Class History: Security Analysis & Portfolio Management (Summer 2018)
Course: Security Analysis & Portfolio Management (Summer 2018)
Total classes: 40 (23 regular classes and 17 extra classes).
Class 1
May 15, Room 601, Time 2:45 - 4:29
What is Finance? Accounting vs. Finance. STEM vs. Business studies: advantages and disadvantages. Career opportunities in Finance. Freedom vs. skills. Value -- economic, market, book, intrinsic.
Class 2
May 17, Room 601, Time 2:30 - 4:00
Values and their types. Asset and its classifications. Investment.
Class 3
May 22, Room 601, Time 2:00 - 3:35
Approaches of valuation: top down and bottom up. Valuation theory. RRR. Investment decision. Dhaka stock exchange.
Class 4
May 24, Room 601, Time 2:00 - 3:30
Capital market: how does it work? Time value of money. Present value. Relationship between present value and intrinsic value. Various types of fixed income securities.
Class 5
May 29, Room 601, Time 2:00 - 3:15
Preferred stock and its characteristic. Dividend equalization fund. Mode of payment (number of payments per year). Math: Finding the intrinsic value of preferred stocks and making a decision based on 15 percent rule.
Class 6
May 31, Room 601, Time 1:45 - 3:15
Perpetuity and its characteristics. Intrinsic value of perpetuity. Growing perpetuity and its intrinsic value. PVIF and PVIFA. Bond and its classification. Intrinsic value of a simple annual bond and applying 15 percent rule.
Class 7 (Extra), Class 8 (Extra), Class 9 (Extra)
June 3, Room B2-301,
Time slots:
12:00 - 1:00
1:00 - 2:00
2:00 - 2:50
Calculations of the intrinsic value of a monthly payment bond. Bond valuation using shortcut procedure. Zero coupon bond. Selling at discount, premium and at par. Valuation of a zero coupon bond. Current yield and YTM -- interpretation. Current yield, approximate YTM, after tax current yield, after tax YTM calculation. Treasury STRIPS. How do perpetuities work? Comparative risk premium of a bond, a debenture, and a common stock issued by the same company.
Class 10 , Class 11 (Extra)
June 5, Room 601,
Time slots:
1:50 - 2:50
2:50 - 3:50
Protection mechanism for bond, debenture, perpetuity, preferred stock, and common stock: sink fund, collateral, dividend equalization fund. Common stock valuation approaches. Calculation of gH and gS (math). Calculation of intrinsic value of a common stock using Gordon growth model. Mathematical problems on Gordon growth model: (1) both gH and gS, (2) only gS.
Class 12 , Class 13 (Extra)
June 7, Room 601,
Time slots:
2:00 - 3:00 (class 12)
3:00 - 4:20 (class 13)
Multi stage Gordon growth model and its applications. Valuation of common stock using historical average P/E approach. Share valuation using industry averages P/E approach (shortcut procedure).
(Last class before the Eid vacation)
Announcement: Model test on June 27. Syllabus: mathematical problems of chapter 2 and 3.
Class 14
June 26, Room 601, Time: 2:40 - 4:10
Review of the mathematical problems from the midterm Syllabus.
Class 15 , Class 16 (Extra)
June 27, Room 702,
Time slots:
3:30 - 4:30 (class 15)
4:30 - 5:35 (class 16)
1st model test.
Class 17 (Extra)
June 27, Room 702, Time: 6:00 - 6:50
Solution to the 1st model test.
Midterm Exam
July 7, 2018. Time: 5:00 PM.
Syllabus: Chapter 1, 2, 3.
Class 18
July 10, Room 601, Time: 2:35 - 3:35
Sources of risk: nine type of risks associated with securities. The concept of risk premium. Arbitrage-free approach of bond valuation.
Class 19
July 12, Room 602, Time: 2:45 - 3:50
What is return? Various types of returns: holding period return, average return, TTM return.
Class 20
July 17, Room 601, Time: 2:20 - 3:05
The meaning of risk in finance. Various proxies of measuring risk.
Class 21
July 19, Room 601, Time: 2:35 - 4:05
Measuring risk of a stock using standard deviation from month-end closing price. Coefficient of variation.
Class 22
July 24, Room 601, Time: 2:30 - 4:00
Security market indices. Usages of market indices. Factors to consider when constructing an index. Unweighted index (math).
Class 23
July 26, Room 601, Time: 2:00 - 3:05
Expected return and risk calculation based on a probability distribution of the expected price.
Class 24 (Extra)
July 26, Room 601, Time: 3:05 - 4:10
Stock split and reverse split. Market value of a stock. Price weighted index and adjustable divisor. Math: price weighted index.
Class 25, Class 26 (Extra)
July 31, Room 601
Time: 2:00 - 3:15, 3:15 - 4:05
Freely floating shares. Value weighted index. DJIA and its limitations. Indices of DSE. Differences between DSEX and DGEN. Beginning index value of DSEX and the reason behind this odd-looking value.
Class 27
August 7, Room 601
Time: 2:00 - 3:25
Market return and market risk. Risk free rate of return. Market risk premium. Beta. An introduction to CAPM. Equilibrium rate of return.
Class 28
August 9, Room 601
Time: 2:15 - 3:35
Historical alpha, expected alpha. Interpretation of alpha. Buy/sell decision based on alpha. Mathematical problems on alpha when market and stock related data are directly given.
Class 29 (Extra)
August 9, Room 601
Time: 3:50 - 4:55
Calculate beta, historical alpha, expected alpha only from historical data of 6 months. Make buy/sell decision based on calculated expected alpha. Interpretation of the result.
Class 30, Class 31 (Extra)
August 14, Room 601
Time:
2:10 - 3:30
3:30 - 4:30
Return of portfolios. Correlation vs. covariance. Risk of a 2-asset portfolio.
Class 32, Class 33 (Extra)
August 16, Room 601
Time:
3:00 - 4:30
4:50 - 6:00
Constructing 2-asset portfolio from raw data. The matrix method of SD calculation of 3-assets and multi-asset portfolio. Determinator of risk in a portfolio.
Class 34, Class 35 (Extra), Class 36 (Extra)
August 27, Room 702
Time:
11:30 -12:30
12:30 -1:30
1:30 -2:30
The concept of correlation. Efficient portfolio of two assets. Efficient portfolio of many assets. Feasible set. Efficient frontier. Math: constructing minimum risk portfolio only from month end price data, and finding the improvement factors based on CV.
Class 37
August 30, Room 701
Time: 2:00 -3:00
2nd Model Test.
Class 38 (Extra), Class 39 (Extra)
August 30, Room 701
Time:
4:00 -5:15
5:15 -6:30
Solution to the 2nd model test.
Class 40 (Extra)
August 30, Room 701
Time: 6:30 -7:45
Systematic and unsystematic risk. Diversifying the unsystematic risk. Feasibility of adding a new stock in an.existing portfolio (math). Various measures of portfolio performance.
Final Exam
September 8, 2018. Time: 4:30 PM.
Syllabus: Chapter 4, 5, 6, 7, 8.