Vision of the School of Business

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1 SYLLABUS PORTFOLIO THEORY & ITS APPLICATION F I N C F A L L S e m e s t e r 2012 T H E A M E R I C A N U N I V E R S I T Y I N C A I R O S c h l f B u s i n e s s D e p a r t m e n t f M a n a g e m e n t Aliaa Bassiuny Office: BEC P053 Off. Hurs: MR 9:00-10:00am and 1:00-2:45pm Telephne: (+202) [email protected] Curse Prerequisites: FINC 303 and FINC 404. Visin f the Schl f Business The Schl f Business sees itself becming glbally recgnized as the leading business schl cnnecting the regin and the wrld. Missin f the Schl f Business The Schl f Business strives t create an envirnment that fsters the develpment f principled and innvative business leaders and entrepreneurs wh can make a difference. Missin f the Department f Management Our missin is t develp business leaders wh are dedicated t the betterment f sciety by prviding a high quality business educatin t tp caliber students frm all segments f Egyptian sciety as well as frm ther cuntries while fcusing n cntinuus imprvement and a cmmitment t excellence in learning, intellectual cntributins and service. In supprt f this missin the department: Prvides a high quality cntemprary-style business educatin that blends a glbal perspective with natinal cultures and is relevant t the business needs f Egypt and the regin. Prvides prgrams that encurage the develpment f an entrepreneurial spirit that emphasizes creativity, innvatin, individual initiative and teamwrk Prvides a learning envirnment that fsters faculty/student cmmunicatin and prmtes lifelng learning and career develpment Encurages faculty develpment activities that imprve teaching, maintain cmpetence and that keep faculty current with ideas and cncepts in their field.

2 Seeks t develp a prtfli f intellectual cntributins t learning and pedaggy, t practice, and t the thery and knwledge base f the disciplines. AUC is an AACSB Accredited Institutin T read mre abut the benefits f attending an AACSB accredited university nline, g t: Curse Objectives Prtfli management is bth an art and a science. It is a dynamic decisin making prcess, ne that is cntinuus and systematic but als requires a great deal f judgment. The bjective f this class is prvide students with basic cncepts and mdels f financial thery and intrduces them t the evaluatin f quantity risk and return decisins. Prerequisites: Cmpetency Cverage In additin t the specific bjectives f the curse, the material and activities have been selected t aid students in their prgress tward achieving the fllwing departmental learning gals: Learning Gal Ethics: Each student will be able t define, analyze and evaluate ethical issues and the need fr scially respnsible rganizatins. Leadership: Each student will be able t demnstrate knwledge f effective leadership styles, teamwrk and cllabrative behavir. Cmmunicatin: Each student will demnstrate effective written and ral cmmunicatin skills. Entrepreneurship: Each student will be able t identify an entrepreneurial business pprtunity and write a value prpsitin statement. Level f Cverage = nt at all cvered 2= cvered t a limited extent 3= cvered t sme extent 4=cvered t a large extent

3 Teaching Methd and Guidelines The curse will cnsist f lectures, lab wrkshps, case discussins and a prject. Lectures will emphasize thery with numerical illustratins, while the hmewrk assignments and case studies will fcus n real wrld examples. The curse assumes that the student has a certain basic knwledge f finance, ecnmics and statistics. Even if we repeat tpics cvered in a curse such as FINC 303, FINC404, ECON 201, MACT 112 and ECON 216, we will cver the same much faster. Sme familiarity with a spreadsheet package, such as Excel, is essential fr tackling many f the hmewrk assignments and cases. The curse has a substantial theretical cntent. The wrklad will be quite substantial, and it is in yur best interest t attend each class and be regular with all assignments - this will ensure that yu d nt suddenly find yurself lagging t far behind the class. Yu are expected t keep in tuch with the daily happenings in the financial wrld thrugh jurnals and newspapers such as Wall Street Jurnal, Financial Times, dwjnes.cm, Frtune, Business Week, Frbes Magazine, The Ecnmist, Alam El Yum, El-Ahram ElEktsady and Business Tday just t name a few. 1. Sme Things Yu Must D Attend every single class Be n Time t Every Class! I take Attendance in First 5 minutes. Participate in class discussins (intelligently!) Familiarize yurself with Excel. Hand in yur hmewrk assignments n time in hardcpy in class. N assignments will be accepted. Keep track f deadlines and midterm dates Familiarize yurself with Blackbard and check the curse web site n Blackbard regularly fr updates, changes in syllabus, assignments, etc. The prblem sets and answer keys fr hmewrk assignments will als be put up there. Check yur s twice a day fr ntificatins. I will be sending yu s t yur inbx thrugh blackbard. I d nt check Blackbard Messages. If yu want smething me persnally. 2. Sme Things Yu Must NOT d Cllabrate n yur hmewrk assignments, midterm r final exam. Vilate the university plicy n academic hnesty - fr example, d nt attempt t plagiarize material frm the internet r ther resurces in rder t pass ff as yur wrk n the valuatin reprts. Yu may use financial data frm the internet, but make sure the data is free fr public use (r pay fr it!) and acknwledge each and every such surce yu use with detailed citatins. If yu have any questins abut whether yu can use sme particular resurce, ask me first befre yu prceed.

