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KING’S OWN INSTITUTE*
Success in Higher Education
FIN201 INVESTMENT MANAGEMENT T121 24/02/2021 16:10 PAGE 1 OF 17
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FIN201 INVESTMENT MANAGEMENT T121
All information in the Subject Outline is correct at the time of approval. KOI reserves the right to make changes to the
Subject Outline if they become necessary. Any changes require the approval of the KOI Academic Board and will be
formally advised to those students who may be affected by email and via Moodle.
Information contained within this Subject Outline applies to students enrolled in the trimester as indicated
1. General Information

1.1 Administrative Details
Associated HE Award(s) Duration Level Subject Coordinator
B Bus (Accg);
B Bus (Mgt & Finance)
1 trimester Level 2 Dr Mervyn Fiedler
XXXXXXXXXX
P: XXXXXXXXXX
L: Level 1, 545 Kent St.
Consultation: via Moodle or by
appointment

1.2 Core / Elective
This is a core subject for B Bus (Mgt & Finance) and an elective for B Bus (Accg)

1.3 Subject Weighting
Indicated below is the weighting of this subject and the total course points.
Subject Credit Points Total Course Credit Points
XXXXXXXXXX4 BBus (Accg) 96; XXXXXXXXXXBBus (Mgt & Finance) 96

1.4 Student Workload
Indicated below is the expected student workload per week for this subject
No. timetabled hours/week* No. personal study
hours/week**
Total workload hours/week***
4 hours/week
(2 hour Lecture + 2 hour Tutorial)
6 hours/week 10 hours/week

* Total time spent per week at lectures and tutorials
** Total time students are expected to spend per week in studying, completing assignments, etc.
*** Combination of timetable hours and personal study.

1.5 Mode of Delivery Online (face-to-face teaching temporarily suspended due to COVID-19)

1.6 Pre-requisites ACC100 Intro to Accounting and FIN200 Corporate Financial Management

1.7 General Study and Resource Requirements
o Students are expected to attend classes with the weekly worksheets and subject support material
provided in Moodle. Students should read this material before coming to class to improve their
ability to participate in the weekly activities.
o Students will require access to the internet and their KOI email and should have basic skills in
word processing software such as MS Word, spreadsheet software such as MS Excel and visual
presentation software such as MS PowerPoint.
o Computers and WIFI facilities are extensively available for student use throughout KOI. Students
are encouraged to make use of the campus Library for reference materials.
Resource requirements specific to this subject: Students should have a non-programmable calculator.
Applications in smart phones will not be sufficient to perform the required calculations.
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2 Academic Details

2.1 Overview of the Subject

The subject provides an overview of the theory of investing and capital markets, covering domestic and
global markets, investor preferences, asset allocation, security selection, risk versus return,
characteristics of debt and equity markets, financial instruments, valuation models, futures and forward
contracts, portfolio management and performance evaluation, in the setting of current financial events.

2.2 Graduate Attributes for Undergraduate Courses

Graduates of the Bachelor of Business (Accounting), and the Bachelor of Business (Management and
Finance) courses from King’s Own Institute will achieve the graduate attributes expected from successful
completion of a Bachelor’s degree under the Australian Qualifications Framework (2nd edition, January
2013). Graduates at this level will be able to apply an advanced body of knowledge from their major area
of study in a range of contexts for professional practice or scholarship and as a pathway for further
learning.

King’s Own Institute’s generic graduate attributes for a bachelor’s level degree are summarised below:
below:

Across the course, these skills are developed progressively at three levels:
o Level 1 Foundation – Students learn the basic skills, theories and techniques of the subject and
apply them in basic, stand-alone contexts.
o Level 2 Intermediate – Students further develop skills, theories and techniques of the subject and
apply them in more complex contexts, beginning to integrate the application with other subjects.
o Level 3 Advanced – Students have a demonstrated ability to plan, research and apply the skills,
theories and techniques of the subject in complex situations, integrating the subject content with a
range of other subject disciplines within the context of the course.


KOI Bachelor Degree
Graduate Attributes Detailed Description

Knowledge Current, comprehensive and coherent knowledge

Critical Thinking Critical thinking and creative skills to analyse and synthesise information and evaluate new problems
Communication
Communication skills for effective reading, writing, listening
and presenting in varied modes and contexts and for
transferring knowledge and skills to a variety of audiences

Information Literacy Information and technological skills for accessing, evaluating, managing and using information professionally
Problem Solving Skills
Skills to apply logical and creative thinking to solve problems
and evaluate solutions

Ethical and Cultural
Sensitivity
Appreciation of ethical principles, cultural sensitivity and
social responsibility, both personally and professionally

Teamwork Leadership and teamwork skills to collaborate, inspire colleagues and manage responsibly with positive results
Professional Skills
Professional skills to exercise judgement in planning,
problem solving and decision making
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2.3 Subject Learning Outcomes
This is a Level 2 subject.
Listed below, are key knowledge and skills students are expected to attain by successfully completing
this subject:
Subject Learning Outcomes Contribution to Graduate Attributes
a) Explain the investment framework and describe the Australian
and major global debt and equity markets
b) Evaluate investor preferences, and the relationship between
risk and return
c) Explain and analyse investments using the capital asset pricing
model and other valuation models
d) Apply portfolio analysis tools to select profitable securities,
manage a portfolio and evaluate portfolio performance.

