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SUBJECT OUTLINE 25503 Investment Analysis Course area

UTS: Business

Delivery

Spring 2020; standard mode; City

Credit points 6cp Requisite(s)

25300 Fundamentals of Business Finance AND Completionof subject 26100 Integrating Business Perspectivesc Completion of subject 26100 Integrating Business Perspectives These requisites may not apply to students in certain courses. There are also course requisites for this subject. See access conditions.

Result type

Grade and marks

Subject coordinator Lorenzo Casavecchia Email: [email protected] Office location: Building 8, Level 7 Online Consultation: Friday 2:00 P.M. - 4:00 P.M.

Teaching staff Lorenzo Casavecchia (Lecturer) Amir Armanious (Tutor) Wayne Markman (Tutor) Christina Bui (Tutor) Don Nguyen (Tutor)

Subject description This subject exposes students to the applied aspects of investment and portfolio management. Students analyse local and international asset classes and investment markets and the role that technology plays in these markets. The subject focuses on developing students’ technical capability to analyse and value equity, debt and alternative investments. Students will also develop the skills to construct, strategically manage and evaluate a portfolio of assets for individual and institutional investors.

Subject learning objectives (SLOs) Upon successful completion of this subject students should be able to: 1. describe the investment process, highlighting the role of asset classes, financial instruments and financial markets 2. apply macroeconomic analysis, industry analysis and financial statements to the valuation of equity securities 3. recommend whether to buy or sell shares in a company by interpreting the reports of financial analysts 4. design an asset allocation scheme or a portfolio by applying a portfolio construction methodology 5. assess the performance of a portfolio, with reference to its investment strategy and stated objectives

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Contribution to the development of graduate attributes The subject contributes to the aim of preparing students to commence a fulfilling and effective career in business, especially in investment management. It pursues this aim through the study of the theory and practice of portfolio construction on under uncertainty. Asset selection and risk management techniques are considered and applied in investment management. Principal asset classes are analysed in the context of their contribution to portfolio objectives, risk and return. Portfolio performance is monitored to illustrate the problems and issues in investment management. This subject contributes to the development of the following graduate attributes: Critical thinking, creativity and analytical skills Business practice oriented skills This subject also contributes specifically to develop the following Program Learning Objectives: 2.2: Apply critical and creative thinking to address issues in business 5.1: Apply technical and professional skills necessary to operate effectively in business and related professions

Teaching and learning strategies Each week a two-hour lecture will present and analyse the relevant theories and concepts required to understand the world of modern investment management. Practical exercises and application of these concepts are then examined in detail in both on-line and off-line learning opportunities, and during interactive tutorial sessions. Alongside these activities, an in-depth, Excel-based, group assignment will also be undertaken outside of class time to allow for authentic collaborative learning which will bridge the gap between theory and practice. The UTSOnline site will be used extensively to share all materials and information. The learning activities available to students are: 1. Pre-lecture videos and articles: Students are required to watch and read a number of introductory online videos and articles before coming to each lecture. This will enable increased interaction during class and allow for active learning during lectures (such as small group discussions). 2. Weekly lectures: These provide the main vehicle for the development of course content. Each week new material builds upon and develops earlier material and so it is important to consolidate understanding of one lecture before attending the next. 3. Tutorial problems: A set of theoretical and practical problems associated with each lecture will be posted on UTSOnline each week. Students are encouraged to make a genuine attempt to solve these problems independently before seeking help from classmates or online. Abbreviated written solutions will accompany the tutorial problems to provide self-assessment and feedback, however these solutions are designed to be a check on students’ own work and not instructional. Instructional videocasts of tutorial solutions will also be provided online (with a lag of one week) which include much more detail and additional interactive exercises. The tutorial problems are an integral part of the subject and their importance cannot be underestimated. 4. Weekly tutorial sessions: A formal one-hour tutorial session will take place each week and each student will be allocated to a specific tutorial session; note that sessions will only start during the second week of classes. These sessions are designed to allow students to obtain feedback on their attempted solutions to the tutorial problems, as such students are required to attempt the assigned problems prior to attending the session and to come prepared to discuss their attempted answers in class. There will also be two in-class quizzes during the tutorial sessions throughout the semester. 5. UTSOnline engagement: To stimulate collaborative learning, students are encouraged to use the UTSOnline discussion board. The discussion board is a forum for students to post subject-related inquiries, discuss topics, and exchange ideas with classmates. The discussion board is a great tool for discussion between students and will also be monitored regularly by the lecturer(s) and tutors.

