INTRODUCTION TO INVESTMENTS, PGP-1, TERM 3, 2018-19

Indian Institute of Management-Bangalore.

Course Objectives
The course is designed with the following specific objectives and learning outcomes:

a. To advance the understanding of fundamental concepts of finance, financial

markets and market participants.
b. To explain the structure of publicly traded financial assets and the global markets
in which they trade.
c. To evaluate the economic and industry environment in which companies operate
and develop and employ tools of financial analysis for examining company
fundamentals.
d. To understand the techniques of for valuing financial instruments.
e. To link theories of valuation to practical aspects of investing and portfolio
management.

Course Outline

During this semester, you will become familiar with the structure of domestic and
international financial markets and some of the securities traded therein. We will critically
examine qualitative concepts such as market efficiency, intrinsic value and risk. These
tools should enable you to build valuation models for common stocks and fixed-income
securities. You will also learn how professional financial analysts should evaluate
companies and how investment managers build diversified portfolios and assess portfolio
performance. The course concludes with some discussion of financial derivatives

Pre-requisites (if any): Corporate Finance (Term 2)

Pedagogy
The pedagogy involves lectures and discussion. Guest speakers will be invited for specific
topics as appropriate. The textbook is Z. Bodie, A. Kane, A. Marcus, Mohanty, Investments,
latest Edition, McGraw Hill.

In addition to the textbook, there are readings on my website, www.ramurapt.wordpress.com

as well as at www.ccmrm.org, the website of the Centre for Capital markets at IIM-B which
I chair. Lecture notes for each week will also be available on the website.

Please be aware that relevant business experience does not generally provide a substitute
for the analytical basis that pre-requisites to this course normally provide.

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 Expect to spend about two class periods of time in preparation for each class period.
 Focus in particular on chapter concept checks in the textbook. Solutions to these
appear at the end of the textbook. Attempt the suggested end-of-chapter problems.
 During class, I will spend more time on problems and concepts that require further
elaboration and may not discuss all the topics explicitly. As the semester evolves,
relevant topics of current interest may be discussed even if outside the textbook.
 Please come prepared to participate actively in the classroom. At times, there has
been substantial variation in the backgrounds of students enrolling in this course. Do
not let this keep you silent.

Course Evaluation & Grading Pattern

Grading for this course consists of two exams (35% each). A project with an individual and a group
component comprises the remaining 30% of your grade and will use the Bloomberg resources in
the Finance Lab. Details will be forthcoming.

Session-wise plan
Week Date / week Topic and Readings
No.
1 December 17- Introduction to markets, players, participants, risk
18, 2018 and return. BKMM Chapters 1 ,2.

2 December 24, Primary and Secondary Markets, structures and

29, 2018 practices.
3 December Secondary market structure and dynamics.
31, January 1. Investment companies and mutual funds.

4 January 7-8, Behavioral finance

2018 Technical analysis. Equity Valuation basics: Top
down, economic and industry analysis.
January 14- Equity Valuation, macro, economic and industry
5 15, 2018 analysis.

January 28- Fixed Income Markets – Introduction.

6 29, 2018

February 4, Fixed Income Continued.

7 February 5, Portfolio Analysis and Markowitz,
2018

8 February 18 Efficient Financial Markets.

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 February 19 Introduction to Option Markets.

February 25- Option strategies.

9 26, 2018 Presentations.

March 4-5, Futures Markets-Introduction, Structure and

10 2018 pricing.

MID-TERMS
JANUARY 19-24, 2018.

FINALS
MARCH 10-15, 2018.

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