Review Oct 19 2011

Review Oct 19 2011 - FINA 3104: Investment Analysis and...

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Unformatted text preview: FINA 3104: Investment Analysis and Portfolio Management Midterm Review Darwin Choi October 19, 2011 Midterm Announcements • Midterm: Monday, October 24, 7:30 ‐ 9:30pm – LTA We will post a Seating Plan on LMES later this week • Material: • Lecture 1 (Course overview) to Lecture 11 (APT and Multifactor Models), inclusive • Required Readings in the Syllabus • No questions on REUTERS and Optional Readings • Style (Similar to past midterms on LMES): • Total 120 points • Both conceptual questions and calculations • True/False 45 points, Short Questions 74 points Midterm Announcements • Exam is closed ‐ book, closed ‐ notes • Allowed to use: Pen or pencil, calculator • Not allowed to use: Phones, computers, etc. • Formulas (“Formula Sheet Fall 2011” on LMES) will be provided • Office Hours: • Wednesday Oct 19 2:30 ‐ 5pm • Thursday Oct 20 9am ‐ 12pm, 2:30 ‐ 5pm • Friday Oct 21 3:30 ‐ 5pm • Monday Oct 24 9am ‐ 12pm Environment Instruments Trading Returns Risk Allocation Selection CAPM & Index Models APT The Investment Process Lecture 1: Environment • What is an investment? • Current commitment of money (or other resources) Expect to reap future benefits • Current vs. future: Sacrifice now and get something back later • Expectation: The future benefits are uncertain 5 Lecture 1: Environment • Real Assets • Assets used to produce goods and services • Financial Assets • Claims on real assets • Primary Market • New issues of securities • Secondary Market • Already existing securities are bought and sold 6 Lecture 1: Environment • Why do we need financial markets? 1. Allocation of capital 2. Consumption timing 3. Allocation of risk 4. Separation of ownership and management 7 Lecture 2: Trading • Financial Instruments • Marketable vs. Non ‐ marketable • Primitive securities vs. Derivative securities • Securities Indexes • Price ‐ weighted, value ‐ weighted • How securities are traded • Secondary markets: direct search, brokered search, dealer markets, auction markets • Market orders vs. Limit orders • Buying on margin & Short selling 8 •...
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This note was uploaded on 11/27/2011 for the course FINA 3104 taught by Professor Darwin during the Spring '11 term at HKUST.

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Review Oct 19 2011 - FINA 3104: Investment Analysis and...

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