
such precious investment. You really want to be rich and want to know how to manage that
richness; so that, you can buy apartments, retirement plan, bank accounts, lands, insurance,
car, a family and a vacation trip to Bahamas or Switzerland. Let‟s join and know how we can
make this happen!

1.02 Course Objectives:

After giving a brief overview of the objective of the investor, it is time to focus on the objective
of the course. To start with it has to be agreed that, the recent meltdown of financial markets
across the world is one of the most common characteristics of modern capitalist economy.
From the time of stock market crash of 1901 through the great depression of 1930s to the
Black Monday of 1987, the Asian financial crisis of 1997 and finally the latest tsunami of global
credit crunch; the history of major stock market crashes is undoubtedly a testimony of its
nature. According to IMF, the world has witnessed more than 100 stock market crisis in last 30
years. However, with the endeavors of so many talented academicians, policymakers, and
researchers, professors especially in the west; the reasons behind these crashes still remain
unexplored. After almost 22 years no body has a solid answer regarding the reasons behind
one of the spectacular stock market crash of black Monday in 1987. The recent credit crunch
and subsequent stock market crashes across the globe, shows such madness has no remedy
in capitalism. Meetings after meetings, summits after summits, conferences after conferences
of the world leaders, thinkers and academicians either in the form of DAVOS summit, in the
form of G-8 summit, in the form of EU summits, in the form of G-20 summits etc. have failed
miserably to find the root causes behind the crisis; let alone finding a common solution! The
expectations of finding a common approach to solve the problem from such high level
summits have ended up with common blame-games with BBC headlining “Blame game starts
at DAVOS”. Moreover, due to the blessings of globalization (!) various economies of the world
have quickly entered into much painful and long term recessions with lot many human stories
of pain, sufferings, job lost and even suicide etc.

This course therefore, has been designed completely in a new dimension along with a basic
understanding of current world investment management system. This course wills explains
why such problem exists in the current investment mechanism?

1.03 Overview of Course Contents:

The course will begin with a brief overview of the factory or the heart of money making i.e.
financial markets and financial instruments in current system, followed by detailed discussions
on some of the common concepts in investment: risk-return, diversification etc. After
establishing a background in the technical & theoretical aspects, focus will be on developing a

                                          Investment Management (Instructor: Md. Al-Mamun)

solid understanding about what an investment professional must know to do his or her job
well. In this segments discussion will be made on certain models (CAPM, APT, Index model
etc.) that forms the building blocs of understanding security pricing. Thereupon the usefulness
of such model will be critically reviewed. After that a discussion will be on whether the idea of
having financial economy along with real economy is good or bad, what is the usefulness of
financial markets and its process?

At the end of the course we will move to more practical aspects of gambling to discuss in the
form of technical analysis and option, futures based strategies. Then we will move to ask a
question if there is any relation between return in financial market and growth in real
economy? Finally how alternative system can offer the only solution to such madness and
financial diseases in the west.

1.04 The Teaching Method
As you know different teachers have different teaching method and styles. But the
objective of a class room remains same. The instructor‟s aim is to develop in students a
level of confidence that will help you to reframe the investment world and make money out of
this knowledge by investing in various sectors with rationality. Thus an appropriate teaching
method involves among others class room discussion, presentation, & problem solving, group

                                02     SUBJECT DETAILS
Subject Title:         Investment Analysis & Management
Subject Code:          FIN 425
Credits:               03 (Three)
Prerequisite:          FIN 201, STA 327, Eco 102, MAT 311
Applicability:         Compulsory for Finance Major
                       Bachelor of Business Administration (BBA) Degree.

Text Book:
Investment by Zvi Bodie, Kane and Marcas. Seventh Edition, McGraw Hill Inc.

Reference Books:

Investment Analysis & and Portfolio Management, Sixth Edition by F. Reilly and K. Brown
(Thomson Southwestern)

The Turbulence of the Stock Markets: Their causes & the shari'ah rule pertaining to these
causes (Al-Khilafah Publications)

Reading Journals:
    Dhaka Stock Exchange (Member‟s Margin) Regulations, 2000
    Meir Statman (2003) A Century of Investors, Financial Analyst Journal, P. 52-59. AIMR®
    Gary P. Brinson, Brian D. Singer and Gilbert L. Beebower (July-Aug 1986), Determinants
     of Portfolio Performance I. Financial Analyst Journal P. 39-44
    Panic Grips in Financial Markets and other articles provided by the instructor.

