Investments II: Lessons and Applications for Investors
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Investments II: Lessons and Applications for Investors
This course is part of Financial Management Specialization
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893 reviews
893 reviews
What you'll learn
Interpret and use the CAPM and the 3-Factor Model to evaluate the performance of investments.
Compare returns in the form of dividends and capital gains and their tax consequences.
Describe evidence regarding the performance of individuals’ stock investments and the performance of actively-managed mutual funds.
Evaluate strategies designed to “earn alpha”.
Details to know
5 assignments
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There are 5 modules in this course
In this course, you will start by reviewing the fundamentals of investments, including the trading off of return and risk when forming a portfolio, asset pricing models such as the Capital Asset Pricing Model (CAPM) and the 3-Factor Model, and the efficient market hypothesis. You will be introduced to the two components of stock returns – dividends and capital gains – and will learn how each are taxed and the incentives provided to investors from a realization-based capital gains tax. You will examine the investment decisions (and behavioral biases) of participants in defined-contribution (DC) pension plans like 401(k) plans in the U.S. and will learn about the evidence regarding the performance of individual investors in their stock portfolios. The course concludes by discussing the evidence regarding the performance of actively-managed mutual funds. You will learn about the fees charged to investors by mutual funds and the evidence regarding the relation between fees charged and fund performance. Segments of the portfolios of mutual funds that may be more likely to outperform and examples of strategies designed to “earn alpha” will also be introduced.
Learners are welcome to take this course even if they have not completed "Investments I: Fundamentals of Performance Evaluation," as the first module contain a review of investment fundamentals and regression analysis to get everyone up to speed. Also, the course contains several innovative features, including creative out-of-the-studio introductions followed by quick-hitting "Module in 60" countdowns that highlight what will be covered in each module, four "Faculty Focus" interview episodes with leading professors in finance, and a summary of each module done with the help of animations! The over-arching goals of this course are to provide a review of the fundamentals of investments and then assess the historical performance of several groups of investors, with an emphasis on research findings with clear real-world applications. Specifically, upon successful completion of this course, you will be able to: • Interpret and use the CAPM and the 3-Factor Model to evaluate the performance of investments • Compare returns in the form of dividends and capital gains and their tax consequences • Describe evidence regarding the performance of individuals’ stock investments • Understand key behavioral biases of investors and their effects on financial decisions • Describe evidence regarding the performance of actively-managed mutual funds • Evaluate strategies designed to “earn alpha” This course is part of the iMBA offered by the University of Illinois, a flexible, fully-accredited online MBA at an incredibly competitive price. For more information, please see the Resource page in this course and onlinemba.illinois.edu.
During the Orientation, you will become familiar with the course, your classmates, and our learning environment. In Module 1, we will briefly review the fundamentals of investments, including the trading off of return and risk when forming a portfolio, asset pricing models such as the Capital Asset Pricing Model (CAPM) and the 3-Factor Model, and the efficient market hypothesis. We will also discuss the two components of stock returns – dividends (cash received) and capital gains (changes in price since purchase).
What's included
15 videos11 readings2 assignments1 discussion prompt
15 videos•Total 168 minutes
- Welcome to Investments II: Lessons and Applications for Investors (the launching of a sequel)!•15 minutes
- Get to know Scott (introductory video used for his iMBA course)•6 minutes
- See the “Movie Trailer” for Scott’s Course!•1 minute
- Learn on Your Terms•1 minute
- The Impact of the Gies Community•2 minutes
- Module 1 Introduction ("High Stakes Poker Game" and Module in 60)•4 minutes
- 1-1.1. Basics of Return and Risk•18 minutes
- 1-1.2. Capital Asset Pricing Model (CAPM)•20 minutes
- 1-1.3. 3-Factor Model and Market Efficiency•16 minutes
- 1-1.4. Interpretation of Regression Model Results•13 minutes
- 1-1.5. Regression Analysis of Returns to Small-Value Stocks•13 minutes
- 1-2.1. Dividends, Capital Gains, and Firm Payout Policy•14 minutes
- 1-2.2. Realization-Based Capital Gains Tax•15 minutes
- 1-2.3. Seasonality in Stock Returns•20 minutes
- Summary of Module 1 with Animations•9 minutes
11 readings•Total 110 minutes
- Syllabus•10 minutes
- Video Lecture Transcripts•10 minutes
- A Preview of Coming Attractions: Introduction Videos for Modules 1-4•10 minutes
- What You Will Learn: Course Summary with Animations•10 minutes
- Learning from the Experts: Full Collection of Faculty Focus Episodes•10 minutes
- About the Discussion Forums•10 minutes
- Online Education at Gies College of Business•10 minutes
- Updating Your Profile•10 minutes
- Module 1 Overview•10 minutes
- Module 1 Readings•10 minutes
- Module 1 Spreadsheet•10 minutes
2 assignments•Total 60 minutes
- Module 1 Quiz•30 minutes
- Orientation Quiz•30 minutes
1 discussion prompt•Total 10 minutes
- Getting to Know Your Classmates•10 minutes
In Module 2, we discuss the investment decisions of participants in defined-contribution (DC) pension plans like 401(k) plans in the U.S. Not falling prey to common behavioral biases is key to sound financial decision-making in these retirement plans, so we will discuss common behavioral biases of DC pension plan participants.
