FNCE 3151
Investments 1

3.0 Credits


Students examine basic investing and portfolio management from a global perspective. Topics include risk and return; diversification and assets allocation; types of securities; buying and selling securities; stock valuation; price behavior and market efficiency; behavioural finance and the psychology of investing; interest rates; bond prices and yields; portfolio management; return, risk and the security market line; performance evaluation and risk management; options and futures; fixed income, including corporate and government bonds and mortgage-backed securities; and international portfolio management.

Delivery Method


Recommended Requisites

FNCE 2121: Financial Management

ECON 2331: Economic and Business Statistics 2


Upon successful completion of the course, students will be able to:

  • Distinguish between different types of brokers and brokerage accounts
  • Calculate the gain or loss from a purchase on margin
  • Calculate the gain or loss from a short sale
  • Discuss the risks and rewards of margin purchases and short sales
  • Evaluate the risk profile of an investor and describe the constraints faced by investors
  • Describe the strategies and policies that an investor must address
  • Discriminate between the three basic types of financial assets
  • Describe the two principal types and features of fixed-income securities
  • Describe the two principal types of equity securities
  • Identify different types of futures contracts
  • Calculate the gain or loss on a futures position and identify the different types of options contracts
  • Explain the differences between open-end and closed-end funds
  • Outline expenses charged by different types of mutual funds
  • Define and distinguish between money market funds and the three types of long-term funds, including examples of each
  • Explain the accounting for money-market funds
  • Describe problems with performance evaluation of mutual funds
  • Explain the differences between mutual funds, exchange-traded funds and hedge funds
  • Comment on when mutual funds, exchange-traded funds and hedge funds would be used by different types of customers
  • Contrast investments in futures contracts, option contracts and the underlying asset
  • Differentiate between the primary, secondary, third and fourth markets

Course Outline

The following topics will be covered in the course:

  • A brief history of risk and return
  • Diversification and asset allocation
  • Buying and selling securities, and overview of security types
  • Mutual funds
  • The stock market--common stock valuation, stock price behaviour and market efficiency
  • Behavioural finance and the psychology of investing
  • Interest rates
  • Bond prices and yields
  • Portfolio management
  • Return, risk, and security market line
  • Performance evaluation and risk management plus benchmarking
  • Options and futures
  • Futures contracts
  • Fixed income
  • Corporate bonds
  • Government bonds and mortgage-backed securities
  • International investment and international portfolio investment

Maximum Completion

30 weeks.

Required Text and Materials

Students are responsible for sourcing and ordering the following textbook:

Jordan, Miller & Yuce. Fundamentals of Investments: Valuation and Management. 3rd Canadian Ed. McGraw-Hill, 2012.
Type: Textbook, ISBN: 978-007038566-5

Additional Requirements

A computer with internet access is required.

Open Learning Faculty Member Information

An Open Learning Faculty Member is available to assist students. Primary communication is through the Learning Environment's "Mail" tool or by phone. Students will receive the necessary contact information when starting the course.


To successfully complete the course, students must achieve a passing grade of 50% or higher on the overall course and on the final exam.

Assignment 1 20%
Assignment 2 10%
Assignment 3 20%
Final Exam * 50%
Total 100%

* Mandatory