Capital Market & Portfolio Theory
- Management Sciences
- 400 level
- 3 credit units
- 145 pages
- 14 units
This course introduces students to capital market operations and portfolio performance analysis. It covers core portfolio selection and management topics, including investment risk and returns, potential profitability of various investments, forecasting returns on individual portfolios, and models for evaluating portfolio performance. The course aims to equip students with the knowledge to make informed investment decisions and understand the intricacies of risks and returns in capital market operations.
About this course
- Difficulty
- Intermediate
- Study hours
- 60 hours
- Maths
- Intermediate
- Content
- Theoretical, case study
- Practical work
- No
- Assignments
- Tutor Marked Assignments
- Final Examination
What you'll read
The real module and unit structure of BFN403, taken from the course material NOUN publishes.
One paragraph, so you can see how it reads
BFN403 · UNIT 1 OVERVIEW OF THE CAPITAL MARKET
In the secondary markets, existing securities are sold and bought among investors or traders, usually on an exchange, over-the-counter, or elsewhere. The existence of secondary markets increases the willingness of investors in primary markets, as they know they are likely to be able to swiftly cash out their investments if the need arises.
What you should be able to do
- Understand capital market operations
- Analyze portfolio performance
- Evaluate investment risks and returns
- Apply security analysis techniques
- Assess bond values
- Make informed investment decisions
What it prepares you for
- Financial Analyst
- Portfolio Manager
- Investment Banker
- Stockbroker
- Banking
- Investment Management
- Insurance
- Financial Consulting
Where it gets hard
The units students slow down on, and what makes each one heavy.
- Module 3:
Unit 4: Bond Valuation and Analysis
Involves complex calculations of bond values and yields, requiring a strong understanding of financial mathematics and market dynamics.
- Module 4:
Unit 2: International Transactions and Currency Values
Requires understanding of international economics, currency exchange rates, and the balance of payments, which can be challenging for students without a background in these areas.
A suggested way through it
13 weeks, about 52 hours in total. Yours will differ.
- Week 1Module 1:
Unit 1: Overview of the Capital Market · 4 hours
Define capital markets and differentiate between money and capital markets.. Discuss the forces reshaping financial institutions and services..
- Week 2Module 1:
Unit 2: The Investment Setting · 4 hours
Explain the meaning of investment and compare different investment alternatives.. Analyze the effects of inflation on common stock values..
- Week 3Module 1:
Unit 3: Investment Return · 4 hours
Understand the concept of return and its components.. Calculate capital gains and losses on investments..
- Week 4Module 1:
Unit 4: Risks on Investments · 4 hours
Discuss the concept of risk and its relationship with return.. Identify various risks associated with different investment instruments..
- Week 5Module 2:
Unit 1: Investing in Common Stocks · 4 hours
Explain the appeal of common stocks and their potential for capital gains.. Discuss the pros and cons of stock ownership..
- Week 6Module 2:
Unit 2: Buying and Selling of Common Stocks · 4 hours
Describe the process of buying and selling common stocks.. Understand how to read stock quotes and calculate transaction costs..
- Week 7Module 2:
Unit 3: Evaluation of Common Stocks · 4 hours
Discuss the rationale behind evaluating common stocks.. Understand the sources of common stock value and the impact of dividend payments..
- Week 8Module 3:
Unit 1: Security Analysis · 4 hours
Explain the principles of security analysis and its application in efficient markets.. Discuss the importance of economic and industry analysis..
- Week 9Module 3:
Unit 2: Investing in Fixed-Income Securities · 4 hours
Describe the process of investing in fixed-income securities.. Analyze the advantages and disadvantages of bond investments..
- Week 10Module 3:
Unit 3: Bond Investment · 4 hours
Discuss the primary investment interests in bonds.. Understand the relationship between bond prices and interest rates..
- Week 11Module 3:
Unit 4: Bond Valuation and Analysis · 4 hours
Explain the basic principles guiding bond valuation.. Analyze the factors that influence bond prices and yields..
- Week 12Module 3:
Unit 5: Preferred Stocks and Convertible Securities · 4 hours
Describe the nature of preferred stocks and their advantages and disadvantages.. Understand the rights of preferred stockholders..
- Week 13Module 4:
Unit 1: Marketability, Default Risk and Call Privileges · 4 hours
Explain marketability, default risk, and call privileges in capital markets.. Understand the implications of liquidity and illiquidity..
Preparing for the exam
- Review all Tutor-Marked Assignments (TMAs) and their solutions.
- Create summaries of key concepts and formulas from each unit.
- Practice numerical problems related to bond valuation and portfolio performance.
- Focus on understanding the relationship between risk and return.
- Study the different types of investment instruments and their characteristics.
Questions students ask about this course
What is BFN403 about?
This course introduces students to capital market operations and portfolio performance analysis. It covers core portfolio selection and management topics, including investment risk and returns, potential profitability of various investments, forecasting returns on individual portfolios, and models for evaluating portfolio performance. The course aims to equip students with the knowledge to make informed investment decisions and understand the intricacies of risks and returns in capital market operations.
How many units does BFN403 have?
BFN403, Capital Market & Portfolio Theory, has 14 units across 4 modules, over 145 pages of course material. You can read it one unit at a time.
How many credit units is BFN403?
BFN403 carries 3 credit units, at 400 level in Management Sciences.
Is BFN403 hard?
BFN403 is rated intermediate level, with intermediate mathematical content. It is mostly theoretical and case study work.
How long does BFN403 take to study?
About 60 hours of study, spread across its 14 units.
How is BFN403 assessed?
BFN403 is assessed by Assignments, Tutor Marked Assignments and Final Examination.
What can I do with BFN403?
Financial Analyst, Portfolio Manager, Investment Banker and Stockbroker.