4 Text and Other Reading Materials Curse Textbk: Investments (BKM) by Zvi Bdie, Alex Kane and Alan Marcus, 8th ed., Mc-Graw Hill. Suggested Readings: A Randm Walk Dwn Wall Street: The Time-Tested Strategy fr Successful Investing by Burtn Malkiel 2011, W. W. Nrtn & Cmpany Other Materials: Yu may be assigned ther readings fr certain tpics as the curse prgresses. These will be made accessible t yu in advance f the specific class. Grading System Yur perfrmance will be evaluated n the basis f: 1. EXAMS (45%) MIDTERM exam (25%) FINAL exam (20%) The exams will test yur understanding f the cncepts rather than yur memry. They will be either numerical r bjective type, n derivatins, n essays. 2. HOMEWORK (10%) HW assignments will be handed ut and due back in a week, NO LATE SUBMISSIONS. HARCOPY ONLY DURING CLASS! D nt cllabrate n HW assignments - they will prvide invaluable practice fr the exams. If yu d, make sure yu credit t yur peers All Assignment are cunted in the grade. 3. ATTENDENCE & CLASS PARTICIPATION AND POP QUIZZES (10%) Yu are REQUIRED t ATTEND EVERY SINGLE CLASS Yu are REQUIRED t participate in class discussins (intelligently!) A prtin f yur participatin grade will be based n the 10 minute Investment Highlights will have in class. Mre infrmatin will be given n the first day. Unexcused Absents will be penalized heavily. Yu are allwed 3 unexcused absences; each extra absence will result in al ne-letter grade deductin. Maximum absences allwed t pass a curse are 8. Pp quizzes will be given if the instructr sees the students n participating actively in class. 4. CASE STUDIES (15%) Tw case studies will be given thrughut the curse f the semester. They shuld be slved individually and are due in a week s time. 5. PROJECT (20%).

5 Academic Dishnesty Yu are expected t be hnest in all f yur academic wrk. The University plicy n academic hnesty is distributed annually in the AUC Catalg. Instances f alleged dishnesty will be frwarded t the Student Judicial System. Ptential sanctins include failure in the curse and suspensin frm the University. If yu have any questins abut my expectatins, refer t the sectin n Things Yu Must NOT D r ask me The University Academic Integrity Plicy All students are expected t agree t and cmply with the University Academic Integrity Plicy, fund n the University Web site,which states Valuing the cncepts f academic integrity and independent effrt, the AUC expects frm its students the highest standards f schlarly cnduct. The University cmmunity asserts that the reputatin f the institutin depends n the integrity f bth faculty and students in their academic pursuits and that it is their jint respnsibility t prmte an atmsphere cnducive t such standards. Schedule and Tpics t be Cvered Tpic Intrductin Chapter/readings assigned fr this class Discussin The Investment Backgrund (Review frm 404) Ntes, Chapter 1,2,3,4 Statistical and Math Review Ntes, Handuts Security Analysis: Bnds (Review frm 404) Ntes, Chapters 14, 15, 16 Security Analysis: Equity (Review frm 404) Ntes, Chapters 18 Stck Market Indices Ntes, Chapter 3, Handuts Utility, Risk Aversin and Risk Premium Ntes, Chapter 6, Appendix Chapter 6 The Capital Allcatin Prblem Ntes, Chapter 7 Prtfli f Risky Assets and Diversificatin Ntes, Chapter 7 Tw Risky Assets and the Risk-Free Asset Ntes, Chapter 8 Asset Pricing Mdels Ntes, Chapter 9 Fund Creatin and Management Ntes, Chapter 4, Handuts Prtfli Perfrmance Evaluatin Ntes, Chapter 24