Financial Evaluation and Strategy: Investments

Learn the fundamental principles of trading off risk and return, portfolio optimization, and security pricing—useful skills and concepts to have when making both corporate and personal financial decisions. Also explore market efficiency, behavioral finance, and firm valuation techniques.

About The Course

This course is for anyone who is interested in how financial investments can affect their decisions, strategy, and ultimately their company’s business operations as well as their personal portfolio.

We will study and use risk-return models, such as the capital asset pricing model (CAPM), and multi-factor models to evaluate the performance of various securities and portfolios. Building upon this framework, market efficiency and behavioral finance as common behavioral biases of investors are introduced. Also see their potential effects on wealth accumulation and asset prices. We will also analyze money-management strategies and performance by institutional investors, such as mutual funds and pension funds. Finally, connect investment finance with corporate finance by examining firm valuation techniques.

Frequently Asked Questions

How does this course fit into the Improving Business Finances and Operations Specialization?

This is the third course in the track.

Illinois is a world leader in research, teaching, and public engagement, distinguished by the breadth of our programs, broad academic excellence, and internationally renowned faculty.

Recommended Background

You are strongly recommended to have knowledge of statistics (in particular, an understanding of correlations and linear regression analysis). An ability to use Excel (or another spreadsheet program) is also strongly recommended, as we will use Excel in the course to study and conduct regression analysis of data on stock returns.