FINA 3382 91L

INVESTMENT PRINCIPLES (ONLINE)

FALL 2016

Instructor: Hamid R. Sakaki

Office: MAGC 3.506
Office Hours: TR 11 12:30 pm
(Do not hesitate to send me an email if we need to talk so we can agree on a convenient
time for a meeting).
Office Phone: 956 - 665 - 2635
E-mail: hamid.sakaki@utrgv.edu
CONTACT INFORMATION
Email is my preferred mode of contact. Please email me directly at my email address
instead of using the email tool from Blackboard so that I can receive and reply to your
email in a timely manner. Generally, I will respond to emails within 24 hours of receiving
them. If I plan to be away from my computer for more than a couple of days, I will let you
know in advance. Any technical questions can be referred to Blackboard Support.
COURSE STRUCTURE & DESCRIPTION
This course will be delivered entirely online through the course management system
Blackboard Learn. You will use your UTRGV account to login to the course from the My
UTRGV site and under applications click on Blackboard Learn.
The course is organized into 4 modules and 12 weeks, as outlined in the course schedule
and due dates below. Each week is listed by its main topic and contains required readings,
videos and assignments.
This course provides the theoretical framework, techniques and applications of investment
management. It also develops models for performance evaluation emphasizing optimum
combination of risk and return.
TEXTBOOK & COURSE MATERIALS
The required textbook for the course is Essentials of Investments, 10th edition by Bodie,
Kane & Marcus. The textbook picture is provided below. McGraw-Hill Connect access
is required. Register via the following link:
http://connect.mheducation.com/class/h-sakaki-fina-3382

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COURSE GOALS AND OBJECTIVES

Students who successfully complete the course will be able to:
1. Understand the overall investment process and the key elements involved in the
investment process such as asset allocation and security selection.

2. Understand the various financial instruments available to the potential investor.

3. Understand the primary market issue methods and how investment bankers
assist in security issuance.
4. Identify key differences between open-end and closed-end investment
companies.
5. Explain the risk-return relationship and how risk and return is measured.
6. Explain the concept of risk aversion and utility.
7. Calculate standard deviation, minimum variance combinations and return for
two security.
8. Explain the theory of the capital asset pricing model (CAPM), factor models
and the arbitrage pricing theory (APT).
9. Explain the concept of market efficiency and how to make rational investment
decisions based upon efficient markets.
10. Analyze a firm using the basic financial statements to perform ratio analysis.
ROBERT C. VACKAR COLLEGE OF BUSINESS AND ENTREPRENEURSHIP
LEARNING GOALS
This course contributes to the following College of Business and Entrepreneurship learning
objectives:
COBE Goals
Critical thinking and problem-solving
Professional attitudes

Assessment
Exams and Assignments
Assignments & Projects
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Written communication skills
Basic quantitative and analytical skills
Functional areas of business (e.g., finance,
marketing, accounting)
Global awareness
Knowledge of Finance

Fall 2016
Assignments & Projects
Exams and Assignments
Exams and Assignments
Assignments & Projects
Exams and Assignments

COURSE ASSIGNMENTS AND DEADLINES

Class activities and materials are organized in 4 modules. The relevant activities in a
learning module include video clips, required readings from the textbook and other sources
and homework assignments.
For each module, you will have the following tasks/assignments to work on:
1. Watch lecture videos and read the required reading materials posted in the weekly
folders.
2. Homework assignments (through McGraw Hill Connect:
http://connect.mheducation.com/class/h-sakaki-fina-3382)
Your overall performance in the class is based on your performances throughout the 4
modules in the semester. Each module is as important as the others in its contribution
toward to overall grade of the course.
Deadlines for each of the assignments and exams are announced in each respective module.
Please check the module information as well as the course calendar for details. After the
deadline the assignments / exams will be closed and we will move on to the next topic. At
this point, students will not be able to make up for past modules any more. Therefore,
please be sure that you complete all the assignments in a timely manner. No extensions
will be granted.
All assignments and exams must be completed as scheduled. Late or make-up work
will not be accepted unless you have requested and received approval in advance for
handing an assignment in late.
Note: If you get too far behind, that is, you do not fully complete all the assignments for
two or more modules within the assigned time, I will drop you or ask you to withdraw from
class.
HOMEWROK ASSIGNMENTS
Homework assignments can be found at the following website through McGraw Hill
Connect http://connect.mheducation.com/class/h-sakaki-fina-3382. The submitted
assignments will be graded by the system and feedbacks will be provided 1 hour after
the due date. Homework assignments are always due at 11:59pm on a Sunday. Please
see the tentative course schedule for the exact due dates of assignments.

