• Course Objectives

Investment analysis develops the concepts and tools needed to analyze publicly traded securities (e.g., stocks,bonds, options and futures), and apply these tools to real world situations. The course deals with the nature of the securities that trade in the market place, the determination of securities prices, the relationships between these prices, and the optimal choice of a portfolio or trading strategy involving these securities. You will apply the tools you learn in class to analyze different fixed-income, equity, and derivative securities and portfolios. You will also learn some basic empirical facts about security returns in the class. Investment Analysis is not a course about how to pick stocks. Instead, it is a course about how to pick portfolios and design strategies. Generally, financial markets are efficient, so there is no such thing as a free lunch. Don't despair! This means that if you understand the basics of financial pricing models, you can find strategies that do well, on average. Once you understand basic arbitrage pricing techniques, you will learn how to identify and take advantage of arbitrage situations.

• Textbook

The textbook for this course is Modern Portfolio Theory and Investment Analysis, by Elton, Gruber, Brown, and Goetzmann, 7th edition (EGBG). I will hand out copies of my lecture notes as we go through the semester. I will put copies of the class lectures and supplementary reading materials on the AFTP course wall, which can be accessed from your profile.

• Evaluation

• Prerequisites