This Course Guide has been taken from the most recent presentation of the course. It would be useful for reference purposes but please note that there may be updates for the following presentation.
FIN B385
Investment Management
Welcome to FIN B385 Investment Management.
FIN B385 Investment Management is a half-year, five-credit, required course for HKMU students seeking a Business Administration (BBA) degree. It introduces you to a wide spectrum of investment knowledge and techniques that are necessary for making sound investment decisions. The essentials of investing include a solid understanding of investment theories and principles; a good knowledge of available investment vehicles in both local and global markets; and an appropriate set of analytical techniques and strategies. With this in mind, this course aims to equip you with a good understanding of the elements of investments and the investment decision-making process based on modern investment theories and industry best practices. After studying the course, you are expected to be able to apply investment management tools in your daily life and make sound investment decisions.
Investing has always been popular in Hong Kong. Local news media and television provide ample financial information to the investing public. Nonetheless, the financial information from popular news media appears to be piecemeal and overly factual. In addition, the news media emphasizes common stock with little discussion on other investment topics. The aims of this course are to provide you with a systematic understanding of investment management, and an ability to critically analyse investment decisions. The tools for such analysis are provided in the form of understanding of the currently dominant (mainly US) investment theories and practices. Hong Kong-based examples of investment management, and where appropriate examples from the US and other societies, will be used to help you learn to manage your investments effectively.
The study units, readings and self-tests will help you master these topics and skills over a period of around 16 weeks.
This Course Guide tells you briefly what the course is about and how you can work your way through the material. For information on assignments, please refer to the Assignment File. For information on due dates and deadlines for work to be submitted, please refer to the Presentation Schedule (available on the Online Learning Environment).
After introducing the course aims and learning outcomes, this Course Guide provides:
Course aims
The course aims to provide you with solid knowledge about investment management. It introduces the modern investment theories that provide economic rationales for making investment decisions.
Course learning outcomes
Upon completion of this course, you should be able to:
The table below gives an overview of the course — the study units, the number of weeks you are expected to spend on each one, and the scheduling of the assignments.
| Unit | Title | Study time (weeks) | Assessment activity (end of unit) |
| 1 | Overview of investment theory | 3 | |
| 2 | Efficient market hypothesis and asset pricing models | 3 | Assignment 1 |
| 3 | Common stocks | 3 | |
| 4 | Fixed income securities | 3 | |
| 5 | Portfolio management and introduction to derivatives | 3 | Assignment 2 |
| Revision | 1 | Examination | |
| Total | 16 |
FIN B385 builds on previously acquired accounting and quantitative skills. Your accounting background enables you to extract useful information from financial statements on which investment decisions are based.. Your quantitative background enables you to structure your reasoning analytically in order to arrive at sound decision alternatives. If you feel rusty on either subject, please take some time to review the relevant course materials.
The time needed to complete all of the work involved in the course will differ from learner to learner. However, the estimated time you need to spend on the course is about 11 hours per week. This estimate includes time for reading the study units and the textbook, working on activities and self-tests, completing your assignments, undertaking the suggested reviews, attending live online tutorials and preparing for the final examination. Although you can deviate from the suggested schedule, you must successfully complete the assignments according to the schedule.
This section gives information about what materials are needed, and how the assignments and marking are arranged.
Materials
In addition to this Course Guide, please ensure that you have the following important course components:
Study units
There are five units in FIN B385. The first two units provide discussion on the essential elements of investments and investment theories. These basic concepts and theoretical tools will be useful in understanding the investment management process. Units 3 and 4 focus on common stocks and fixed income securities. We shall study the characteristics, mechanics, and pricing of common stocks and fixed income securities. Unit 5 provides descriptions of principles of portfolio management, active investment management and fundamentals of derivatives. Allocation strategies and performance evaluations will also be discussed in Unit 5.
Readings
Some additional readings are incorporated into the study units. The additional reading materials are mostly articles from scholarly journals or practitioner magazines. These provide you with examples of contemporary investment issues and current events and explain how they are addressed in real-life situations, or how they are debated in academic circles. There are also excerpts from publications that describe some of the institutional details of Hong Kong's financial markets.
These readings will be available online or provided as hard copies.
E-Library E-Reserve readings
You may be instructed to read articles in the E-Library E-Reserve. To read these items, go to the University's E-Library and click on E-Reserve. Log in, click Accept/Agree on the Copyright Restrictions page, fill in the Course Code box, and click Search.
Set textbook
You are required to purchase the following set textbook:
Bodie, Z, Kane, A and Marcus, A J (2021) Essentials of Investments, 12th edn, McGraw-Hill LLC.