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Homework assignment for each chapter includes two parts. The first part is doing the
assignment through the smart book (Learn Smart).This part will guide you through the
fundamentals concepts in your course. The second part includes some problem solving or
multiple questions.
Students are allowed to attempt the homework assignments up to three times between
the beginning of the module (Monday) and 11:59pm of Sunday so as to achieve the
highest score possible. However, your total score would be the average of the total
attempts.
If you do not complete an assignment before its due date/time, you will receive a zero for
it.
While you are working on the assignments, you might need help, so please do not start
working on the assignments on the due date. Allow yourself plenty of backup time so that
you can contact me for any questions you might have and so that I can have time to reply
to your questions.
EXAMS
At the end of module 1, 2 and 4 you will have an exam which covers the concepts and
problems in the module. Questions on the exam are reflective of the questions you practice
in your homework assignment, so please pay close attention to the lecture videos, textbook
and homework assignments, and make sure you understand them thoroughly.
Take the tests either from your personal computer or at the labs in COBE, UTRGV. Other
public computers may cause problems. If you prefer your personal computer, make sure it
meets all requirements. Tests will not be re-opened to you online. Predict and remove
technical problems right now.
GRADING POLICIES
There will be three exams for this course. No make-up exams will be given. All exams are
worth 20% each. Home works will be assigned throughout the semester. These problems
are designed to help students learn relevant material and will be turned in for a grade. Home
works are worth 30% of the final grade. Also, there are two mini projects which will be
worth 10% of your final grade (5% each). More information will be provided as the
semester progresses.
Points you receive for graded activities will be posted to the Blackboard Grade Book. Click
on the My Grades link on the left navigation to view your points.
You will see a visual indication of new grades posted on your Blackboard home page under
the link to this course.
Letter grades will be determined as:
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A 90 points or up
D 60 - 69 points

Fall 2016
B 80 - 89 points
F 59 or fewer points

70 - 79 points

DISCUSSION FORUMS
You will find the following discussion forums in the course Blackboard site:
1. General Help: Post any questions or comments you may have about course
mechanics or technical issues to this forum.
If you have a question about course content or mechanics, I encourage you to post it to the
General Help discussion forums. Doing so gives students in the course an opportunity to
help one another and allows everyone to benefit from answers to your questions. Of course,
dont hesitate to email me directly if your concern is of a personal nature.
2. Q & A Forums: Post any questions or comments you may have about chapter
content to this forum.
My role in Q & A discussion forums is that of a facilitator. I will occasionally correct
misconceptions and/or redirect conversations that need redirecting. I may also post
comments following the completion of discussion indicating my general impressions of the
comments and conclusions.
CLASS PARTICIPATION
Online courses require your active participation. Here are some tips for success:

In discussion forums, you learn from one another by posting questions, justifying
your comments, and providing multiple perspectives. When you prepare for
discussions through thoughtful reflection, you contribute to your own successful
learning experience as well as to the experience of your peers.

Log in to the course frequently (at least several times per week) and check the
announcements. This will keep you apprised of any course updates, progress in
discussions, assignment information, and messages requiring immediate attention.

Be aware of and keep up with the Course Schedule in the Syllabus.

I will be using Blackboard tracking tool and discussions forum to monitor student
participation in the course.
NETIQUETTE
Netiquette describes the code of conduct for an online environment. It ensures respect for
others and prevents misunderstandings or unintentional offenses to others. The netiquette
described here is amended to ensure your success in this course.

When you are typing or submitting a response, do not use all capital letters (caps).
Caps is equal to SHOUTING YOUR MESSAGE.
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Although it is customary to use acronyms (ex. ROFL - rolling on floor laughing,

BTW - by the way, or FYI - for your information) when chatting online, try to
avoid using these. There may be those in this course who are not as experienced
as you and may miss out on understanding.
Although you are encouraged to participate and ask questions, it is asked that you
do not spam other users (SPAM refers to unwanted or excessive email). Before
sending mass emails, consider using the discussion board to post general inquiries
or requesting assistance from your instructor.

