Topic
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Reading Assignment (* = optional)
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| I. |
Introduction to Financial
Markets |
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A. |
The Securities Industry |
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1. |
What is an investment? |
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Kolb: Chapter |
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2. |
What is an asset? |
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*Malkiel: Chapter 1 |
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3. |
Investments 101 |
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4. |
Three investment philosophies |
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5. |
Careers in the securities industry |
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B. |
Measuring Returns |
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1. |
Holding period returns |
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Kolb: Chapter |
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2. |
Five applications of the annualization formula |
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3. |
Adjusting for inflation |
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4. |
Adjusting for taxes |
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5. |
The miracle of compound returns |
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C. |
Risk and Return in Financial
Markets |
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1. |
The investment environment |
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Kolb: Chapter |
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2. |
Realized (ex post) vs. expected (ex ante)
returns |
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3. |
Using the historical record to forecast
expected returns |
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4. |
Measuring risk |
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5. |
Diversification and risk |
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6. |
Measuring non-diversifiable risk |
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7. |
Attitudes towards risk |
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8. |
The fundamental financial relationship |
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9. |
The goal of financial investing |
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D. |
Measurement and Interpretation
of Risk |
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1. |
Measuring risk |
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Kolb: Chapter |
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2. |
Interpreting risk |
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3. |
Probability and financial markets |
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| II. |
Overview of the Structure and
Function of Financial Markets |
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A. |
Market Basics |
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1. |
Why do we have financial markets? |
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Kolb: Chapter |
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2. |
Primary vs. secondary markets |
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3. |
Investment banks and brokerage houses |
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B. |
Market Transactions |
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1. |
The market makers and specialists |
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Kolb: Chapter |
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2. |
Basic transactions |
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3. |
Buying on margin and leverage |
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4. |
Short sales |
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5. |
Market regulation |
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C. |
Equity Markets |
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1. |
Introduction to equities |
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Kolb: Chapter |
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2. |
The stock markets |
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3. |
The players |
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4. |
Minimizing taxes and transaction costs |
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5. |
An example illustrating how hazardous excessive
trading can be to your wealth |
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6. |
Stock market indices |
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7. |
Sources of market information |
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