FIN 506: Portfolio Theory and Policy
Rigorous examination and analysis of asset-holder behavior under conditions of risk and uncertainty.
Overview | Objectives | Materials | Library Resources | Technical Requirements | Course Assignments | Grading | Course Schedule | Course Policies | Academic Integrity | Accommodating Disabilities | Additional Policies
Overview
This is an advanced finance course that covers topics in investment/portfolio management. The primary focus is on the design of stock portfolios, rather than the details of the pricing of financial instruments or identification of arbitrage opportunities. That is, this is not a course about stock picking (stock valuation and selection). Only limited time will be devoted to such issues. The course is applied in the sense that various ideas and approaches are subjected to real-world financial data. Instead of describing the institutional details of current investment practice, the course strives to provide a framework that enables students to view investment management in a changing investment environment.
Course Objectives
By the end of the course, students will be able to:
- analyze the properties of, and issues behind, risk and “optimal portfolios;”
- understand the issues and use the tools underlying portfolio management;
- evaluate the performance of a portfolio.
Required Course Materials
Most World Campus courses require that students purchase materials (e.g., textbooks, specific software, etc.). To learn about how to order materials, please see the Course Materials page. You should check LionPATH approximately 3–4 weeks before the course begins for a list of required materials.Required Software
The following software are required.
- After agreeing to the Morningstar Direct Software Usage Agreement, you will be provided access to a file which will contain download instructions and login information. Note: If you do not agree to the terms of the agreement, you will not be provided with access to the software.
- Microsoft Excel will be the software package used for this course. Refer to the technical specifications listed in the course syllabus for version requirements.
Library Resources
Many of the University Libraries resources can be utilized from a distance. Through the Libraries website, you can
- access magazine, journal, and newspaper articles online using library databases;
- borrow materials and have them delivered to your doorstep—or even your desktop;
- get research help via email, chat, or phone using the Ask a Librarian service; and
- much more.
You must have an active Penn State Access Account to take full advantage of the Libraries' resources and service. The Off-Campus Users page has additional information about these free services.
Required Library Articles
The following articles can be accessed from the Penn State Library's website:
- Malkiel, B. G. (1995). Returns from investing in equity mutual funds. The Journal of Finance.
- Statman, M. (1987). How many stocks make a diversified portfolio? Journal of Financial and Quatitative Analysis.
You can access this list by clicking on the Student Resources link in the left menu and then click on the Library Reserves link to access the articles through the library's site. Another access route is to go to the Penn State University Library, click on the Course Reserves tab at the top and search for "BUSAD 528". See below for further information about the library.
Technical Specifications
Note: Courses that are designated as running in Canvas have different technical requirements. For those courses, please review the Canvas Technical Requirements for MFIN courses.
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| Operating System | Windows Vista, Windows 7, Windows 8* Macintosh users may have problems using the specialized software required in some courses. *Windows 8 support excludes the tablet only RT version |
| Processor | 1 GHz or higher |
| Memory | 2 GB of RAM |
| Hard Drive Space | 500 MB free disk space |
| Browser | We recommend the latest Angel-supported version of Firefox or
Internet Explorer. To determine if your browser fits this criteria and
for advice on downloading a supported version, please refer to the
following ITS knowledgebase article:http://kb.its.psu.edu/cms/article/6
Note: Cookies, Java, and JavaScript must be enabled. Pop-up blockers should be configured to permit new windows from Penn State web sites. Due to nonstandard handling of CSS, JavaScript, and caching, older versions of Internet Explorer (such as IE 6 or earlier) do not work with our courses. |
| Plug-ins | Adobe Reader [Download from Adobe]
Flash Player [Download from Adobe] |
| Additional Software | Microsoft Office 2007 or higher |
| Internet Connection | Broadband (cable or DSL) connection required |
| Printer | Access to graphics-capable printer |
| DVD-ROM | Required |
| Sound Card, Microphone, and Speakers | Required |
| Monitor | Monitor (Capable of at least 1024 x 768 resolution) |
To ensure instructional videos play correctly on your computer:
- Ensure that your javascript is enabled in your browser. Visit the Enable JavaScript in my browser webpage which will help you through the process of enabling your javascript - https://www.google.com/adsense/support/bin/answer.py?answer=12654.
- Ensure that you have at least Flash Player 11.0 installed. Visit the Install Adobe Flash Player webpage which will help you through the process of installing the flash player - http://get.adobe.com/flashplayer/.
If you need technical assistance at any point during the course, please contact the Service Desk.
For registration, advising, disability services, help with materials, exams, general problem solving, visit World Campus Student Services!
Course Assignments
Homework Problems
There will be several homework problems assigned at the end of each lesson (which will include concept check problems, end-of-chapter problems, and/or CFA problems which are found either within or at the end of the assigned chapter reading. Check the course schedule to view the assigned problems. Note: There is nothing to hand in with this assignment. However, it is very important that you complete the homework problems assigned, in order to master the materials, keep up with the course schedule, and do well on the quizzes and exams. Solutions will be provided for your review. Although you should try to solve the problems without looking at the solutions first.
Discussion Activities
Students will be asked to participate in ongoing online discussion activities. Please refer to the course schedule for discussion due dates. The discussion activities will be graded collectively from Weeks 1-4, resulting in a mid-term grade for the discussion activities. Then, another grade will be assigned for Weeks 5-7 at the end of the semester.
Additionally, discussions will be graded based on the criteria listed in the Class Participation Grading Rubric. You can also access this file by clicking on the Activities link in the left-hand menu.
