Energy Systems Engineering (English)
Bachelor	TR-NQF-HE: Level 6	QF-EHEA: First Cycle	EQF-LLL: Level 6

General course introduction information

Course Code:

FNCE304

Course Name:

Investment and Portfolio Management

Course Semester:

Fall

Course Credits:

Theoretical	Practical	Credit	ECTS
3	0	3	6

Language of instruction:

Course Requisites:

Does the Course Require Work Experience?:

Type of course:

Compulsory

Course Level:

Bachelor

TR-NQF-HE:6. Master`s Degree

QF-EHEA:First Cycle

EQF-LLL:6. Master`s Degree

Mode of Delivery:

Face to face

Course Coordinator :

Prof. Dr. GÖKÇE TUNÇ

Course Lecturer(s):

Prof. Dr. GÖKÇE TUNÇ

Course Assistants:

Course Objective and Content

Course Objectives:

The objective of this course is to introduce the specifics of investment environment; overview of financial instruments; security trading; initial public offerings; market orders; buying on margin; short sales; investment companies; open-end funds; closed-end funds; risk and return; risk premium; risk aversion; capital allocation line; portfolios of risky and risk-free assets; the capital market line; optimal risky portfolios; diversification; portfolios of two risky assets; minimum variance portfolio; the Markowitz portfolio selection; capital asset pricing model; arbitrage pricing theory; factor models; market efficiency; simulation application.

Course Content:

Investment environment; overview of financial instruments; security trading; initial public offerings; market orders; buying on margin; short sales; investment companies; open-end funds; closed-end funds; risk and return; risk premium; risk aversion; capital allocation line; portfolios of risky and risk-free assets; the capital market line; optimal risky portfolios; diversification; portfolios of two risky assets; minimum variance portfolio; the Markowitz portfolio selection; capital asset pricing model; arbitrage pricing theory; factor models; market efficiency; simulation application.

Learning Outcomes

The students who have succeeded in this course;

Learning Outcomes

1 - Knowledge
Theoretical - Conceptual
1) • Discuss the financial environment in terms of portfolio management.
2) • Determine expected values and variances of financial assets and portfolios.
3) • Discuss whether the financial markets are efficient.
4) • Build a diversified portfolio and assess portfolio performance.
2 - Skills
Cognitive - Practical
3 - Competences
Communication and Social Competence
Learning Competence
Field Specific Competence
Competence to Work Independently and Take Responsibility

Lesson Plan

Week	Subject	Related Preparation
1)	• Describe the course. • Differentiate real and financial assets. • Identify the relationship between financial markets and economy. • Explain the specifics of the Money Market • Explain the specifics of the Bond Market • Explain the specifics of the Equity Securities • Discuss the Stock and Bond Market Indexes • Explain the specifics of the Derivative Markets • Syllabus. • Recognize the informational role of Financial Markets • Discuss the consumption timing, allocation of risk, separation of ownership and management and corporate governance and corporate ethics with regard to investment environment. • Justify the the Investment Process. • Argue the the Risk–Return Trade-Off and Efficient Markets. • Discuss the Money Market and the Bond Market instruments. • Define options and futures contracts.	NONE
2)	• Explain how firms issue securities. • Argue how securities are traded. • Identify market structure in different countries. • Recognize the types of Investment Companies. • Explain the specifics of Mutual Funds. • Discuss the Investment Banking and Initial Public Offerings (IPOs). • Compare Direct Search Markets, Brokered Markets, Dealer Markets and Auction Markets. • Analyze type of orders (Market Orders / Price-Contingent Orders). • Discuss trading mechanisms. • Compare the important securities markets around the world. • Differentiate Buying on Margin and Short Sales.	Review the Syllabus. Read, in Bodie-Kane-Marcus, chapters 1-2-3-4 on pages 1-116.
3)	• Explain the determinants of the level of Interest Rates. • Compare the rates of return for different holding periods. • Identify risk and risk premiums. • Argue the time series analysis of past rates of return. • Justify the the normal distribution. • Evaluate the deviations from normality and risk measures. • Compare the historical returns on risky portfolios: equities and long-term government bonds. • Distinguish real and nominal rates of interest. • Analyze the effect of taxes on the real rate of interest. • Recognize annual percentage rates and identify continuous compounding. • Compute and evaluate Holding-Period Returns, Expected Return and Standard Deviation, Excess Returns and Risk Premiums. • Identify and analyze the the Reward-to-Volatility (Sharpe) Ratio. • Evaluate Value at Risk, Expected Shortfall, Lower Partial Standard Deviation and the Sortino Ratio meaures with regard to deviations of returns from normality. • Discuss the global view of the historical record on equities and long-term government bonds.	Read, in Bodie-Kane-Marcus, chapter 5 on pages 117-159. Review the Lecture Notes.

Sources

Course Notes / Textbooks:	INVESTMENTS Zvi Bodie-Alex Kane-Alan J. Marcus, 9th ed., 2011 ISBN 978-0-07-353070-0
References:	INVESTMENTS Zvi Bodie-Alex Kane-Alan J. Marcus, 9th ed., 2011 ISBN 978-0-07-353070-0

Course-Program Learning Outcome Relationship

Learning Outcomes	1	2	3	4
Program Outcomes
1) Closed Department

Course - Learning Outcome Relationship

No Effect	1 Lowest	2 Low	3 Average	4 High	5 Highest

	Program Outcomes	Level of Contribution
1)	Closed Department

Learning Activity and Teaching Methods

Individual study and homework
Group study and homework
Project preparation

Assessment & Grading Methods and Criteria

Written Exam (Open-ended questions, multiple choice, true-false, matching, fill in the blanks, sequencing)
Homework
Individual Project
Group project

Assessment & Grading

Semester Requirements	Number of Activities	Level of Contribution
Midterms	1	% 40
Final	1	% 60
total		% 100
PERCENTAGE OF SEMESTER WORK		% 40
PERCENTAGE OF FINAL WORK		% 60
total		% 100

Workload and ECTS Credit Grading

Activities	Number of Activities	Workload
Course Hours	16	48
Study Hours Out of Class	15	90
Homework Assignments	4	8
Quizzes	3	3
Midterms	1	10
Final	1	22
Total Workload		181