2.4 Subject Content and Structure

Below are details of the subject content and how it is structured, including specific topics covered in
lectures and tutorials. Reading refers to the text unless otherwise indicated.

Weekly Planner:

Week
(beginning)
Topic Covered in Each
Week’s Lecture
Reading(s) Expected work as
listed in Moodle
1
08 Mar
Investments - What Are They?:
Background; Introduction to the Investment
Process; Asset Classes; Markets and
Managed Funds
Ch. 2 Tutorial exercises
2
15 Mar
Risk and Returns: Risk Premiums: Nominal
and Real Returns; The Historical Record;
Asset Allocation and Passive Strategies
Ch. 5 Tutorial exercises
3
22 Mar
Capital Asset Pricing Model: CAPM and
Index Models; Multi-factor models; and
Arbitrage Pricing Theory
Ch. 7 Tutorial exercises
4
29 Mar
Bond Characteristics: Bond Prices and
Yields over Time; Default Risk and the
Yield Curve
Ch. 10 Tutorial exercises
5
05 Apr
Managing Bond Portfolios: Interest Rate
Risk; Duration; Convexity; Active and
Passive Bond Management
Ch. 11 Tutorial exercises
6
12 Apr Revision
Based on
Topics 1 to 4
Mid trimester exams –
see Section 2.6 below for
further information
7
19 Apr
Macroeconomic and Industry Analysis; The
Global and the Domestic Economy; Interest
Rates; Government Policy and Business
Cycles
Ch 12
Preview of Assessment 2
(Individual Assignment)
Tutorial exercises
8
26 Apr
Equity Valuation: Book Values v. Market
Values; Dividend Discount Models; Price-
Earnings Ratios; Free Cash Flow Models
and the Aggregate Stock Market
Ch 13
Tutorial exercises
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2.5 Public Holiday Amendments

Please note: KOI is closed on all scheduled NSW Public Holidays.

T121 has 3 days of public holidays (Easter Holidays) that occurs during this trimester. Classes scheduled
for these public holidays (Calendar Class Dates) will be rescheduled as per the table below.

This applies to ALL subjects taught in T121.

Please see the table below and adjust your class timing as required. Please make sure you have
arrangements in place to attend the rescheduled classes if applicable to your T121 enrolment.

Classes will be conducted at the same time and in the same location as your normally scheduled class
except these classes will be held on the date shown below.

Calendar Class Date Rescheduled Class Date
Friday 2 April 2021 (Week 5)
Saturday 3 April 2021 (Week 5)
Monday 5 April 2021 (Week 6)
Friday 04 June 2021 (Week 13) (Study Review Week)
Saturday 05 June 2021 (Week 13) (Study Review Week)
Monday 31 May 2021 (Week 13) (Study Review Week)

2.6 Review of Grade, Deferred Exams & Supplementary Exams/Assessments

Review of Grade:

There may be instances when you believe that your final grade in a subject does not accurately reflect
your performance against the marking criteria. Section 8 of the Assessment and Assessment Appeals
Policy (www.koi.edu.au) describes the grounds on which you may apply for a Review of Grade.

If you have a concern about your marks and you are unable to resolve it with the Academic staff
concerned, then you can apply for a formal Review of Grade as explained in section 3.2(e) Appeals
9
03 May
Financial Statement Analysis: Measuring
Firm Performance; Profitability Measures;
Ratio Analysis; Comparability Problems and
Value Investing
Ch. 14
Tutorial exercises
Deferred mid trimester
exams - see Section 2.6
below for more information
10
10 May
Evaluating Investment Performance: The
Conventional Theory; Style Analysis;
Market Timing and Performance Attribution
Procedures
Ch. 18 Tutorial exercises Assessment 2 due
11
17 May
Investors and the Investment Process;
Investor Objectives; Investor Constraints;
Investment Policies; Monitoring and Review
of Investment portfolios.
Ch. 22 Tutorial exercises
12
24 May Revision of Topics 7 to 11.
Ch. 12, 13,
14, 18 and
22
Revision
13
30 May Study Review Week
14
07 Jun Final Exam Week
Please see Exam Timetable for Exam date,
time and location
15
13 Jun
Student Vacation begins
Enrolments for T221 open
16
21 Jun
Results Released 29 June 2021
Certification of Grades 02 July 2021
T221 begins 05 Jul 2021
1
05 Jul
Week 1 of classes for T221
Friday 02 July 2021 – Review of Grade Day for T121 – see Sections 2.6 and 3.2 below
for more information.
Approved by KOI Academic Board for T1 2021
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Process below. Please note the time limits for requesting a review. Please ensure you read the Review
of Grade information before submitting an application.

