Fundamentals of Investing Syllabus

This syllabus is constructed according to a sample set of topics similar to Bodie, Kane and Marcus's Investments. All classroom tools include a teaching note and slide deck. Relevant analytics tools have also been also included in the syllabus. These are designed for research and have corresponding documentation.

Topic Classroom Tools

I. The Investment Environment

Getting Started

Getting Started with WRDS familiarizes students with accessing WRDS and running a query.

II. Mutual Funds and Other Investment Companies

Mutual Fund Turnover

Review the concept of mutual fund turnover and tax implications.

III. Learning About Return and Risk from the Historical Record

Porfolio Risk Over Time

Estimate portfolio risk by calculating return variances.

VI. Optimal Risky Portfolios

Mechanics of Diversification

Explore the mechanics of diversification using a variance-covariance matrix, a two-asset opportunity set, and a graph depicting limits of diversification.

Efficient Frontier

This teaching tool introduces concepts such as the efficient frontier, capital market line, and indifference curve while illustrating how risk and return characteristics change as stocks are added and removed from a hypothetical portfolio.

Efficient Frontier (Full Fledged Version)

After you enter a list of security identifiers and specify parameters, this analytics tool calculates the corresponding efficient frontier, optimal complete portfolio, optimal risky portfolio, and minimum variance portfolio.

Portfolio Diversification

Learn how multiple assets can be combined to reduce overall portfolio variability.

V. The Capital Asset Pricing Model

Beta Visualization

Use the Beta Visualization teaching tool to examine and interpret beta and R2, two important and related measures that arise from the Capital Asset Pricing Model.

Market and Firm-Specific Risk

Learn about alpha and beta, and how they relate to firm-specific and market risk.

CAPM Equity Valuation

The CAPM Equity Valuation teaching tool provides the means to estimate the cost of equity using the Capital Asset Pricing Model.

Beta Suite by WRDS

This analytics tool enables you to specify securities and calculate the alpha and beta on common risk factors.

VI. Multifactor Models of Risk and Return

Fama-French Three-Factor Analysis

Learn about the Fama-French factors by creating a regression model in Excel.

VII. Behavioral Finance and Technical Analysis

Event Study

The Event Study teaching tool introduces this statistical method for assessing the market reaction to firm-specific and market events.

U.S. Daily Event Study

Study the effect of events on U.S. stocks by uploading your own events file or using events from Capital IQ's Key Development database using this analytics tool.

VIII. Equilibrium in Capital Markets

Estimating Volatility

Use MATLAB to learn about volatility clustering in stock prices and test the predictive power of the GARCH model.

IX. Fixed-Income Securities

Time Value of Money: Compound Interest

Learn basic time value of money concepts and visualize growth of investments using an interactive compound interest graph.

Time Value of Money: Present and Future Value

Become familiar with the variables in time value of money problems while learning techniques of compounding and discounting.

WRDS Bond Returns

With this analytics tool you can access monthly U.S. corporate bond returns going back to 2002, including accrued interest, duration, and yield computations.

Bond Valuation

This introduction to bond valuation provides step-by-step instructions for computing the fair price of a fixed rate coupon bond.

Reinvestment Risk: Bonds

Compare yield to maturity with realized compound yield and learn about exposure to reinvestment risk.

Bonds: Spot Rates and Forward Rates

Learn the relationship between spot rates, implied forward rates, and yield to maturity

Treasury Yield Curve

Learn how the U.S. Treasury yield curve is used as a benchmarking and forecasting tool.

X. Options, Futures, and Other Derivatives

Futures Contracts

Learn the mechanics of futures trading, including how profits and losses are calculated.

XI. Financial Statement Analysis

Introduction to Financial Statements

Download and analyze pre-formatted balance sheet, income statement, and statement of cash flows data for domestic and global companies.

Balance Sheet

View and analyze corporate balance sheets. In a few easy steps, balance sheets for publicly traded companies are requested and delivered directly to screen.

Income Statement

Review corporate income statements to learn how a company's profit and loss accounting is structured.

Statement of Cash Flows

Learn the components of a statement of cash flows and analyze the cash flows in and out of a specific company.

Three Levers of Performance

Learn the methods that financial managers use to increase return on equity (ROE). This teaching tool looks at profit margin, asset turnover, and financial leverage to show how companies generate value for shareholders.

Financial Ratios Visualization

Using the Financial Ratios Visualization teaching tool, generate and compare financial ratios to one another and to baseline industry measures.

Firm Liquidity Ratios

The Firm Liquidity Ratios teaching tool explains four financial ratios used to determine liquidity: (1) the cash conversion cycle; (2) cash ratio; (3) current ratio; and (4) quick ratio (acid-test).

Financial Ratios: Firm Level

With this analytics tool you can access over 70 pre-calculated financial ratios for the U.S. company of your choosing.

Financial Ratios: Industry Level

Access over 70 pre-calculated financial ratios at industry or sector-level aggregation with this analytics tool.