Syllabus
MASTERS SYLLABUS
2229 - Investments
Spring 2025
Instructor: Martijn Boons
Martijn Boons is a Professor of Finance at Nova School of Business and Economics. He has a Ph.D. in Finance from Tilburg University. His research is in the area of asset pricing and has been published in top-tier finance journals, like the Journal of Finance and the Journal of Financial Economics. Most of Martijn's projects are directly related to the material taught in this course and, more generally, to asset management practice. For more detail on his past and current research, please visit Martijn’s website: https://sites.google.com/site/martijnboons/
Contact information:
Instructor
Office hours: Every Tuesday with classes from 11 – 12 pm in office D2.14.
Teaching assistant
Diogo Luís diogo.luis@novasbe.pt
Special online office hours in the weeks before exams and assignment hand-in dates to be announced.
Moodle:
Password: gaur6octopus
Use Moodle forums for asking questions!
Course Unit Aims.
This course is designed to provide students with a strong foundation in all the fundamental concepts in investments. Broad topics include risk and return, constructing optimal portfolios, asset pricing models, fixed-income securities, and financial derivatives. We will seek a balance between the theoretical paradigms, the empirical findings, and their application to the real world. Lectures and exams will concentrate on both conceptual foundations and quantitative problem solving.
Course Unit Content
Main topics covered in the course:
• Introduction: present values, risk and return
• Portfolio Theory
• Equities
• Fixed Income
• Linear Derivatives
• Options
Class Calendar (subject to change):
Week |
Section A |
Section B |
Topic |
Book |
Exercise set |
|
1 |
February 3&4 |
February 3&4 |
Introduction and course overview |
|
|
|
2 |
February 10&11 |
February 10&11 |
Risk and return |
1,2,3,4, 5 |
1 |
|
3 |
February 17&18 |
February 17&18 |
Capital allocation |
6,7 |
2 |
|
4 |
February 24&25 |
February 24&25 |
8,9 |
3 |
|
|
5 |
March 3 |
March 3 |
Catch up |
10 |
|
|
6 |
March 10&11 |
March 10&11 |
Factor models |
|
4 |
|
Make-up |
March 18 |
March 18 |
Midterm prep |
|
|
|
Midterm: Tuesday March 25 at 8.30am |
|
||||
|
Hand in Assignment 1: Sunday March 16 at Midnight |
|
||||
|
7 |
March 31 & April 1 |
March 31 & April 1 |
Market efficiency and anomalies |
11,12,13 |
5 |
|
8 |
April 7&8 |
April 7&8 |
14,15,16 |
6 |
|
|
9 |
April 14&15 |
April 14&15 |
7 |
||
|
10 |
April 21&22 |
April 21&22 |
20, 21 |
8 |
|
|
11 |
April 28&29 |
April 28&29 |
|
|
9 |
|
12 |
May 5&6 |
May 5&6 |
Catch up and Final prep |
|
|
|
Final exam: Thursday May 29 at 5.30pm |
|
||||
|
Hand in Assignment 2: Sunday May 11 at Midnight |
|
||||
Learning Objectives
Upon completion of this course, students should be able to:
A. Knowledge and Understanding
• Have a broad knowledge of different investment assets and strategies
• Understand the economic role of financial assets and markets
• Understand the risk-return trade-offs faced by investors
• Understand the concept and implications of market efficiency
B. Subject-Specific Skills
• Know how to value different securities: bonds, stocks, derivatives
• Know how to estimate the term structure of interest rates
• Know how to construct efficient portfolios
• Know how to engineer simple hedging strategies using derivatives
C. General Skills
• Present quantitative results in a clear and concise manner, both written and orally
• Work effectively in teams
Coherence
The topics we cover in the course will expose students to all knowledge areas that are most relevant to Investments. The type of work they have to conduct in class will incentivize them to think about finance and develop the skills necessary for the practice of Investments.
Teaching and Learning Methods
There are four main teaching and learning methods:
1. Lecture-style classes: conceptual material is presented and illustrated with real-world examples.
2. Written group assignments (2 in total)
3. Weekly exercise sets: students will be given simple problem sets, mostly aimed at consolidating technical material (for example, valuing derivatives). These exercise sets are meant for students to practice the material and prepare for exams.
4. Topical issues: a recent event and/or news piece may be selected for class discussion (for example: the recent contraction of the hedge-fund industry and its potential implication for market efficiency).
Assessment
The Final Exam is mandatory and must cover the entire span of the course. Its weight in the final grade can be between 30 to 70%. The remainder of the evaluation can consist of class participation, midterm exams, in class tests, etc. Overall, written in class assessment (final exam, midterm) must have a weight of at least 50%.
Assessment methods
1. Cases: 2x15%=30%
· Cases are to be done in groups of 3, 4 or 5 students.
· There will be special office hours with the TA and professor supervising each assignment.
· Deadlines
i. Assignment 1: Sunday March 16 Midnight
ii. Assignment 2: Sunday May 11 Midnight
2. Midterm: 35%
· 15 MC questions through Moodle quiz and students will have access to Excel.
· Preceded by a review lecture.
3. Exam: 35%
· 10 MC and a number of open questions through Moodle quiz and students will have access to Excel.
· Preceded by a review lecture.
Students will have to deliver both cases and do the midterm to be able to complete the course. All intermediate grades as well as the final grade are rounded at the closest integer. Students that fail the course will take a single resit exam (covering both the midterm and final material) that counts for 70%.
A cheat sheet is not allowed on the exam, but a formula sheet will be provided.
Bibliography and Resources
• Lecture notes available on Moodle.
• “Investments”, by Bodie, Kane, and Marcus, 10th edition, McGraw‐Hill
• Selected academic papers announced in class.
Resources on the web that you may find interesting and useful:
• http://www.bloomberg.com/ for market news and data
• http://finance.yahoo.com/ lots of free data and news
• http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html data
• http://johncochrane.blogspot.pt/ Prof. John Cochrane’s blog
The Nova Investment Club (http://www.novainvestmentclub.com/) has many interesting initiatives in the area of finance.