Review of Grade Day:

Final exam scripts will not normally be returned to students. Students can obtain feedback on their exam
performance and their results for the whole subject at the Review of Grade Day. KOI will hold the Review
of Grade Day for all subjects studied in T121 on

Only final exams and whole subject results will be discussed as all other assessments should have been
reviewed during the trimester. Further information about Review of Grade Day will be available through
Moodle.

If you fail one or more subjects and you wish to consider applying for a Review of Grade you are
STRONGLY ADVISED to attend the Review of Grade Day. You will have the chance to discuss your final
exam and subject result with your lecturer, and will be advised if you have valid reasons for applying for
a Review of Grade (see Section 3.2 below and the Assessment and Assessment Appeals Policy).

A formal request for a review of grade may not be considered unless you first contact the subject
coordinator to discuss the result.

Deferred Exams:

If you wish to apply for a deferred exam because you are unable to attend the scheduled exam, you
should submit an Application for Assignment Extension or Deferred Exam Form available from
https://forms.gle/YWwCVapeVeGULpGU6 as soon as possible but no later than three working days
after the scheduled exam date.

If you miss your mid-trimester or final exam there is no guarantee you will be offered a deferred exam.

You must apply within the stated timeframe and satisfy the conditions for approval to be offered a
deferred exam (see Section 8.1 of the Assessment and Assessment Appeals Policy and the Application
for Assignment Extension or Deferred Exam Forms). In assessing your request for a deferred exam,
KOI will take into account the information you provide, the severity of the event or circumstance, your
performance on other items of assessment in the subject, class attendance and your history of previous
applications for special consideration.

Deferred mid-trimester exams will be held before the end of week 9. Deferred final exams will be held
on two days during week 1 or 2 in the next trimester. You will not normally be granted a deferred exam
on the grounds that you mistook the time, date or place of an examination, or that you have made
arrangements to be elsewhere at that time; for example, have booked plane tickets.

If you are offered a deferred exam, but do not attend you will be awarded 0 marks for the exam. This
may mean it becomes difficult for you to pass the subject. If you apply for a deferred exam within the
required time frame and satisfy the conditions you will be advised by email (to your KOI student email
address) of the time and date for the deferred exam. Please ensure that you are available to take the
exam at this time.

Marks awarded for the deferred exam will be the marks awarded for that item of assessment towards
your final mark in the subject.

Supplementary Assessments (Exams and Assessments):

A supplementary assessment may be offered to students to provide a final opportunity to demonstrate
successful achievement of the learning outcomes of a subject. Supplementary assessments are only
offered at the discretion of the Board of Examiners. In considering whether or not to offer a supplementary
assessment, KOI will take into account your performance on all the major assessment items in the
subject, your attendance, participation and your history of any previous special considerations.



Friday 02 July 2021

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If you are offered a supplementary assessment, you will be advised by email to your KOI student email
address of the time and due date for the supplementary assessment – supplementary exams will normally
be held at the same time as deferred final exams during week 1 or week 2 of the next trimester.

You must pass the supplementary assessment to pass the subject. The maximum grade you can achieve
in a subject based on a supplementary assessment is a PASS grade.

If you:
o are offered a supplementary assessment, but fail it;
o are offered a supplementary exam, but do not attend; or
o are offered a supplementary assessment but do not submit by the due date;
you will receive a FAIL grade for the subject.

Students are also eligible for a supplementary assessment for their final subject in a course where they
fail the subject but have successfully completed all other subjects in the course. You must have completed
all major assessment tasks for the subject and obtained a passing mark on at least one of the major
assessment tasks to be eligible for a supplementary assessment.

If you believe you meet the criteria for a supplementary assessment for the final subject in your course,
but have not received an offer, complete the Complaint, Grievance, Appeal Form and send your form to
XXXXXXXXXX. The deadline for applying for supplementary assessment is the Friday of the first
week of classes in the next trimester.

2.7 Teaching Methods/Strategies

Briefly described below are the teaching methods/strategies used in this subject:

o Lectures (2 hours/week) are conducted in seminar style and address the subject content, provide
motivation and context and draw on the students’ experience and preparatory reading.
o Tutorials (2 hours/week) include class discussion of case studies and research papers, practice sets and
problem-solving and syndicate work on group projects. Tutorials often include group exercises and so
contribute to the development of teamwork skills and cultural understanding. Tutorial participation is an
essential component of the subject and contributes to the development of many of the graduate attributes
(see section 2.2 above). Tutorial participation contributes towards the assessment in many subjects (see
details in Section 3.1 for this subject). Supplementary tutorial material such as case studies,
recommended readings, review questions etc. will be made available each week in Moodle.
o Online teaching resources include class materials, readings, model answers to assignments and
exercises and discussion boards. All online materials for this subject as provided by KOI will be found in
the Moodle page for this subject. Students should access Moodle regularly as material may be updated at
any time during the trimester
o Other contact - academic staff may also contact students either via Moodle messaging, or via email to the
email address provided to KOI on enrolment.

