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Back to Investments I: Fundamentals of Performance Evaluation

Investments I: Fundamentals of Performance Evaluation, University of Illinois at Urbana-Champaign

4.7
440 ratings
95 reviews

About this Course

In this course, we will discuss fundamental principles of trading off risk and return, portfolio optimization, and security pricing. We will study and use risk-return models such as the Capital Asset Pricing Model (CAPM) and multi-factor models to evaluate the performance of various securities and portfolios. Specifically, we will learn how to interpret and estimate regressions that provide us with both a benchmark to use for a security given its risk (determined by its beta), as well as a risk-adjusted measure of the security’s performance (measured by its alpha). Building upon this framework, market efficiency and its implications for patterns in stock returns and the asset-management industry will be discussed. Finally, the course will conclude by connecting investment finance with corporate finance by examining firm valuation techniques such as the use of market multiples and discounted cash flow analysis. The course emphasizes real-world examples and applications in Excel throughout. This course is the first of two on Investments that I am offering online (“Investments II: Lessons and Applications for Investors” is the second course). The over-arching goals of this course are to build an understanding of the fundamentals of investment finance and provide an ability to implement key asset-pricing models and firm-valuation techniques in real-world situations. Specifically, upon successful completion of this course, you will be able to: • Explain the tradeoffs between risk and return • Form a portfolio of securities and calculate the expected return and standard deviation of that portfolio • Understand the real-world implications of the Separation Theorem of investments • Use the Capital Asset Pricing Model (CAPM) and 3-Factor Model to evaluate the performance of an asset (like stocks) through regression analysis • Estimate and interpret the ALPHA (α) and BETA (β) of a security, two statistics commonly reported on financial websites • Describe what is meant by market efficiency and what it implies for patterns in stock returns and for the asset-management industry • Understand market multiples and income approaches to valuing a firm and its stock, as well as the sensitivity of each approach to assumptions made • Conduct specific examples of a market multiples valuation and a discounted cash flow valuation This course was previously entitled “Financial Evaluation and Strategy: Investments” and was part of a previous specialization entitled "Improving Business and Finances Operations", which is now closed to new learner enrollment. “Financial Evaluation and Strategy: Investments” received an average rating of 4.8 out of 5 based on 199 reviews over the period August 2015 through August 2016. You can view a detailed summary of the ratings and reviews for this course in the Course Overview section. 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....

Top reviews

By DH

Nov 12, 2016

This was a fantastic course, with a realistically attainable amount of material, and a humble, knowledgable professor whose teaching style makes a normally difficult topic very easy to understand.

By KL

Dec 07, 2017

Professor Weisbenner is fabulous! He is able to make anyone understand complex investment topics through his delivery and curriculum design. You are missing out not taking Investments from him!

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90 Reviews

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May 03, 2019

Very useful, very detailed.

Best part for me:

- almost no extra reading needed

- perfect length and structure of videos for to/from job trips

- although coarse is focused on US stock market, I found most of the material applicable for MOEX as well

By Juan Miguel Maria Garlit Ventura

Apr 23, 2019

Great course!

By Stephen Koehl

Apr 10, 2019

This course takes hard work, but if you put in the time, it is well worth it. The professor is top-rate.

By Aashish Sharma

Feb 10, 2019

Amazing course. Gained a lot of insights regarding investments.

By Jason Dümmer

Feb 05, 2019

Instructor know's his stuff, but there are sooooo many "ahh" and "umm". It is impossible to follow. I expect better from U of I. Really ashamed. I counted it up and on average in one video he says it about every 10-12 seconds.

By Claudia Stemate

Feb 05, 2019

I would have preferred to be slightly shorter and to the point. For me was a little difficult to comprehend all the words at the beginning.

By Ponciano Rincón

Jan 31, 2019

Fantastic course full of detailed and well explained examples!

By Stella Aybazova

Jan 02, 2019

Very useful course! Many thanks to Scott.

By Kenny Smart

Dec 19, 2018

Amazing! Shed light on so many questions that I didn't even know to ask and corrected a lot of assumptions I had wrong. Loved this class. A must take class.

By Kedves Hanga

Dec 19, 2018

Profound, a lot of information, nice presentation, helpful Professor, lighthearted style.

I can only recommend it.

It takes time, but it definitely

worth it!