STUDENT RESPONSIBILITIES
Online courses are typically just as time intensive, and may be more rigorous than
traditional courses. Many students claim that online courses require more time and
commitment. As you begin this course, you would be wise to schedule 8 or more hours
per week for studying materials and completing assignments.
Falling behind in this course is particularly problematic because the concepts we
cover are cumulative. This means that not becoming proficient with information and
objectives presented and assessed in a particular week can lead to low scores for that
week as well as in subsequent weeks.
TECHNICAL REQUIREMENTS
To participate in this online course, you should have easy access to a computer less than 5years old with high-speed internet connection via cable modem, LAN or DSL. To ensure
you are using a supported browser and have required plug-ins please refer to Supported
Browsers, Plugins & Operating Systems for Blackboard Learn from Blackboards resource
page. You are expected to be proficient with installing and using basic computer
applications and have the ability to send and receive email attachments.
SOFTWARE

Mozillas Firefox (latest version; Macintosh or Windows)

Google Chrome (latest version; Macintosh or Windows)

Adobes Flash Player & Reader plug-in (latest version)

Apples QuickTime plug-in (latest version)

Virus protection

Microsoft Office

If you need technical assistance at any time during the course or to report a problem with
Blackboard you can:

Visit the Blackboard Student Help Site

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Submit a Blackboard Help Ticket

Help Contact Information ( UTRGVs Blackboard Support):

Brownsville Campus

Edinburg Campus

Location: Rusteberg Hall Room 108

Location: Education Building Room

2.202

Phone: 956-882-6697 or 956-8826792

Phone: 956-665-5327

Monday Friday: 7:30AM-6:00PM

Monday Friday: 7:30AM-6:00PM

COURSE DROPS
According to UTRGV policy, students may drop any class without penalty earning a grade
of DR until the official drop date. Following that date, students must be assigned a letter
grade and can no longer drop the class. Students considering dropping the class should be
aware of the 3-peat rule and the 6-drop rule so they can recognize how dropped classes
may affect their academic success. The 6-drop rule refers to Texas law that dictates that
undergraduate students may not drop more than six courses during their undergraduate
career. Courses dropped at other Texas public higher education institutions will count
toward the six-course drop limit. The 3-peat rule refers to additional fees charged to
students who take the same class for the third time.
STUDENTS WITH DISABILITIES
If you have a documented disability (physical, psychological, learning, or other disability
which affects your academic performance) and would like to receive academic
accommodations, please inform your instructor and contact Student Accessibility Services
to schedule an appointment to initiate services. It is recommended that you schedule an
appointment with Student Accessibility Services before classes start. However,
accommodations can be provided at any time. Brownsville Campus: Student Accessibility
Services is located in Cortez Hall Room 129 and can be contacted by phone at (956) 8827374 (Voice) or via email at accessibility@utrgv.edu. Edinburg Campus: Student
Accessibility Services is located in 108 University Center and can be contacted by phone
at (956) 665-7005 (Voice), (956) 665-3840 (Fax), or via email at accessibility@utrgv.edu.
MANDATORY COURSE EVALUATION PERIOD
Students are required to complete an ONLINE evaluation of this course, accessed through
your UTRGV account (http://my.utrgv.edu); you will be contacted through email with
further instructions. Students who complete their evaluations will have priority access to
their grades.

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SCHOLASTIC INTEGRITY
As members of a community dedicated to Honesty, Integrity and Respect, students are
reminded that those who engage in scholastic dishonesty are subject to disciplinary
penalties, including the possibility of failure in the course and expulsion from the
University. Scholastic dishonesty includes but is not limited to: cheating, plagiarism, and
collusion; submission for credit of any work or materials that are attributable in whole or
in part to another person; taking an examination for another person; any act designed to
give unfair advantage to a student; or the attempt to commit such acts. Since scholastic
dishonesty harms the individual, all students and the integrity of the University, policies
on scholastic dishonesty will be strictly enforced (Board of Regents Rules and Regulations
and UTRGV Academic Integrity Guidelines). All scholastic dishonesty incidents will be
reported to the Dean of Students.
SEXUAL HARASSMENT, DISCRIMINATION, and VIOLENCE
In accordance with UT System regulations, your instructor is a responsible employee for
reporting purposes under Title IX regulations and so must report any instance, occurring
during a students time in college, of sexual assault, stalking, dating violence, domestic
violence, or sexual harassment about which she/he becomes aware during this course
through writing, discussion, or personal disclosure. More information can be found at
www.utrgv.edu/equity, including confidential resources available on campus. The faculty
and staff of UTRGV actively strive to provide a learning, working, and living environment
that promotes personal integrity, civility, and mutual respect in an environment free from
sexual misconduct and discrimination.