2.8 Student Assessment
Provided below is a schedule of formal assessment tasks and major examinations for the subject.
Assessment Type When Assessed Weighting Learning Outcomes
Assessed
Assessment 1: Mid-trimester exam
1.5 hours
Week 6 20% a, b, c
Assessment 2: Individual
(2,500+/-10% words) Week 10
30% a, b, c, d
Assessment 3: Final examination
(2 hours + 10 min reading time)
Final Exam Period 50% a, b, c, d

Requirements to Pass the Subject:
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To gain a pass or better in this subject, students must gain a minimum of 50% of the total available
subject marks.

2.9 Prescribed and Recommended Readings

Provided below, in formal reference format, is a list of the prescribed and recommended readings.

Prescribed Text:

Bodie, Z., Kane, A. and Marcus, A. J XXXXXXXXXXEssentials of Investments, 11th ed., McGraw Hill
Education, New York. NY. USA.

Recommended Readings:

Brailsford, T., Heaney, R. and Bilson, C XXXXXXXXXXInvestments: Concepts and Applications, 5th ed. Cengage
Learning Australia, South Melbourne, Vic., Australia.

Gitman, L., Joehnk, M. D., Juchau, R., Wheldon, B. J. and Wright, S. J., 2017. Fundamentals of Investing.
13th ed. Australia: Pearson.

Reilly, F. K., Brown, K. C. and Leeds, S., 2018. Investment Analysis and Portfolio Management. 11th ed.
Cengage Learning, USA.

Recommended References:

o Australasian Accounting, Business and Finance Journal
o Australian Journal of Financial Planning
o Australian Financial Review https://www.afr.com/
o Journal of Banking and Finance
o Journal of International Financial Markets, Institutions & Money
o Journal of Financial Research
o Money Management
o The Australian – Business Review section https://www.theaustralian.com.au/business
o The Financial Review

Useful Websites:

The following websites are useful sources covering a range of information useful for this subject. However,
most are not considered to be sources of academic peer reviewed theory and research. If your assessments
require academic peer reviewed journal articles as sources, you need to access such sources using the
Library database, Ebscohost, or Google Scholar. Please ask in the Library if you are unsure how to access
Ebscohost. Instructions can also be found in Moodle.

o ASIC Money Smart https://www.moneysmart.gov.au/investing
o Australian Investors Association http://www.investors.asn.au/
o Smart Investor http://www.afrsmartinvestor.com.au/
3. Assessment Details

3.1 Details of Each Assessment Item

The assessments for this subject are described below. The description includes the type of
assessment, its purpose, weighting, due date and submission requirements, the topic of the
assessment, details of the task and detailed marking criteria, including a marking rubric for essays,
reports and presentations. Supplementary assessment information and assistance can be found in
Moodle.

KOI expects students to submit their own original work in both assignments and exams, or the original
work of their group in the case of group assignments.

Approved by KOI Academic Board for T1 2021
https://www.afr.com/
https://www.theaustralian.com.au/business
https://www.moneysmart.gov.au/investing
http://www.investors.asn.au/
http://www.afrsmartinvestor.com.au/
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Note: Changes to the method / mode of assessment can only be made in accordance with KOI
Assessment Policy and with the authority of the KOI Academic Board. Any changes will be formally
advised to those students who may be affected.

Assessment 1

Assessment Type: Mid-trimester exam – 1.5 hours - individual assessment - closed book exam.
Students are expected to bring pens and a non-programmable calculator to the exam. A formula sheet
will be provided. No other materials permitted

Purpose: This assessment is designed to allow students to demonstrate an understanding of
investment performance measurement, domestic and international finance markets and selected
investment concepts, and analyse and evaluate the suitability of investment options using the capital
asset pricing model. This assessment relates to learning outcomes a, b, c.

Value: 20% Due Date: Week 6

Topic: Subject content from Weeks 1 – 5 inclusive

Task Details: The Exam will be of 1.5 hours duration and will consist of 5 Multiple-choice Questions
worth 1 mark each, and 5 problem-type questions worth 3 marks each. Total 20.Students will need to
understand appropriate performance measurement techniques, foreign investment markets, bonds,
selected investment concepts and sources of finance for given sets of circumstances, and be able to
use the capital asset pricing model to evaluate investment alternatives. Students are expected to bring
a non-programmable calculator to the exam. As indicated above, a formula sheet will be provided.
No other aids or materials are permitted.

Assessment 2

Assessment type: Individual Assignment – Investment Management calculations paper. 2,500 +/- 10%
words.

Assessment purpose: To allow students to demonstrate an understanding of various portfolio
investment analysis calculation techniques, applicable to real world situations. Facility with these
techniques will assist students to construct an investment portfolio, analyse the expected and actual
performance of selected securities and to review and change - if deemed desirable - the content of a
portfolio. The assessment will reflect the analysis which would be expected of students if, after
graduating, they are working in a modern accounting practice or a fund manager’s office. This
assessment relates to learning outcomes a, b, c and d.