Content (topics) Asset classes, financial instruments and financial markets The characteristics of individual and institutional investors New technology in investing, such as AI, machine learning, fintech and cryptocurrencies Equity valuation using macroeconomic analysis, industry analysis and financial statement analysis Understanding the role of equity analysts and interpreting their reports The properties of bonds and debt securities 26/07/2020 (Spring 2020)

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Alternative assets, such as private equity and hedge funds ESG investing Portfolio construction techniques Investment strategies, investment objectives and performance measurement and attribution

Program Week/Session

Dates

Description

1

31 Jul

Topic 1 - Overview of Investment Analysis

2

7 Aug

Topic 2 – Estimating Discount Rates

3

14 Aug

Topic 3 - Industry Analysis and Economic Analysis

4

21 Aug

Topic 4 – Financial Statement Analysis

5

28 Aug

Topic 5 – Valuing Equity: Market-based approach

6

4 Sept

Topic 6 – Valuing Equity: Fundamental Valuation (Part 1)

7

11 Sept

Topic 7 – Valuing Equity: Fundamental Valuation (Part 2)

18 Sept

StuVac

8

25 Sept

Topic 8 – Special Lecture: Equity Valuation of a Professional Analyst

9

2 Oct

Topic 9 - Individual Investors and the Investment Process

10

9 Oct

Topic 10 – Active Investing and Performance Evaluation

11

16 Oct

Topic 11 – Valuing Debt Securities

12

23 Oct

Topic 12 – Special Lecture: Technology in Finance

Additional information Please be aware that additional information of relevance to both the subject's teaching and assessment will be posted on UTSOnline. It is a students' own responsibility to ensure that they have access to, and are aware of, this additional information. Covid-19 specific teaching variations Due to Covid-19 environment, our teaching delivery concept in Spring 2020 will comprise online lectures and online tutorials delivered via Zoom. There will be no face-to-face activities or group assignments, for this session only. Microsoft Excel 26/07/2020 (Spring 2020)

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Microsoft Excel is an extremely important part of this subject. You should familiarise yourself with this application as soon as possible. Good Excel skills are essential for successful completion of the assignment problems. Whilst there will be plenty of demonstrations in lectures and the tutorial sessions, mastering Excel is your responsibility—it is not taught as part of the subject. Calculators A non-programmable business/financial calculator is absolutely necessary, and you are advised to spend some time learning how to use it properly. The quiz and exam problems for this subject will require computations, so practice solving the in-class exercises on your calculator quickly and efficiently. Programmable calculators are not allowed in the quizzes and exams.

Assessment Assessment task 1: Online quizzes (Individual) Objective(s): This addresses subject learning objective(s): 1, 2, 3, 4 and 5 Weight:

50%

Task:

The quizzes will test students’ understanding of essential concepts in investment analysis. The quizzes will cover the material from Topics 1 - 10.

Further There will be no other opportunities to take these quizzes. The format of these quizzes will be information: multiple choice and / or short answer questions. Students who fail to attend a quiz will have the weighting of that assessment task added to the final examination conditional on the students submitting, receiving approval and complying with the requirements of special consideration in accordance with the UTS rules. If no such approval is given then a mark of zero will be awarded and no further opportunities to sit for the quiz will be given. If the composite mark for the final exam is more than 50 percent and the student is in the final subject of their degree, the UTS rules on borderline result (range of 45-49, inclusive) shall apply whereby students will be allowed to undertake a supplementary final examination. Where a student completes and passes a supplementary examination, the maximum mark awarded for the subject will be 50 Pass.

Assessment task 2: Final Examination (Individual) Objective(s): This addresses subject learning objective(s): 1, 2, 3, 4 and 5 Weight:

50%

Task:

The final examination will test students’ understanding of the theories outlined in this subject as well the students’ ability to apply these theories in practice. The exam will cover the material from the entire subject (Topics 1-12).

Length:

TBA

Due:

UTS Exam period

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Minimum requirements To pass this subject you must achieve a combined grade of at least 50% for your assignment plus mid-semester and final exams.

Recommended texts “Essentials of Investments” – International Student Edition by Bodie, Kane and Marcus, 11th Edition (2019) – McGraw Hill Other useful texts: Edwin J. Elton, Martin J. Gruber, Stephen J. Brown, and William N. Goetzmann, Modern Portfolio Theory and Investment Analysis, 9th edition, Wiley, 2014.

Other resources Consultation Times The lecturer(s) will be available for consultation at certain times throughout the week. These consultation times will be made available on UTSOnline. The UTSOnline Discussion Board The UTSOnline discussion board is a forum for students to post subject-related inquiries, discuss topics, and exchange ideas with classmates. Please note that the discussion board is a great tool for discussion between students and will be monitored regularly by the lecturer and tutors and you are encouraged to make good use of it.

Academic liaison officer Dr Robert Czernkowski, Accounting Discipline Group, telephone 9514 3736 Mr Harry Tse, Economics Discipline Group, telephone 9514 7786 or 9514 5456 Dr Otto Konstandatos, Finance Discipline Group, telephone 9514 7758 Dr Paul Wang, Marketing Discipline Group, telephone 9514 3692 Associate Professor Carmel Foley, Management Discipline Group, telephone 9514 5102 Any arrangements should be negotiated within the first six weeks of session.

