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FIN2105 Portfolio Management

Semester 2, 2013 On-campus Springfield
Units : 1
Faculty or Section : Faculty of Business and Law
School or Department : School of Accounting, Economics and Finance
Version produced : 21 July 2014

Contents on this page

Staffing

Examiner: Frank Elston
Moderator: Chandrasekhar Krishnamurti

Requisites

Pre-requisite: FIN1101 and FIN1103 and STA2300

Other requisites

Students are required to have access to a personal computer, e-mail capabilities and Internet access to UConnect. Current details of computer requirements can be found at http://www.usq.edu.au/current-students/support/computing/hardware.

Rationale

Increasingly workers are responsible for their own saving and investing, usually through a superannuation fund. To assist with that responsibility this course is designed to provide students with an introduction to the concepts and tools of modern portfolio management. The course assumes some knowledge of finance and statistics. See the pre-requisites.

Synopsis

The current trend in the funds management industry is away from security analysis (stock picking) and towards asset allocation (managing the balance of equities, bonds, cash etc). The former, which may be called investment management, has been surpassed in importance by the latter, which may be called portfolio management. Portfolio management is important to both individuals who manage their own personal assets and managers who manage the assets of others. This course aims to cover the important aspects of portfolio management. Coverage includes: the construction of the portfolio and importance of investment objectives and policies; the management of the portfolio including the selection of assets, the utilisation of modern portfolio methods and the revision of the portfolio; and the protection of the portfolio through the use of derivatives. Emphasis is placed on the analytical aspects of portfolio management and the decision making process to enable students to apply the established theories and models in the financial world.

Objectives

On successful completion of this course, students should be able to:

  1. demonstrate an understanding of the process of portfolio construction, management and protection
  2. apply portfolio theory to investment analysis and portfolio management
  3. demonstrate an understanding of how investments such as international securities, property and collectables fit into a well-diversified portfolio
  4. demonstrate an understanding of the process of security selection and revision
  5. construct, manage and protect a portfolio of financial investments
  6. evaluate the performance of a portfolio
  7. discuss the responsibilities incumbent upon professionals in the portfolio management industry
  8. demonstrate an ability to solve problems and think critically in the context of portfolio management, especially by the application of theory to practice
  9. demonstrate professional literacy skills, including numeracy, by interpreting and analysing data
  10. confidently and coherently communicate the results of an analysis to specific audiences such as investors or professional portfolio managers.

Topics

Description Weighting(%)
1. Introductory concepts and tools 5.00
2. Portfolio objectives and investment policy 10.00
3. Portfolio diversification 20.00
4. International diversification 5.00
5. Equities in the portfolio 10.00
6. Bonds in the portfolio 10.00
7. Real assets 5.00
8. Revising the equity and bond portfolios 10.00
9. Using options to generate income 10.00
10. Performance evaluation 5.00
11. Protecting the portfolio 10.00

Text and materials required to be purchased or accessed

ALL textbooks and materials available to be purchased can be sourced from USQ's Online Bookshop (unless otherwise stated). (https://bookshop.usq.edu.au/bookweb/subject.cgi?year=2013&sem=02&subject1=FIN2105)

Please contact us for alternative purchase options from USQ Bookshop. (https://bookshop.usq.edu.au/contact/)

  • Strong, RA 2009, Portfolio construction, management and protection, 5th edn, South-Western Cengage Learning, Mason, Ohio.

Reference materials

Reference materials are materials that, if accessed by students, may improve their knowledge and understanding of the material in the course and enrich their learning experience.
  • Bodie, Z, Kane, A & Marcus, A 2011, Investments, 9th edn, McGraw-Hill/Irwin, New York.
  • Gitman, LJ, Joehnk, M, Smart, S, Juchau, R & Ross, D 2011, Fundamentals of investing, 3rd edn, Pearson Education Australia, Frenchs Forest, New South Wales.
    (Australian edition.)
  • Reilly, F & Brown, K 2009, Investment analysis and portfolio management, 9th edn, Cengage, Mason, Ohio.
  • Vishwanath, S & Krishnamurti, C (eds.) 2009, Investment management: a modern guide to security analysis and stock selection, Springer, Heidelberg.

