Investments

Instructor Information

• Instructor: Dr. Nikhil Rao (Assistant Professor of Finance)
• Email: nrao@university.alkimi.ai
• Office: Tidewell Hall 314
• Office Hours:
  • Monday & Thursday: 9:00–10:30 a.m. (In person, Tidewell Hall 314)
  • Friday: 2:00–3:00 p.m. (Virtual via Zoom; link posted in Canvas)
  • Also available by appointment.

Course Description

Security markets and trading, risk and return, portfolio theory, the capital asset pricing and factor models, market efficiency, bond valuation and duration, and equity analysis. FIN 320 offers a rigorous, mathematically grounded examination of modern portfolio theory, capital market equilibrium, security valuation, and risk management. Students master the mechanics of security trading, quantify the trade-off between risk and expected return, and implement Markowitz mean-variance portfolio optimization. The course investigates the Capital Asset Pricing Model (CAPM), multifactor pricing models, the Efficient Market Hypothesis, fixed income duration and convexity, equity valuation methodologies, and option pricing foundations, bridging theoretical asset pricing with empirical portfolio management.

Prerequisites

FIN 301.

Measurable Student Learning Outcomes

Upon successful completion of FIN 320, students will be able to:

1. Construct Optimal Risky Portfolios: Apply Markowitz mean-variance portfolio theory to construct efficient frontiers, calculate covariance matrices, and determine optimal asset allocation combinations.
2. Evaluate Asset Pricing Models: Critically analyze the Capital Asset Pricing Model (CAPM), Arbitrage Pricing Theory (APT), and Fama-French multifactor models to assess expected security returns.
3. Conduct Fixed Income Valuation and Immunization: Value debt instruments, analyze the term structure of interest rates, and manage interest rate risk using Macaulay duration, modified duration, and convexity.
4. Perform Fundamental Equity Analysis: Value common equities using dividend discount models, discounted free cash flow to equity/firm models, and market multiples within a top-down macroeconomic framework.
5. Measure Investment Performance and Derivatives: Evaluate managed portfolio performance using risk-adjusted metrics (Sharpe, Treynor, Jensen's alpha) and analyze basic option strategies and binomial pricing.

Required Course Materials & Approximate Costs

1. Zvi Bodie, Alex Kane, and Alan J. Marcus. Investments. 12th ed., McGraw Hill, 2021. Approx. $70 digital rental, $150 print purchase.
2. Texas Instruments BA II Plus or HP 10bII+ Financial Calculator. Approx. $35 (or use standard approved financial calculator from FIN 301).
3. Total estimated cost: $70 to $185.

Generative AI Policy (AI Level 2: AI Permitted with Disclosure for Specified Tasks)

In accordance with Alkimi University Academic Policies (Student Handbook §5.8), FIN 320 operates under AI Level 2.

• What is permitted: You may use generative AI tools to review quantitative finance formulas, verify Python or Excel spreadsheet syntax for portfolio variance, and brainstorm macroeconomic sector risk factors.
• What is prohibited: You may not use AI tools to solve examination or quiz questions, nor may you submit AI-generated equity valuation models, stock pitches, or portfolio management reports as your own work.
• Disclosure: Any project deliverable or homework assignment that incorporates AI assistance must include a specific disclosure note outlining the prompt used, the tool name, and how the results were validated.

Grading Components and Weights

• Midterm Examination 1: 20% (In class, Thursday, September 24)
• Midterm Examination 2: 20% (In class, Thursday, October 29)
• Portfolio Management & Equity Analysis Project: 20% (Due Friday, November 20 at 11:59 p.m.)
• Quantitative Problem Sets: 15% (Five Excel- and calculator-based investment problem sets submitted via Canvas on Fridays at 11:59 p.m.; lowest score dropped)
• Market Tracking & Concept Quizzes: 5% (Bi-weekly market analysis quizzes and trading mechanics checks completed in Canvas)
• Comprehensive Final Examination: 20% (Thursday, December 17, 2026, 3:30–5:30 p.m.)

Grading Scale (Alkimi University Standard)

• A: 93–100% | A-: 90–92%
• B+: 87–89% | B: 83–86% | B-: 80–82%
• C+: 77–79% | C: 73–76% | C-: 70–72%
• D+: 67–69% | D: 60–66% | F: Below 60%
• Extra credit: No extra credit assignments are available in FIN 320. Students are encouraged to devote their energy to the homework problem sets, portfolio project, and exam preparation.

Course Schedule (Fall 2026)

Course Policies

Attendance Policy

Classroom attendance in Tidewell Hall 130 is critical for understanding dynamic market simulations, mathematical proofs, and portfolio optimization models. If an unavoidable absence arises, inform Dr. Rao in advance and coordinate with a peer to obtain class notes and spreadsheet templates. Students who miss the first two class meetings without notifying the instructor may be dropped. Students may miss class for religious observance without penalty if they notify the instructor in writing within the first two weeks of the semester (by Wednesday, September 9, 2026). Absences for university-sponsored activities (athletics, performances, conferences) are excused with a letter from the sponsoring office at least one week in advance.

Late Work Policy

Quantitative problem sets and the Portfolio Management Project will receive a 10% penalty for each calendar day they are late and will not be accepted after 72 hours. Online Canvas quizzes expire at the designated deadline and cannot be reopened.

Final Exam Policy

The final examination (Thursday, December 17, 2026, 3:30–5:30 p.m.) is scheduled by the University Registrar and can't be moved without the Dean's written approval (Faculty Handbook §5.5). A student with three or more final exams on the same calendar day may reschedule one of them. Requests go to the instructor of the middle exam by the last day of classes. For this term, send the request by Wednesday, December 9, 2026 (Student Handbook §6.4).