Assignment File
Assignment details for this course are contained in your Assignment File. The nature of these assignments is described in the 'Assignments' section below. You are required to complete your assignments and send them to your tutor in accordance with the timetable provided in the Presentation Schedule explained below.
Presentation Schedule
The Presentation Schedule for this course is available on the Online Learning Environment (OLE). In this schedule, you will see the times (due dates) by which your tutor should receive your assignments. Please note that you must submit all your assignments in time for them to reach your tutor by the dates shown.
Other media
You are required to have a financial calculator. Models such as HP12C, Texas Instrument BA II Plus or Casio FC-100 are ideal.
You are also required to have access to the Internet. In your textbook there is a website listing at the end of each chapter. You will be referred to the relevant listings in the Introduction of each study unit, in order to gather information and insight into the practices of investments and discussions from the World Wide Web.
Assessment
This course is designed to assist you in moving easily from the subject material to the assignments and examination. You are expected to apply concepts and techniques introduced during the course when attempting the assignments. Most problems require qualitative and narrative responses.
The course carries two formal activities in student assessment: assignments and a final examination. Assignments serve as continuous assessment within the study period and contribute 50% of the total course marks. The other 50% are evaluated through a final examination. Assignments must be submitted to your tutor, via the OLE, for formal assessment according to the given due dates.
To be assured of achieving a pass result, you must obtain a pass for both the total course mark and the examination mark.
Assignment
There are two written assignments for the course. Assignment 1 includes practical problems covering Units 1 and 2 and Assignment 2 contains an essay-type question which covers all units in the course. The assignments will help you better understand how the theories learned from the course can be applied to the real investment situations.
The total weighting of the assignments is 50% (each of the two assignments carries 25%). For details, please refer to the Assignment File, which will be made available on the OLE. You are required to complete the two assignments and submit them to your tutor via the OLE for evaluation and grading.
How to submit assignments
You must use word processing software (such as Microsoft Word) to prepare the assignments, and submit them via the Online Learning Environment (OLE). All assignments must be uploaded to the OLE by the due date.
Failure to upload an assignment in the required format to the OLE may result in the score of the assignment being adjusted to zero.
Assignment submission extension policy
The assignment policy of the University as stated in the Student Handbook should be observed. You are required to submit assignments for this course in accordance with the dates communicated by your Course Coordinator. You may apply for a submission extension on the grounds of illness, accident, disability, bereavement or other compassionate circumstances.
Applications for extensions must be submitted online via the OLE. Please note the following:
After an assignment is submitted via the OLE, it is your responsibility to check that the assignment has been successfully submitted. Extension applications due to any problem with uploading will not be accepted. The University cannot accept any responsibility for assignments that are not received by your tutor due to any problem with submission via the OLE. As a precaution, you are advised to keep a copy of each assignment you submit.
According to the University's policy, no extension of the due date will be allowed for the final assignment. This policy will be strictly enforced.
Any late submission of the final assignment will result in the score of the assignment being adjusted to zero.
Assessment summary
The following table summarizes the assessment requirements for this course.
| Assessment type | Marks |
| Two assignments | Assignment 1 and Assignment 2 = 25% × 2 = 50% |
| Final examination | 50% |
| Total | 100% |
Your final result in this course will depend on your performances in both the continuous assessment (assignments) and the examination. In order to pass the course, you need to obtain a pass for both the total course mark and the examination mark. For more information on the University's policies on assignments and examinations, please refer to your Student Handbook.
Case studies are a useful and increasingly popular form of learning and assessment in HKMU's Lee Shau Kee School of Business and Administration. In this section we will look at why case studies are used and then suggest some learning strategies that you can use to approach case studies. We will also briefly discuss some problems that you may encounter as you learn from case studies.
What is a case study approach to learning?
One main purpose of a case study is to explore an issue or a number of issues in relation to an organization. The intention is to get you to carefully diagnose an organization; to focus on key problems, and to suggest how these might be resolved. Often the case is a real-life account of an organization which you are required to analyse in order to focus on a problem. Usually, the information that is provided is incomplete and you are often expected to observe developments in the organization over a period of time. The case study approach is an excellent opportunity to actively apply material that you have read and conceptual knowledge to the reality of an organization.
At HKMU, case studies may be used as part of assignments, exams, study units, or day-school exercises. You normally are given some information about a company (this could be both text and graphical information, such as figures and tables). You are then asked to think about some problems related to the company and to use concepts and apply theories that you have learned in your course to propose possible solutions for the company.
Let's have a look at two kinds of case study questions that you might be asked to work through in your courses. The first example is quite structured, while the second is much more open-ended.
Two examples of case study questions
Why case studies?
