Security Analysis and Portfolio Management-Syllabus

JOHNS HOPKINS  designed its MBA course as a comprehensive study of primarily institutional investment analysis and portfolio management. It will approach investment management as a rational decision-making process based on the theoretical foundation and best practice techniques of investments. The course is presented to help understand how the basic theories of managing a portfolio of financial assets within the risk–return framework will be addressed. Due to the increasing globalization in the capital markets, portfolio management has become an international business. Thus, a good understanding of valuation of equities and fixed income securities, options and futures, and other investment instruments within a global setting is necessary to maintain optimal investment in this dynamic environment. The course emphasizes portfolio management as a dynamic process in which the concepts from security analysis are factored into the dynamics of strategic and tactical investment decision-making criteria. The course covers the formulation of appropriate investment portfolio objectives for a key institutional investor, and alternative techniques for achieving them. Determination and allocation of asset classes—including bonds, equities, and alternative investment instruments into efficient portfolios—will be discussed, along with such topics as portfolio optimization, risk management, asset selection and allocation, investment management, monitoring, and revising and rebalancing a portfolio. Finally, criteria for evaluating portfolio performance will be discussed. Students are encouraged to incorporate corporate social responsibility and sustainable investing concepts into class discussions and deliverables.[Source: Johns Hopkins]

SMU Course Contents(Syllabus)

Unit 1

Investment – A Conceptual Framework: Investment process, risks of investment and the common mistakes made in investment management

Unit 2

Investment Environment: Features and composition of money market and capital market, money market, capital market instruments and financial derivatives

Unit 3

Risk and Return: Concepts of risk and return, how risk is measured in terms of standard deviation and variance, the relationship between risk and return

Unit 4

Fundamental Analysis: Economy analysis, industry analysis and company analysis, weaknesses of fundamental analysis

Unit 5

Technical Analysis: Tools of technical analysis, important chart formations or price patterns and technical indicators

Unit 6

Efficient Market Hypothesis: Concept of ‘Efficient Market’ and its implications for security analysis and portfolio management.

Unit 7

Behavioral Finance: Meaning of Behavioral finance, deals with when, how and why psychology influences investment decisions

Unit 8

Valuation of bonds and shares: Elements of investment, bond features and prices, call provisions on corporate bonds, convertible bonds and valuation of bonds

Unit 9

Portfolio Management – Risks and Returns: Concept of portfolio and portfolio management, concept of risk, types of portfolio management

Unit 10

Markowitz Portfolio Selection Model: Concept of portfolio analysis and diversification of risk. Also discusses Markowitz Model and Efficient Frontier

Unit 11

Capital Asset Pricing Model (CAPM): Deals with the assumptions of CAPM and the inputs required for applying CAPM and the limitations of this Model

Unit 12

Sharpe-The Single Index Model: Measurement of return on an individual stock, measurement of portfolio return and measurement of individual stock risk

Unit 13

Factor Models and Arbitrage Pricing Theory: Arbitrage Pricing Theory and its principles, Comparison of Arbitrage Pricing Theory with the Capital Asset Pricing Model.

Unit 14

International Portfolio Investments: Investment avenues for foreign portfolio investors, risks and returns associated with such investment.

Unit 15

Mutual Fund Operations: Mutual funds as a key financial intermediary, mobilizing savings and investing them in capital markets.

Source- SMU

Alternative syllabus for Portfolio Management

1. Introduction to Portfolio Management – Measurement of Expected Risk and
   Returns of Portfolio, Alternative measures of Risk
2. Asset Classes, Risk Premia, and Asset Allocation
   – Basic Asset Allocation Techniques (mean variance; passive approach)
   – Advanced Asset Allocation Techniques (alpha strategies; active approach)
3. Asset Selection: Equity, Fixed Income Investments
   – Equity Asset Class Characteristics
   – Equity Portfolio Risk
   – Fixed Income Asset Class Characteristics.
   – Roles of Duration, Convexity
   – Fixed Income Portfolio Value Distributions
4. Investment Alternatives and Objectives
5. Introduction to Risk – Return Tradeoff, Measures, Analysis, Determinants of Required Rates of Return and Relationship between Risk and Return, Risk-free rate and its influencing factors and Risk Premium
6. Introduction to Indian Stock Markets, Stock Market Indices, Indices
   Calculations
7. Industry Analysis – Business Cycles and industry sectors, Evaluating
   Industry life cycle, analysis of industry competition and industry rate of
   returns
8. Company Analysis, SWOT Analysis, Analysis of Financial Statement and
   Stock Valuation
9. Technical Analysis – Assumption, Advantages, Challenges, Types of
   Charts, Technical Trading Rules and Indicators
10. Capital Market Theory – CAPM theory: Assumptions – CAPM Model – Capital
    Market Line (CML) – Security Market Line (SML) – Evaluation of securities – Present validity of CAPM – Arbitrage Pricing Theory (APT) – Assumptions – APT model – AP equation – Factors affecting return – APT and CAPM.
11. Markowitz Portfolio Theory
12. Bond Fundaments, Valuation and Bond Yield
    The Analysis and Valuation of Bond – Determinants of Interest Rates, Term
    structure Interest Rates Theories, Bond Theorems
13. Introduction to Mutual Funds
14. Alternative Investments
    – Private Equity
    – Hedge Funds
    – Venture Capital
    – REITs
15. Strategic Commodities: Oil, Gold
16. Risk Management
    – Managing portfolio risk
    – Equity portfolios and risk management
    – Fixed income portfolios and risk management

Reference

1- Investment Analysis and Portfolio Management by Reilly and Brown, Cengage Learning, India Ed.
2. Investment Analysis and Portfolio Management by Prasanna Chandra
3.Investments by Zvi Bodie, Alex Kane, Alan Marcus and Pitabas Mohanty
4. Security Analysis and Portfolio Management by Donald Fisher and Ronald Jordan Maginn, John L. and Donald L. Tuttle (MT). Managing Investment Portfolios: A Dynamic Process. 3rd Ed. CFA Institute Investment Series. Wiley and Sons, 2007.

5. Bodie, Zvi, Alex Kane and Alan Marcus (BKM). Investments. 11th Edition (or recent). McGraw Hill. 2018.

More referencer

1- Fischer & Jordan, Security Analysis and Portfolio Management, Prentice Hall
India.
2. Punithavathy Pandian, Security Analysis and Portfolio Management, Vikas
Publishing
House Pvt. Ltd.
3. I. M. Pandey, Financial Management, Vikas Publishing House Pvt. Ltd.
4. Martin Pring, Technical Analysis Explained, McGraw Hill.
5. V. A. Avadhani, Investment and Securities Market in India, Himalaya Publishing
House.
6. D. C. Patwari, Options and Futures: Indian Perspective, Jaico Publishing House.
7. Hull, Introduction to Futures and Options, Prentice Hall.
8. Richard Waldron, An Introduction to Commodity Trading, Quantum Publishing.
9. Nick Battley, Introduction to Commodity Futures and Options, Irwin
10. French, Don, Security and Portfolio Analysis, Merril Publishing Co.
11. Preeti Singh, Investment Management, Himalaya Publishing.
12. Devin S., Portfolio Management, Prentice Hall.
13. Cheney, Muses, Fundamentals of Investments
14. V. K. Bhalla, Portfolio Analysis and Management, Sultan Chand & Sons
15. Agarwal, A Guide to Indian Capital Markets, New Delhi.
16. Jack Clark Francis and Richard W. Taylor, Investment, Schaum’s outline series,
Tata McGraw Hill.

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