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Fall 2010 ECON 133 Course Materials

Syllabus

Required Reading:

Essentials of Investment (8th Edition) by Zvi Bodie, Alex Kane, Alan Marcus; McGraw-Hill Publishers

"The Myth of The Rational Market" by Justin Fox; Publisher: HarperBusiness, First Printing edition (June 9, 2009)

Financial press, such as The Wall Street Journal (student discount subscription available in class)

Articles for class discussion:

Raghuram G. Rajan (2006) "Has Financial Development Made the World Riskier?"
European Financial Management, Vol.12(4), pp. 499533
PDF or Shorter Version from the August 27, 2005 speech at The Jackson Hole Conference

Marcus Brunnermeier(2009) "Deciphering the Liquidity and Credit Crunch 20072008"
Journal of Economic Perspectives, Vol.23(1), pp. 77100
PDF

Mark Carlson (2007) "A Brief History of the 1987 Stock Market Crash, with a Discussion of the Federal Reserve Response"
FEDS Working Paper No. 2007-13
PDF

Homeworks:

HW 1 Due Friday, Oct.1 AK
HW 2 Due Friday, Oct.8 AK
HW 3 Due Friday, Oct.15 AK and Deteailed Case Example AK
HW 4 Due Friday, Oct.29 AK (Fama/French Benchmark Factors available here)
HW 5 Due Monday, Nov.8 AK
HW 6 Due Wednesday, Nov.24 AK

Quizzes:

Quiz 1 AK
Quiz 2 AK
Quiz 3 AK
Quiz 4 AK
Note: No AK for Quiz 5
Quiz 6 AK

Additional Practice Questions:

Practice Questions for Midterm 1 AK (Don't worry about question 5, omitted)

Practice Questions for Midterm 2 AK

Practice Questions on Futures AK

Practice Questions on Foreign Exchange AK

Practice Questions for Final Exam AK

Exams:

Midterm 1 AK
Midterm 2 AK

Note: The exams follow the format of Santa Clara University MBA class, Professor Sharath Sury

Lecture Slides:

Lecture 1 Introduction to Securities Markets
Lecture 2 How Securities are Traded
Lecture 3 Arythmetic, Geometric, and Holding Period Return
Lecture 4 Expected Return, Uncertainty, and VaR
Lecture 5 Complete Portfolio, Risk, and Leverage
Lecture 6 Risk and Return Optimization
Lecture 7 Efficient Diversification
Lecture 8 Single Factor Model; Mutual Funds and Other Investment Companies
Lecture 9 Finance and Systemic Risk, begin CAPM
Lecture 10 CAPM
Midterm Review
Lecture 12 Fama-French 3 Factor Model
Lecture 13 Efficient Market Hypothesis and Behavioral Finance
Lecture 14 Fixed Income Securities
Lecture 15 Bond Prices and Yields
Lecture 16 Bond Yields, Ratings, and Credit Default Swaps
Lecture 17 The Yield Curve
Lecture 18 Bond Duration
Lecture 19 Bond Portfolio Immunization, Equity Valuation, Gordon Constant Growth Model
Lecture 20 Stocks, Dividend Discount Model, P/E Ratio
Midterm Review
Lecture 21 Options
Lecture 22 Options Cont'd
Lecture 23 Portfolio Insurance and The 1987 Stock Market Crash
Lecture 24 Futures Markets and Risk Management
Lecture 25 Foreign Exchange Markets and Carry Trade
Lecture 26 The 2007-08 Credit Crisis
Final Exam Review