Investments

What you'll learn

• Distinguish real and financial assets, describe the main asset classes, intermediaries and markets, and explain how price-weighted, value-weighted and equally weighted indices are built.
• Explain order types, trading costs, margin purchases and short sales, and compare RRSPs, TFSAs, FHSAs and taxable accounts, including capital gains inclusion, the dividend tax credit and the superficial loss rule.
• Measure annualized, geometric, log, real, time-weighted and money-weighted returns, and describe risk with standard deviation, skewness, value at risk, expected shortfall and drawdown.
• Apply utility and risk aversion to the choice between a risky portfolio and the risk-free asset, and calculate the risk, minimum-variance weights and diversification benefit of two-asset portfolios.
• Construct the efficient frontier and the tangency portfolio for many assets, explain the separation property, use the single-index model, and recognize the limits of mean–variance optimization.
• Derive and apply the CAPM, distinguish the capital market line from the security market line, estimate beta and alpha by regression, and evaluate the empirical evidence on the model.
• Explain the arbitrage pricing theory and multifactor models such as Fama–French, test for apparent alpha with factor regressions, and evaluate market efficiency, anomalies and behavioural finance.
• Apply top-down analysis, the residual income model and justified multiples to value shares, assess earnings quality, and infer the growth or risk premium implied by market prices.
• Describe fixed-income securities, compute realized compound yields, bootstrap spot rates, derive forward rates, interpret the yield curve and calculate breakeven inflation.
• Calculate duration and convexity, estimate bond price changes, immunize a liability, and decompose credit spreads into expected loss and risk premiums.
• Value options with put–call parity, binomial trees and the Black–Scholes model, build basic option strategies, price futures by the cost of carry, and hedge a portfolio with index futures.
• Compare fund structures and fees, evaluate managers with the Sharpe, Treynor, Jensen, information-ratio and M² measures, explain CIRO and CIPF protection, and build a diversified, tax-aware portfolio for an invented investor.