As you can see from the above examples, a case study approach to learning requires a great deal of thinking and often will not easily yield a quick 'wrong' or 'right' answer. However, case studies are also good preparation for dealing with real-life business problems. Cases may be short and relatively simple, or longer and complex. The purpose is the same for both types: to give you an opportunity to develop your skills in analyzing the strengths and weaknesses of the organization under examination, to consider the processes at work within the organization, and to make decisions about future actions.
Case studies are not meant to replace textbooks, but rather to ask you to draw connections between theories and practice and to apply abstract ideas, concepts, and principles to specific concrete situations.
Consequently, case analysis develops a number of skills that are crucial in business. In particular, they help you to:
You may find that there are many possible 'right' answers to the questions in a case study. This illustrates that there is often no single best way to responsibly manage and solve real-life business problems.
Some guidelines for analysing case studies
The following strategies should help you to successfully analyse case studies:
1 Read the case and become familiar with the facts
First, skim read the case to obtain a general understanding of the main point(s). Highlight or underline the pertinent points as you read.
Read the case again, and this time note down critical facts (such as names, time sequences, and where events occurred). Try to understand how events have influenced decisions. Identify the important individuals or stakeholders, and try to assess the importance of supporting information in the case. How reliable is this supporting information? Are there any gaps in the information that is given?
Make a note of any questions that you have as you read the case.
2 Assess the context of the case
Try to understand the environment of the organization and the wider context of the case.
Ask yourself questions about:
A SWOT analysis is a good way to get a better understanding of the organization and the context or environment in which it is operating. A SWOT analysis considers the strengths and weaknesses of the organization, and the opportunities and threats which the organization faces in the external environment.
3 Recognize the case's symptoms
Read the case again and as you read, try listing all the symptoms of the case. The symptoms of a case are not the problems, but they may help you to identify the problems. Symptoms are all the things that are undesirable or that are not as expected. For example, falling sales could be a symptom of several problems such as poor market segmentation, poor product quality, or problems in a supply chain. At this stage of your analysis, you should just try to observe all the symptoms, and avoid prematurely identifying problems or suggesting solutions. Like a doctor who consults a patient, you first need to observe and note all the symptoms before you can give a definite diagnosis of the problem. Think about how the symptoms may be interrelated. Relationship diagrams, like the one below, may help you to see the relationships between symptoms.
4 Diagnose the case's problems
After you have a good sense of the symptoms, you're ready to determine key issues that need to be analysed more closely. You are now diagnosing the situation, like a doctor diagnosing a patient's symptoms. Ask yourself 'what seems to be the trouble in this organization?' and make a list of what you now perceive to be the key problem(s). You will probably need to go back to the details of the case and as you do this; you may add to or refine your list of potential problems.
If there are several problems, you need to order and prioritize them. You might want to number problems according to how you perceive their importance, or make a matrix, like the one below, which shows relationships between various criteria and each problem.
| Criteria | Problem #1 | Problem #2 | Problem #3 |
| Importance — What will happen if the problem is not addressed? | |||
| Urgency — How quickly must this problem be solved? | |||
| Centrality — To what extent does this problem cause others? | |||
| Solvability — Can this problem actually be solved? |
Also try to establish if there are relationships or themes in common among the various problems. Perhaps different problems in your list are actually variations of a broader central problem.
Ask yourself what assumptions you have made about the case. Are these assumptions reasonable, and are they supported by the facts? Would other people objectively suggest the same problems, based on the facts that you have? Are you suggesting problems that are not supported by the facts of the case?
After you have considered and put into order the possible problems and questioned your assumptions relating to these problems, you should write a statement of the problems as you perceive them. Avoid suggesting solutions at this stage.
Once you have a problem statement, you need to find evidence in the case to support your problem diagnosis. Also, try to identify ideas, concepts and theories from your textbook and course units which help to explain what is happening in the case.
5 Formulate criteria for a 'good' solution and identify possible constraints to solutions
Before you propose a solution, you need to consider the characteristics of a 'good' solution. Obviously, your solution should bring benefits such as improved productivity, reduced costs or greater profits. However, it also needs to be viable and to accommodate the constraints that you have already identified, i.e. Is the solution legal? Is there a budget for this solution? Does it conflict with the organization's culture?
Try to brainstorm alternative solutions. Aim to generate a broad and creative range of options and then try to rate each according to various criteria.
The following matrix demonstrates how this can be done.
| Cost | Ease of implementation | Impact on organization culture | Impact on profits | |
| Option 1 | *** | * | * | ** |
| Option 2 | * | *** | *** | ** |
| Option 3 | ** | * | * | *** |
Also refer to ideas, concepts and theories from your course materials as you consider and assess each possible solution.
