2084 K5 - Investments and Portfolio Analysis
Dr. William Curtis Johnson
Contact details
Weekly hours
Language of instruction
09/16/19 to 09/24/19
Registration via LPIS
Notes to the course
Day Date Time Room
Monday 10/14/19 02:30 PM - 05:30 PM D3.0.233
Thursday 10/17/19 10:00 AM - 01:00 PM D4.0.133
Monday 10/21/19 02:30 PM - 05:30 PM TC.4.04
Thursday 10/24/19 10:00 AM - 01:00 PM EA.5.044
Monday 10/28/19 02:30 PM - 05:30 PM EA.5.040
Thursday 10/31/19 10:00 AM - 01:00 PM D4.0.133
Monday 11/04/19 02:30 PM - 05:30 PM EA.5.040
Thursday 11/07/19 09:00 AM - 10:30 AM D5.0.002

The investment process once seemed a fairly simple procedure.  Most investors would hold a portfolio containing some mix of U.S. blue chip stocks and U.S. Treasury securities.  But the current investment climate has changed in many ways from the past.  First, there has been a huge growth in on-line and Internet trading.  Secondly, investors now have an enormous choice of securities (stocks, options, futures, bonds, ETFs, etc.) for their portfolio.  Finally, markets today are much more globally oriented than in the past, providing investors with a diverse array of foreign and domestic securities to purchase.

The class will focus primarily on a top-down approach.  This involves examining investments at the portfolio level, allocating assets to certain classes first before analyzing individual securities.  This course is designed to introduce you to the workings of the modern financial system and to the techniques needed to make sense of the investment environment.

Learning outcomes

Upon successful completion of this course, students should be able to:

  • understand the basic relationship between risk and return
  • know how to optimize a portfolio to reduce risk
  • understand the valuation principles of stocks
  • understand how to value a bond
  • understand the risks involved in a bond portfolio
  • know how to benchmark a portfolio of stocks appropriately
  • discuss the risk-return trade off
  • create a diversified portfolio of bonds and/or stocks; discuss the risk associated with such an investment
  • calculate the value of a stock given certain assumptions
  • calculate the price of a bond using a discounted cash flow method,
  • evaluate the interest rate exposure of bonds
  • calculate the alpha and beta for a stock; discuss the use of various measures in portfolio performanc
Attendance requirements

I reserve the right to take attendance several times during the semester. If students are not in class, they cannot fully participate in the learning process. As such, absences will impact your course participation and final grade. Students will be responsible for all administrative announcements given during class time.  There will be material presented in class not covered in the text or lecture notes.

Students should expect to come to every class and actively participate in the teaching and learning of material. Since class discussions and student interaction is an integral part of the class, attending classes is a necessary part of the student’s experience. Students may miss one class without a penalty to their grade, but will lose 5% of their grade for each additional absence. Students missing three or more classes will not receive a passing grade in the class.

I will teach material that is necessary to complete assignments and projects during the class. In particular, I will be teaching Excel in addition to the portfolio analysis in the class. This means that students will want to attend each class and carefully take notes so that they can complete assignments.

Teaching/learning method(s)

This course moves very quickly and students should expect to prepare before every class. Students should read the materials in the book and be prepared to take part in the classroom discussions. I have put together a list of topics for the course and expect to follow these topics as closely as possible. However, there is some discretion as to what topics I will focus on depending upon the preparation of the students in the class.

Reading Assignments:

You are strongly encouraged to read the chapters before class. It will help you understand the material better. It will enable you to ask appropriate questions during the class lectures. Even if you don’t understand everything discussed in a particular chapter, continue to read. (You are not expected to understand everything before class.)

Course Policy:

An important goal of this class is to help you develop an ability to critically evaluate issues relating to investments.  As such, the course meetings will often involve class discussion and other in-class activities.  You should be prepared to discuss the day’s assigned reading(s).  I would also strongly encourage you to read a business publication such as the Wall Street Journal on a regular basis.  This will enable you to stay abreast of current events and raise issues of interest in class.  Selected articles from the news media will be discussed in class.

