UNIVERSITI SAINS MALAYSIA

School of Management

COURSE DESCRIPTION:
AFW369E is an introductory investment course. The course will expose
students to the investment alternatives available and to the theory and
practice of investments and portfolio management. The course covers the
primary financial securities stocks, bonds, and derivatives, and methods
for combining these underlying assets into a portfolio.

BACHELOR OF MANAGEMENT (HONOURS)

Semester I, 2016/2017

Broadly, the class lectures will cover the modern developments in

investments and portfolio theory, the portfolio management process, asset
pricing models, implications of efficient capital markets for investments,
various techniques for valuing stocks and bonds, and various evaluation
methods of portfolio performance. Students will have an opportunity to
apply the concepts learned in class through an investment portfolio
management project.

COURSE SYLLABUS
AFW369E / 4
SECURITIES INVESTMENT & PORTFOLIO MANAGEMENT
PELABURAN SEKURITI & PENGURUSAN PORTFOLIO

COURSE OBJECTIVES:

Instructor:
Phone/Email:
Office:
Class:
Tutorial:
Office Hours:

The main objective of the course is to enable students to acquire the

analytical skills necessary to conduct valuations of equities, fixed-income
securities, and alternative investments through the study of portfolio
theory and asset-pricing models. This learning process leads to an
understanding of the concept of portfolio management and the importance
of diversification in controlling portfolio risk. Specifically, the course will
provide instruction in the following broad topics:

Dr. Hooy Chee Wooi

(604) 6533889 / cwhooy@usm.my
SOM, Room 118
Tuesday, 2.00 pm 3.50 pm [DKF]
To be determined.
Wednesday 2pm-4pm
Thursday 2pm-4pm

1. The basic theory and practice of investing and investment choices;

2. The four-step portfolio management process;
5

 Investments: An Introduction by Herbert B. Mayo, 8th Edition,

Thomson-South Western, 2006.

3. The concept of diversification in an investment setting;

Module 10: Asset and Funds Management by Securities

Commission (Malaysia), 1999.

4. Market efficiency and investment performance evaluation.

LEARNING OUTCOMES:
After completing this course, students are expected to be able to
accomplish the following:
1. Understand how markets value securities;
2. Apply portfolio theory to the creation of an efficient portfolio;
3. Be able to analyze the risk and return relations in financial
investments;
4. Be able to apply various techniques for valuing stocks, bonds and
derivatives;
5. Manage a portfolio given specific risk parameters
6. Evaluate portfolio and portfolio manager performance;
MAIN TEXT:

Course
O
b
je
ct
iv
e

Learning
O
ut
co
m
e

Instructional & Learning Technique

1, 2

1 (75%) ; 2 (25%)

2, 3

1 (65%) ; 2 (15%) ; 3 (10%); 5 (10%)

4, 5

1 (60%) ; 2 (15%) ; 3 (10%); 5 (15%)

5, 6

1 (50%) ; 2 (15%) ; 3 (10%); 5 (15%);

6 (10%)

COURSE EVALUATION:

Essentials of Investments by Zvi Bodie, Alex Kane, and Alan J. Marcus,

9th Edition, McGraw Hill/Irwin, 2013. [STOCK-TRAK certificate number
attached]

OTHER USEFUL TEXT:

Investments: Analysis and Behavior by Mark Hirschey and John
Nofsinger, McGraw Hill/Irwin, 2010/2008.

Instructional & Learning Techniques:

1. Lecture
2. Tutorial
3. Problem-based learning
4. Case study
5. Project
6. Project presentation
7. Computer laboratory
8. Library search
9. Industrial training

Component

COURSE COMPONENT DESCRIPTION:

Percentage

Group Assignment
STOCK-TRAK Portfolio
Simulation

10%

Quizes

10%

Mid-Semester Examination

20%

Final Examination

60%

Course Component

Learning
L
ev
el

Instructional & Learning

Techniques

Group Assignment

2, 3, 5

1, 2, 3

Test (Quizes)