Support Student Services Unit/Counselling: Student Services provides a range of free and confidential professional services to support different aspects of your life and learning at UTS. These services include counselling for personal and learning problems or issues. If you are experiencing difficulties with your overall study program, for whatever reason, telephone +61 2 9514 1177 (City campus). Students with disabilities or ongoing medical conditions: If you are a student who has a disability or ongoing medical condition that requires support services you are encouraged to contact the accessibility consultants or Accessibility Service (telephone +61 2 9514 1177) for a confidential interview. Supporting documentation regarding your disability or ongoing medical condition is required if you wish to apply for assessment adjustments, including alternative assessment conditions. Each faculty has appointed academic liaison officers (ALOs) who are responsible for approving assessment adjustments. Meeting with the accessibility consultants or Accessibility Service before seeking assessment adjustments from your ALO is required. Improve your academic and English language skills: Marks for all assessment tasks such as assignments and examinations are given not only for what you write but also for how you write. If you would like the opportunity to improve your academic and English language skills, make an appointment with the HELPS (Higher Education Language and Presentation Support) service in Student Services. HELPS (Higher Education Language and Presentation Support): HELPS provides assistance with English language proficiency and academic language. Students who need to develop their written and/or spoken English should make use of the free services offered by HELPS, including academic language workshops, vacation intensive courses, drop-in consultations, individual appointments and Conversations@UTS. HELPS is located in Student Services, Building 1, Level 5, Room 25 (CB01.05.25). Study skills / learning support: If you are experiencing difficulty with your studies or need to develop the necessary study skills you require for your course, there is a host of useful information and websites to help you on the UTS Business School, Study and Assessment Resource website. Links on how to write better, study more effectively, 26/07/2020 (Spring 2020)

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available support services/staff to help, how to complete assignments; as well as tips for successful study and online study skills resources can all be accessed. In addition, HELPS provides self-help resources. Special consideration: Special consideration consists of the exercise of academic discretion to provide equitable treatment to students whose performance in an assessment item is affected by illness, misadventure or work-related circumstances. You should only apply for special consideration when your performance in an assessment item, including examinations, has been affected by extenuating or special circumstances beyond your control. These circumstances include: Serious illness or psychological condition: such as hospital admission, serious injury or illness, severe anxiety or depression Loss or bereavement: such as death of a close family member, family relationship breakdown Hardship or trauma: such as being a victim of a crime, sudden loss of income or employment, severe disruption to domestic arrangements Exceptional employment demands: such as active service (e.g. ADF Reserves, bushfire and SES services). Special consideration is not automatically guaranteed and may not result in a mark adjustment Careers Service: The UTS Careers Service aims to actively support the career development needs of all UTS students.

Statement about assessment procedures and advice Assessment of coursework subjects All staff and students involved in the assessment of coursework subjects at UTS are subject to the Policy for the Assessment of Coursework Subjects. The policy is applicable to the assessment of all coursework subjects. This policy does not apply to thesis subjects that are taken by students enrolled in research degrees, but does apply to any coursework subjects undertaken by research degree students. It does not describe policy that relates to academic progression through a course of study. The policy should be read in conjunction with the Procedures for the Assessment of Coursework Subjects.

Statement on copyright Australian copyright law allows you as a student or researcher to copy and use limited amounts of other people's material in your study or research without their permission and free of charge. This applies to any sort of published or unpublished work, and includes written material, tables and compilations, designs, drawings (including maps and plans), paintings, photographs, sculpture, craft work, films (such as feature films, television programs, commercials and computer video games), software (such as computer programs and databases), sound recordings, performances and broadcasts (including podcasts and vodcasts of these) and text, including books, journals, websites, emails and other electronic messages. It is important to remember that you can only use a limited amount for your study or research purposes and that you need to correctly acknowledge the author and reference their material when you use it in your work. Incorrect or improper use of copyright protected material could result in breaking Australian copyright law, for which significant penalties apply. Incorrect or improper use of copyright protected material at UTS would result in consideration under the UTS Student Misconduct rules. UTS Rules and the UTS Student Charter require that students familiarise themselves and comply with UTS student policies and procedures. Students should also see the copyright information advising what you can copy and how much you can use. Copyright notice concerning teaching materials Please remember that teaching materials and course resources provided to you at UTS are protected by copyright. You are not permitted to re-use the UTS teaching materials for commercial purposes without permission of the copyright owner. Improper or illegal use of teaching materials may lead to prosecution for copyright infringement. For further information see UTS copyright for students and researchers.

Statement on plagiarism At UTS, plagiarism is defined in rule 16.2.1(4) as: 'taking and using someone else's ideas or manner of expressing them and passing them off as his or her own by failing to give appropriate acknowledgement of the source to seek to 26/07/2020 (Spring 2020)

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gain an advantage by unfair means'. The definition infers that if a source is appropriately referenced, the student's work will meet the required academic standard. Plagiarism is a literary or an intellectual theft and is unacceptable both academically and professionally. It can take a number of forms including but ...