...THE UNIVERSITY OF CALGARY THE HASKAYNE SCHOOL OF BUSINESS FNCE 759, L01 Investment & Portfolio Management Course Outline Fall 2012 INSTRUCTOR TELEPHONE OFFICE EMAIL Colin Jackson OFFICE HOURS WEBSITE LECTURE LOCATION LECTURE TIME By appointment only http://blackboard.ucalgary.ca Downtown Campus Room 432 Wednesdays 17:30 – 20:20 COURSE DESCRIPTION Theory and analysis of investment and portfolio management decisions. Evaluation of performance of individual and professional investors and portfolio managers. REQUIRED TEXTBOOK AND/OR MATERIALS Bodie, Kane, Marcus et al. Investments 7th Edition. McGraw-Hill Ryerson, 2011. FEE FOR EXTRA READINGS N/A CLASS PREPARATION & BLACKBOARD Lectures focus on the material presented in the textbook and general discussion relating to the topic(s) outlined in the lecture schedule. Students are expected to read the assigned text chapters and readings before class, and be prepared for class discussion. Important information and additional readings for FNCE 759, L01 are posted on Blackboard. Students should regularly check the Announcements section of Blackboard for ongoing notices. Your instructor may not necessarily cover all of the materials in the chapter, but it is the responsibility of the student to understand the concepts presented in the textbook and lectures. If you are unsure of any of the concepts, please take the initiative to ask the instructor during class. CONTACTING YOUR ...
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...Seagate Technology Buyout Case Analysis FNCE 601, Chenxi Zhu (00311724) September 28, 2015 Seagate was one of the world’s largest manufacturers of computer disk drives and related data storage devices. Besides the disk drive operations, Seagate’s main asset was a significant stake in Veritas’s common stock. The entire market capitalization of Seagate was approximately $14.6 billion (stock price: $64.25, shares outstanding: 227.2 million). However, the market value of the Seagate’s stake in Veritas was about $21.6 billion (stock price: $168.69, shares outstanding: 393.6 million). It seemed that the market assigned no value to Seagate’s disk drive business, despite its large size and market-leading position. Therefore, we can tell Seagate’s stock price was underestimated. There are two main reasons to cause the arbitrage: * Value of Seagate’s stake in Veritas’s common stock would be significantly reduced due to high tax liability if it ever tried to sell these shares. * Stock market favored Internet businesses and companies that manufactured cheaper data storage hardware. And the market did not favor disk drive business because of its volatile revenue, short-life cycle as well as heavy capital needs in R&D investment. Therefore, Seagate’s core disk drive operations were not receiving full value in the stock market. In addition, there was another soft issue contributed to the low stock price of Seagate’s shares. Seagate’s employee held stock options and restricted...
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...FNCE 370v8: Assignment 4 Assignment 4 is worth 5% of your final mark. Complete and submit Assignment 4 after you complete Lesson 12. There are 12 questions in this assignment. The break-down of marks for each question is presented in the table below. Please show all your work as this will help the marker give you part marks as well as serve as a good study aid as you prepare for the Final Examination. Question | Marks Available | Reference | 1 | 5 | Lesson 10 | 2 | 5 | Lesson 10 | 3 | 5 | Lesson 10 | 4 | 5 | Lesson 10 | 5 | 10 | Lesson 11 | 6 | 15 | Lesson 11 | 7 | 10 | Lesson 11 | 8 | 10 | Lesson 11 | 9 | 5 | Lesson 12 | 10 | 10 | Lesson 12 | 11 | 10 | Lesson 12 | 12 | 10 | Lesson 12 | Total | 100 | | 1. Explain the interactions among market efficiency, capital budgeting, and the cost of capital. (5 marks) In order to make good capital budgeting decisions the manager should use a correct cost of capital which is determined by the use of funds. The NPV in an efficient market will be zero which indicates that managers should explore positive NPV projects to to determine the cshflow estimate and the source of value. When the market is efficient the cost of capital in the market is a good estimate of the return required. (5 marks) a. Give two examples of anomalies in the financial markets. Seasonality of stock prices (January Effect) which is when firms with small capitalizations have high returns in the first days of the new year...