It's often wise to propose a solution that allows for plausible alternatives if it should fail. Managers use the term satisfice when they are considering acceptable alternative solutions, that is, the solution is able to satisfy the situation while also making some realistic sacrifices to existing constraints. Therefore, it is a satisficing rather than a maximizing solution.
Finally, don't forget to consider the possibility of taking no action. What will actually happen if no action is taken? Are any (or all) of the solutions less viable than taking no action at all?
6 Recommend a viable solution
After you have assessed the merits and pitfalls of each alternative solution, select the best solution for the situation.
Remember that the solution needs to be viable. Can the recommended solution be introduced? Are there the resources and the willingness to implement it? Be realistic about what may work. Explain why it is the best solution within the constraints of the existing context and explain how it can be applied to the organization. Suggest a time-frame for the solution's implementation.
Outline possible strategies for implementing your solution, either partially or completely. As many feasible courses of action as possible should be considered before you choose the one that seems the most likely to succeed. The more ideas you have, the greater your chance will be of finding a solution that will work well. The complexity of most organizational problems means that it is highly unlikely that one idea alone will correct the situation. Usually a combination of actions is required, and these need to be funded differently, timed carefully and staffed as necessary.
7 Present your solution as a written recommendation
Review your final solutions and then prepare a set of written recommendations. These should clearly outline your proposed solution in relation to the problems that you have identified. Your recommendations should also include details of why these solutions are the most appropriate given the circumstances and constraints of the case. Finally, you need to clearly state how and when your proposals will be implemented.
Your tutor and your course Assignment File can provide some guidelines on how to present your recommendations.
Some mistakes to avoid as you analyse cases
When you first tackle case studies, you should be careful to guard against the following mistakes:
Analysing cases poses many challenges, and this is one reason the case study method is so rewarding. It is a very active form of learning. It offers you a risk-free opportunity to gain managerial and organizational experience and should greatly increase your confidence to make informed decisions in the real world.
Good luck and we hope you enjoy working through the cases that you encounter!
Tutors and live online tutorials
At the start of the course, you will be allocated a tutor who may be a practitioner in the field of finance/banking, or a teacher from one of Hong Kong's tertiary institutions. Much of the communication you have with HKMU during the course will be with your tutor. Your tutor is responsible for marking and commenting on your assignments as quickly as possible, as well as taking a personal interest in your studies. Keep a copy of all assignments sent to your tutor. These will prove useful if you wish to refer to them during telephone conversations with your tutor.
Do not hesitate to telephone your tutor for help, if:
Tutors are responsible for the grades you receive on assignments. If you disagree with a mark, try to resolve the issue with your tutor before contacting the Course Coordinator. If you cannot complete all of your assignments, you should also contact your tutor to make alternative arrangements.
To assist you in this course, five two-hour live online tutorials will be organized with your assigned tutor. You will be notified of the dates, times and locations of these sessions, along with the name and phone number of your tutor, as soon as you are allocated a tutorial group. It is strongly recommended that you attend these tutorials. They will help you in your study of investment management and they will improve your chances of gaining higher marks. They also offer the opportunity to meet other learners studying through HKMU.
Tutors are required to start tutorial sessions on time. If a tutor fails to turn up 30 minutes after the scheduled starting time, students may assume that the session is cancelled and they should report the case to the Course Coordinator so that a make-up session can be arranged.
Online support
This course is supported by the Online Learning Environment (OLE). Students can find course materials and the latest course information from the OLE and use the discussion board to communicate with their tutors, the Course Coordinator and fellow students. Links will be provided to the main government sites relevant to this course. Email tutoring support will also be provided where appropriate.
FIN B385 Investment Management attempts to cover aspects of investment management that are of interest and relevance to learners. The course introduces various investment instruments, markets and analytical techniques, and places a strong emphasis on the conceptual foundations that underlie sound investment decisions, application to actual problems and relevance to the investment environment in Hong Kong. In addition, due to the widespread availability of computers and information technology, you will be able to practise what you have learned in this course at work and/or when making your own investments.
Over a period of 16 weeks, you will work through five study units, with support from regular live online tutorials, a seminar, contact with your tutor and the Online Learning Environment. You are required to buy a set textbook, which you will refer to for consolidation of the topics covered in the units. You will be able to assess your own progress during the course through regular formative self-tests. The summative assessment will take place through two assignments and a final examination.
By the time you have completed the course, you should have the confidence to apply the investment management tools in your daily life and make sound investment decisions. Good luck, and enjoy the course!
If you wish to defer your studies of this course until a later date, you should apply for deferment of studies. For the regulations governing deferment of studies, please refer to your Student Handbook. If you have applied for deferment of studies, you should continue with your studies of this course and submit the required assignments until formal approval is given by the University.
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