Invstmt Strat & Portfolio Mgmt
Run by Bangor Business School
15 Credits or 7.5 ECTS Credits
Organiser: Dr Rasha Alsakka
Overall aims and purpose
To analyse portfolio strategies which can effectively control risk and enhance returns; to develop intellectual skills and research expertise in the area of investment analysis and portfolio management; and to demonstrate appropriate modelling techniques for investment decision-making and risk management.
- The characteristics and roles of investment institutions
- Investment objectives and the asset allocation decision
- Principles of portfolio management.
- Bond valuation and bond portfolio management strategies.
- Equity portfolio management strategies.
- Performance measurement.
thresholdNo major omissions or inaccuracies in the deployment of information/skills; Some grasp of theoretical/conceptual/practical elements; Integration of theory/practice/information present intermittently in pursuit of the assessed work's objectives.
goodMuch of the relevant information and skills mostly accurately deployed; Adequate grasp of theoretical/conceptual/practical elements; Fair integration of theory/practice/information in the pursuit of the assessed work's objectives; Some evidence of the use of creative and reflective skills. High Standard: Very good performance; Most of the relevant information accurately deployed; Good grasp of theoretical/conceptual/practical elements; Good integration of theory/practice/information in pursuit of the assessed work's objectives; Evidence of the use of creative and reflective skills.
excellentAn outstanding performance, exceptionally able; The relevant information accurately deployed; Excellent grasp of theoretical/conceptual/practice elements; Good integration of theory/practice/information in pursuit of the assessed work's objectives; Strong evidence of the use of creative and reflective skills.
- Explain the different sources of risk and return in managing equity and bond portfolios.
- Demonstrate awareness of the process of investment management.
- Apply the principles of investment theory and practice to the optimal selection of investments to satisfy a specific set of risk-return objectives.
- Construct a portfolio from a range of available investment instruments, including bonds, equities and derivative securities.
- Analyse appropriate benchmarks and methods for the evaluation of the performance of a portfolio of investments.
Teaching and Learning Strategy
One 3-hour lecture/class per week.
- Literacy - Proficiency in reading and writing through a variety of media
- Numeracy - Proficiency in using numbers at appropriate levels of accuracy
- Computer Literacy - Proficiency in using a varied range of computer software
- Exploring - Able to investigate, research and consider alternatives
- Information retrieval - Able to access different and multiple sources of information
- Critical analysis & Problem Solving - Able to deconstruct and analyse problems or complex situations. To find solutions to problems through analyses and exploration of all possibilities using appropriate methods, rescources and creativity.
- Teamwork - Able to constructively cooperate with others on a common task, and/or be part of a day-to-day working team
Subject specific skills
- knowledge of theories and empirical evidence concerning financial management, risk and the operation of capital markets (in cases of degrees with significant finance content).
- An appreciation of the nature of the contexts in which finance can be seen as operating, including knowledge of the institutional framework necessary for understanding the role, operation and function of markets and financial institutions (e.g. the economic, legal, regulatory and tax environment, both national and international; the firm; the capital markets and the public sector).
- A knowledge of the major theoretical tools and theories of finance, and their relevance and application to theoretical and practical problems (e.g. concept of arbitrage and examples of its use; financial mathematics and capital budgeting criteria; informational efficiency; optimal risk sharing; portfolio theory; asset pricing models and the valuation of securities; cost of capital; derivative pricing; risk management; information asymmetry; principal agency relationships; signalling; Fisher separation and capital budgeting criteria; behavioural finance; term structure and the movement of interest rates; determination of exchange rates and financial intermediation).
- An ability to interpret financial data including that arising in the context of the firm or household from accounting statements and data generated in financial markets. The interpretation may involve analysis using statistical and financial functions and procedures such as are routinely available in spreadsheets (eg Microsoft Excel) and statistical packages. It may assume the skills necessary to manipulate financial data and carry out statistical and econometric tests (e.g. estimation and interpretation of asset pricing models; financial modelling and projections; event studies and residuals analysis; elements of time series analysis, such as serial correlation mean reversion, and stochastic volatility).
- An understanding of the relationship between financial theory and empirical testing, and application of this knowledge to the appraisal of the empirical evidence in at least one major theoretical area. The appraisal should involve some recognition of the limitation and evolution of empirical tests and theory (eg the efficient markets hypothesis; anomalies; pricing of derivatives and other securities; bond portfolio management; exchange rates; raising capital and capital structure).
- An understanding of the financing arrangements and governance structures of business entities, and an appreciation of how theory and evidence can be combined to assess the effectiveness and efficiency of such arrangements (e.g. decisions as to sources of finance and financial structure; the pricing of corporate securities; the market for corporate control; corporate governance structures and mechanisms; financial planning and international dimensions of finance).
- An understanding of the factors influencing the investment behaviour and opportunities of private individuals (bonds, equities, and derivatives; risk aversion; risk/return trade-offs; portfolio management and performance measurement; pensions and long term savings; the tax treatment of savings and investments; international diversification; forex risk; objectives of and constraints on institutional investors and advisors).
- An understanding of financial service activity in the economy, and an appreciation of how finance theory and evidence can be employed to interpret these services (for example, information asymmetry, adverse selection and moral hazard could be employed to analyse the fundamental nature of services, such as insurance, pensions, bank lending and consumer credit, and also explore fundamental problems arising in such financial service provision. Efficient market hypothesis could be used to explore evidence for fund manager performance and the effectiveness of equity and bond saving services).
- Problem solving and critical analysis: analysing facts and circumstances to determine the cause of a problem and identifying and selecting appropriate solutions.
- Research: the ability to analyse and evaluate a range of business data, sources of information and appropriate methodologies, which includes the need for strong digital literacy, and to use that research for evidence-based decision-making.
Courses including this module
Compulsory in courses:
- N3AV: MA Finance year 1 (MA/FIN)
- N3CP: MA Finance (10 month) year 1 (MA/FIN10)
- N3BV: MBA Finance year 1 (MBA/FIN)
- N3CN: MBA Finance (10 month) year 1 (MBA/FIN10)
- N3CM: MSc Finance (10 month) year 1 (MSC/FIN10)
- N3AJ: MSc Finance year 1 (MSC/FINANCE)
- N3CB: MSc International Finance year 1 (MSC/IF)
- N3CQ: MSc International Finance (10 month) year 1 (MSC/IF10)
- N3CC: MSc Investment Management year 1 (MSC/IMGT)
- N3CR: MSc Investment Management (10 month) year 1 (MSC/IMGT10)
Optional in courses:
- M1AL: LLM Law and Banking year 1 (LLM/LB)
- N3CH: MA Banking & Finance (Chartered Banker) year 1 (MA/BFCB)
- N3AB: MA Banking & Finance year 1 (MA/BIF)
- N3BE: MA Islamic Banking and Finance year 1 (MA/IBF)
- N3AD: MBA Banking and Finance year 1 (MBA/BIF)
- N4AJ: MSc Accounting year 1 (MSC/ACC)
- N4AG: MSc Accounting and Finance year 1 (MSC/ACCFIN)
- N3AX: MSc Banking and Finance year 1 (MSC/BANKFIN)
- N3CK: MSc Banking & Finance (Chartered Banker) year 1 (MSC/BFCB)
- N3BF: MSc Islamic Banking and Finance year 1 (MSC/IBF)
- N2AO: MSc Management and Finance year 1 (MSC/MANFIN)