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...FACULTY OF BUSINESS BURSARY Donor: This award is generously funded annually by friends and alumni of the Athabasca University Faculty of Business Value: $1000 Number: One (1) Description of Bursary Awarded annually to a student currently enrolled in a Faculty of Business degree program who has completed at least 12 AU credits in the last 12 months. Applicants must have a cumulative AU GPA of 3.0 or greater. Recipients will be selected based on financial need and may only receive this award once. Conditions of Eligibility An applicant must meet the following criteria to be eligible to apply for this award: * Current AU Faculty of Business degree program student * Completion of 12 AU credits, or more, in the last 12 months * Have a cumulative AU GPA of 3.0 or greater * Has never received this award * Submission of the fully completed application, and required enclosures, to the Student Awards Administrative Assistant, Office of the Registrar at AU, by October 15, of the current year Application Process Complete the application form by typing your answers. Submit the fully completed application by fax to 780-675-6174 or mail to: Athabasca University Student Awards Unit Office of the Registrar 1 University Drive Athabasca, Alberta, T9S 3A3 *It is not recommended that applications be sent by email, as they will not be received by a secure server. * Application Submission Deadline October 15th Bursary Notification ...
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...FNCE 100 Corporate Finance Discounting 1 First Basic Principle of Finance A dollar today is worth more than a dollar tomorrow » But how much more?.. 2 1 1 Topic Overview Compounding & Future Value Discounting & Present Value Multiple Cash Flows “Special” Streams of Cash Flows » Perpetuities » Annuities Interest Rates » APR versus EAR 3 Lottery Example You just won a lottery which gives you two options: (1) Receive $100 today (2) Receive $120 in one year $100 $120 0 Money Time 1 Which option should one take? 4 2 2 Lottery Example: Future Value If you take money now, you can put them in the bank at the current interest rate “r” of 5%, and have the following amount in one year: V0=$100 0 Money Time V1=$105 1 The amount in one year – future value (FV) – is calculated as FV = Principal + r × Principal = $100 + 0.05 × $100 = $105 Which option should we take now? 5 Lottery Example: Present Value Alternatively, we can compare the value at time 0: V0=$114.3 0 Money Time V1=$120 1 The amount in a given year – Present Value (PV) – is: $120 = PV+ r × PV = PV+ 0.05 × PV → PV = $114.3 Which option should we take? 6 3 3 Basic Terminology Timeline: a linear representation of the timing of potential cash flows. Two types of cash flows: 1. Inflows (i.e., money we get) are represented by positive numbers ...
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...before or by November 17th to the Module 5 Drop box. Covers material for Modules 5 to 8. Topics: Depository Institutions, Risk Management, Insurance Cos. & Pension Funds & Mutual Funds & Investment Firms Hi all. Here is Exam 2, which is a short take-home, open-book exam. You are on your honor to do the exam on your own without the help of others—please type or sign your name below in accordance with the honor code below to turn in with your exam. Exam 2 is a nice review for Modules 4 to 8. In Module 5 see the FNCE3600ReviewProbsforExam 2 Review File with review problems & answers (also see lecture notes & review questions for modules 4 to 8). Instructions: Please turn in your exam as a word file with your answers typed below each question or if you prefer writing your answers, scan your pages and turn your exam in as a pdf file. Be sure to show your work for each problem to receive credit for the problem, and to save your file with your name at the end (such as for me: FNCE3600Ex2cooperman), and upload the file to the Drop Box for Exam 2 in Module 5 any time before or by midnight, November 17th--If you prefer to hand-write your exam, please scan the exam as a file to upload or you can deliver it to my office, B-School, Rm. 4207 (fine to leave it under the door if I’m not there) by November 17th. I can’t answer specific questions or let you know whether your answers are correct or incorrect, but will be happy to answer any general questions about how to do problems...
