Dr. P.V. Viswanath

 

pviswanath@pace.edu

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  Courses / FIN 652 /  
 
 
 
 
 

FIN 652: INVESTMENT ANALYSIS Fall 2011

70433: Mondays 5:30 pm to 8:15 pm at the New York Campus, Room W513
Email: pviswanath@pace.edu Tel: (212) 618-6518
Webpage: http://www.pviswanath.com
Blackboard: http://blackboard.pace.edu

Office W416, Pace New York
Office hours:

3:45-5:30 on Mondays and 4-7:15 on Tuesdays
Note:  I am in my office in New York most days of the week; let me know if you want to see me at other times.

   

 


Course Objectives

This course will emphasize an understanding of the economic forces that influence the pricing of financial assets. This is viewed as a necessary prelude to the application of financial theory. Accordingly, understanding of the theory will be stressed and accompanied by the discussion of normative techniques such as portfolio selection, interest rate immunization and hedging.

Although the course material will cover formulas that can be applied in different business situations, a primary objective of this course will be, on the one hand, to learn the concepts behind the formulas. This second aspect is very important for a good reason: simple memorization of formulas is meaningless and is no use to most people; the reason is that in this age of computers, simple computation of formulas is increasingly automated. Rather, the added value that a human being brings to a work situation is the ability to impose structure on a unstructured situation and then to analyze the situation

When you have completed this course successfully, you will be familiar with:

  • Asset valuation: how to value assets such as stocks and bonds.
  • Risk-return models: how to price risk, i.e. how to adjust the value of an asset to take into account the riskiness of the asset.
  • Interest rates: how to interpret the term structure of interest rates; how to manage interest rate risk.
  • Portfolio Management: how to manage and evaluate portfolios.

Course Text

Investments, by Bodie, Kane and Marcus, 9rd. edition, McGraw-Hill Irwin. You can purchase different versions of the textbook at the bookstore. (Note the prices are from Spring 2011 and may not be exact. The relative prices should be more or less correct.)
  • Package -- book plus Connect Plus:
    Hard Cover: Investments, 9th Edition with Connect Plus by Bodie, Kane and Marcus ( ISBN: 9780077477561) Net Price: $ 161.75 
    Loose Leaf: Investment, 9th Edition with Connect Plus ( ISBN: 9780077971311) Net Price: $ 123.74 
  • Stand Alone (without Connect Plus):
    Hard Cover: Investments, 9th Edition ( ISBN: 9780073530703) Net Price: $ 160.50
    Loose Leaf: Investment, 9th Edition ( ISBN: 9780077470609) Net Price:  $ 112.50
  • If you buy the textbook elsewhere, you will still need to buy Connect. You can buy this directly from McGraw-Hill by going to http://connect.mcgraw-hill.com/class/p_viswanath_70433. This will cost $40
  • If you want the book, as well, but don't need a hard-copy version of the book, you can buy Connect Plus for $90.50 at http://connect.mcgraw-hill.com/class/p_viswanath_70433. Connect Plus is an online eBook integrated within the Connect learning management system. 

How to Study for this Course:

Computer Use and E-mail Policy:

You should obtain a Pace e-mail address as soon as possible, so that I can send you e-mail. Any student's Pace e-mail address can be obtained by going to http://appserv.pace.edu/WhitePages/Students.cfm or by going to the main Pace Home Page and clicking on White Pages from the IntraPace section towards the bottom of the page (the default password is the studentís Pace Identification Number).  More information about e-mail address, etc. can be obtained from the DoIT website and clicking on Computer from the left-hand side menu panel.  Even if you have another e-mail address where you wish to get your e-mail, you should still get a Pace e-mail address.  Once you have your Pace e-mail account and password, you can go to the Pace University Student E-Mail Server at http://stmail.pace.edu and have your e-mail forwarded to your preferred e-mail address.  You can find information on how to have your mail automatically forwarded at the DoIT websiteThe only way that I can communicate with you is through your Pace e-mail account.  So please get your Pace account information as soon as possible.

Check your e-mail and the FIN 652 website on a regular basis.  This will enable you to get the maximum from the course. I am available for consultation by e-mail at pviswanath@pace.edu. I check my e-mail practically every day, and, in most cases, you should get a speedy response to any questions.  

We will also be using Blackboard as a gateway for some aspects of the course.  Please log in to Blackboard at the earliest opportunity.    Blackboard login procedures can be found on the appropriate Blackboard site.  Essentially, your login ID for Blackboard will be your email ID, and your password will be your 9-digit social security number.  

