Portfolio Management Techniques

Curriculum Guideline

Effective Date:
Course Code
FINC 4360
Portfolio Management Techniques
Commerce & Business Administration
Start Date
End Term
Semester Length
15 Weeks X 4 Hours per Week = 60 Hours
Max Class Size
Contact Hours
Lecture: 3 Hrs. Seminar: 1 Hr. Total: 4 Hrs.
Method(s) Of Instruction
Learning Activities

A combination of lectures, supplementary materials & presentations and class presentations.

Course Description
This course covers portfolio analysis of a group of securities. The Mean Variance Portfolio Theory is introduced and its application in determining the properties of combinations (portfolios) of the individual assets, delineating the characteristics of portfolios that make them preferable to others. The composition of the preferred portfolios is determined and demonstrated Issues of investment analysis are covered. Performance evaluation of well-managed portfolios and their evaluation process is described. Models of equilibrium in the capital markets and the non-standard forms of capital asset pricing models are illustrated. The Arbitrage Pricing Model (APT) and its comparison to the Capital Asset Pricing Model (CAPM) are illustrated.
Course Content
  1. Introduction of securities and the investment process.
  2. Markets for securities and taxes.
  3. Risk and return in a portfolio.
  4. Industry analysis.
  5. Company analysis: measuring earnings.
  6. Company analysis: forecasting techniques.
  7. Company analysis: applied evaluation.
  8. Bond analysis: returns, systematic and unsystematic risk assessment.
  9. Portfolio analysis, Markowitz Risk-Return Optimization.
  10. Portfolio selection, risk and investor preferences.
  11. Delineation of efficient portfolios, and techniques of calculating efficient frontiers.
  12. Portfolio theory and portfolio selection process.
  13. The correlation structure of security returns: the Single Index Model.
  14. Techniques of determining the efficient frontier.
  15. Utility analysis.
  16. The standard capital asset pricing model (CAPM) and its application in portfolio management.
  17. The Arbitrage Pricing Model (APT) and its application in portfolio management.
  18. Option Pricing Theory.
  19. The valuation and uses of financial futures.
  20. Evaluation of the investment process.
Learning Outcomes

At the end of the course, the student should be able to:

  1. describe the characteristics of risk, measures of dispersion and variance of combinations of assets;
  2. describe the techniques of calculating the efficient portfolios;
  3. describe the correlation structure of security returns;
  4. evaluate and describe the techniques required to select an optimum portfolio;
  5. describe strategies for optimal mix portfolio models, capital allocation for portfolio mix;
  6. evaluate portfolio returns of a small, active portfolio;
  7. explain  the portfolio evaluation techniques, earning estimation, and bond pricing techniques;
  8. describe the valuation and uses of financial futures in the management of portfolios;
  9. test a simple Arbitrage Pricing Model for asset pricing, for a small portfolio of assets.
Means of Assessment
Midterm exam  30%
Portfolio Cases (2)         30%
Presentation  10%
Final Exam  30%
Total 100%


Textbook Materials

Textbooks and Materials to be Purchased by Student


Elton, Gruber. Modern Portfolio Theory and Investment Analysis (Latest Edition). John-Wiley and Sons, Canada.


FINC 2340 and (BUSN 2429 with a B- or BUSN 3431)