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TENTATIVE COURSE SCHEDULE

While every effort will be made to follow the schedule and procedures presented here, they
are subject to change in the event of extenuating circumstances.
Module 1 Elements of Investments (Chapters 1, 2, 3 & 4)
Objectives:
After covering the chapter, the Students should be able
to:
1. Understand the overall investment process and
the key elements involved in the investment
process such as asset allocation and security
selection.
2. Understand debt, equity and derivatives
securities.
Students should understand
differences in the nature of financial and real
assets.
3. Identify the major players in the markets;
differentiate between primary and secondary
market activity; and describe some of the
features of securitization and globalization of
markets.
Aug 29 - Sep 4 (Week 1)
Chapter 1 Investments: Activities and Assignment:
Background and Issues
1. Read course syllabus carefully.
2. Register in McGraw-Hill website. If you dont
do so by the end of the first week, I will drop you
from the class.
3. Navigate through Blackboard.
4. Go to student introduction in the Discussion
Board and post a well-written introduction about
yourself to formally register your presence in
the course. If you dont do so by the end of the
first week, I will drop you from the class.
5. Read assigned materials.
6. Watch Learn Smart instruction video.
7. Complete chapter 1 homework assignment by
11:59pm Sep 4th.

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Objectives:
After covering the chapter, the Students should be able
to:

Sep 5 - Sep 11 (Week 2)

Chapter 2 - Asset Classes
and Financial Instruments

1. Understand the various financial instruments

available to the potential investor.
2. Understand the differences between discount
yields and bond-equivalent yields and some
money-market-rate-quote conventions.
3. Have an insight as to the interpretation,
composition, and calculation process involved in
the various market indexes presented on the
evening news.
4. Have a basic understanding of options and
futures contracts.
Activities and Assignment:
1. Watch Chapter 2 lecture videos.
2. Read assigned materials.
3. Complete chapter 2 homework assignment by
11:59pm Sep 11th.
Objectives:
After covering the chapter, the Students should be able
to:

Sep 12 - Sep 18 (Week 3)

Chapter 3 - Securities
Market

1. Understand the primary market issue methods

and how investment bankers assist in security
issuance.
2. Identify the various security markets and should
understand the differences between exchange
and over the counter trading.
3. Understand the mechanics, risk, and calculations
involved in both margin and short trading and
should begin to understand some of the
implications, ambiguities, and complexities of
insider trading and the regulations concerning
these issues.
Activities and Assignment:
1. Watch Chapter 3 lecture videos.
2. Read assigned materials.
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3. Complete chapter 3 homework assignment by
11:59pm Sep 18th.

Objectives:
After covering the chapter, the Students should be able
to:

Sep 19 - Sep 25 (Week 4)

Chapter 4 - Mutual Funds
and Other Investment
Companies

1. Identify key differences between open-end and

closed-end investment companies.
2. Understand the advantages of investing in funds
rather than investing directly in individual
securities.
3. Describe the expenses associated with
investment in mutual funds, calculate net asset
value and fund returns and identify the major
types of investment policies of mutual funds.
4. Understand the implications of turnover on
expenses and taxes.
5. Describe services provided by mutual funds and
be able to identify sources of information on
investment companies.
Activities and Assignment:
1. Watch Chapter 4 lecture videos.
2. Read assigned materials.
3. Complete chapter 4 homework assignment by
11:59pm Sep 25th.

Sep 26 - Oct 2
Exam 1

Exam 1 is open from 8am Sep 26th to 11:59pm Oct

2nd. You have only one chance to work on the exam. So
please review the materials well before you start
working on the exam. Exam 1 covers chapters 1, 2, 3
and 4.

Module 2 - Portfolio Theory (Chapters 5, 6, 7, 8)

Objectives:

Oct 3 - Oct 9 (Week 5)

Chapter 5 - Risk, Return

After covering the chapter, the Students should be able

to:
1. Describe the major factors that influence the
level of interest rates.
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2. Apply the Fisher effect to interest rates and
inflation.
3. Calculate risk and return statistical measures,
such as holding period returns, average returns,
expected returns, and standard deviations, ex
post and ex ante.
Activities and Assignment:
1.
2.
3.
4.

Watch Chapter 5 lecture videos.

Read assigned materials.
Watch Learn Smart instruction video.
Complete chapter 5 homework assignment by
11:59pm Oct 9th.

Objectives:
After covering the chapter, the Students should be able
to:

Oct 10 - Oct 16 (Week 6)

Chapter 6 Efficient
Diversification

1. Calculate the standard deviation and return for

two security portfolios find the minimum
variance combinations of two securities.
2. Understand the systematic and firm-specific risk
3. Construct the optimal portfolio consisting of
both risky and risk-free assets.
4. Construct portfolios of different risk levels,
given information about risk-free rates and
returns on risky assets or portfolios of risky
assets.
5. Calculate the expected return and standard
deviation of these portfolios.
Activities and Assignment:
1. Watch Chapter 6 lecture videos.
2. Read assigned materials.
3. Complete chapter 6 homework assignment by
11:59pm Oct 16th.

