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 鈥� dividends and capital gains 鈥� 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 鈥渆arn alpha鈥� 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: 鈥� Interpret and use the CAPM and the 3-Factor Model to evaluate the performance of investments 鈥� Compare returns in the form of dividends and capital gains and their tax consequences 鈥� Describe evidence regarding the performance of individuals鈥� stock investments 鈥� Understand key behavioral biases of investors and their effects on financial decisions 鈥� Describe evidence regarding the performance of actively-managed mutual funds 鈥� Evaluate strategies designed to 鈥渆arn alpha鈥� 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.
Module 4 Introduction ("Reliving Past Glory with a Visit to the Track" and Module in 60)
Skills You'll Learn
Risk Management, Investment Strategy, Leadership and Management, Investment, Investment Management, Strategy, Stock, Finance, Financial Markets
Reviews
4.8 (868 ratings)
- 5 stars83.87%
- 4 stars11.98%
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RB
Dec 7, 2017
I could have known this course before 2009 recession to be a better investor and its great teaching of behavioral finance . This helped me to identify personal bias in investing .
KL
Dec 7, 2017
Professor Weisbenner is amazing! Insanely smart, yet delvers complex concepts in such a manner you would never realize it. This is a must take class for investments!
From the lesson
Module 4: Performance of Mutual Funds and Search for Alpha
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 鈥渆arn alpha鈥� (i.e., yield positive risk-adjusted returns).
Taught By
Gies College of Business, University of Illinois