2, 4, 5

1, 2, 3

Mid-Semester Examination

1, 2, 3

1, 2, 3

Final Examination

1, 2, 3, 4,
5,
6

1, 2, 3, 5`

Group Assignment STOCK-TRAK Portfolio Simulation

All students (in group basis) are required to conduct the STOCK-TRAK
portfolio simulation to gain some valuable insights about
investments.
The STOCK-TRAK portfolio simulation will allow you to buy and sell
Malaysian common stocks, as well as certain international stocks.
The STOCK-TRAK will allow you to place, buy or sell limit
orders. The beginning and ending trading dates allotted for this
assignment are 4 September, 2016 (Tuesday) and 29 November,
2016 (Tuesday), respectively.
Please see attached handout for details of STOCK-TRAK Portfolio
Simulation framework.
Mid-Semester Examination
Time:
2 hours
Type of questions:
Multiple Choice
Coverage:
Topics covered in Lectures 1 through 6.
Learning level:
Memory recall, understanding and application.
Note: There will strictly be NO make-up exam for anyone.

Final Examination
Time:
Type of questions:
Coverage:
Learning level:

Learning Level:
1. Memory recall
2. Basic understanding
3. Absolute understanding
4. Analysis
5. Application
6. Synthesis

3 hours
MCQs and essay-type (including calculation)
Comprehensive
Memory recall, basic and absolute undersatnding,
analysis and synthesis.

TENTATIVE COURSE SCHEDULE:

Lecture

Topic

INTRODUCTION:
Course Outline / Objectives and Syllabus.

PART 1: ELEMENTS OF INVESTMENTS

Investment Background

Asset Classes, Financial Instruments and

Securities Markets

Reference

Tutorial

Assignment

Syllabus + Handout
on STOCK-TRAK
Project

Introduction to STOCK-TRAK Portfolio Simulation.

BKM Chap 1
SC Chap 1

Tips: At this point, students are expected to registered

online using the account number you have been assigned
and the certificate number attached with the textbook
and get familiar with STOCK-TRAK.

BKM Chaps 2-3

T1 Case Study,
and STOCKTRAK Q&A

Tips: At this point, students are expected to make their

first trading and each group need to submit a sector
selection memo.

PART 2: PORTFOLIO THEORY:

Risk and Return

BKM Chap 5

T2 Calculation
questions

Tips: At this point, students are expected to invested at

least 20% of their cash

Efficient Diversification

BKM Chap 6

T3 Concept and
calculation
questions

Tips: At this point, students are expected to understand

the possible implications on their portfolios in case of
changes in interest rates, exchange rates, political
situation, etc.

Capital Asset Pricing and

Arbitrage Pricing Theory

BKM Chaps 7
SC Chap 8

T4 Concept and
calculation
questions

Tips: At this point, students are expected to have

invested at least 10 tradings. Students may start to trade
foreign shares for diversification.

The Efficient Market Hypothesis

(MID-SEMESTER EXAM, week 1-6)

BKM Chaps 8

Tips: At this point, students are expected to have

invested at least 50% of their cash.

PART 6: ACTIVE INVESTMENT

MANAGEMENT
Portfolio Performance Evaluation
Globalization and International Investing

BKM 18
SC Chaps 3-4,7,12

T5 Concept and
Calculation
questions
T6 Concept
questions

BKM 19

T7 Calculation
questions

BKM Chaps 12

T8 Concept
questions

Tips: At this point, students are expected to understand

the impact of foreign macroeconomic changes on
domestic market.
Tips: At this point, students are expected to see results
from international diversification.

8
9
10

PART 4: SECURITY ANALYSIS

Macroeconomic and Industry Analysis

11

Guess Lectures (CFA career talk)

12

Equity Valuation

Presentation
BKM Chap 13
Presentation
SC Chap 7

13

Guess Lectures (SIDC / CIMB)

14

Revision

T9 Calculation
questions

Tips: At this point, students are expected to revise their

respective trading strategies, if deem necessary.
Tips: At this point, students are expected to conduct
discussion among the group members on the outcome of
different trading strategies based on the base sector that
they have decided.
Tips: At this point, the group is expected to prepare a
summary report of the underlying reasoning for
individual investment strategies, evaluating group
performance as a whole contrasted with the benchmark
index and suggesting alternative ways in order to
improve performance of their portfolios.
Each groups are required to present and submit the Final
Report during the tutorial hour.