THE
Department
of Economics and Business
Economics and Business
: Investments Spring 2005
Dr. Clark Maxam
http://faculty1.coloradocollege.edu/~cmaxam
All course information as well as
a wealth of other info is available on this web page: BOOKMARK IT!
E-Mail: cmaxam@coloradocollege.edu (you can also email through my web page)
Formal Office Hours:
Due to high demand for
office hours, appointments should be made if at all possible. I have found that this eliminates students
having to wait outside my office for long periods of time particularly close to
exam and other due dates. Email me with a suggested appointment time as far in
advance as possible (note: if I am in my office, this may be with as little
notice as 1 minute).
Informal Office Hours:
Drop by anytime, but note that I may ask you to come back at a later time if I
am especially busy. I will generally be available only via email on Fridays.
Course Meeting Time:
Course Description
This course is designed to provide a sound basis in the fundamental concepts of investments. We will approach the material from the perspective of the professional money manager and thus our work will be both quantitative and applied. Students who master the material will acquire the quantitative and theoretical tools necessary for building sound portfolios and making informed investment decisions. In addition, to learning the material you will exit the course with a much greater ability to utilize spreadsheet software to conduct quantitative analysis.
The field of investments can be highly lucrative and as a result it is highly competitive. Successful investments professionals come from varied backgrounds, but share at least one common characteristic – the willingness to put in long hours of hard work. You can expect to spend a minimum of 3-4 hours per day, 7 days per week on the readings, homework and other assignments.
Required Materials
Text:
Investments Analysis and Portfolio Management 7th Edition, Reilly
and Brown.
The
Wall Street Journal – you should have signed up for the WSJ during 4th
block.
Course Philosophy
A good deal of the text material that is descriptive in
nature will not be elaborated upon in class.
It is difficult to learn the principles of investments without applying
the material and working problems on your own.
You should plan on a minimum of 3
hours per day to work the homework problems and do the assigned reading.
All students are required to come to class with their assigned problems
completed. You must also arrive in class
having read the chapter IN ADVANCE of the lecture.
As an added incentive, there will be regular quizzes on
the readings throughout the semester. I will
distribute textbook problem solutions and additional problems via email or on
my web page at the appropriate time during the semester. Remember, you cannot
really learn without hard work and effort!
In addition to textbook material,
we will make heavy use of the Wall Street Journal in class as we apply the concepts
learned in class to the current market environment. We will generally take the first few minutes
of each class to discuss current financial market issues and events. You must
read the Wall Street Journal in order to actively participate in these discussions
(watching
This course will build on prerequisite material including, but not limited to, time value of money, macroeconomics, and accounting. I STRONGLY encourage you to communicate with both me and your group members by email whenever possible. I frequently send clarifications and answers to interesting questions out to the entire class by email, so daily email monitoring by you is essential. In addition, you may find that you can quickly and easily get an answer from me about class etc. without having to come to office hours. Toward this end, I will GUARANTEE that you will receive a response to any email query within 3 hours if sent during the business day (and frequently in the evening as well) or by first thing the next morning if sent during the evening. You will generally find that if I am not in class or a meeting that you will get a response within 10 minutes. If I do not respond within the prescribed time, I will credit you with 5 bonus points to be added to your overall course grade.
Performance Evaluation and
Application of the College Honor Code
A few years ago, the faculty approved a statement clarifying the meaning of grades. That statement noted that grades of “A” are reserved for “excellent work that reflects superior understanding and insight, creativity, or skill;” grades of “B” are assigned to “good work that reflects a high level of understanding and insight, creativity, or skill;” grades of “C” are assigned to “adequate work that indicates readiness to continue study in the field;” and grades of “D” are assigned to “marginal work, only minimally adequate.”
Final grades for the course will reflect these standards, and are determined on the basis of both objective and subjective factors. The objective factors include homework, two examinations, daily market recaps and reviews and the final project. Please note, too, my subjective evaluation of your performance will also have an important influence on your final grade. Failure to attend class or complete assigned homework problems, poor preparation for class, or lack of engagement can lower your final grade by one or more letter grades.
Grading
Objective
Mid-term Exam 200 points
Final Exam 200 points
Final Project 100 points
Project Presentation 50 points
Homework 100 points
Daily Market Recap/Review 100 points
Daily WSJ Quotes etc. 100 points
Quizzes 100 points
-----
950 points
Subjective
Class preparation
Class participation
You are encouraged to work together and teach each other when completing assigned problems. The college’s honor code applies, however, to the final project, quizzes, and examinations. The completed case analyses should reflect the group’s own efforts and the examinations should be taken without the aid of the textbook, notes, or consultation.
Individual Homework
Assignments
Homework is assigned daily and subject to collection on a random basis five times during the block. HW will be graded for accuracy or merely completeness at my option. There are ABSOLUTELY NO exceptions to not handing in the homework. If you are absent and you want your homework to count toward your final grade if it is collected, you are responsible for handing it in PRIOR TO the start of class. Homework should be prepared in a professional manner. You do not have to type it, but it should be legible, well organized and well presented. If you wouldn’t turn it in at your dream job, don’t turn it in for this class. You may submit homework electronically in MS-Word or Excel format. If you elect this option please name your file using the following convention: lastnamefirstnameYYMMDD.* where star means the appropriate file type (eg. doc or xls).
Portfolio Management Project
I will randomly assign each of you to groups of four or five. You must meet with your group on a regular basis (daily?) in order to make good decisions and progress toward completing the end of semester project. You may find that email communication works well, but it is no substitute for fairly regular face to face meetings. In order to encourage full and equal participation, confidential peer evaluations will be collected with the end of semester project. In other words, your fellow group members will be evaluating your contribution to the group as you will be evaluating them. Should a strong trend emerge regarding a particular group member's contribution, these peer evaluations will be used to re-weight your group based grades accordingly. I will provide more details in class.
The final group report should be a 4-6 page, highly professional, error free discussion of your group’s performance. You should include the how, why and what of your performance with particular emphasis on how you interpreted economic events correctly or incorrectly and how your performance was impacted by your trading decisions based on these interpretations. Put particular emphasis on how the sensitivity of the markets to various economic conditions led you to trade as you did and whether you judged these sensitivities correctly or not.
The report must include a
full complement of supporting information regarding risk exposures, performance
relative to competitors and appropriate benchmarks and a complete discussion of
your methods, decisions and reasons behind them. If you are not sure what this
entails, an excellent starting point is the material and methods presented and
analyzed in class. The best reports in the past have utilized
Daily Market Re-cap/Review
Each day, two or three students will be responsible for providing a current market update including a synopsis of economic statistics, market reactions and the major news affecting the market that day. Another two or three students will be responsible for reviewing the previous day. Students will be selected on a random basis and everyone in the class will have at least three opportunities to participate during the block.
Daily WSJ
Quotes etc. Presentation
Each day, one group will be assigned to lead the class in reading and interpreting a particular section of the WSJ. Examples include, stock quotes, indexes, options, futures etc. Groups will be assigned their section in advance and have at least two days to prepare.
Course Schedule - TBA