Investment Banking and Portfolio Management

Course Description:

The course emphasizes on the application of analytical methods and tools to actual securities for portfolio formation and analysis within a banking framework. Students attending this course are expected to acquire a fundamental background in finance and investments. The goal of the course is to become familiar with the theory and empirical evidence related to investment management through the financial institutions. Successful security analysis and portfolio management requires the development of a broad array of quantitative and qualitative skills, involving an analysis of both the investment instruments available in the capital market and the objectives and constraints of the ultimate investor.

Topics will include fundamentals of security valuation, the functioning of capital markets, optimal portfolio construction, elements of investor psychology, performance evaluation, risk measurement and the role of banks in the whole process. We’ll emphasize stocks, but other investments such as fixed income securities and financial derivatives will also be considered. Understanding the principles of investment management requires a solid grounding in statistics.  Familiarity with statistics should extend through covariance, correlation, and regression analysis.

Course Learning Outcomes:

Upon successful completion of this course, students will be able:

• Have a good overall understanding of Financial Markets, Instruments and Institutions.
• Understand the characteristics of different financial assets such as money market instruments, bonds, and stocks, and how to buy and sell these assets in financial markets.
• Learn about techniques used in constructing and managing Investment Portfolios.
• Understand the basics of managing mutual funds and measuring its return.
• Understand the benefit of diversification of holding a portfolio of assets, and the importance played by the market portfolio.
• Apply principles of portfolio theory to construct optimal complete portfolios.
• Use asset pricing models to identify correctly priced and mispriced investments.
• Apply principles of bond valuation to construct immunized portfolios.