Course Requirements

Class Attendance and Participation

Class attendance is mandatory.  This is for two reasons: one, I believe that you will understand the material much better if you attend the class sessions; two, modifications to the class schedule will be announced in class and/or on the BlackBoard website.  Also, on occasion, I conduct classroom exercises, give short quizzes, or assign additional work. If you miss a class session during which we have such a classroom exercise, or additional work is assigned, your grade will be adversely affected for this reason as well.  (Of course, it goes without saying that missing quizzes will affect your grade adversely.)  In any case, you should consult fellow students on what was done during the class time that you missed, and collect handouts for that day's session. You should also bring a calculator to all class meetings.

I also require that you read the Wall Street Journal and/or the business section of the New York Times on a regular basis. Some exam questions will be based on current newspaper and magazine articles that are related to course material. Hence you should cultivate and improve your ability to read newspaper articles critically.  If you do not already subscribe to the Wall Street Journal, you can do so online from the FIN 652 Home Page.

There are two other reasons why you should try to attend as regularly as possible. One, classroom participation will help your grade. By participation, I mean answering questions and making intelligent comments. Two, we will sometime do learning exercises in class; doing them can help you substantially in understanding the material.  I often also give credit for participation in these classroom exercises.

Tutoring

The Tutoring Center, located on the 2nd floor, 41 Park Row, offers free tutoring to all Pace University students.

No appointment is necessary, but students should check the schedules posted in the center or call 212-346-1329 for any changes.  Along with their questions, they should come prepared with their course materials.

For more information, please contact John P. Cleveland, the Center Director at 212-346-1407.

Academic Integrity

Students must accept the responsibility to be honest and to respect ethical standards in meeting their academic assignments and requirements.  Integrity in academic life requires that students demonstrate intellectual and academic achievement independent of all assistance except that authorized by the instructor. The use of an outside source in any academic paper, report or submission for academic credit without the appropriate acknowledgement is plagiarism. It is also academically dishonest to submit anything in electronic form as one's own that is the work, either fully or in part, of someone else.  It is unethical to present as one's own work, the ideas, words or representations of another without the proper indication of the source.  Therefore, it is the student's responsibility to give credit to any quotation, idea or data borrowed from an outside source.  Students who fail to meet the responsibility for academic integrity subject themselves to sanctions ranging from a reduction in grade or failure in the assignment or course in which the offense occurred to suspension, dismissal or expulsion from the University.

If you need more information on how to avoid plagiarism, you can find it on the Library's website.

Any student taking this course is presumed to agree to abide by the school policy on academic integrity, as described on page L-52 of the Graduate Catalog. Please obtain a copy of the catalog and familiarize yourself with the policy.

Disability Policy

Pace University believes that it is important for students receive appropriate accommodation for any disability.  To receive accommodation for any disability, students must contact the campus Counseling Center (Pace Plaza, 212-346-1526; Westchester, 914-773-3710).  The Coordinator of Disability Services will:

  • Evaluate the student's medical/learning/psychological documentation
  • If further documentation is necessary, refer the student for appropriate tests
  • Make recommendations for a plan of accommodation
  • Prepare letters for the student arranging for the recommended accommodations.

Course instructors are not authorized to provide any accommodation prior to your arranging for it through the Counseling Center.

School policy regarding disabilities is described on page L-56 of the Graduate Catalog. Information can also be found on the University webpage.

Assignments

Assignments are a critical part of the course.  The main purpose of these assignments is to make sure that you understand the material, and to prepare you for the exams. The deadlines are indicated on the Course TimeTable; if the deadline passes, you will lose points so you are advised to do them on time. Assignments can be found on the website on the Assignments Page.

There are two kinds of assignments. First of all, assignments using the Connect system that comes with the textbook. To access these, go to the Connect website (http://connect.mcgraw-hill.com/class/p_viswanath_70433), register and you should be on your way. If you have bought Connect access already, you will have an access code that you will have to enter. If you have not bought Connect Access, you can buy it by going to this site. Once you are on the Connect site, you will see the assignments that I have given you. Deadlines for the assignments can be seen on the Connect site, but also on the Course Outline page. These Connect Assignments, you will do individually.

For all Connect questions, you can get much more informed and speedy answers.  Here’s the contact information.
Phone - 1-800-331-5094
Email – http://www.mhhe.com/support and click on “Contact Us” to send a web email.

Customer Experience Team hours:
Monday – Thursday, 9am – midnight
Friday, 9am – 7pm
Sunday, 7pm – midnight

The second set of assignments should be done on a team basis. They can be seen on the Assignments Page.

