PORTFOLIO MANAGEMENT

FIN3IPM

2018

Credit points: 15

Subject outline

This subject focuses on the principles of investment. The key components of the subject include portfolio theory and the application of risk and return concepts to portfolio construction. You will look at equilibrium in equity markets, including CAPM as a theory of asset pricing. This leads to the study of the market model and multi-factor models of security returns. You will also be introduced to the valuation of equity securities. Finally, you will examine portfolio theory and its practical application to portfolio evaluation and management as it relates to both equity and bond portfolios.

SchoolLa Trobe Business School

Credit points15

Subject Co-ordinatorJing Zhao

Available to Study Abroad StudentsYes

Subject year levelYear Level 3 - UG

Exchange StudentsYes

Subject particulars

Subject rules

Prerequisites FIN2FIN or FIN1FOF

Co-requisitesN/A

Incompatible subjectsN/A

Equivalent subjectsN/A

Special conditionsN/A

Readings

Resource TypeTitleResource RequirementAuthor and YearPublisher
ReadingsPrinciples of InvestmentsPrescribedBodie, Z., Drew, M., Basu, A., Kane, A., and Marcus, AMcGraw Hill , 1st Edition

Graduate capabilities & intended learning outcomes

01. Formulate the risk return trade-off encapsulated in portfolio theory and the Markowitz model

Activities:
Lectures and tutorials
Related graduate capabilities and elements:
Literacies and Communication Skills (Writing,Quantitative Literacy)
Literacies and Communication Skills (Writing,Quantitative Literacy)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Personal and Professional Skills (Autonomy and independence)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

02. Justify the CAPM and its alternative the APT and critique these theories using empirical evidence.

Activities:
Lectures and tutorials
Related graduate capabilities and elements:
Literacies and Communication Skills (Writing,Quantitative Literacy)
Literacies and Communication Skills (Writing,Quantitative Literacy)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Personal and Professional Skills (Autonomy and independence)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

03. Examine the relevance of the term structure of interest rates and relate duration to the management of bond portfolios

Activities:
Lectures and tutorials
Related graduate capabilities and elements:
Literacies and Communication Skills (Writing,Quantitative Literacy)
Literacies and Communication Skills (Writing,Quantitative Literacy)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Personal and Professional Skills (Autonomy and independence)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

04. Analyse the components of the investment process and the central role of asset allocation decisions

Activities:
Lectures and tutorials
Related graduate capabilities and elements:
Literacies and Communication Skills (Writing,Quantitative Literacy)
Literacies and Communication Skills (Writing,Quantitative Literacy)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Personal and Professional Skills (Autonomy and independence)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

05. Justify how industry-wide factors and key macroeconomic factors affect financial asset valuation.

Activities:
Lectures and tutorials
Related graduate capabilities and elements:
Literacies and Communication Skills (Writing,Quantitative Literacy)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Personal and Professional Skills (Autonomy and independence)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

06. Apply the common measures of portfolio performance evaluation and evaluate the issues relating to active portfolio management

Activities:
Lectures and tutorials
Related graduate capabilities and elements:
Literacies and Communication Skills (Writing,Quantitative Literacy)
Literacies and Communication Skills (Writing,Quantitative Literacy)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Personal and Professional Skills (Autonomy and independence)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

Subject options

Select to view your study options…

Start date between: and    Key dates

Melbourne, 2018, Semester 1, Day

Overview

Online enrolmentYes

Maximum enrolment sizeN/A

Enrolment information

Subject Instance Co-ordinatorJing Zhao

Class requirements

Tutorial Week: 11 - 22
One 1.0 hours tutorial per week on weekdays during the day from week 11 to week 22 and delivered via face-to-face.

Lecture Week: 10 - 22
One 2.0 hours lecture per week on weekdays during the day from week 10 to week 22 and delivered via face-to-face.

