Handbook : Unit informationEdith Cowan University

School: Business and Law

This unit information may be updated and amended immediately prior to semester. To ensure you have the correct outline, please check it again at the beginning of semester.

• Unit Title

  Investment Finance

• Unit Code

  ECF2226

• Year

  2019

• Enrolment Period

  2

• Version

  2

• Credit Points

  15

• Full Year Unit

  N

• Mode of Delivery

  On Campus
  Online

• Unit Coordinator

  Dr Anna GOLAB

---

Description

Risk and return are fundamental to investment decisions. This unit involves developing a conceptual framework and a practical set of skills that will allow the measurement of both risks and returns for a range of different investments including shares and fixed interest securities. As part of this conceptual framework, there will be coverage of modern portfolio theory, the capital asset pricing model, derivative securities, the efficient market hypothesis, and recent developments in the area of behavioural finance.

Prerequisite Rule

Students must have passed ECF1120.

Learning Outcomes

On completion of this unit students should be able to:

1. Explain the major conceptual frameworks that are used in finance in the measurement of risk and return.
2. Apply this conceptual understanding to the practical measurement of risk and return for investments such as shares and fixed interest securities.
3. Demonstrate the benefits of asset diversification and calculate the return and risk of combinations of financial assets.
4. Understand and apply financial performance measurements to evaluate various investment opportunities based on their risk and return.
5. Understand Options and Futures derivative securities, and calculate the value of stock options using Black-Scholes Option Pricing Model.
6. Explain the concept of the efficient market hypothesis and how human behaviour can impact investment decisions.

Unit Content

1. Rates of return.
2. The measurement of risk.
3. Portfolio theory.
4. Capital asset pricing model.
5. Performance measurement.
6. Introduction to derivatives and option pricing
7. The efficient market hypothesis.
8. Behavioural finance.
9. Bond valuation and yield curves.
10. Duration and immunisation.

Learning Experience

ON-CAMPUS

Students will attend on campus classes as well as engage in learning activities through ECU Blackboard.

For more information see the Semester Timetable

ONLINE

Students will engage in learning experiences through ECU Blackboard as well as additional ECU learning technologies.

Additional Learning Experience Information

On-campus Lectures are used to introduce modern portfolio theory, various ways to measure risks and returns of different asset classes, and the emerging area of behavioural finance. Ample provision is made within the lectures for time for students to undertake short individual and small group activities to solidify understanding of the key concepts. The tutorial sessions are used to review the solution of problems and exercises that are based upon the material covered during lectures. Students participate by asking questions, offering solutions, and working in small groups. Online students are supplied with unit materials accessed via Blackboard. These materials include lecture notes, electronic versions of the internal lectures, and the solutions to the weekly tutorial exercises and problems.

Assessment

GS1 GRADING SCHEMA 1 Used for standard coursework units

Students please note: The marks and grades received by students on assessments may be subject to further moderation. All marks and grades are to be considered provisional until endorsed by the relevant Board of Examiners.

Core Reading(s)

• Basu, A., Drew, M. E., Bodie, Z., Kane, A., & Marcus, A. J. (2013). Principles of investments. North Ryde, NSW: McGraw Hill Education. Retrieved from https://ecu.on.worldcat.org/oclc/838024784?databaseList=638

---