What's included
12 videos2 readings1 assignment
12 videos•Total 128 minutes
- Module 2 Introduction ("Talking Retirement Plans in the Playroom" and Module in 60)•3 minutes
- 2-1.1. Overview of Key Biases in Decisions•10 minutes
- 2-1.2. Representativeness•4 minutes
- 2-1.3. Familiarity Bias and Background Risk•22 minutes
- 2-1.4. Endorsement Effects•7 minutes
- 2-1.5. Naïve Diversification•19 minutes
- 2-1.6. Inertia•5 minutes
- 2-1.7. Option Confusion•6 minutes
- 2-1.8. Power of Defaults•16 minutes
- 2-1.9. Bottom Line on Biases in Investment Decisions•8 minutes
- 2-2.1. Faculty Focus with Dean Jeffrey Brown (interview)•24 minutes
- Summary of Module 2 with Animations•4 minutes
2 readings•Total 20 minutes
- Module 2 Overview•10 minutes
- Module 2 Readings•10 minutes
1 assignment•Total 30 minutes
- Module 2 Quiz•30 minutes
In Module 3, we will learn about the evidence regarding the performance of individual investors in their stock portfolios. A few key behavioral biases that affect many individuals will be highlighted, and the potential information embedded in some parts of individual investors’ stock portfolios will be discussed.
What's included
14 videos2 readings1 assignment
14 videos•Total 223 minutes
- Module 3 Introduction ("Picking a Portfolio at the Pub" and Module in 60)•2 minutes
- 3-1.1. Overview of the Performance of Individual Investors•26 minutes
- 3-2.1. Overconfidence•18 minutes
- 3-2.2. Loss Aversion•17 minutes
- 3-2.3. Effects of Loss Aversion (Part 1): Loss Aversion & Tax Incentives for Stock Trades•19 minutes
- 3-2.4. Effects of Loss Aversion (Part 2): Personal Connection to Asset•13 minutes
- 3-2.5. Effects of Loss Aversion (Part 3): Corporate Finance Decisions•9 minutes
- 3-2.6. Faculty Focus with Professor Yuhai Xuan (interview)•28 minutes
- 3-2.7. Effects of Loss Aversion (Part 4): Explanation for Momentum?•5 minutes
- 3-2.8. Effects of Loss Aversion (Part 5): Importance of Endowment•16 minutes
- 3-2.9. Emotion and Financial Decisions•16 minutes
- 3-3.1. Local Investments•36 minutes
- 3-3.2. Changing Nature of Individual Investors?•15 minutes
- Summary of Module 3 with Animations•3 minutes
2 readings•Total 20 minutes
- Module 3 Overview•10 minutes
- Module 3 Readings•10 minutes
1 assignment•Total 30 minutes
- Module 3 Quiz•30 minutes
In Module 4, we will learn about the evidence regarding the performance of actively-managed mutual funds. We will also discuss a few examples of portfolio strategies designed to “earn alpha” (i.e., yield positive risk-adjusted returns).
What's included
17 videos2 readings1 assignment
17 videos•Total 279 minutes
- Module 4 Introduction ("Reliving Past Glory with a Visit to the Track" and Module in 60)•5 minutes
- 4-1.1. Overview of Performance of Mutual Funds•17 minutes
- 4-1.2. Fees and Fund Performance•11 minutes
- 4-1.3. Brokers and Fund Performance•15 minutes
- 4-1.4. Trends in Mutual Fund Industry•8 minutes
- 4-2.1. Introduction to Search for Alpha•6 minutes
- 4-2.2. Mutual Fund Disclosure•7 minutes
- 4-2.3. Mutual Funds and Local Investments•22 minutes
- 4-2.4. Information Networks and Performance•21 minutes
- 4-2.5. Closet Indexing and Performance Persistence•21 minutes
- 4-2.6. Valuing Complicated Firms and Exploiting Inattention•27 minutes
- 4-2.7. Faculty Focus with Professor Joshua Pollet (interview)•25 minutes
- 4-2.8. Potential Modern Sources of Information•19 minutes
- 4-2.9. Faculty Focus with Professor Jiekun Huang (interview)•19 minutes
- 4-3.1 Economics of Mutual Funds•29 minutes
- 4-3.2 International Evidence on Active Mutual Fund Management•15 minutes
- Summary of Module 4 with Animations•13 minutes
2 readings•Total 20 minutes
- Module 4 Overview•10 minutes
- Module 4 Readings•10 minutes
1 assignment•Total 30 minutes
- Module 4 Quiz•30 minutes
It's now time to say goodbye to the Investments II course! Key takeaways from the course are reviewed. Don't forget to answer the survey question regarding how was Scott's sequel that is located at the end of the Conclusion to Investments II: Lessons and Applications for Investors!
What's included
1 video2 readings1 discussion prompt
1 video•Total 14 minutes
- Conclusion of Investments II (and farewell from Scott!)•14 minutes
2 readings•Total 20 minutes
- Congratulations on completing the course!•10 minutes
- Get Your Course Certificate•10 minutes
1 discussion prompt•Total 10 minutes
- Final Reflections•10 minutes
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This course is part of the following degree program(s) offered by University of Illinois Urbana-Champaign. If you are admitted and enroll, your completed coursework may count toward your degree learning and your progress can transfer with you.¹
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Reviewed on Mar 21, 2017
Thank you, Professor Scott Weisbenner, for an excellence course that you put your heart and passion (for Star Wars) into.
Reviewed on Dec 12, 2016
Excellent class! Very useful information for investing. Great faculty focus sessions with UIUC researchers!. Also love the passion that Dr. Weisbenner displays in teaching. Would highly recommend!
Reviewed on Mar 11, 2018
Professor Weisbenner is phenomenal! The course material is accessible, very well presented, highly informative, and can be applied for the rest of your life.
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