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...FNCE papern the balance sheet. The company lacks sufficient amount of cash to fund the investment so it needed to engage in debt financing to meet its goal. In the 2007 financial statements, HPL had Net Working Capital of $102.5 Million so it has the capital means to pay off creditors, whichallows HPL to use debt financing. Historically, HPL has been a very conservative company and refrained from using debt as a means to finance projects. The current Debt/Equity for HPL’s industry is 49.1%. If HPL used all debt to finance this investment, its Debt/Equity would be 18.7% (See Appendix B); if it used cash in conjunction with debt, the Debt/Equity would be 16.8%. In both cases, the Debt/Equity is closest to 17.6% which points to a WACC of 9.45%. If the firm undertook a more substantial amount of debt, the cost of the debt would not continue to be 7.75% so it is beneficial for HPL to keep its debt low. n the balance sheet. The company lacks sufficient amount of cash to fund the investment so it needed to engage in debt financing to meet its goal. In the 2007 financial statements, HPL had Net Working Capital of $102.5 Million so it has the capital means to pay off creditors, whichallows HPL to use debt financing. Historically, HPL has been a very conservative company and refrained from using debt as a means to finance projects. The current Debt/Equity for HPL’s industry is 49.1%. If HPL used all debt to finance this investment, its Debt/Equity would be 18.7% (See Appendix...
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...w 9B07N002 ENCANA CORPORATION: THE COST OF CAPITAL Ken Mark wrote this case under the supervision of Professors James E. Hatch and Larry Wynant solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2007, Richard Ivey School of Business Foundation Version: (A) 2010-06-18 OVERVIEW Barb Williams and Steven Lau, two managers from service firms, were attending a week-long executive education course at a well-known business school in February 2006. In preparation for the next day’s classroom session, both had read an article dealing with the cost of capital. As they vigorously discussed the concept, it became clear they had several differences of opinion. Their assignment was to calculate the cost of capital for EnCana Corporation (EnCana)...
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...CASE: A-197 DATE: 02/05/09 BAIDU.COM, INC.: VALUATION AT IPO Since its official launch in January 2000, Baidu.com, Inc. (Baidu) quickly grew to become the leading Internet search engine in China. After three rounds of private funding, Baidu registered to go public on the NASDAQ Stock Market (Ticker Symbol: BIDU) on August 5, 2005. (See Exhibits 1 and 2 for a listing of Baidu’s private funding sources and pre-IPO share allocations.) The initial public offering (IPO) turned out to be one of the highest-profile debuts since the Internet bubble burst in 2000. The stock price jumped 354 percent on the first day of trading and closed at $122.54, valuing the company at about $3.96 billion based on 32.3 million shares outstanding. While the market showed strong enthusiasm for the stock, Baidu’s public offering nevertheless generated much debate in the investment community about the underlying value of the firm. Furthermore, concerns were raised about whether or not Baidu was able to sustain its growth rate and exceed investor expectations after the IPO. Factors leading to this uncertainty included: the state of the Internet-paid search market in China, the expected growth in the marketplace, the competitive landscape, and the strength of Baidu’s business model and strategic position. BACKGROUND ON CHINA’S ADVERTISING AND ONLINE ADVERTISING MARKETS Advertising Market From 1995 to 2005 China’s advertising market grew at a compounded annual growth rate (CAGR) of 17...
