Investment Concepts Analysis Strategy Radcliffe - PDF by sso18804


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									Subject Code              :   AF5332
Subject Title             :   Investment Management
Level                     :   5
Credits                   :   3
Mode of Study             :   Seminar                       42 hours
Pre-requisites            :   Finance for Executives (AF5327 / ACCT550) OR equivalence
Exclusions                :   Advanced Investment Theory & Practice (AF5305)
Assessment                :   Coursework                    50%
                              Final Examination             50%
Minimum Pass Grade        :   Coursework                    (D)
                              Final Examination             (D)


This module builds on Accounting for Executives, Finance for Executives and Corporate
Financial Management. It introduces students to securities analysis, portfolio theory and
management. It is a complement to modules in Financial Institutions and Organization
Corporate Risk Management and Derivatives for Corporations.

•   To enable students to understand the nature of different types of investment products
    and apply the investment techniques in light of risk-return trade-offs.

•   To provide students with the analytical skills and techniques required to effectively
    manage institutional and individual portfolios of securities and other investment products.


The concept of investment. Security selection process. Brief review of the securities market
in Hong Kong. Stock indexes.

Risk, Return, Portfolio Theory and Asset Pricing Models
Risk and return of portfolios. Diversification. Markowitz Portfolio Theory. Utility analysis.
Capital Asset Pricing Model. Arbitrage Pricing Theory.

Securities Analysis
Fundamental analysis: market and industry analysis, company analysis. Technical analysis:
moving average, momentum analysis, rate of change analysis, on-balance volume, relative
strength index etc. Review of theory and evidence of efficient market and its implications.

Nature, advantages, disadvantages and valuation of fixed income securities and common
stocks, warrants, rights issue and convertibles, real estates, and unit trusts.

Use of Derivative Instruments in Investment
Hang Seng Index Futures, Stock futures, Hang Seng Index Options, Traded stock options,
Black-Scholes Option Valuation Model, Equity-Linked Instruments, Hedge Funds.

AF5332.DOC                                    1                             (Updated in Jul 07)
Portfolio Management Strategies
Overview of the portfolio management process. Identification of investor objectives,
preferences and constraints. Portfolio types, including individual investor and pension funds.
Portfolio monitoring and revision.

Performance Evaluation
Portfolio performance measures and their application.   Performance of investment
companies. Criticisms of performance evaluation techniques. Active versus passive

International Investment
Domestic versus international returns, efficient international investment, hedging exchange
rate risk, active international investment.


Lectures will be used to introduce the underlying concepts. Guided private study is an
essential element for this module.

Seminars will concentrate on applied work so as to develop students’ understanding of the
concepts involved. International and local examples and current issues will be discussed
and relevant computer software will be used to apply and illustrate the theories.


Elton, Edwin J., and Martin J. Gruber, Modern Portfolio Theory and Investment Analysis, 6th
Edition, Wiley & Sons, 2003.

Reilly, F.K. and K.C. Brown, Investment Analysis and Portfolio Management, Harcourt
College Publishers, 7th Edition, 2002.

Bodie, Kane and Marcus, Investments, 5th Edition, 2002.

Radcliffe, R., Investment Concepts, Analysis, Strategy, Addison Wesley, 1997.

The Securities and Futures Commission     

The Stock Exchange of Hong Kong Limited   

Hong Kong Futures Exchange Limited                  H

Hong Kong Investment Funds Association    



AF5332.DOC                                    2                             (Updated in Jul 07)

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