Assessment details

Description Marks out of Wtg (%) Due Date Notes
QUIZ 10 10 07 Aug 2013
ASSIGNMENT 25 25 11 Sep 2013 (see note 1)
2-HOUR EXAMINATION 65 65 End S2 (see note 2)

NOTES
  1. The assignment consists of Excel worksheets and interpretation of results. Each teaching week prior to the due date of the assignment, you will be given an assignment question (via the Study Desk) related to that week's course material. You are strongly advised to complete these questions while the related coursework is fresh in your mind. Retain all completed questions and post as a complete set prior to the assignment due date. Additionally, there are numerous self-assessment questions (with answers supplied) for you to complete as you progress through the modules. In sum, the assignment and self-assessment questions are designed so that you can evaluate your progress throughout the course and take whatever timely remedial action that you consider necessary.
  2. The examination is scheduled to be held in the end-of-semester examination period. Students will be advised of the official examination date after the timetable has been finalised.

Important assessment information

  1. Attendance requirements:
    It is the students' responsibility to attend and participate appropriately in all activities (such as lectures, tutorials, laboratories and practical work) scheduled for them, and to study all material provided to them or required to be accessed by them to maximise their chance of meeting the objectives of the course and to be informed of course-related activities and administration.

  2. Requirements for students to complete each assessment item satisfactorily:
    To satisfactorily complete an individual assessment item a student must achieve at least 50% of the marks. (Depending upon the requirements in Statement 4 below, students may not have to satisfactorily complete each assessment item to receive a passing grade in this course.)

  3. Penalties for late submission of required work:
    If students submit assignments after the due date without prior approval of the examiner, then a penalty of 5% of the total marks gained by the student for the assignment may apply for each working day late up to ten working days at which time a mark of zero may be recorded.

  4. Requirements for student to be awarded a passing grade in the course:
    To be assured of receiving a passing grade a student must achieve at least 50% of the total weighted marks available for the course.

  5. Method used to combine assessment results to attain final grade:
    The final grades for students will be assigned on the basis of the aggregate of the weighted marks obtained for each of the summative assessment items in the course.

  6. Examination information:
    This is a restricted examination. Candidates are allowed access to specific materials during the examination. The only materials that candidates may use in the restricted examination for this course are:
    1. writing materials (non-electronic and free from material which could give the student an unfair advantage in the examination)
    2. calculators which cannot hold textual information (students must indicate on their examination paper the make and model of any calculator(s) they use during the examination).
    Students are not permitted to take mobile telephones, pagers or other electronic means of communication into the examination room.

  7. Examination period when Deferred/Supplementary examinations will be held:
    Any Deferred or Supplementary examinations for this course will be held during the next examination period.

  8. University Student Policies:
    Students should read the USQ policies: Definitions, Assessment and Student Academic Misconduct to avoid actions which might contravene University policies and practices. These policies can be found at http://policy.usq.edu.au.

Assessment notes

  1. Assignments submission:
    1. Assignments must be submitted electronically via the EASE portal on the FIN2105 StudyDesk. No hard copies will be accepted unless prior arrangement has been made.
    2. Assignments are to be labelled with your surname first, your initials, and the last three digits of your student number; for example, SMITH_JA_789.
    3. Assignments are to be submitted using an EXCEL format (2010 or earlier).
    4. Times and dates refer to Toowoomba time, that is Australian Eastern Standard Time (AEST).
    5. Late submissions may incur a penalty unless a request for an extension has been granted.


  2. Referencing in assignments:
    Harvard (AGPS) is the referencing system required in this course. Students should use Harvard (AGPS) style in their assignments to format details of the information sources they have cited in their work. The Harvard (AGPS) style to be used is defined by the USQ Library's referencing guide at http://www.usq.edu.au/library/referencing.

  3. Course weightings:
    Course weightings of topics should not be interpreted as applying to the number of marks allocated to questions testing those topics in an examination paper. The examination may test material already tested in assignments.

Other requirements

  1. Computer, e-mail and Internet access:
    Students are required to have access to a personal computer, e-mail capabilities and Internet access to UConnect. Current details of computer requirements can be found at http://www.usq.edu.au/current-students/support/computing/hardware.