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...Assignment 1 FNCE 4467 What exchange rate regime do you think the Bank of China followed until July, 2005? Justify your opinion. The monetary policy framework of China was the monetary aggregate target in which the exchange rate arrangement was the Crawl-like arrangement. The de facto monetary policy framework was an exchange rate anchored to the dollar (Brean, Eun, Resnick, 2014). As shown in figure 1 during 2003 to mid-2005 the Chinese Yuan exchange rate was fixed with the USD at around 8.28 Yuan/Dollar. The Chinese fixed exchange rate against the U.S dollar was already set more than a decade ago. Furthermore, by having a fixed rate, the Peoples’ Bank of China (PBOC) made China able to maintain its goods at a lower price compared to the rest of the world, which help them reach a faster economic growth and great foreign excess reserves (China Fixes Value of Yuan, 2003). Figure 1 Figure 2 What regime do you believe the Bank of China was following from July, 2005 to July, 2008? Justify your opinion. The Bank of China followed the float rate regime from 2005 to 2008. In which the exchange rate is tied to a basket of currencies in which U.S dollar, euro, yen, and Korean won were the main ones. The regime allowed movement up to +/- 0/5% (Frankel, 2009). as seen in figure 3, the floating regime created volatility in the Yuan as seen in the upward trend of the daily exchange rate USD/RMB compared to figure 1 between 2003-05. Figure 3 ...
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...| People Data | Name | : | Kadzinga, Steven Tawanda | ID | : | 2013050011 | Birthday | : | 22/08/1991 | Assessment Data | Program | : | Bachelor of Business Administration Accounting | Center | : | Main Campus | Bulletin | : | 2010-2012 Bulletin | Date Start | : | 01/05/2013 | Date End | : | 31/12/2017 | Basis of Adm. | : | 2 'A' Levels Plus 6 'O' Levels | Observation | : | | Advisor | Name | : | Ndlovu, Ivonne Lec - Lecturer | Title | : | | Academic Variables | Admission Status | Date | Type | Document | 01/05/2013 | Regular | 1 | | Academic Status | Date | Type | Document | 01/05/2013 | Active | 1 | | Documents Control | Academic Record | 2013 1st Semester :: Main Campus | Mode / Type / Cond | Crd. | Grd. | Qpt. | | | MATH | 181 | Business Algebra | Reg / Core / regular | 3.00 | C | | | | INSY | 110 | Computers and Business Information Systems | Reg / Core / regular | 3.00 | B | 7.00 | | | CONV | 101 | Convocation [1st Year 1st Semester] | Reg / Core / regular | 0.00 | S | 0.00 | | | ACCT | 111 | Financial Accounting 1A | Reg / Core / regular | 4.00 | C | 8.00 | | | ORIE | 100 | Orientation | Reg / Core / regular | 0.00 | S | 0.00 | | | RELT | 215 | Philosophy of Christian Education | Reg / Core / regular | 2.00 | | 0.00 | | | MGMT | 155 | Principles of Management | Reg / Core / regular | 3.00 | B+ | 7.00 | | | ECON | 215 | Principles of Microeconomics | Reg / Core / regular | 3...
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...Investment Principles and Analysis Trinity University FNCE 3352 Spring 2010 INSTRUCTOR: Carl M. Hubbard, Ph.D., CFA Office: CGC N3l6; phone 999-7283, carl.hubbard@trinity.edu OFFICE HOURS: 9:30 – 11:30 MW; 2:30 – 4:00 TTh; Other times available by appointment. TEXTBOOK: Zvi Bodie, Alex Kane, and Alan J. Marcus. Essentials of Investments, 7th Edition. New York: McGraw-Hill, 2008. CALCULATOR: Texas Instruments BAII Plus Calculator COURSE OBJECTIVES The learning objectives for students in this course are: (l) improve your understanding of financial securities and markets, (2) develop the ability to analyze investment companies, common stocks, and bonds for investment decisions, (3) understand how options are valued and how option contracts are used in hedging and speculating, (4) understand how to apply security analysis techniques in relatively efficient capital markets, and (5) gain practical experience in trading securities. The prerequisite for this course is the completion of FNCE 3301 with a grade of C- or better. REQUIREMENTS OF THE COURSE 1. Complete the assigned readings and problems. 2. Attend and participate in each class meeting. 3. Complete the security analysis project. 4. Complete the three examinations as scheduled. READING AND PROBLEM ASSIGNMENTS The reading and problem assignments are designed to achieve the goals of the course and are to be completed in preparation for the discussion of that...
