BEC-56806 Investment Analysis

Course

Credits 6.00

Teaching methodContact hours
Individual Paper4
Lecture20
Tutorial20
Independent study0
Course coordinator(s)prof. dr. ir. AGJM Oude Lansink
Lecturer(s)prof. dr. ir. AGJM Oude Lansink
dr. J Sok
Examiner(s)prof. dr. ir. AGJM Oude Lansink

Language of instruction:

EN

Assumed knowledge on:

Concepts and methods used in business economics such as balance sheets, profit-loss account, time value of money, discounting, net present value. The main target groups are BBC and MME students, but the course can also be taken by other students

Continuation courses:

Thesis Business Economics

Contents:

This course provides the theoretical background and foundations of investment theory. Particular attention will be paid to the investment in stocks and bonds. The course also addresses the applicability of the theoretical models and their empirical implementation. Also, this course
discusses several topics:

- the investment environment and how securities are traded;
- mutual fund and other investment companies;
- the concept risk aversion and capital allocation to risky assets;
- pricing of risk in capital markets;
- value-at-Risk and GUISE;
- (Markowitz) portfolio theory (MPT) with exogenous risk;
- the Capital Asset Pricing Model;
- intrinsic value of equity and dividend discount model;
- empirical tests of the CAPM and pricing risk in securities markets;
- bond prices and yields;
- default risk and credit rating agencies;
- managing risk of bond portfolios (duration and convexity).

Learning outcomes:

After successful completion of this course students are expected to be able to:
- understand the main investment analysis formula’s and are able to combine them and apply them to a given situation;
- apply and interpret the concepts of pricing of risk in capital markets, in particular in the context of (Markowitz) Portfolio theory;
- choose, apply and interpret the Capital Asset Pricing Model, APT and multifactor models to a given situation;
- apply and interpret models for equity valuation, and discuss empirical evidence on equity returns;
- apply and interpret models for bond pricing and yields and how to manage (bond) portfolios;
- choose and apply different investment analysis methods to a given situation;

Activities:

Lectures and practicals. In addition, students will write an individual paper in which they apply methods taught during the course.

Examination:

Written exam.

Literature:

Investments” Global Edition - 11th edition - Bodie, Kane and Marcus (2018), McGraw – Hill - ISBN 978-1-260-08339-2