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International Investment

Fall 2012 (1st Semester of Academic Year 2012-2013)

1 Instructor: Yu Zhou. Lecturer. Dept. of Applied Economics, ACEM, SJTU (zy@sjtu.edu.cn)


2 Course Mailbox: intlinvestment@163.com, password: fisheryuzhou
3 Course Code: 001-(2012-2013-1) ET310 (34 hours
4 Prerequisites: Economics, Corporate Finance, basics of International Trade and Statistics.

5 Textbook & Reference Books:


1) Essentials of Investments. Zvi Bodie, Alex Kane, Alan J. Marcus, 6th edition, McGraw-Hill
Companies, Inc, 2007. Call No. -F830.59. B667E6
2) International Financial Markets: prices and policies, Richard M. Levich. The Irwin/McGraw-Hill
series in finance, insurance and real estate, 3rd edition, 2001. Call No. -F831.5 L664I
3) Investments. William F. Sharpe, Gordon J. Alexander, Jeffery V. Bailey. Tsinghua University
Press, 2001. Call No. -F830.59. S532I6.
4) 2010 Call No. -F831.6
5) 2012 Call No. -F831.6/A7

6 Course Objectives:
This course is aimed at students wishing to acquire a sound understanding of main opportunities
in various investment arenas, either of real or virtual nature. Specifically, following a top-down logic
of investment decision-making, the course objectives can be delineated into three layers: 1) help
students grasp the ability of analyzing the social-economic development pattern of the globe or some
target economy during given time period as well as industries biz prospects immersed in these
macro circumstances; 2) enable students comprehend different investment strategies, instruments,
and their applications as well as respective risk-return balances; 3) cultivate students the skill to
modeling individual investment motives and complete scientific and veracious investment rationale.

7 Course Descriptions:
This case-based course will analyze investing in two broad asset categories, namely real assets
and virtual or financial counterparts. We will take a macro-financial perspective, focusing on
specific investment locations rather than individual securities. Economic growth theory
accompanying with Mundells Unholy Trinity workhorse approach will help us map out rough
investment decisions. Over the course of the semester, we will use case studies to test what financial
instruments or their combinations could be appropriate to achieve desired risk-return trade-off.
This course is not a sum up of the contents covered by courses thus as Fixed Income Securities,
Financial Derivatives, nor Portfolio Management. We will not spend class time discussing the
principles of a single financial instrument, though some concept checks will remind you to review
them in advance. However, after prudently appreciating relevant economic environment with the
approach we have developed in this course, students are expected to utilize whatever financial
categories to realize their investment ambitions. All the evaluation elements of the course are open;
students may choose course paper or investment simulation to acquire their course credits.

8 Course Assessments:
1) General performance (In-class participation + Problem-focused Analysis) 50%
2) Course Paper or Portfolio Management Simulation or Assets Allocation Proposal 50%

9 Fortnightly Course Outline (may adjust as course proceeds):

1-2 Week
Course Administration
Chapter 1 Introduction: what is international investment?

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Fisher Y. Zhou, SOE, ACEM, SJTU
9/10/2012
3-4 Week
Chapter 2 Economic growth and global imbalance

5-6 Week
Chapter 3 Trinity workhorse framework and investment positioning

7-8 Week
Chapter 4 Economic policies and industrial selecting

9-10 Week
Chapter 5 Financial statement and company anchoring

11-12 Week
Chapter 6 Global portfolio management and risk diversification

13-14 Week
Chapter 7 Investment strategy and Alpha building

15-16 Week
Chapter 8 Forever investment and capital sustainability

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Fisher Y. Zhou, SOE, ACEM, SJTU
9/10/2012