About Workshop
The Investment Fundamental and Analysis workshop exposes the participants to the fundamental concepts of investment theory, financial markets, and financial instruments. The session provides a detailed hands-on experience in analyzing and valuation of various investment instruments such as stocks, bonds and also provides an insight on key investment fundamentals such as trade-off between risk & return, cost of capital, portfolio management and asset allocation strategies. There will also be a session on Capital Budgeting to equip managers with various tools for project evaluation and selection.
After the session, you should have a basic understanding of risk and return, portfolio theory, asset allocation strategy, the capital asset pricing medel, bond pricing, interest rate risk, stock valuation, project evaluation and market efficiency.
For the success of our programs we rely on a combination of theory with practical assignments, discussions, and real life simulated group exercise.
Workshop topics to be covered:
Introduction to Investment Management
What is Finance?
What are the major areas of Finance
Overview of Financial System
Real v/s Financial Assets
Investment Process
Active and Passive Investment Management
Overview of topics to be covered
Relationship between Risk and Return
Principles of Risk and Return
Modern Portfolio Theory
Definition of Risk and discuss the role it plays in portfolio management
Risk Aversion and Diversification
Identify different types of investment instruments used by institutional investors
Asset Allocation Strategy
Importance of Correlation between assets in portfolio selection
Group Exercise (using risk v/s return concept on portfolio designing)
Main Focus: Provide participants tools and understanding the trade-off between risk v/s return
Security Analysis: Bond Valuation
Describing the characteristics of long term debt instruments
Define key terms related to the bond market
Identify the major types of domestic and foreign bonds
Pricing/valuation of a bond
What is Interest rate risk
Default risk and Bond Ratings
Group Exercise (Bond Valuation and YTM Calculation)
Main Focus: Provide mechanism for valuation of Debt Security (Bond) and understanding the risk factors involved in selection of Bond
Weighted Average Cost of Capital (WACC) and Capital Asset Pricing Model (CAPM)
(i) Cost of Capital
Different sources of Long term financing
Concept of WACC (Weighted Average Cost of Capital)
Calculation of WACC
Use of WACC in Project Valuation
(ii) Calculation of Required rate of return using CAPM
Concept of CAPM Model
Using CAPM for investment decisions
Explanation of assumptions behind CAPM
Using the model to determine the required return for each investment
Group Exercise (using concept of WACC and rate of return for investment selection)
Security Analysis: Stock Valuation
Primary and Secondary Market
Concept of Market Efficiency
Difference between Common and Preferred Stocks
Group Exercise on Stock Valuation
Main Focus: Use various analytical tools in valuation of stocks
Project Analysis / Capital Budgeting
The Nature of Capital Expenditure Decisions
The Appropriate Discount Rate
Evaluation of Investment Alternatives using NPV, IRR, PI and Payback Approaches
Calculation of IRR
Capital Rationing
Independent and Interdependent Projects
Strategic considerations for Project selection
Group Exercise on Capital Budgeting
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