Value: 30% Due Date: Week 10 – in Tutorial

Submission: Upload a soft copy to Turnitin located on KOI’s Moodle subject homepage by Monday,
Week 10. Submit a hard copy in that week’s Tutorial (see Due Date).

Topic: Portfolio Investment Management Calculations and their Application to Decision-making. This
assessment covers Topics 1 to 5 inclusive.

Task Details: This assessment consists of five questions (some with multiple parts) and students should
answer all questions. Please note that you must solve each problem using the appropriate formula/e,
which must be shown. All calculations and workings must also be shown.
Please see Assignment below.




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TRIMESTER T121
FIN201 – INVESTMENT MANAGEMENT
INDIVIDUAL ASSIGNMENT
Please complete these details
Student No. ………………………………………….
Student Last Name;………………………………….
Student’s Other Names:……………………………………………………..
Tutor name: Dr Mervyn Fiedler
Instructions to students.
Please Note::
i. This Assessment consists of five questions (all problems), some with multiple parts.
ii. All questions must be attempted.
iii. Solve each problem using the appropriate formula/e, which must be shown at the start of each
problem.
iv. EXCEL formulae or workings using EXCEL will NOT be accepted.
v. Show all calculations
Submission requirements details:
A. Presentation.
- Answers to be typed. Handwritten answers will not be accepted and will not be marked.
- Please type each answer after each part question. The Assignment (below) is reproduced on
Moodle, with space provided for each answer. If more space is required, then scroll down the
page, and extra page(s) automatically will be produced.
- Typing should use Arial or Times New Roman or Calibri font (10, 11 or 12 pitch), 1.5 line spacing;
and
- Left and right margins to be at least 2.5 cms from the edge of the page.

B. Research and referencing.
- All references sourced should be quoted at the end of the Assignment in a List of References.
- Use Harvard referencing. See http://en.wikipedia.org/wiki/Harvard_referencing
- As the questions are calculation problems, there is no need to submit via Turnitin.

C. Submission
Every page should be clearly numbered. The lodged Assignment must include the following, in
order:
(a) A KOI Cover Sheet for an Individual Assignment.
(b) A title page, which indicates Subject Title, Trimester Number, Assignment Title, Student’s Full
Name; KOI Student Number; and Tutor’s name.
(c) Assignment Questions and Answers.
(d) List of references (using Harvard – Anglia style).
(e) A copy of the Assignment Marking rubric (see page XX below).
A copy of your Assignment, containing the requirements specified in Items (a) to (e) above, needs to be
emailed to your Tutor at XXXXXXXXXX by 12.00 noon on Thursday of week 10. Late
lodgments will be penalised – see Section 3.2 a) below.
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http://en.wikipedia.org/wiki/Harvard_referencing
mailto: XXXXXXXXXX
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QUESTION 1. [(a. = XXXXXXXXXX = 12 Marks) + (b. = REC’NS = 3 Marks)]
a. Jennifer Strong has an investment portfolio which comprises shares in four companies, Breadth
Ltd, Depth Ltd, Height Ltd and Length Ltd, The following table shows the initial value and end
value for each of the shares over 2020.
Company Value as at XXXXXXXXXX
$
Value As at XXXXXXXXXX
$
Breadth Ltd 10,000 12,500
Depth Ltd 20,000 15,000
Height Ltd 30,000 33,000
Length Ltd 40,000 48,000

Calculate the following percentage returns achieved by Jennifer’s portfolio over 2020 by each of
the following methods, assuming that she holds 5,000 shares in Breadth Ltd and 10,000 shares
in each of the other 3 companies.
i. The equal-weighted return.
ii. The price-weighted return
iii. The value weighted return.

b. Which of the above methods provides the most accurate calculation of the portfolio return over
2020?
Give reasons.
QUESTION 2. [(a. + b. + d = XXXXXXXXXX = 16 Marks) + (c = REC’NS = 3 Marks)]
a. You manage an equity fund with an expected risk premium of 10% and a standard deviation of
14%. The rate on Treasury bills is 6%. Your client wishes to invest $150,000, comprising
$90,000 of his portfolio in your equity fund and $60,000 in a risk-free T-bill money market fund.
i. What is the expected return of your client’s portfolio?
ii. What is the standard deviation of your client’s portfolio?

b. Following an audit of your equity fund, you are advised that the above standard deviation of
14% is incorrect and it is really 16%. You advise your client of the correct figure and he states
that he does not wish to take any more risk in his investment mix of your equity fund and the T-
bill money market fund and that he would like to maintain the figure calculated in a.ii. above. To
meet his wishes and maintain his overall investment of $150,000, what will be the new
allocation of amounts (each correct to the nearer dollar) to be invested in each of the above
funds?

