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Course Code: 
AFN 405
Course Type: 
Area Elective
P: 
3
Lab: 
0
Credits: 
3
ECTS: 
6
Course Language: 
İngilizce
Course Objectives: 
The main goal of the course is to advance the skills of the students in international finance and international investment management. After a brief review of domestic financial instruments and investment analysis, students will learn through this course international financial instruments as well as international portfolio management. These learnings are theoretical as well as practical. By using the “trading room”, students can combine their theoretical knowledges with real data and then evaluate financial instrument and manage an investment portfolio.
Course Content: 

This course covers the following topics: local and international financial instruments, domestic and international models (CAPM and ICAPM; APT and IAPT), international financial markets, financial instruments evaluation (equities, bonds, stocks, derivatives), performance measures, active, and passive investments. 

Course Methodology: 
1: Lecture, 2: Question-Answer, 3: Discussion, 4: Simulation, 5: Case Study
Course Evaluation Methods: 
A: Testing, B: Presentation, C: Homework, D: Project, E: Laboratory

Vertical Tabs

Course Learning Outcomes

Learning Outcomes

Program Learning Outcomes

Teaching Methods

Assessment Methods

1. To be able to describe the  fundamental concepts, underlying theories, practical methods and techniques used in investment analysis and portfolio management

1,2,3

1, 2, 3, 4

A, B, C, D

2. To be able to explain the investment tools, characteristics and investment environment

2,5,7,10

1, 2, 3, 4

A, B, C, E

3. To be able to value different assets

1,2,5,8

1, 2, 3, 5

A, B, C, D

4. To be able to describe the fundamental investment strategies and to execute them

 

1,2,8

 

1, 2, 3, 4

A, B, C, E

5. To be able to identify the impact of business events or macroeconomic factors on investment performance

3,4,5,7,8,10

1, 2, 3, 4

A, B, C, D

6. To be able to integrate theory and practice of construction and performance evaluation of investment portfolios

1,2,5,8,10

1, 2, 3, 5

A, B, C, D

 
 

Course Flow

Week

Topics

Study Materials

1

Introduction: financial instruments, markets and trading in a global environment.

Markets integrations - global markets

Chap. 25 Bodie et al. + documents

Chap. 1,2 and 3 - Elton et al.

2

Diversification, Markowitz's approach and efficient portfolios

Efficient frontier in a global environment

Chap. 4, 5 and 6 Elton et al.

3

Calculating the return and risk on domestic and foreign securities (portfolios)

Return from international diversification and the effect of exchange risk

Exchange Rate Determination; Relationship Among Inflation, Interest Rates and Exchange Rates

Chap 12 Elton and al.

4

Index models, Capital Asset Pricing Models and Arbitrage Pricing Theory

International models: Factor models, ICAPM and IAPT models

Chap 9 and 10  Bodie et al.

5

International models: Factor models, ICAPM and IAPT

Other extensions of assets pricing models

Documents

6

Other extensions of assets pricing models

Documents

7

Valuation of securities: domestic and foreign equities, bonds, derivatives,…

Part 4 Elton et al.

8

Interest rate curve and valuation of bonds

Chap. 21 Elton et al. + document

9

Valuation of derivatives (options, futures, forwards,…)

Chap. 23 and 24 Elton et al. 

10

Potential of International Diversification and Performance Attribution

Documents

11

Portfolio Management: active and passive managements

Chap. 27  Bodie et al. + document

12

The Theory of Active Portfolio Management

Chap. 27  Bodie et al. + document

13

The Treynor-Black model and the Black-Litterman Model

Chap. 27  Bodie et al. + document

14

Summary

 

15

Final Exam

 

 
 

Recommended Sources

Textbook

Essentials of Investments, Bodie, Kane, and Marcus, 8e, McGraw-Hill/Irwin.

Modern Portfolio Theory and Investment Analysis - Edwin J. EltonMartin J. GruberStephen J. BrownWilliam N. Goetzmann

Additional Resources

Course website, lecture notes, financial markets lab, virtual portfolio management program, scientific calculator, online resources and spreadsheet software.

 
 

Material Sharing

Documents

Guidelines and additional examples for lecture topics, homework assignments and simulation, virtual portfolio management program.

Assignments

Homework/Lab assignments, and simulation.

Exams

2 Midterm Exams and Final Exam

 
 
 

Assessment

IN-TERM STUDIES

NUMBER

PERCENTAGE

Simulation      

1

15

Midterms

2

60

Homework/Lab Assignments     

10

25

Total

 

100

CONTRIBUTION OF FINAL EXAMINATION TO OVERALL GRADE

 

35

CONTRIBUTION OF IN-TERM STUDIES TO OVERALL GRADE

 

65

Total

 

100

 

 

 

 

 

COURSE CATEGORY

Expertise/Field Courses

 

 

 

 

Course’s Contribution to Program

COURSE'S CONTRIBUTION TO PROGRAM

No

Program Learning Outcomes

Contribution

1

2

3

4

5

 

1

 

To understand the core principles of finance and to be able to apply them both nationally and internationally.

 

 

 

 

X

 

2

 

To effectively use contemporary information technologies and up-to-date financial instruments.

 

 

X

 

 

 

 

3

 

To understand the ethics rules and the social responsibility mentality adopted by professional finance organizations and apply them in the decision-making process.

X

 

 

 

 

 

 

4

 

To have the necessary background to be able to work in multicultural and multilingual environments.

X

 

 

 

 

 

5

 

To be informed about markets and the factors affecting them, and to be able to analyze the developments in these markets.

 

 

 

 

 

X

 

6

 

To recognize management tools and models specific to multinational companies and to be able to apply them where necessary.

 

 

X

 

 

 

7

 

 

To understand the structure of the global economic system and to be able to analyze how new developments will affect this structure.

 

 

X

 

 

 

 

 

 

8

 

To be able to use critical thinking ability in decision making process.

 

 

 

 

X

 

9

 

To be able to transfer the leadership, teamwork and communication skills acquired to the lifelong learning process.

 

 

X

 

 

 

10

 

To be able to predict the opportunities and problems that may arise under dynamic working conditions and manage these using analytical and creative approaches.

 

 

 

X

 

 

 

ECTS

Activities

Quantity

Duration
(Hour)

Total
Workload
(Hour)

Course Duration (Including the exam week: 16x Total course hours)

15

3

45

Hours for off-the-classroom study (Pre-study, practice)

15

4

60

Mid-terms

2

5+7,5

12,5

Homework/Lab

10

1,5

15

Simulation

8

1,5

12

Final examination

1

10

10

Total Work Load

 

    

154,5

Total Work Load / 25 (h)

 

 

6,18

ECTS Credit of the Course

 

 

6