Blackboard Discussion Participation:

The Discussion Board is an important part of the course. You will be given articles to read and react to. At the bottom of the article, you will generally find some comments/questions at the bottom of the article; however, you should not treat these questions as requiring "answers" necessarily. Rather treat them as my thoughts and simply comment on the issues raised by the article or by the information contained in the article. Even if you are reacting to my thoughts, the structure of your posting should not in the form of an "answer" to my questions. I will deduct points if you ignore this requirement! Postings must be made according to the schedule indicated on the calendar. Do not start new threads unless you have also responded to a previous posting in an existing thread.

Postings will be evaluated according to the following criteria:

  1. Originality
  2. Proper Grammar and correctness of spelling
  3. Logic of arguments
  4. Relating arguments to previous posts (the sequence of posts is supposed to represent a conversation -- not a set of unrelated posts of people talking past each other!).
  5. Relating arguments to issues brought up in the text and on the slides.

There will be at least two Blackboard discussions. Please read everybody's posting and reply to them. Look at the discussion forum every couple of days, at least, and keep the discussion vigorous.

Exams

There will normally be a midterm exam and a final; any modifications to this will be announced in class. Exams are usually closed book, but I will allow you to bring in one 8.5" x 11" sheet of paper containing only formulas -- nothing else (two sides). More details on the nature of the exams can be found on the FAQ page.  If you miss an exam without being excused, I cannot give you any credit for that exam.  University policy allows make-ups only for serious personal illness or death in the family, for which documentation may be required.  You can look at past exams and solutions on my website; however, the actual format of the exams this term will differ substantially from those of other exams. Please bring your own calculators to the exams; however the use of computers, PDAs, graphing calculator, phone calculators or other instruments that can communicate and/or are able to store alphanumeric information is strictly prohibited during the exam. It is your responsibility to verify whether your calculator is allowed, otherwise you will end up in an exam without a calculator. Get in touch with me regarding any question you may have regarding the exams, or the course in general.

Short Quizzes

There may, in addition, be short quizzes. 

Media Articles

On my webpages, you will find recent media articles.  From time to time, I will add to this list.  There are several reasons why you should look regularly at these pages.  

  • I will be posting interesting and recent articles to this directory.  As such, it will be a useful way for you to keep abreast of topical issues (in addition to your regular perusal of the Wall Street Journal.)
  • I will pose questions on the subject matter of several of the articles.  These questions will be good preparation for the media article based questions on the exams.
  • You can draw on the articles for classroom discussions.
  • These articles and the appended questions are useful preparation for job interviews.

The password, necessary to access the Media Articles section, will be announced in class and can also be found at the Blackboard website. In case of emergency, you can contact me for the password.

If you have difficulty in accessing the site and you're using Internet Explorer, you may want to try the following fix: Go to Tools on the Main menu, then choose Internet Options. Then choose Security; after that select Trusted Sites. Then click on sites and add "http://webpage.pace.edu/pviswanath" (make sure that you have unchecked the "Require Server Verification for all sites in this zone").
This should allow you to access the articles by using the correct password.

Grades

Your final grade will be determined as follows:

Factor  Impact on grade
Midterm 25%
Final 40%
Connect Assignments 10%
Other Assignments 10%
Blackboard Discussion 10%
Class Participation 10%

Letter grades will be assigned as follows:  

Course Grade Quantitative Class Score
A, A- 90%-100%
B+, B 80%-89.99%
B-, C+ 70%-79.99%
C 60-69.99%
F 0-59.99%

Note that the minimum and maximum quantitative scores for plus and minus refinements to the letter grades will be at my discretion. These will be partly determined by the distribution of student scores within each letter grade category.   I place a high value on effort; at my discretion, I will raise your grade one notch if I feel that you have tried hard to satisfy all the requirements of the course.

Prerequisites:

Students must have satisfied the prerequisite for this course, viz. MBA 648. I will presume complete familiarity with all topics taught in this courses.

Data Cards

On the index card handed out in class, please fill in the information requested below.  Make sure to number the item that you are responding to.  Leave space on the top right hand side for a photograph.

  1. Name
  2. Home and Work Phone number; Fax number, if any
  3. Email address, other than at pace.edu (for my convenience).  (Note that I will send you email only to your Pace email address)
  4. Functional expertise/interest in business administration (e.g. accounting, finance, personnel administration)
  5. Work experience, if any (provide particulars of what your duties were)
  6. Previous knowledge of finance (if any)
  7. Interests outside of business management (such as languages, music, etc.)
  8. What spreadsheet program do you know? Where did you learn it, and when?