The focus of this course is on the financial theory for making investment decisions and the factors that influence the pricing of financial assets. The main topics include portfolio theory, securities markets instruments, risk and return, modern portfolio concepts, common stock valuation, market efficiency, derivative securities.

On successful completion of this course, participants should be able to:

• Discuss the principal types of investments
• Describe the investment process and types of investors
• Describe the most common types of short-term investments
• Review the key aspects of the globalization of securities markets and discuss the importance of international markets
• Explain long purchases, margin transactions, and short sales
• Describe the basic types of orders, online transactions, transaction costs, and the legal aspects of investor protection
• Calculate real, risk-free, and required returns
• Review the traditional and modern approaches to portfolio management
• Explain the capital asset pricing model (CAPM) conceptually, mathematically, and graphically
• Discuss the basic features of common stocks, including issue characteristics, stock quotations, and transaction costs
• Gain a basic appreciation of the procedures used to value different types of stocks, from traditional dividend-paying shares to more growth-oriented stocks
• Compute and use technical trading rules for individual stocks and the market as a whole
• Analyze the different types of bonds and the kinds of investment objectives these securities can fulfill
• Use the Sharpe, Treynor, and Jensen measures to compare a portfolio’s return with a risk- adjusted, market-adjusted rate of return, and discuss portfolio revision.