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...Investment Principles and Analysis Trinity University FNCE 3352 Spring 2010 INSTRUCTOR: Carl M. Hubbard, Ph.D., CFA Office: CGC N3l6; phone 999-7283, carl.hubbard@trinity.edu OFFICE HOURS: 9:30 – 11:30 MW; 2:30 – 4:00 TTh; Other times available by appointment. TEXTBOOK: Zvi Bodie, Alex Kane, and Alan J. Marcus. Essentials of Investments, 7th Edition. New York: McGraw-Hill, 2008. CALCULATOR: Texas Instruments BAII Plus Calculator COURSE OBJECTIVES The learning objectives for students in this course are: (l) improve your understanding of financial securities and markets, (2) develop the ability to analyze investment companies, common stocks, and bonds for investment decisions, (3) understand how options are valued and how option contracts are used in hedging and speculating, (4) understand how to apply security analysis techniques in relatively efficient capital markets, and (5) gain practical experience in trading securities. The prerequisite for this course is the completion of FNCE 3301 with a grade of C- or better. REQUIREMENTS OF THE COURSE 1. Complete the assigned readings and problems. 2. Attend and participate in each class meeting. 3. Complete the security analysis project. 4. Complete the three examinations as scheduled. READING AND PROBLEM ASSIGNMENTS The reading and problem assignments are designed to achieve the goals of the course and are to be completed in preparation...
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...FNCE 6330 – Fall 2012 Class portfolio project, part I Due: August 27 Blackboard folder: Project, Parts I&II\Portfolio Project, part I This project has three goals. The first is to compare (contrast?) the investment practices of eight legendary investors to the theoretical methods considered in this class. The second is to give you an opportunity to work with real data, albeit over an unrealistically short time horizon. The third and most important goal is that the investor and stock selection process be interesting and fun. Please do not let it turn into a huge time commitment. The assignment is as follows. Part I 1. Go to the Project folder on our website. There you will find links to the biographies of 8 legendary investors. The chapters describing the investors come from John Train's books, The Money Masters and The New Money Masters. Browse the investor profiles and select an investor that interests you. 2. Read the chapter that describes your chosen investor. 3. Choose one stock that reflects your investor's stock selection style. Links to helpful stock-screening websites can be found in the Webliography on eCollege or External Links on Blackboard. Your stock's price must be reported on the Yahoo! Finance web site (link in Webliography or External Links) and have weekly price data going back to July 5, 2011. 4. Go to finance.yahoo.com and download the weekly price series for your stock. To do this, enter your stock's ticker symbol in...
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...FNCE 101 Problem Set #3 Due: 11-5-12 1. A) The private savings would not change, in the long-run, because since consumers tend to be consumption-smoothers, there would be a natural switch from the consumption of foreign goods to the consumption of domestic goods. However, in the short-run, there would be a decrease in savings because the demand for domestic goods would increase thus increasing domestic prices and since consumers are consumption-smoothers, they would dip into private savings, decreasing national private savings. The Domestic Investment would increase because there’s an incentive to invest in domestic assets because of the inevitable increase in production of domestic goods (increase in exports). The gov’t budget deficit would decrease because more domestic production would require less government spending to stimulate the U.S. economy. B) It will not necessarily decrease the current account deficit because other factors, such as net exports, net factor payments and net unilateral payments can outweigh the decrease in imports. Also, if the foreigner who was previously importing the good has a perfectly inelastic demand for American goods, this will not change their demand for American exports and therefore not change the current account deficit of the United States. 2. A) Debit- When the dollars were converted to euros because there is an increased demand for the foreign currency/ Credit- exchanged at a German bank because now the foreign bank is...
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