Assignments

• Practice problems (you don't have to turn these in - just for additional practice)
• Numerical problems - Solutions to numerical problems (please post a comment if you believe any answers are incorrect)
• Conceptual questions
• Assigned groups - for Market Watch and Group Homework
• Market Watch
• Virtual Stock Exchange site
• VSE Trading rules
• Market watch assignment
• Market watch accounting - standard client reports (excel spreadsheet) and directions (pdf)
• Homework 1

Readings

Instead of a textbook, I've put together the following readings.  If you find readings that you think are useful to FIL 242, please let me know.



Web readings

These are sites that I have found that discuss course topics.  There are several types of web readings that I've found:

1. The first type describes material that is very similar to what I present in class.  If you want to reinforce and review class material, I've found short articles on various web sites. 
   
   
2. Sometimes, instead of covering definitions in class, it is easier to link to an article that describes these terms.  You are responsible for these definitions for the exam, but I'd rather spend time in class doing other things than read definitions (I'll let you know in class and on the web site if there are readings that you SHOULD read before an exam).
3. Finally, some readings get a bit deeper into the subject.  If you are interested in more information about a particular subject, these readings will help.

Other articles

Sometimes I can't find readings that closely relate to course content.  I am constantly adding information to the site as back up for important

FIL 242 Schedule

Date	Subject	Reading/Download/Assignment
Mon., August 23	Introduction	Syllabus: (1) two-page handout and (2) full syllabus
Wed., August 25	Chapter 1 - Investments overview	Part 1 notes (Chapters 1-5)
Mon., August 30	Chapter 2 - Economic and financial news	Yahoo! Finance Calendar of Economic Releases
Wed., September 1	Chapter 3 - Measuring risk and return Market watch project begins	Market watch project assignment
Mon., September 6	NO SCHOOL - LABOR DAY
Wed., September 8	Chapter 3 cont'd
Mon., September 13
Wed., September 15	Chapter 4 - Introduction to stocks Introduction to Baseline	See the U: drive for videos and documentation on using Baseline
Mon., September 20	Chapter 4 - cont'd
Wed., September 22	Chapter 5 - Market indices
Mon., September 27	----------   EXAM #1 ----------
Wed., September 29	Chapter 6 - portfolios
Mon., October 4	Chapter 6 - cont'd
Wed., October 6	Chapter 7 - Financial ratios
Mon., October 11	Chapter 7 - cont'd
Wed., October 13	Chapter 8 - valuation
Mon., October 18	Chapter 8 - cont'd
Wed., October 20	Catch up
Mon., October 25	Chapter 9 - Technical analysis
Wed., October 27
Mon., November 1	----------   EXAM #2 ----------
Wed., November 3
Mon., November 8
Wed., November 10
Mon., November 15
Wed., November 17
November 22-26	NO SCHOOL - THANKSGIVING BREAK
Mon., November 29
Wed., December 1
Mon., December 6
Wed., December 8
----------   FINAL EXAM (EXAM #3) ----------    Section 04 (12:35): Thursday, December 16, 1-3pm Section 06 (2pm): Tuesday, December 14, 1-3pm

Outline of text

Chapter 1 - Introduction to investments

Chapter 2 - Economics

Chapter 3 - Security

Chapter 4 - Individual security risk and return

Chapter 5 - Portfolio risk and return

Chapter 6 - Fundamental analysis of stocks

Chapter 7 - Stock valuation techniques

Chapter 8 - Technical analysis

Chapter 9 - Efficient market hypothesis

Chapter 10 - Bond valuation

Chapter 11 - Investment companies

Chapter 12 - Markets and transactions

Chapter 13 - Options

Chapter 14 - Futures

Review Exam #!

TOPIC 1 - INVESTMENT OVERVIEW

• Define the term "investments"
• Discuss how investments are created in the financial markets by the interaction of suppliers (typically households) and users of funds (typically governments and firms)
• List the dimensions that often differentiate financial markets and the securities created - maturity and risk
• Give broad characteristics of three categories of investments
  • Debt is a fixed claim on the income and assets
  • Equity is an ownership and residual claim on income and assets
  • Derivatives derive value from underlying assets but have no claim on a company's physical assets
• Distinguish the goals for individual and institutional investors
• Explain the need for financial intermediaries in financial markets and how their introduction increases the variety and type of investments available (direct vs. indirect investments)
• Outline the steps involved in the investment process especially:
  • types of goals for individual investors
  • differentiating asset allocation and security selection
  • recognizing typical constraints for investors
• If given a tax table, calculate taxable income for individuals
• Determine taxes on investment returns including capital gains, dividends, and interest income

TOPIC 2 - ECONOMY

• Explain top-down investment analysis and the sequence of decisions made
• List items that affect the growth of an economy (spending, capacity, etc.)
• Show how changes in currency values affect competition among domestic and international companies
• Discuss the importance of interest rates to the economy and the effects that the federal government has on interest rates
• Describe the fed funds market
• Explain a typical business cycle and the approximate sequence of events
• Explain the tradeoff between economic growth and inflation
• Differentiate cyclical and defensive stocks and provide examples of each
• Indicate how sector rotation strategies attempt to earn higher returns

TOPIC 3 - OVERVIEW OF SECURITIES

• Compute the total dollar and percentage returns on investments and separate returns into their income and capital gains components
• Calculate HPRs
• Annualize HPRs using APR and EAR
• Set up the equation that determines IRR and use an excel to find IRR
• Determine the cash flows of a bond - ALWAYS ASSUME SEMIANNUAL COUPONS UNLESS OTHERWISE STATED
• Distinguish secured vs. unsecured bonds, notes vs. bonds, term vs. serial/sinking fund bonds, and senior vs. junior bonds
• Compute current yield of bonds
• Identify the major issuers of bonds, explaining the key characteristics of each
• Explain the role of US government agencies in raising funds in the financial markets
• Find the equivalent tax-exempt yield of taxable bonds given an investor's tax rate
• List the rights of stockholders
• Differentiate important dates related to dividend payments on stock
• Determine the market capitalization of companies
• Distinguish common stock, treasury stock, and classified stock
• Describe characteristics of different types of stocks: income vs. growth, cyclical vs. defensive, hi tech, speculative, blue chip, small vs. large vs. mid-cap
• Understand all the information provided in a stock quote - e.g., Yahoo Finance quote (P/E ratio and div yield)
• Construct price-weighted and value-weighted indices

Economics Blog : Chorus Growing Louder for Larger Rate Cut

• What will the Fed do next Tuesday? Growing expectations of a whopping 75 b.p. change.

Economics Blog : Chorus Growing Louder for Larger Rate Cut

• More discussion of the Fed's dilemma and how much to lower rates
• Most of this stems from last Friday's employment report (which wasn't good). Here is a summary of comments from the financial press interpreting the report.