SYLLABUS
FINA 8365: THEORY OF INVESTMENTS
Classroom: BUSA 121
Day-Time: Fridays, 1:10 – 3:50 PM
Dates: January 20 – May 15, 2015
INSTRUCTOR INFORMATION
Instructor: Fernando M. Patterson
Office: BUSA 218B
Office Hours: By appointment
E-mail: Blackboard Message
COURSE DESCRIPTION
This course covers issues in investment analysis. Part of the class is devoted to asset pricing
theories, including Markowitz Portfolio Analysis, the Capital Asset Pricing Model, the Arbitrage
Pricing Theory, and the Fama-French Three-Factor Model. The course also delves into current
issues related to investment analysis focusing on market efficiency and investment “anomalies,”
such as over- and under-reaction. Additionally, the course explores derivative pricing theories.
TEXTBOOK & COURSE MATERIALS
Copeland, Weston and Shastri (aka CWS), Financial Theory and Corporate Policy, 4th edition.
Baker and Nofsinger (aka BN), Behavioral Finance: Inverstors, Corporations, and Markets, 2010.
Other required readings are listed below (See Topic Outline/Schedule).
COURSE ORGANIZATION & ONLINE TOOLS
Course Structure:
The course is organized into weeks of instruction, as outlined in the Course Schedule below. Each
week is listed by its main topic and contains required readings and assignments. Unless indicated
otherwise, you will submit all your assignments through Blackboard. Assignments are due on the
last day of each week (Thursdays at 11:59 PM) unless otherwise indicated. Be aware that your
work will be checked for plagiarism. Plagiarism carries significant penalties, whether
unintentional or otherwise. It is your responsibility to check your work for plagiarism.
Note: Most materials used in conjunction with the course are subject to copyright protection.
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University of Texas-Pan American
Theory of Investments
Spring 2015
TOPIC OUTLINE/SCHEDULE
Week
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Day
1/23
1/30
2/6
2/13
2/20
2/27
3/6
3/13
3/20
3/27
4/3
4/10
4/17
4/24
5/1
5/8
5/15
Week
1
2
3
4
Assigned Readings
 CWS Chapter 6
 CWS Chapter 10
 CWS Chapter 11
 BN Chapter 11
 Kahneman and Tversky. Econometrica 1979
 Post, Assem, Baltussen, and Thaler. AER 2008
 Bassi, Colacito, and Fulgheiri. RFS 2013
 BN Chapter 10
 Dhar and Zhu. MS 2006
 Barberis and Xiong. JF 2009
 Locke and Mann. JFE 2005
 BN Chapter 13
 Grinblatt and Keloharju. JF 2009
 Hirshleifer, Low and Teoh. JF 2012
 Barber and Odean. QJE 2001
 BN Chapters 14
 Cooper, Dimitrov, Rau. JF 2001
 Emery and Li. JFQA 2009
 Hong and Kacperczyk. JFE 2009
 CWS Chapter 7
 CWS Chapter 8
 BN Chapter 33
 Choe and Eom. JFM 2009
 Coval and Shumway. JF 2005
 Low. JB 2004
5
6
7
8
9
10
Introduction
CAPM and APT
Market Efficiency 1 – Theory
Market Efficiency 2 – Evidence
Prospect Theory, Risk Attitudes and Individual Investor Trading
Investment Biases 1 – Disposition Effect
Investment Biases 2 – Overconfidence
Investment Biases 3 – Representativeness
SPRING BREAK – NO CLASSES
Derivatives 1 – Options
EASTER HOLIDAY – NO CLASSES
Derivatives 2 – Forwards and Futures
Derivatives 3 – Derivative Markets Investor Behavior
Portfolio 1 – Mean-Variance Theory
Portfolio 2 – Individual Investor Portfolios
STUDY DAY – NO CLASSES
Final Exam
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Theory of Investments
Week
11
12
13
14
Spring 2015
Assigned Readings
 CWS Chapter 5
 BN Chapter 29
 Gomes. JB 2005
 Grinblatt and Keloharju. JF 2001
 Huberman. RFS 2001
 No assigned reading (Finalize Research Proposal)
 No assigned reading (Work on Final Exam)
Grading Policy
Description
Points
Weekly Assignments
40%
Research Proposal
30%
Final Exam
30%
Total Possible
100%
Final grades assigned for this course will be based on the percentage of total points earned and are
assigned as follows:
A = 90-100%
B = 80-89%
C = 70-79%
F = Below 70%
Late Work Policy
Be sure to pay close attention to deadlines—there will be no make-up or late work accepted without
a serious and compelling reason and instructor approval.
Viewing Grades in Blackboard
Points you receive for graded activities will be posted to the Blackboard Grade Book. Click on the
My Grades link on the left navigation to view your points.
Your instructor will update the online grades each time a grading session has been complete—
typically 7 days following the completion of an activity. You will see a visual indication of new
grades posted on your Blackboard home page under the link to this course.
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