This course is part of the Financial Management Specialization

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Scott Weisbenner

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Part of the Master of Business Administration (iMBA) degree
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Financial Management SpecializationUniversity of Illinois at Urbana-Champaign

About this Course

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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!

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.

Flexible deadlines

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Shareable Certificate

Earn a Certificate upon completion

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Course 4 of 7 in the

Financial Management Specialization

Approx. 19 hours to complete

English

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Skills you will gain

Stock
Financial Markets
Investment Strategy
Investment

Flexible deadlines

Reset deadlines in accordance to your schedule.

Shareable Certificate

Earn a Certificate upon completion

100% online

Start instantly and learn at your own schedule.

Course 4 of 7 in the

Financial Management Specialization

Approx. 19 hours to complete

English

Could your company benefit from training employees on in-demand skills?

Try Coursera for Business

Instructor

Instructor rating

4.75/5 (92 Ratings)

Scott Weisbenner

William G. Karnes Professor of Finance

Department of Finance, College of Business

65,219 Learners

3 Courses

Offered by

University of Illinois at Urbana-Champaign

Start working towards your Master's degree

This course is part of the 100% online Master of Business Administration (iMBA) from University of Illinois at Urbana-Champaign. If you are admitted to the full program, your courses count towards your degree learning.

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Syllabus - What you will learn from this course

Content Rating97%(2,110 ratings)

Week1

Week 1

2 hours to complete

Course Orientation

2 hours to complete

4 videos (Total 22 min), 8 readings, 1 quiz

4 videos

Welcome to Investments II: Lessons and Applications for Investors (the launching of a sequel)!14mGet to know Scott (introductory video used for his iMBA course)6mSee the “Movie Trailer” for Scott’s Course!1mLearn on Your Terms30s

8 readings

Syllabus10mVideo Lecture Transcripts10mA Preview of Coming Attractions: Introduction Videos for Modules 1-410mWhat You Will Learn: Course Summary with Animations10mLearning from the Experts: Full Collection of Faculty Focus Episodes10mAbout the Discussion Forums10mLearn More About Flexible Learning Paths10mUpdating Your Profile10m

1 practice exercise

Orientation Quiz30m

3 hours to complete

Module 1: Fundamentals and Composition of Returns

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).

3 hours to complete

10 videos (Total 144 min), 2 readings, 1 quiz

10 videos

Module 1 Introduction ("High Stakes Poker Game" and Module in 60)3m1-1.1. Basics of Return and Risk18m1-1.2. Capital Asset Pricing Model (CAPM)20m1-1.3. 3-Factor Model and Market Efficiency15m1-1.4. Interpretation of Regression Model Results13m1-1.5. Regression Analysis of Returns to Small-Value Stocks13m1-2.1. Dividends, Capital Gains, and Firm Payout Policy14m1-2.2. Realization-Based Capital Gains Tax15m1-2.3. Seasonality in Stock Returns20mSummary of Module 1 with Animations8m

2 readings

Module 1 Overview10mModule 1 Spreadsheet10m

1 practice exercise

Module 1 Quiz30m

Week2

Week 2

3 hours to complete

Module 2: Investment Decisions in DC Pension Plans

3 hours to complete

12 videos (Total 128 min), 2 readings, 1 quiz

12 videos

Module 2 Introduction ("Talking Retirement Plans in the Playroom" and Module in 60)2m2-1.1. Overview of Key Biases in Decisions9m2-1.2. Representativeness4m2-1.3. Familiarity Bias and Background Risk22m2-1.4. Endorsement Effects7m2-1.5. Naïve Diversification18m2-1.6. Inertia4m2-1.7. Option Confusion5m2-1.8. Power of Defaults16m2-1.9. Bottom Line on Biases in Investment Decisions7m2-2.1. Faculty Focus with Dean Jeffrey Brown (interview)23mSummary of Module 2 with Animations3m

2 readings

Module 2 Overview10mModule 2 Recommended Reading10m

1 practice exercise

Module 2 Quiz30m

Week3

Week 3

4 hours to complete

Module 3: Performance of Individual Investors

4 hours to complete

14 videos (Total 223 min), 1 reading, 1 quiz

14 videos

Module 3 Introduction ("Picking a Portfolio at the Pub" and Module in 60)2m3-1.1. Overview of the Performance of Individual Investors25m3-2.1. Overconfidence17m3-2.2. Loss Aversion16m3-2.3. Effects of Loss Aversion (Part 1): Loss Aversion & Tax Incentives for Stock Trades18m3-2.4. Effects of Loss Aversion (Part 2): Personal Connection to Asset12m3-2.5. Effects of Loss Aversion (Part 3): Corporate Finance Decisions9m3-2.6. Faculty Focus with Professor Yuhai Xuan (interview)28m3-2.7. Effects of Loss Aversion (Part 4): Explanation for Momentum?5m3-2.8. Effects of Loss Aversion (Part 5): Importance of Endowment15m3-2.9. Emotion and Financial Decisions15m3-3.1. Local Investments35m3-3.2. Changing Nature of Individual Investors?15mSummary of Module 3 with Animations2m

