Module aim;
The aim of the Fixed Income and Equity Investment Analysis module is to equip students with the theoretical and practical knowledge required to understand the investment process, financial and securities markets, and the principles and techniques used to analyze fixed-income and equity securities. The module enables students to evaluate investment opportunities, assess risk and return, value different types of securities, construct and manage diversified and efficient portfolios, and make informed investment decisions in financial markets.
Learning outcome;
Upon successful completion of the module, students should be able to:
• Understand the meaning and principles of investment.
• Explain the meaning and objectives of portfolio management.
• Understand and explain the investment process and its major stages.
• Describe and analyze the investment environment and different investment vehicles.
• Analyze factors affecting investment decisions.
• Analyze and value fixed-income and equity securities.
• Assess investment risk and return.
• Construct and manage diversified investment portfolios.
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Content;
CHAPTER ONE: INTRODUCTION TO INVESTMENT AND SECURITY ANALYSIS
• Security analysis concepts
• Investment objectives
• Investment process
• Factors affecting investment decisions
• Investment environment and securities markets
CHAPTER TWO: SECURITY ANALYSIS
• Introduction to financial markets
• Approaches to security analysis:
Ø Fundamental analysis
Ø Technical analysis
Ø Random Walk Theory
• Efficient Market Hypothesis (EMH)
CHAPTER THREE: PORTFOLIO THEORY AND ASSET PRICING
• Markowitz Theory / Modern Portfolio Theory
• Capital Asset Pricing Model (CAPM)
• Arbitrage Pricing Theory (APT)
• Comparison of APT and CAPM
CHAPTER FOUR: RISK AND RETURN IN PORTFOLIO ANALYSIS
• Concept of risk and return
• Types and sources of investment risk
• Measurement of return
• Measurement of risk
• Risk and return in portfolio analysis
CHAPTER FIVE: VALUATION AND ANALYSIS OF BONDS
• Concept of bond valuation
• Bases of valuation
• Valuation of irredeemable (perpetual) bonds
• Valuation of redeemable bonds
• Bond yield and relationship between bond prices and interest rates
CHAPTER SIX: VALUATION AND ANALYSIS OF SHARES
• Valuation of preference shares
• Valuation of ordinary shares
• Dividend-based valuation of ordinary shares
• Growth and expected return
• CHAPTER SEVEN: INVESTMENT PERFORMANCE EVALUATION AND MANAGEMENT
• Portfolio performance evaluation
Ø Sharpe measure
Ø Treynor measure
Ø Jensen's measure
Ø Appraisal ratio
• Portfolio management strategies:
Ø Passive management strategies
Ø Active management strategies
Lecturer contact;
MUDAKEMWA Augustin
Assistant Lecturer at University of Kigali
School of Business Management and Economics
Tel: 0785818622
Email: amudakemwa@uok.ac.rw
- Teacher: AUGUSTIN MUDAKEMWA