This comprehensive course, "Fundamentals of Investment," is designed for Bachelor of Business Studies (BBS) 4th Year students. Its primary objective is to equip students with a robust understanding of the principles, processes, and tools essential for effective investment decision-making. The course focuses on both the theoretical foundations and the practical application of investment concepts, with a particular emphasis on the Nepalese context where applicable.
The curriculum begins by establishing The Investment Environment (Chapter 1), defining investment, types of investors, the investment process, and different investment vehicles, including consideration of investment planning and suitability. This is followed by an in-depth exploration of Securities Markets (Chapter 2) and Investment Information and Securities Transactions (Chapter 3), covering primary and secondary markets, market indexes (including NEPSE indexes), and the mechanics of securities trading like short selling and margin trading.
A critical segment of the course is dedicated to Risk, Return, and Portfolio Management (Chapter 4). Students will learn to measure and analyze various components of return and risk, including the Holding Period Return, Yield to Maturity, and internal rate of return, along with the principles of portfolio construction, diversification, and the Capital Asset Pricing Model (CAPM). This segues into a study of Common Stock Fundamentals (Chapter 5) and advanced Common Stock Analysis and Valuation (Chapter 6), where students are introduced to both fundamental and technical analysis, economic and industry analysis, and various valuation models such as the Dividend Discount Model and Price-Earnings (P/E) approaches.
The subsequent chapters delve into specific asset classes. Fixed Income Securities (Chapter 7) and Bond Valuation (Chapter 8) cover various types of bonds, the term structure of interest rates, and bond pricing models, including the measurement of duration and immunization strategies. Mutual Fund and Performance Evaluation (Chapter 9) examines the structure, types, and services of mutual funds, including the Nepalese scenario. Managing Portfolios (Chapter 10) integrates the concepts by focusing on constructing, evaluating, and revising investment portfolios, including performance measurement against market benchmarks.
Finally, the course addresses advanced instruments with Derivative Securities (Chapter 11), providing an introduction to options (Puts and Calls), option pricing, and other derivatives like futures contracts and currency options. The inclusion of Illustrative Problems, List of Formulae, Concept Check Questions, and end-of-chapter Problems ensures students develop strong analytical and problem-solving skills necessary for a career in finance and investment. Upon completion, students will be prepared to analyze individual securities, manage investment portfolios, and make sound investment decisions.