1 reading

Module 3 Overview10m

1 practice exercise

Module 3 Quiz30m

Week4

Week 4

5 hours to complete

Module 4: Performance of Mutual Funds and Search for Alpha

5 hours to complete

17 videos (Total 279 min), 2 readings, 1 quiz

17 videos

Module 4 Introduction ("Reliving Past Glory with a Visit to the Track" and Module in 60)5m4-1.1. Overview of Performance of Mutual Funds16m4-1.2. Fees and Fund Performance10m4-1.3. Brokers and Fund Performance15m4-1.4. Trends in Mutual Fund Industry7m4-2.1. Introduction to Search for Alpha5m4-2.2. Mutual Fund Disclosure6m4-2.3. Mutual Funds and Local Investments21m4-2.4. Information Networks and Performance21m4-2.5. Closet Indexing and Performance Persistence20m4-2.6. Valuing Complicated Firms and Exploiting Inattention27m4-2.7. Faculty Focus with Professor Joshua Pollet (interview)24m4-2.8. Potential Modern Sources of Information19m4-2.9. Faculty Focus with Professor Jiekun Huang (interview)19m4-3.1 Economics of Mutual Funds28m4-3.2 International Evidence on Active Mutual Fund Management15mSummary of Module 4 with Animations13m

2 readings

Module 4 Overview10mModule 4 Recommended Reading10m

1 practice exercise

Module 4 Quiz30m

1 hour to complete

Course Conclusion

1 hour to complete

2 videos (Total 17 min), 2 readings

Reviews

4.8

166 reviews

5 stars
83.70%
4 stars
11.97%
3 stars
2.59%
2 stars
0.61%
1 star
1.11%

TOP REVIEWS FROM INVESTMENTS II: LESSONS AND APPLICATIONS FOR INVESTORS

by TBOct 31, 2021

Great sequel to the Investment I course, and dives into a lot of interesting finance research. Great course, and very engaging.

by SSMay 8, 2020

Thanks Scott! Outstanding course with the research work papers analysis, animations and the fun made it easier for the longer lectures !

by SMNov 18, 2022

A very well explained course. Professor was very innovative and interactive during the entire course which really helped a lot.

by CMMay 24, 2017

Much better than Investments I, I feel that I got more from this course and sort of wish their order was flipped as then I might have gotten more from the first class.

View all reviews

About the Financial Management Specialization

This Specialization covers the fundamentals of strategic financial management, including financial accounting, investments, and corporate finance. You will learn to evaluate major strategic corporate and investment decisions and to understand capital markets and institutions from a financial perspective, and you will develop an integrated framework for value-based financial management and individual financial decision-making.

The Financial Management Specialization is part of the University of Illinois iMBA Program. Each course in this Specialization also fulfills a portion of the requirements for a University of Illinois course that can earn you college credit. When you complete the Financial Management Specialization, you will: · Have a solid foundation in developing an integrated framework for strategic financial decision-making. · Have a thorough understanding of financial statements and the financial information they provide, and be able to critically evaluate and analyze cash flows statements. · Understand the management and evaluation of portfolios and firm valuation techniques. · Understand how to incorporate risk and uncertainty into investment decisions and understand how companies make financing and investment decisions.

Frequently Asked Questions

When will I have access to the lectures and assignments?
Access to lectures and assignments depends on your type of enrollment. If you take a course in audit mode, you will be able to see most course materials for free. To access graded assignments and to earn a Certificate, you will need to purchase the Certificate experience, during or after your audit. If you don't see the audit option:
The course may not offer an audit option. You can try a Free Trial instead, or apply for Financial Aid.
The course may offer 'Full Course, No Certificate' instead. This option lets you see all course materials, submit required assessments, and get a final grade. This also means that you will not be able to purchase a Certificate experience.
What will I get if I subscribe to this Specialization?
When you enroll in the course, you get access to all of the courses in the Specialization, and you earn a certificate when you complete the work. Your electronic Certificate will be added to your Accomplishments page - from there, you can print your Certificate or add it to your LinkedIn profile. If you only want to read and view the course content, you can audit the course for free.
Is financial aid available?
Yes. In select learning programs, you can apply for financial aid or a scholarship if you can’t afford the enrollment fee. If fin aid or scholarship is available for your learning program selection, you’ll find a link to apply on the description page.

More questions? Visit the Learner Help Center.

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Investments II: Lessons and Applications for Investors

About this Course

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