Web links:

                                         Investment Management (Instructor: Md. Al-Mamun)

4.        http://highered.mcgraw-

     Detailed Subject Outline & Number of Expected Class: Tentative Schedule

 Topic                     Topic Name                         Book & Chapter            No of
  No.                                                                                  Classes
  01        Investment Nature and Settings and Assets     F. Reilly and K. Brown
            Allocation Decision                           (Chapter : 02)
     02     Reading: Asset Classes and Financial          Zvi Bodie (Chapter : 02)
            Investments (Within 1st Mid Term)                                             03
     04     Mutual Funds and Other Investment             Lecture Slides plus Zvi
            companies                                     Bodie (Chapter : 04)
     03     How Securities are Traded: Focus on DSE       Zvi Bodie (Chapter : 03)        02
     05     Learning About Return and Risk from the       Lecture Slides plus             03
            Historical Record                             Zvi Bodie (Chapter : 05)
                                   First Mid-Term
                                Last class day of Mid term week
     06     Optimal Risky Portfolios & Lecture Sheets    Zvi Bodie (Chapter : 07)         02
     07     Models of Assets Pricing: Markowitz model, Lecture Sheets                     04
            CAPM and APT
     08     The Efficient Market Hypothesis              Zvi Bodie (Chapter : 11)         01
     09     Behavioral Finance and Technical Analysis    Zvi Bodie (Chapter : 12)         02
                                 Second Mid-Term
                                 Last class day of Mid term week
     10     Stock Market Analysis                         F. Reilly and K. Brown          01
                                                          (Chapter : 18)
     11     Industry Analysis                             F. Reilly and K. Brown          02
                                                          (Chapter : 19)
     12     Options Markets: Introduction & Strategies    Lecture Sheet will be           03
     13     Failure of Current Investment Mechanism       Lecture Sheet will be           02
                                      Final Exam
                                       To be announced

                           03     STUDENTS EVALUATION
3.01 Marks Composition:
Students will be evaluated for a total of 100 marks in this course. The distribution will follow
the following pattern:
                01.     Attendance & Class Performance                     10%
                02.     Quizzes (2 * 5)                                    10%
                03.     Assignments                                        10%
                04.     First Mid-Term Exam                                20%
                05.     Second Mid-Term Exam                               20%
                06.     Final Exam                                         30%
                Total                                                     100%
3.02 Grading Policy

                                             Investment Management (Instructor: Md. Al-Mamun)

Numerical grades will be converted into letter grades according to following grading rules
accepted by the EWU:
A+     97% - 100%          A      90% - 96%             A-     87% - 89%
B+     83% - 86%           B      80% - 82%             B-     77% - 79%
C+     73% - 76%           C      70% - 72%             C-     67% - 69%
D+     63% - 66%           D      60% - 62%             F      bellow 60%

Course Lecturer:         Md. Al-Mamun. MBA (DU in Finance)
                         MBA (AUS in Finance) MBA (AUS in HRM)
                         ACCA (Part Qualified).
Contact Address:         Room No # DDC, 12/A
                         Tele: 9882308, 8812335 Ext: 301
                         E-mail: or

Class Hours:             Section: 02                                    _
                         SUN                      : 11:50 P. M - 1:30 P.M.
                         TUES                     : 11:50 P. M - 1:30 P.M.

Office Hours:            SUN                   : 10:50 A. M –11:50 P.M
                         MON                   : 01:35 P. M – 03:05 P.M
                                               : 04:40 P. M – 05:40 P.M
                         TUES                  : 10:50 A. M – 11:50 A.M
                                               : 01:30 P. M – 03:00 A.M
                         WED                   : 01:35 P. M – 03:05 P.M
                                               : 04:40 P. M – 05:40 P.M
                         THURS                 : 09:00 P. M – 10:00 A.M
                         Or, by making appointment at  01727707755

                       05   HOW TO GET MORE MARKS TODAY
                       AND MAKE MORE MONEY TOMMORROW!!

In a business school we all are stakeholders. I (as the service provider) & you (as the service receiver or
customer) have a great deal or responsibility in the delivery (co-production) of education services to
add value to the society. Any course offered by the EWU has its own merits & adds value to the
stakeholders. Being students your motto should be acclimatizing yourself into the organizational
environment in such way so that you can add value in your work place and in your corporation. Certain
things therefore are very important to remember.
   Attend all the classes. Note that class attendance contributes 10% in your overall grade. Failure to
    attend the classes will result securing bad grades.
   You must take part in all the scheduled exams, tests, and other exams. No make up tests will be
    conducted as per the rule of the EWU. But for reasonable cause you must inform the instructor and
    take permission from the chairperson.
   Any materials provided in the class should get copied by the students. The hard copy must be
    returned to the lecturer. Read the text properly. Questions may appear in any exam form texts &
    assigned topics.
   Carrying of books & scientific / financial calculator is a must for every student.
   There will be a comprehensive term paper for students on group basis. Each group shall consist of
    3- 4 members. Make group within first week of the class. The topic of such term paper is
    “Examining if stock market promote economic development”
   Do not attempt to turn in assignment date. They are not acceptable. Failure of following the
    submission date will earn 20% reduced marks.

                                           Investment Management (Instructor: Md. Al-Mamun)

   Switch off your mobile completely when you are entering into the class
   Please check your university code of conduct for the students. .

Note: Don’t be so concerned about grades! It’s not my parent property. I will help you to
earn it. Even if I will trouble you with lot of work I am sure that it will yield dividend.

                              WISHING U ALL THE VERY BEST!


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