- 1.1: Explain the roles of borrowers (users of invested funds), investors (providers of invested funds), and financial institutions.
- 1.2: Describe the different financial products and services of banks, non-bank financial intermediaries, and investment companies.
- 1.3: Describe the general nature of investments in terms of them being either equity or debt investments.
Securities & Investments
This course will examine securities markets, as well as how securities are created and traded. Students will also learn about time value of money and the concepts of risk and return. They will examine investment information and analysis, as well as investment in common stocks, preferred stocks, corporate bonds, and government bonds. Students will also explore mutual funds, REITs, ETFs, and derivates before covering how to structure an investment portfolio.
The content of this course was created by BNED. Unless otherwise noted, it is under CC BY-NC-SA 4.0 Attribution License.
- 2.1: Describe the steps in the initial public offering (IPO) process including the role of the corporation, investment bankers, and investment syndicates.
- 2.2: Describe the federal and state legislation governing the issuance of securities including the Securities and Exchange Commission (SEC), registration statements, prospectuses, and Blue Sky Laws.
- 2.3: Describe the difference between publicly traded and privately held securities, as well as the restrictions placed on investing in privately held securities.
- 3.1: Describe what a financial market is including a discussion of primary and secondary markets.
- 3.2: Describe the U.S. stock markets (Dow Jones / NASDAQ), bond markets, and others (futures, commodity, etc.).
- 4.1: Describe direct search markets, brokered markets, dealer markets, and auction markets.
- 4.2: Explain market orders, bid-ask spread, price-contingent orders, and the process of buying on margin.
- 5.1: Explain time value of money, including a comparison contrast of present value (PV) and future value (FV).
- 5.2: Calculate the PV of a lump sum using a financial calculator and spreadsheet software.
- 5.3: Explain cash flow streams and annuities, and calculate their PV and FV using a financial calculator and spreadsheet software.
- 5.4: Describe how the value (aka: price) of a security is equal to the PV of the future cash flows from the security.
- 6.1: Define risk (in the investment context), standalone risk, and portfolio (market) risk.
- 6.2: Explain how an investor using the capital asset pricing model (CAPM) can determine the rate of return desirable for a given investment.
- 7.1: Describe basic financial ratios, how to calculate them, and how to interpret them; all in a context of evaluating a company’s financial position.
- 7.2: Describe sources of financial data on public companies, including company websites, Yahoo Finance, Bloomberg, Stock Quotes, and Analyst Opinions.
- 8.1: Explain the value of an investment .
- 8.2: Describe the attributes of common stock, including its role as ownership of a corporation, and how to value it.
- 8.3: Describe a stock split, why they occur, and the impact on stock price.
- 9.1: Describe the attributes of preferred stock, how it differs from common stock, and how the dividend stream is an annuity which is valued using the PV of an annuity formula.
- 9.2: Explain how preferred stock is hybrid investment similar to common stock and to debt.
- 10.1: Explain bonds, including descriptions of standard bond terms.
- 10.2: Calculate the price to maturity, price to call, yield to maturity, and yield to call of a bond using a financial calculator and spreadsheet software.
- 11.1: Explain the purpose of government bonds and their valuation.
- 11.2: Explain how interest payments on “tax free bonds” are free of federal income tax and calculate the equivalent taxable bond rate.
- 12.1: Describe the main asset classes and return objectives of mutual funds and ETFs.
- 12.2: Describe a mutual fund, its advantages, its disadvantages, open end funds, closed end funds, and net asset value (NAV).
- 12.3: Describe an ETF and how its correlation to the index it tracks determines how well it performs.
- 12.4: Describe REITs and the different types of REITs (mortgage, equity, hybrid).
- 13.1: Define derivatives (including options and futures).
- 13.2: Describe an option, define the holder, writer, premium, call option, put option, and how to value the options relative to the market value of the underlying asset.
- 13.3: Describe a futures contract and how it is used.
- 14.1: Describe portfolio structures and how they are impacted by the objectives and age of the investor.