IM Lecture 1 chp4.pptx - INVESTMENT MANAGEMENT...

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INVESTMENT MANAGEMENT FIN60604/BUSF2444 Lecturer: Dr. NATHRAH YACOB Phd Finance, Msc. Finance, BSc. Finance Room E9B.04 ext. 5676 Email: [email protected] Consultation : by appointment 4 CREDIT HOURS (2 hours lecture + 2 hours tutorial) Textbook: Analysis of Investments and Management of Portfolios, Reilly Brown, 10 th ed.
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ASSESSMENTS MID TERM TEST (20%) 10 MCQs & 5 STRUCTURED QUESTIONS TOPIC 1- 3 Date: 29th Sept 2017 10am-12pm (Fri) Venue: LT21 GROUP ASSIGNMENT (30%) 4-5 MEMBERS IN A GROUP FROM THE SAME TUTORIAL GROUP DUE 23/11/2017, Thursday 2.00pm FINAL EXAM (50%) Covers only 5 topics 5 structured Questions, Choose only 4 (25 marks each question) Past Performance March 2015 (193 students) – 5 barred, 26 (13%)Fs, 27 As (14%) August 2015 (218 students) – 0 barred, 13 (6%) Fs, 25 As (11%) March 2016 (172 students) – 3 barred, 33 (19%) Fs, 16 As (9%) August 2016 (215 students) – 0 barred, 13 (6.5%)Fs, 25As (12%) March 2017 (123 students) – 0 barred, 9 (8%) Fs, 13% 16As (13 %) 4-2
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Lecture 1 CHAPTER 4 : SECURITIES MARKETS: ORGANIZATION AND OPERATION
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What is INVESTMENT? 4-4 An investment is an asset or item that is purchased with the hope that it will generate income or will appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will be sold at a higher price for a profit.
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What Is A Market? Basic Concepts It brings buyers and sellers TOGETHER to aid in the transfer of goods and services It DOES NOT need to have a physical location The market does not necessarily have to own the goods and services It can deal in any VARIETY of goods and services Both buyers and sellers benefit from the market 4-5
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What Is A Capital Market? 4-6 Capital markets are markets for buying and selling equity and debt instruments. Capital markets channel savings and investment between suppliers of capital such as retail investors and institutional investors , and users of capital like businesses, government and individuals.
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Characteristics of a Good Market 4-7 Availability of past transaction information must be timely and accurate Liquidity Marketability Price continuity Depth Low transaction costs: Internal efficiency Rapid adjustment of prices to new information: External efficiency
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Types of capital markets Primary markets Market where new securities are sold and funds go to issuing unit (IPOs) 4-8 Corporation Investment Bank Investors $$$ $$$ Shares Shares
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Primary Capital Markets 4-9 Corporate Bond and Stock Issues Corporate bond issues are almost always sold through a negotiated arrangement with an investment banking firm that maintains a relationship with the issuing firm.
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