Online stock trading simulation:

You may participate in the online stock trading simulation in groups of up to three.  You will be responsible for finding your own group members and ensuring that each member contributes to the group appropriately.  There are two group assignments for the class to be handed in.  In the middle of the semester, you will be required to hand in an interim stock report detailing your stock trading strategy and performance to date (2 pages, maximum).  At the end of the semester, you will hand in an executive summary detailing your trading strategy and performance (2-5 pages).  Your grade will be determined by how well you analyze and benchmark the portfolio’s performance.  Your actual portfolio return will not be considered on your grade on the project.  More information is contained in the trading simulation assignment sheet.

Thoughts on the Provided Lecture Notes:

The notes distributed for this class and should help students prepare for a passing grade.  These notes are designed as guide points to help you prepare for class and to review general issues.  Understanding the finer grain of the course material will require close attention to readings and practice problems, participation in class discussions and careful note taking in lectures.  These actions will likely be necessary for getting to or above the mean course grade.  The notes may be found on the course website and will be available at least two lectures in advance. 


Your final grade will be based on the following projects, quizzes, exams, and assignments.  No late assignments will be accepted.  The weights assigned to each activity are as follows:

  • Homework (10%)
  • Quizzes (15%)
  • Projects (30%)
  • Final Exam (45%)

Please note that all homework assignments are due at midnight on the assigned date. Homeworks are "collected" and graded using Learn@WU. Since homework solutions are posted online, late assignments cannot be accepted.

The readings, quizzes, and test questions are derived from Ivestments, Zvi Bodie, Alex Kane, and Alan J. Marcus, 10th global edition, McGraw-Hill/Irwin, ISBN 9780077161149


Prerequisites for participation and waiting lists

positive completion of the course K1 "Basics in Finance"

1 Author: Zvi Bodie, Alex Kane, and Alan J. Marcus


Publisher: McGraw-Hill Education
Edition: 10., global ed.
Year: 2014
Content relevant for class examination: Yes
Recommendation: Strongly recommended (but no absolute necessity for purchase)
Type: Book
Recommended previous knowledge and skills

Quantitative Skills:

Statistical skills are necessary for you to succeed as an investment professional.  I do not intend to review the basic concepts from your statistical courses.  In this course, we will build on the basic statistical concepts you should already know in order to increase your portfolio of quantitative abilities.  If you lack confidence on the topics of means, variances, covariances, and basic regressions, I strongly suggest that you carefully read Appendix A of the required textbook.  I will also assume that you are comfortable using Excel.  You will also need a financial calculator for this class.  I would recommend you purchase one and learn how to use it early in the semester.  I will not be in a position to help you use your calculator on the night of exams. 

Availability of lecturer(s)

Professor William C. Johnson
Office: DA.4.074
Phone: 6361
Preferred E-mail: ; Alternate E-Mail:


Cell Phones, Electronic Devices, and Laptop Use During Class:

Please make sure wireless phones, PDAs, iPods, pagers and all other electronic devices are turned off and not used during class.  If a student chooses to use these devices during class, including texting, the professor reserves the right to confiscate the device and/or ask the student to leave the class.  If a student would like to use a laptop computer during class, please consult the professor.  The use of electronic language translator devices during class, other than during quizzes or exams, is permitted.  Please consult the professor for use during a quiz or exam.

During classes using Excel, it would be helpful if students have a current version of Excel to follow along with the work being done in class.

Academic Integrity:

Cheating on examinations, plagiarism and/or improper acknowledgment of sources in essays or research papers, and the use of a single essay or paper in more than one course, without the permission of the instructor, constitute unacceptable academic conduct. Student work may be checked by plagiarism detection software.  Academic dishonesty will be reported to the appropriate authorities at the university level. An undergraduate student who has been found to have violated this policy is subject to an automatic grade of “F” in the course and to suspension, enforced withdrawal, or dismissal from the University or appropriate lesser penalties if warranted by the circumstances.

This syllabus is considered tentative at this point and it will be adjusted to meet any new changes required in the format or material covered for the course.

Last edited: 2019-10-24