c. In the present economic and financial situation, and assuming current XXXXXXXXXXreturns on market
equity funds and T-bills (rather than those quoted above) how would you advise the client to
invest $150,000 (you are not limited to equity funds or T-bill money market funds)? Explain
fully, with reasons, and considering in general terms, investing for the next 5 years.
d. Claude Constable has received a large inheritance and wishes to invest it at a continuously
compounded rate of interest for one year. He has been quoted a rate of 3.5% per annum, but is
not sure whether this is the continuously compounded rate or the effective annual rate.
i. What will be the effective annual rate if 3.5% is a continuously compounded rate?
ii. What will be the continuously compounded rate if 3.5% is the effective annual rate?
[Additional Information: The exponential, e = XXXXXXXXXX.]
QUESTION 3. [(a. + b. + c. (part) = XXXXXXXXXX = 16 Marks) + [c. (other part) = REC’NS = 2 Marks}]
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a. Assume that portfolios X and Y are well-diversified and plot on the security market line. The
expected returns and betas of the portfolios are as shown in the following table.
Portfolio Expected Return Portfolio Beta
X 17% 1.2
Y 20% 1.5
Calculate the following:
i. The expected market return
ii. The risk-free rate.
b. Based on your calculations in a., what is the expected return on each of the following
portfolios?
i. Portfolio V, which has a beta of 0.5?
ii. Portfolio W, which has a beta of 0?
iii. Portfolio Z, which has a beta of -0.5?
c. This question will require some research. Describe, with illustrative formulae, ONE ONLY of the
following two theories, stating one advantage and one disadvantage of your selected theory,
and whether you recommend the use of your selected theory rather than CAPM for portfolio
analysis. Give one reason for your recommendation
i. The APT (Arbitrage Pricing Theory)
ii. The Fama-French (or other) Multi-factor model
QUESTION 4. [(a. + b. + c. = XXXXXXXXXX = 12 Marks) (No REC’NS)]
a. The following table contains spot rates and forward rates for the next 3 years. However, the
labels got mixed up. Identify which row of interest rates represents spot rates (i.e., today’s
compound average annual rates expected for the next year, for the next two years and for the
next three years respectively), and which one represents the forward rates (i.e., today’s
expected one-year rates for each of year 1, year 2 and year 3 respectively)?

Description of rates Year 1 Year 2 Year 3
Spot rates or forward
rates
10% 12% 14%
Spot rates or forward
rates
10% XXXXXXXXXX% XXXXXXXXXX%.
b. The yield to maturity on one-year zero-coupon bonds is 8%. The yield to maturity on two-year
zero-coupon bonds is 9%.Wjhat is the forward rate of interest for the second year?

c. A 3 year bond with a par value of $1,000 will make annual coupon payments of $60 (the first in
one year from now, the second in 2 years and the third in 3 years from now). It is priced today
at par ($1,000). If, in one year, immediately after payment of the first coupon payment, market
yields on bonds declines to 5%, what then will be the market price of this bond?
QUESTION 5. [(a. + b. + c. + d. = XXXXXXXXXX = 14 Marks) + (e. = REC’NS = 2 Marks)]
Given a coupon-paying bond with a face value of $100,000, a coupon of 6% per annum,
payable half-yearly, and a yield to maturity of 4% per annum, compounded half-yearly, with 2.5
years to maturity, answer each of the following parts. Show answers with the accuracy
specified.

a. What price would the bond sell for now (2.5 years before maturity, with the first coupon
payment due in six months)? [Show answer correct to the nearer cent.]
b. Calculate the duration of the bond. [Show answer in half-years, correct to 4 decimal
places.]
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c. Calculate the convexity of the bond. [Show answer correct to 4 decimal places.]
d. Suppose that the yield to maturity immediately changes to 5% per annum. Calculate the
resultant change in bond price (correct to the nearer cent) by each of 3 methods.
i. Using the duration adjustment.
ii. Using the duration-with-convexity adjustment.
iii. Using the method employed in a. above.
e. What do you conclude about the accuracy of the three rules in d.? Which method would
you recommend? Why?
List of references used.
“By uploading this Assignment, I declare that the Assignment answers are my own work and I
have not sought or obtained help.”
END OF ASSIGNMENT.
MARKING GUIDE: Marks will be awarded as follows:
Element XXXXXXXXXXMarks
Calculations, including research and analysis (as above XXXXXXXXXX
Recommendations and Conclusions (REC’NS above XXXXXXXXXX
Presentation XXXXXXXXXX10
TOTAL XXXXXXXXXX100
The TOTAL will be converted to a mark (correct to the nearer whole number) out of 30%.



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Marking Rubric for Assessment No. 2; Value 30% XXXXXXXXXXStudent ID

Student Name – Last Name ………………….……….…. Other Names……………………………………...…

Criteria Fail (0 – 49%)
Pass
(50 – 64%)
Credit
(65 – 74%)
Distinction
(75 – 84%)
High Distinction
(85 – 100%)
Research – extent
and application
Value 80%
Mark awarded


………………………



Incomplete work or
few accurate
calculations. Many
errors.
Tentative or
incomplete
calculations reflect
limited knowledge
and
understanding.
Most workings
shown. Some
errors.
Mostly accurate
calculations, at
least in several key
areas. Most
workings shown.
Minor errors.
Mostly accurate
calculations
made and all
workings
shown. Few
errors.
Accurate
calculations
made to solve
problems. All
workings
shown, Nil or
minimal errors.
Recommendations/
explanations /
conclusions
Value 10%
Mark awarded


