Investments

Name of the Faculty S.G. Badrinath

Affiliation
(Institution / Organisation) IIM_B

Teaching Area Finance and Accounting

Long duration programmes to which
this course may be offered
(PGP, FPM, PGPEM, PGPPM, EPGP)
http://www.iimb.ernet.in/programmes PGP-1

Credits (No. of hours)

(3 credits=30 classroom hours; 1.5 credits-15
classroom hours; session=90 minutes) 3

Term / Quarter Term 3

Are there any financial implications to

this course? No

Course Type (Regular/ workshop)? Regular

http://www.iimb.ernet.in/user/224/s-g-
Faculty Profile badrinath

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Course Objectives
The course is designed with the following specific objectives and learning outcomes:

a. To advance the understanding of fundamental concepts of finance, financial

markets and market participants.
b. To explain the structure of publicly traded financial assets and the global markets
in which they trade.
c. To evaluate the economic and industry environment in which companies operate
anddevelop and employ tools of financial analysis for examining company
fundamentals
d. To understand the techniques of for valuing financial instruments.
e. To link theories of valuation to practical aspects of investing and portfolio
management.

Course Outline

During this semester, you will become familiar with the structure of domestic and
international financial markets and some of the securities traded therein. We will critically
examine qualitative concepts such as market efficiency, intrinsic value and risk. These
tools should enable you to build valuation models for common stocks and fixed-income
securities. You will also learn how professional financial analysts should evaluate
companies and how investment managers build diversified portfolios and assess portfolio
performance. The course concludes with some discussion of financial derivatives

Pre-requisites (if any): Introduction to Finance?

Pedagogy
The pedagogy involves lectures, discussion forums homework assignments. The textbook
is Z. Bodie, A. Kane and A. Marcus, Investments, latest Edition, McGraw Hill. Use the online
learning center at www.mhhe.com for your textbook.

In addition to the textbook, there are readings on my website, www.ramurapt.wordpress.com

as well as at www.ccmrm.org, the website of the Centre for Capital markets at IIM-B which I chair.
Lecture notes for each week will also be available at both locations.

Please be aware that relevant business experience does not generally provide a substitute
for the analytical basis that pre-requisites to this course normally provide.
 Expect to spend about two class periods of time in preparation for each class period.

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 Focus in particular on chapter concept checks in the textbook. Solutions to these
appear at the end of the textbook. Attempt the suggested end-of-chapter problems.
 During class, I will spend more time on problems and concepts that require further
elaboration and may not discuss all the topics explicitly. As the semester evolves,
relevant topics of current interest may be discussed even if outside the textbook.
 Please come prepared to participate actively in the classroom. At times, there has
been substantial variation in the backgrounds of students enrolling in this course. Do
not let this keep you silent.

Course Evaluation & Grading Pattern

Grading for this course consists of two exams (40% each) and periodic assignments. Expect
to become familiar with the Bloomberg resources in the Finance Lab.

Session-wise plan
Week Date / Topic and Readings
No. week
(Optional)
1 Introduction to markets, players, participants, BKM
Chapters 1 and 2, Lecture notes.

2 Risk and return concepts, BKM Chapter 5, Lecture

notes.

3 Primary Markets, structures and practices, BKM

Chapter 3, Lecture Notes.

4 Secondary market structure and dynamics, margins,

short-selling, BKM Chapter 3, Lecture notes.

Equity Valuation basics: Top down, economic and

5 industry analysis, BKM Chapter 17, Lecture notes.

Equity Valuation, BKM Chapters 18 and 19, lecture

6 notes.

Fixed Income Markets and valuation, BKM Chapters 14

7 and 15, Lecture Notes

Market Efficiency and Behavioral Finance, BKM

8 Chapters 11 and 12, Lecture Notes.

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 9 Option Markets: instruments, structure and pricing.
BKM Chapter 20 and 21, Lecture notes.

Futures Markets: instruments, structure and pricing,

10 BKM Chapter 22, Lecture notes.

Profile of the Adjunct / Guest Faculty

See profile on IIM-B website, http://www.iimb.ernet.in/user/224/s-g-badrinath .

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