Alternative Investments: Beyond Stocks and Bonds

Gain a thorough understanding of the vast range of investment possibilities outside the mainstream equity and fixed income markets. During this course you are offered clear insight into the world of hedge funds, commodities and the foreign exchange market.

Name minor:

Alternative Investments: Beyond Stocks and Bonds

Code:

MINRSM009

Teaching language:

English

Programme which has the coordinating role for this minor:

Rotterdam School of Management, Erasmus University (RSM), Department of Finance

Other programmes which are contributing to the minor:

not applicable

Access:

See admissions matrix

 

Content

The recent financial crisis emphasized that for creating a well-diversified portfolio that could sustain financial turmoil, it is important to have knowledge not only about investments in traditional markets (stocks and bonds) but also in markets of other asset classes. With this growing share of alternatives in institutional investment portfolios, investors should also develop their knowledge of alternative markets (i.e. the pros and cons of alternative investment categories such as hedge funds, commodities, and currencies) to have a successful career in finance. The aim of this course is to provide students with more than just that basic knowledge of investment possibilities outside the traditional markets for stocks and bonds. This interactive course is set up to be academically rigorous while practical insights from investment professionals ensure the critical link with the investment world.

The course begins with an overview of basic knowledge related to investments in financial markets, e.g. the return and risk characteristics of investment strategies, the Efficient Market Hypothesis, and asset pricing models (e.g. the CAPM model). Second, we will discuss several alternative investments e.g. hedge funds, commodities, and currencies.

Learning objectives

At the end of this course, students should be able to:

  • Understand end explain the theories underlying traditional investments (in stocks and bonds) and a range of alternative investments (e.g. hedge funds, commodities, and currencies).
  • Understand and determine the return and risk characteristics and their trade-off of traditional investments and a range of alternative investments.
  • Create portfolios consisting of traditional and/or alternative investments and to determine their performance.
  • Determine whether and which (traditional and/or alternative) investments adds value to an existing portfolio.
  • Use Excel to construct, calculate and evaluate the performance of portfolios consisting of traditional and/or alternative investments.
  • Understand and summarize academic articles published in top finance journals.

Specific characteristics

There are no pre-requisites for this course. In particular, no prior experience with Excel is assumed. Additional (non-compulsory) lectures dealing with the basics of traditional investments (stocks and bonds) and the basics of Excel will be offered. It might be hard(er) to pass the minor or to pass the minor with a good grade when engaging in other activities (e.g. other courses, jobs, internships, etc.) during the minor.


Organisation

Maximum number of students that can participate in the minor: -
Minimum number of students that can participate in the minor: 8

Contact hours: About seventeen 2-hour compulsory sessions (= about 34 hours). This excludes the non-compulsory lectures.

Self study hours: About 386 hours.

ECTS: 15

Teaching method: The course consists of interactive lectures (incl. guest lectures). Attendance to all lectures is mandatory except for the additional, non-compulsory lectures. Attendance will be checked. For this minor students are allowed to miss two compulsory lectures (with or without reason). Missing three or more lectures will result in failing the course. Missing compulsory lectures can be partly compensated by attending non-compulsory lectures.

Teaching materials: Compulsory literature: a reading list containing various academic articles and a textbook (details will be announced later in the Course Manual).  Recommended literature: Burton Malkiel, A Random Walk Down Wall Street (11th Edition), Norton & Company, NY, 2015, ISBN: 9780393246117


Examination:

Method of examination:

Written closed book test (with open questions) and assignments.

Composition of final grade:

The final grade for the course is a weighted average of the written closed book test with open questions (60%) and assignments (40%). Note that all partial grades are only valid for the current academic year. In order to pass the course a score of 5,5 is required for the final grade. In order to obtain a grade you need to score at least 4,5 on the written test.
Feedback method:
Feedback will be provided online and during class.


Contact information

Contact person:

Name: Dr. Ben Tims
E-mail: btims@remove-this.rsm.nl
Phone number: +3110 408 2300
Room: T8-49

Faculty website:

https://www.rsm.nl/people/ben-tims/


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