……………………
Did not make
relevant and
correct
calculations,
conclusions or
recommendation
s.
Explanations,
conclusions and
recommendation
s not adequately
linked to
calculations – or
generally
satisfactory
explanations,
etc. linked to
incorrect
calculations.
Based on the
calculations,
student made
sound
conclusions and
recommendation
s. However,
some
explanations
required more in-
depth analysis.
Based on the
calculations,
student made
sound and
relevant
explanations,
conclusions
and
recommend-
ations.
Based on the
calculations,
student
made in-
depth,
relevant and
correct
explanations,
conclusions
and
recommend-
ations.
Presentation
Value 10%
Mark awarded



…………………..
Presentation is
poor / lacks
professionalism /
incorrect.
Calculations are
inaccurate /
absent / not
applicable. Little
or no referencing.
Acceptable
presentation, but
too many
calculation
errors,
demonstrating
lack of attention
to detail. Some
referencing but
obvious
mistakes.
Good
presentation
overall, but some
obvious errors.
Satisfactory
layout and mostly
correct
calculations.
Referencing is
mainly accurate.
Professional
presentation
with some
minor errors.
Good layout
and mostly
sound
calculations.
Correct
referencing
throughout.
Highly
professional
presentation.
Excellent
layout and
sound
calculations.
Correct
referencing
throughout.
Total Mark:

………..... /
100%

Final Mark:

………...... / 30%
COMMENTS:





Signature of Marker: ………………………………………………. Date:
……………………………….







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Assessment 3

Assessment Type: Final Exam – individual assessment - closed book exam. Students are expected to
bring pens and a non-programmable calculator into the examination room. No other materials will be
permitted.

Purpose: The Final Exam will require students to explain and apply the subject theory to practical
situations as would be found in a modern organisation, identifying issues, drawing conclusions, and
making recommendations. Students will also need to use relevant portfolio analysis tools to develop
appropriate investment recommendations and to calculate appropriate investment measures. This
assessment contributes specifically to learning outcomes a, b, c, and d.

Value: 50%

Due Date: The Final Exam will be held in the official KOI exam period in Week 14 of the trimester. The
specific date and time will be posted towards the end of the trimester.

Topic: The examination may cover content from any part of the material presented in Weeks 7 to 11
inclusive, as set out in section 2.4 above.

Task Details: 2 hours + 10 min reading time closed book exam. The exam will be marked out of 50 and
will consist of two sections.

Section A, worth 10 marks in total, will consist of 5 Multiple-choice Questions worth 2 marks each.
These will be problem solving questions.

Section B, worth 40 marks in total, will consist of 5 five long answer questions, each question consisting
of several parts. These will require knowledge of the subject theories and strategies to identify and
evaluate appropriate investment recommendations for given sets of circumstances.

Although all Final Exam questions will be based specifically on the topics covered in Weeks 7 – 11
inclusive, a thorough understanding of the earlier work will be necessary to grasp the concepts involved
in the Exam coverage.

3.2 General information about assessment

a) Late Penalties and Extensions

An important part of business life and key to achieving KOI’s graduate outcome of Professional Skills is
the ability to manage workloads and meet deadlines. Consequently, any assessment items such as in-
class quizzes and assignments missed or submitted after the due date/time will attract a penalty (see
below).

Students who miss mid-trimester tests and final exams without a valid and accepted reason (see below)
may not be granted a deferred exam and will be awarded 0 marks for assessment item. These
penalties are designed to encourage students to develop good time management practices, and create
equity for all students.

Any penalties applied will only be up to the maximum marks available for the specific piece of
assessment attracting the penalty.

Late penalties, granting of extensions and deferred exams are based on the following:

In Class Tests (excluding Mid-Trimester Tests)

o No extensions permitted or granted – a make-up test may only be permitted under very special
circumstances where acceptable supporting evidence is provided. The procedures and timing to
apply for a make-up test (only if available) are as shown in section Applying for an Extension (see
below).
o Missing a class test will result in 0 marks for that assessment element unless the above applies.

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Written Assessments

o There is a late penalty of 5% of the total available marks per calendar day unless an extension is
approved (see Applying for an Extension section below)

Presentations

o No extensions permitted or granted – no presentation = 0 marks. The rules for make-up
presentations are the same as for missing in-class tests (described above).

