Course Details
| Program Name | PGP | Batch | 26 |
| Term | 4 | Year | II 2023-24 |
| Course Code & Course Title | Investment Analysis and Portfolio Management | ||
| Course type | Elective | Course Credit | 3 |
| Total no. of sessions | 24 | Session Duration | 75 Minutes |
| Sections (if any) | Consultation Hours | TBD | |
| Contact Details | aravinds@iimk.ac.in | ||
| Office | Block B Room 2 | ||
| Pre-requisites (if any) | |||
Instructors
| Faculty Name |
| Aravind Sampath |
Introduction
In recent decades, the field of investment analysis has evolved from a descriptive process to a highly formalized and quantitative area of study. The rapidly changing financial environment and the dynamic nature of new instruments necessitate functional skillset. This course provides the framework to build the necessary functional skillset in two ways. First, the course delves into understanding the structure of individual asset classes, including risk, return and valuation. Subsequently, the course provides the framework to create, manage, and evaluate portfolios constructed using various asset classes. Topics include recognizing risk and return characteristics of investments, developing strategic asset allocations, utilizing options to manage portfolio risk and evaluating portfolio and managerial performance relative to investment objectives and appropriate benchmarks.
Learning Objective / Course Outcome
| CLO No | CLO |
| CLO1 | Choose the right portfolio considering investor objective and various constraints. |
| CLO2 | Analyze managerial competence based on portfolio performance. |
Textbooks and Learning Materials (if any)
Investments, Bodie et al. 12th edition, TMH. |
Reference Books
Modern Portfolio Theory and Investment Analysis, Elton et al. 9th edition, Wiley. |
Pedagogy/Learning Process
This course would use a variety of pedagogical tools such as lectures, problem solving, real-life examples, in class activities and simulations to support the learning activities. The instructor expects the students to participate actively in the class. Students are expected to read the textbook and other assigned readings outside of class and participate in the critical evaluation of the material through class discussion.
Evaluation Components/Assessment of Student Learning
| Assessment Tool | Weight | Remarks | PLO Tested (give the PLO No) | Description |
| Quizzes | 25% |
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| End term Exam | 35% |
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| Projects/Assignments/Submissions | 40% |
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Session Plan
| Session No | Module | Topic Covered | Reading Material |
| 1-3 | Building Blocks | Roadmap; Risk and Return |
BKM Ch 1-5 |
| 4-7 | Fixed Income | Fixed Income Securities |
BKM Ch 14-16 |
| 8-10 | Equity | Equity Valuation |
BKM Ch 17-19 |
| 11-12 | Derivatives | Options, Futures and Applications |
BKM Ch 20-23 |
| 13-15 | Portfolio Management | Portfolio Construction; Capital Allocation |
BKM Ch 6 |
| 16-18 | Portfolio Management | Portfolio Theory: Mean Variance analysis; Efficient frontier; Effects of diversification |
BKM Ch 7 |
| 19-20 | Asset Pricing | Asset Pricing Models: Capital Market Line (CML) and the Security Market Line (SML); CAPM – Extensions, Testing, Limitations; Arbitrage Pricing Theory; Equilibrium models and Portfolio management |
BKM Ch 9-10 |
| 21-22 | Portfolio Performance | Portfolio Performance Management: Challenges in measuring returns; Risk-adjusted return measures; Manipulation-proof performance measure |
BKM Ch 24 |
| 23 | Efficient Market Hypothesis | Efficient Market Hypothesis (EMH); Forms of market efficiencies; Portfolio management vs EMH; Challenges in testing EMH |
BKM Ch 11 |
| 24 | Conclusion | Alternative Investments; end of term review |
Additional Instructions (If any)
- Assignment/other submission dates will be intimated in the class. Details regarding the formation of groups will be shared in the class.
- The schedule of the modules/topics and the pedagogy used may vary between the instructors.