Objectives:
After covering the chapter, the Students should be able
to:
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Oct 17 - Oct 23 (Week 7)

Chapter 7 - Capital Asset
Pricing Model and Arbitrage
Pricing Theory

Fall 2016

1. Understand the concept and usage of the capital

asset pricing model (CAPM).
2. Construct and use the Security Market Line.
3. Understand the index models and the FamaFrench model.
4. Understand the arbitrage pricing theory (APT).
5. Understand the similarities and differences
between the two main theories and the
limitations of each.
Activities and Assignment:
1. Watch Chapter 7 lecture videos.
2. Read assigned materials.
3. Complete chapter 7 homework assignment by
11:59pm Oct 23rd.

Objectives:
After covering the chapter, the Students should be able
to:

Oct 24 - Oct 30 (Week 8)

Chapter 8 The Efficient
Market Hypothesis

1. Explain the concept of market efficiency and

how to make rational investment decisions based
upon efficient markets.
2. Explain tests of market efficiency, the forms of
market efficiency, and observed market
anomalies.
Activities and Assignment:
1. Watch Chapter 8 lecture videos.
2. Read assigned materials.
3. Complete chapter 8 homework assignment by
11:59pm Oct 30th.

Nov 31 - Nov 6
Exam 2

Exam 2 is open from 8am Nov 31st to 11:59pm Nov

6th. You have only one chance to work on the exam. So
please review the materials well before you start
working on the exam. Exam 2 covers chapters 5, 6, 7
and 8.

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Module 3 Debt Securities (Chapters 9 & 10)

Objectives:
After covering the chapter, the Students should be able
to:

Nov 7 - Nov 13 (Week 9)

Chapter 9 - Behavioral
Finance & Technical
Analysis

1. Cognizant of typical analytical errors related to

behaviorism or psychology.
2. Understand some of the basic technical
indicators presented in this chapter.
3. Understand the theoretical problems of
technical analysis in competitive markets that
approach efficiency.
Activities and Assignment:
1. Watch Chapter 9 lecture videos.
2. Read assigned materials.
3. Complete chapter 9 homework assignment by
11:59pm Nov 13th.
Objectives:
After covering the chapter, the Students should be able
to:

Nov 14 - Nov 20 (Week 10)

Chapter 10 - Bond Prices and
Yields

1. Calculate bond prices including accrued

interest, promised yields and realized yields
(called holding period yields or HPYs).
2. Understand how bond prices change as they
approach maturity.
3. Understand the effects of common bond
features such as the call feature, convertibility
and sinking fund provisions on bond yields.
4. Understand what determines the shape of the
yield curve.
Activities and Assignment:
1. Watch Chapter 10 lecture videos.
2. Read assigned materials.
3. Complete chapter 10 homework assignment by
11:59pm Nov 20th.

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Module 4 Security analysis (Chapters 12 & 14)

Objectives:
After covering the chapter, the Students should be able
to:

Nov 21 - Nov 27 (Week 11)

Chapter 14 - Financial
Statement Analysis

1. Analyze a firm using the basic financial

statements to perform ratio analysis.
2. Identify the source of problems over time by
decomposing the ROE using the DuPont
procedure.
3. Identify comparability problems across firms
due to the varying generally accepted accounting
principles available to the firm.
Activities and Assignment:
1. Watch Chapter 14 lecture videos.
2. Read assigned materials.
3. Complete chapter 14 homework assignment by
11:59pm Nov 27th.
Objectives:
After covering the chapter, the Students should be able
to:

Nov 28 - Dec 4 (Week 12)

Chapter 12 - Macroeconomic
& Industry Analysis

1. Understand some of the macroeconomic factors

that affect security prices.
2. Understand the roles of fiscal and monetary
policy in influencing interest rates and security
prices.
3. Understand why some industry groups are more
affected by macroeconomic factors than others
and should have a rudimentary knowledge of the
characteristics of an industry that affect
competitiveness.
Activities and Assignment:
1. Watch Chapter 12 lecture videos.
2. Read assigned materials.
3. Complete chapter 12 homework assignment by
11:59pm Dec 4th.
Final Exam Review & Study day
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Dec 5 Dec 11 (Review and Please review the materials well before you start
working on the exam.
Study Day)
Final Exam is open from 8am Dec 12th to 11:59pm Dec
13th. You have only one chance to work on the exam.
Dec 12 Dec 13 (Final
Final Exam covers chapters 9, 10, 12 and 14.
Exam Week)
Note: While every effort will be made to follow the schedule and procedures presented here, they are subject
to change in the event of extenuating circumstances.

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