Mid-Trimester Tests and Final Exams

If students are unable to attend mid-trimester tests or final exams due to illness or some other event
(acceptable to KOI), they must:
o Complete the Assignment Extension / Exam Deferment Form available from
https://forms.gle/YWwCVapeVeGULpGU6 as soon as possible, but no later than three (3) working
days after the exam date.
o Provide acceptable documentary evidence in the form of a medical certificate, police report or some
other evidence that will be accepted by KOI.
o Agree to attend the deferred exam as set by KOI.
Deferred exam

o There will only be one deferred exam offered.
o Marks awarded for the deferred exam will be the marks awarded for that assessment.
o If you miss the deferred exam you will be awarded 0 marks for the assessment. This may mean you
are unable to complete (pass) the subject.

b) Applying for an Extension

If students are unable to submit or attend an assessment when due, and extensions are possible, they
must
o Complete the Assignment Extension / Exam Deferment Form available from
https://forms.gle/YWwCVapeVeGULpGU6 as soon as possible, but no later than three (3) working
days of the assessment due date.
o Provide acceptable documentary evidence in the form of a medical certificate, police report or some
other evidence that will be accepted by KOI.
o Students and lecturers / tutors will be advised of the outcome of the extension request as soon as
practicable.
Please remember there is no guarantee of an extension being granted, and poor organisation is not a
satisfactory reason to be granted an extension.

c) Referencing and Plagiarism

Please remember that all sources used in assessment tasks must be suitably referenced.
Failure to acknowledge sources is plagiarism, and as such is a very serious academic issue. Students
plagiarising run the risk of severe penalties ranging from a reduction in marks through to 0 marks for a
first offence for a single assessment task, to exclusion from KOI in the most serious repeat cases.
Exclusion has serious visa implications. The easiest way to avoid plagiarising is to reference all
sources.

Harvard referencing is the required method – in-text referencing using Author’s Surname (family name)
and year of publication. A Referencing Guide, “Harvard Referencing”, and a Referencing Tutorial can
be found on the right hand menu strip in Moodle on all subject pages.

An effective way to reference correctly is to use Microsoft Word’s referencing function (please note that
other versions and programs are likely to be different). To use the referencing function, click on the
References Tab in the menu ribbon – students should choose Harvard.

Authorship is also an issue under plagiarism – KOI expects students to submit their own original work in
both assessment and exams, or the original work of their group in the case of a group project. All
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students agree to a statement of authorship when submitting assessments online via Moodle, stating
that the work submitted is their own original work.

The following are examples of academic misconduct and can attract severe penalties:

o Handing in work created by someone else (without acknowledgement), whether copied from
another student, written by someone else, or from any published or electronic source, is fraud, and
falls under the general Plagiarism guidelines.
o Copying / cheating in tests and exams is academic misconduct. Such incidents will be treated just
as seriously as other forms of plagiarism.
o Students who willingly allow another student to copy their work in any assessment may be
considered to assisting in copying/cheating, and similar penalties may be applied.

Where a subject coordinator considers that a student might have engaged in academic misconduct,
KOI may require the student to undertake an additional oral exam as a part of the assessment for the
subject, as a way of testing the student’s understanding of their work.

Further information can be found on the KOI website.

d) Reasonable Adjustment

The Commonwealth Disability Discrimination Act XXXXXXXXXXmakes it unlawful to treat people with a
disability less fairly than people without a disability. In the context of this subject, the principle of
Reasonable Adjustment is applied to ensure that participants with a disability have equitable access to
all aspects of the learning for the subject. For assessment, this means that barriers to their
demonstrating competence are removed wherever it is reasonably practical to do so.

Examples of reasonable adjustment in assessment may include:
o provision of an oral assessment, rather than a written assessment
o provision of extra time
o use of adaptive technology.

The focus of the adjusted assessment should be on enabling the student to demonstrate achievement
of the learning outcomes for the subject, rather than on the method of assessment.

e) Appeals Process

Full details of the KOI Assessment and Assessment Appeals Policy may be obtained in hard copy from
the Library, and on the KOI website www.koi.edu.au under Policies and Forms.

Assessments and Mid-Trimester Exams:

Where students are not satisfied with the results of an assessment, including mid-trimester exams, they
have the right to appeal. The process is as follows:

o Discuss the assessment with their tutor or lecturer – students should identify where they feel more
marks should have been awarded – students should provide valid reasons based on the marking
guide provided for the assessment. Reasons such as “I worked really hard” are not considered
valid.
o If still not satisfied, students should complete an Application for Review of Assessment Marks form,
clearly explaining the reasons for seeking a review. This form is available from the KOI website
under Policies and Forms and is also available at KOI Reception (Kent St, Market St and O’Connell
St). The completed Application for Review of Assessment Marks form should be submitted as
explained on the form with supporting evidence attached to XXXXXXXXXX .
o The form must be submitted within ten (10) working days of the return of the marked assessment,
or within five (5) working days after the return of the assessment if the assessment is returned after
the end of the trimester.




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Review of Grade – whole of subject and final exams:

Where students are not satisfied with the results of the whole subject or with their final exam results,
they have the right to request a Review of Grade – see the Assessment and Assessment Appeals
Policy for more information.

An Application for Review of Grade/Assessment Form (available from the KOI Website under Policies
and Forms and from KOI Reception at Kent St, Market St and O’Connell St) should be completed
clearly explaining the grounds for the application. The completed application should be submitted as
explained on the form, with supporting evidence attached to XXXXXXXXXX .


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Answered 11 days AfterMay 06, 2021FIN201

Solution

Harshit Agarwal answered on May 09 2021
21 Votes

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