Quizzes
There will be two online quizzes that will be administered during the term covering the content of lessons, assigned textbook readings, and associated problem assignments. Quiz 1 will cover material covered in Lessons 1 and 2. Quiz 2 will cover material covered in Lessons 5 and 6.
Note: You will only be able to access the quizzes during the week they are due. Please refer to the course schedule for due dates. Quiz solutions will be available for student review a day after the due date. The solutions will be posted for one week.
Morningstar Direct
Students will be asked to create several stock portfolios and utilize data from the portfolios to form efficient frontiers using Morningstar Direct. In the beginning of the course, students will need to access, review, and agree to the Morningstar Software Usage Agreement, found by clicking on the Activities link in the left menu and then selecting the Morningstar Direct Software folder.
After agreeing to the terms of the agreement, students will then be provided access to the Morningstar Direct Student Login Access and Download Instructions file (Note: you will only be able to access this file after you agreeed to the Morningstar Software Usage Agreement. The Morningstar Direct Student Login Access and Download Instructions file can also be accessed by clicking on the Activities link in the left menu and then selecting the Morningstar Direct Software folder). Please refer to the course schedule for assignment due dates.
Exams
There will be a midterm exam and a final exam, which will be completed online. The midterm exam will cover material learned in Lessons 1 through 4. The final exam will cover material learned in Lessons 5 through 7. You may use your lecture notes, the textbook, or other resources while taking the exams; however, during the examination period, communication with other people concerning the subject matter of the exams is prohibited.
Note: You will only be able to access the midterm exam and final exam on the dates specified within the course schedule. Exam solutions will be available for student review a day after the due date. The solutions will be posted for one week.
Grading
| Assignment | Max Score (percentage) | Source |
|---|---|---|
| Discussion Activities | 20% |
At the end of each lesson:
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| Quizzes | 20% | Lesson 2 and Lesson 6 (10% each) |
| Morningstar Assignment | 10% | Lesson 4 through Lesson 6 |
| Midterm Exam | 25% | Lesson 4 |
| Final Exam | 25% | Lesson 7 |
| Letter Grade | Grade Scale |
|---|---|
| A | 95-100 |
| A- | 90-94 |
| B+ | 87-89 |
| B | 84-86 |
| B- | 80-83 |
| C+ | 77-79 |
| C | 70-76 |
| D | 65-69 |
| F | below 64 |
Please refer to the University Grading Policy for Graduate Courses for additional information about University grading policies.
FIN 506 Course Schedule
[printer-friendly version]The schedule below outlines the associated timeframes and assignments that we will be covering in this course. Note that assignments are due based on the Eastern Time zone (ET). This ensures that all students have the same deadlines regardless of where they live.
- Course length: 7 weeks
Each assignment is identified as individual (I), team (T), graded (G), or ungraded (U).
Course Policies
Assignment Policies - Late Policy
The course schedule is strictly adhered to. Late assignments/discussion participation, and exams will be accepted ONLY if the instructor is notified prior to the due date of a special circumstance that cannot be avoided. Students will receive a zero for late work without an acceptable reason.
Academic Integrity
According to Penn State policy G-9: Academic Integrity , an academic integrity violation is “an intentional, unintentional, or attempted violation of course or assessment policies to gain an academic advantage or to advantage or disadvantage another student academically.” Unless your instructor tells you otherwise, you must complete all course work entirely on your own, using only sources that have been permitted by your instructor, and you may not assist other students with papers, quizzes, exams, or other assessments. If your instructor allows you to use ideas, images, or word phrases created by another person (e.g., from Course Hero or Chegg) or by generative technology, such as ChatGPT, you must identify their source. You may not submit false or fabricated information, use the same academic work for credit in multiple courses, or share instructional content. Students with questions about academic integrity should ask their instructor before submitting work.
Students facing allegations of academic misconduct may not drop/withdraw from the affected course unless they are cleared of wrongdoing (see G-9: Academic Integrity ). Attempted drops will be prevented or reversed, and students will be expected to complete course work and meet course deadlines. Students who are found responsible for academic integrity violations face academic outcomes, which can be severe, and put themselves at jeopardy for other outcomes which may include ineligibility for Dean’s List, pass/fail elections, and grade forgiveness. Students may also face consequences from their home/major program and/or The Schreyer Honors College.
How Academic Integrity Violations Are Handled
World Campus students are expected to act with civility and
personal integrity; respect other students' dignity, rights, and
property; and help create and maintain an environment in which all
can succeed through the fruits of their own efforts. An environment
of academic integrity is requisite to respect for oneself and
others, as well as a civil community.
In cases where academic integrity is questioned, the Policy on Academic Integrity indicates that procedure requires an instructor to inform the student of the allegation. Procedures allow a student to accept or contest a charge. If a student chooses to contest a charge, the case will then be managed by the respective college or campus Academic Integrity Committee. If that committee recommends an administrative sanction (Formal Warning, Conduct Probation, Suspension, Expulsion), the claim will be referred to the Office of Student Accountability and Conflict Response.
All Penn State colleges abide by this Penn State policy, but review procedures may vary by college when academic dishonesty is suspected. Information about Penn State's academic integrity policy and college review procedures is included in the information that students receive upon enrolling in a course. To obtain that information in advance of enrolling in a course, please contact us by going to the Contacts & Help page .
Accommodating Disabilities
Additional Policies
For information about additional policies regarding Penn State Access Accounts; credit by examination; course tuition, fees, and refund schedules; and drops and withdrawals, please see the World Campus Student Center website.
Disclaimer: Please note that the specifics of this Course Syllabus are subject to change, and you will be responsible for abiding by any such changes. Your instructor will notify you of any changes.