Assessments

Assessment elementComments% ILO*
One mid-semester test60-minute test of multiple choice and short answer questions20 01, 02
One 3-hour final examination60 01, 02, 03, 04, 05, 06
Weekly online quizzesStudents need to answer a set of multiple choice questions on LMS starting from Week 2. There are 10 quizzes in total. (Broadly equivalent to a 500 word assessment)20 01, 02, 03, 04, 05, 06

Melbourne, 2018, Semester 2, Day

Overview

Online enrolmentYes

Maximum enrolment sizeN/A

Enrolment information

Subject Instance Co-ordinatorJing Zhao

Class requirements

Tutorial Week: 31 - 43
One 1.0 hours tutorial per week on weekdays during the day from week 31 to week 43 and delivered via face-to-face.

Lecture Week: 31 - 43
One 2.0 hours lecture per week on weekdays during the day from week 31 to week 43 and delivered via face-to-face.

Assessments

Assessment elementComments% ILO*
One mid-semester test60-minute test of multiple choice and short answer questions20 01, 02
One 3-hour final examination60 01, 02, 03, 04, 05, 06
Weekly online quizzesStudents need to answer a set of multiple choice questions on LMS starting from Week 2. There are 10 quizzes in total. (Broadly equivalent to a 500 word assessment)20 01, 02, 03, 04, 05, 06

Sydney, 2018, Study Period 1, Day

Overview

Online enrolmentYes

Maximum enrolment sizeN/A

Enrolment information

Subject Instance Co-ordinatorJing Zhao

Class requirements

Lecture Week: 10 - 22
One 2.0 hours lecture per week on weekdays during the day from week 10 to week 22 and delivered via face-to-face.

Tutorial Week: 10 - 22
One 1.0 hours tutorial per week on weekdays during the day from week 10 to week 22 and delivered via face-to-face.

Assessments

Assessment elementComments% ILO*
One mid-semester test60-minute test of multiple choice and short answer questions20 01, 02
One 3-hour final examination60 01, 02, 03, 04, 05, 06
Weekly online quizzesStudents need to answer a set of multiple choice questions on LMS starting from Week 2. There are 10 quizzes in total. (Broadly equivalent to a 500 word assessment)20 01, 02, 03, 04, 05, 06

Sydney, 2018, Study Period 3, Day

Overview

Online enrolmentYes

Maximum enrolment sizeN/A

Enrolment information

Subject Instance Co-ordinatorJing Zhao

Class requirements

Lecture/Film Week: 46
One 2.0 hours lecture/film per week on weekdays during the day in week 46 and delivered via face-to-face.

Tutorial Week: 46
One 1.0 hours tutorial per week on weekdays during the day in week 46 and delivered via face-to-face.

Assessments

Assessment elementComments% ILO*
One mid-semester test60-minute test of multiple choice and short answer questions20 01, 02
One 3-hour final examination60 01, 02, 03, 04, 05, 06
Weekly online quizzesStudents need to answer a set of multiple choice questions on LMS starting from Week 2. There are 10 quizzes in total. (Broadly equivalent to a 500 word assessment)20 01, 02, 03, 04, 05, 06

Vietnam, 2018, Semester 2, Day

Overview

Online enrolmentYes

Maximum enrolment sizeN/A

Enrolment information

Subject Instance Co-ordinatorJing Zhao

Class requirements

Lecture Week: 31 - 43
One 2.0 hours lecture per week on weekdays during the day from week 31 to week 43 and delivered via face-to-face.

Tutorial Week: 31 - 43
One 1.0 hours tutorial per week on weekdays during the day from week 31 to week 43 and delivered via face-to-face.

Assessments

Assessment elementComments% ILO*
One mid-semester test60-minute test of multiple choice and short answer questions20 01, 02
One 3-hour final examination60 01, 02, 03, 04, 05, 06
Weekly online quizzesStudents need to answer a set of multiple choice questions on LMS starting from Week 2. There are 10 quizzes in total. (Broadly equivalent to a 500 word assessment)20 01, 02, 03, 04, 05, 06