Maricopa Community Colleges  FIN120   19946-99999 
Official Course Description: MCCCD Approval: 05/24/94
FIN120 19946-99999 LEC 3 Credit(s) 3 Period(s)
Investment Management
Principles of investment management, including the study of stocks, bonds, government securities, mutual funds, futures, options, and tangible assets for investment to construct and manage an investment portfolio with knowledge of risk and tax considerations, and time value of money calculations. Prerequisites: FIN110.
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MCCCD Official Course Competencies:
 
FIN120   19946-99999 Investment Management
1. Explain the regulation of securities and markets. (I)
2. Describe the various investment vehicles. (II)
3. Explain assessment of client goals, risk, needs, and preferences. (III)
4. Describe risk, economic environment, and portfolio performance. (IV)
5. Describe strategies, tactics, and tax aspects of investment. (V)
6. Explain modern portfolio theory. (VI)
7. Describe matching investments to client needs. (VII)
8. Explain ethical considerations in retirement planning and employee benefits. (VIII)
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MCCCD Official Course Outline:
 
FIN120   19946-99999 Investment Management
    I. Regulation of securities and markets: government regulations
      II. Investment vehicles
          A. Corporate bonds
          B. US government and agency securities
          C. Mortgage-backed securities
          D. Municipal bonds
          E. Options, futures
          F. Insurance-based investments
          G. Investment companies
            1. Unit investment trusts
            2. Open-end mutual funds
            3. Closed-end investment companies
          H. Certificates of deposit and cash equivalents
          I. Common stock
          J. Real estate, investor-managed
          K. Real estate, indirect ownership
          L. International investments
          M. Miscellaneous
            1. Preferred stock
            2. Employee stock options
            3. Tangible assets (collectibles)
            4. Natural resources
        III. Client assessment
            A. Financial goals: time, dollars, priorities
            B. Risk tolerance and risk exposures
            C. Client tax situation
            D. Liquidity/marketability needs
            E. Analysis and evaluation of client financial statements
            F. Client preferences and investment understanding and experience
          IV. Investment theory, environment and financial markets
              A. Marketability/liquidity
              B. Types of investment risk
                1. Business
                2. Market
                3. Reinvestment
                4. Interest rate
                5. Purchasing power
                6. Regulation (tax audit, tax assessment, legislation)
              C. Measurement of risk
                1. Volatility
                2. Standard deviation
                3. Beta
              D. Influence of time on investment risk
                1. Effects of time
                2. Duration
              E. Types and measures of investment returns
                1. Annualized return
                2. Real (inflation-adjusted) return
                3. Total return
                4. Risk-adjusted return
                5. After-tax return
                6. Holding period return
                7. Internal rate of return
                8. Yield-to-maturity
                9. Yield-to-call
                10. After-tax yield
                11. Realized compound yield
              F. Bond and stock valuation methods
                1. Capitalized earnings
                2. Dividend growth
                3. Price earnings
                4. Intrinsic value
              G. Economic environment and indicators
                1. Business cycles
                2. Monetary/fiscal policies
                3. Yield curves
              H. Portfolio performance measurement
                1. Benchmark portfolios
                2. Risk-adjusted returns
                3. Treynor index
                4. Sharpe index
                5. Time-vs dollar-weighted return
            V. Strategies and tactics
                A. Formula investing
                  1. Dollar cost averaging
                  2. Divided reinvestment
                B. "Active" and "passive" strategies
                  1. Market timing
                  2. Securities selection
                  3. Bond swaps
                  4. Indexed portfolios
                  5. Maturity selection
                  6. Buy/hold
                  7. Immunization
                C. Leverage and use of borrowed funds
                  1. Financial leverage
                  2. Life-cycle borrowing
                  3. Short-term borrowing
                D. Hedging and option strategies
                  1. Options
                  2. Covered calls and puts
                  3. Portfolio insurance
                  4. Short sales
                E. Asset allocation: active and passive
                  1. Among classes: market timing and fixed mix
                  2. Within classes: security selection and index funds
                F. Tax aspects of investments
              VI. Modern portfolio theory
                  A. Pricing models
                    1. Capital asset pricing (capm)
                    2. Arbitrage pricing (apm)
                    3. Option pricing (opm)
                  B. Aspects of modern portfolio theory
                    1. Diversification, measures of diversification
                    2. Markowitz method
                    3. Sharpe method
                  C. Efficient market hypothesis
                    1. Strong form
                    2. Semi-strong form
                    3. Weak form
                    4. Anomalies
                VII. Matching investment vehicles to client needs
                  VIII. Ethical considerations in retirement planning and employee benefits
                      A. ERISA fiduciary obligations
                      B. Prohibited transactions, parties-in-interest, disqualified parties
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