Course Contents

1. Introduction to Investments: Investment Basics, Risk and Return, Trade-Off between Risk and Return, Efficient Market Hypothesis, Individual & Institutional Investors. 2. Investment Alternatives: Money Market Securities, Fixed Income Securities, Equity Securities, Direct & Indirect Investment, Mutual Funds 3. Derivative Securities: Forwards, Futures, Options, Option Strategies 4. Securities Trading: Brokerage Accounts, Order Types, Margin, Short Sales 5. Risk & Return: Measurement of Risk & Return of Individual Securities and Portfolio. Portfolio Construction: Portfolio Risk & Return, Markowitz Portfolio Theory, Efficient Frontier, Capital Allocation Line and Capital Market Line, Sharpe Ratio, Single & Multi –Index Model, Diversification. 6. Investment Theories: Capital Assets Pricing Model, Arbitrage Pricing Theory, Security Market Line 7. Security Markets in Pakistan FINAL TERM PROJECT: The Investment Activities/Operations Incorporated by Different Investment Companies of Pakistan (Insurance Companies, Investment Trusts, Mutual Funds/Pension Funds Companies, Banks) 1. Introduction 2. Type of Investment (Direct, Indirect) and Investment Activities 3. Investment Products (Mutual, Load/No Load Funds, Derivatives & Hybrid Securities) 4. Concluding Remarks on Companies Operations.

Course Synopsis

The course is designed to provide good understanding of the field of investment. The objective of the course is to study the risk and return components pertaining to any organization. It provides a comprehensive coverage of basic concepts, theories, applications and decision-making rules in financial investments. In particular, the course focuses on the analysis of stocks, bonds, options and other derivative securities. Additionally, the course will examine the role and performance of portfolio managers, mutual funds and other investment companies. The course will also focus on composition of diversified and efficient portfolios.

Course Learning Outcomes

By the end of this course, students will be able to: 1. To understand the operations of financial markets; 2. To know the basic theoretical foundations of portfolio theory, 3. To analyse the various types of assets including equities, fixed income securities, and derivatives; 3. To have a deeper understanding of investment alternatives 4. To perform risk analysis. 5. To select the optimal investment strategy.