BUU33750 Investments & Sustainability

(5 ECTS)

Lecturers:

Benjamin Lynch

Email: blynch6@tcd.ie
Office Hours: To be advised at the start of term 

Pre-Requisite: 

• Available  to Exchange Students 
• BUU22550 - Introduction to Finance

Module Description: 

Investing for the future is a matter of major concern to many individuals and institutions, especially as the risk associated with pension provision continues to increasingly shift from the company to the individual.   At the same time the world faces a climate emergency and investors have a major role to play in redirecting capital towards economic activity that prevents or mitigates further environmental degradation.  In this course we examine traditional theories of investment as well as sustainable finance and long term value creation.  We examine how prices are expected to behave in equilibrium and how they behave in reality, how externalities are mispriced and how financial risk and return often do not reflect the true value of an asset.  We will examine topics such modern portfolio theory, asset allocation and the role of derivatives in risk allocation.  Throughout this module, students will become familiar with the fundamental concepts and theories of investments used in the academic literature and the financial services industry.

Lecturing and Teaching Approach:

This module is structured around a series of lectures, tutorials and readings.  Tutorials will begin in week 2 of term and you will be assigned to a tutorial group on your portal.  Students will be expected to prepare homework in advance and to contribute to discussions in tutorials.  

Attendance is expected at all lectures and tutorials and attendance at tutorials will be recorded. As per college regulations, any student who attends less than two thirds of lectures and tutorials may be deemed non-satisfactory and may not be allowed to sit the final exam. 

https://www.tcd.ie/undergraduate-studies/academic-progress/attendance-course-work.php

Learning Outcomes:

Having successfully completed this module, students should be able to:

1. Assess traditional investment theories and pricing models andunderstand how environmental and social externalities can be incorporated into those models. 
2. Compare the main categories of financial assets and their role in the efficient allocation of sustainable consumption over time. 
3. Evaluate the relationship between risk, return and the covariance of asset returns, and how these contribute to overall portfolio risk and performance.
4. Use financial mathematics to calculate the optimal allocation of investment capital between risky assets such as equity, bonds and alternative assets. 
5. Critique the theories underlying asset pricing models such as the Single Index Model, the CAPM and Modern Portfolio Theory, and evaluate the principles of sustainable finance in contrast to these models.

Relation to Degree

This course provides an understanding of the key concepts of the theories and practicalities of investing in risky assets in order to allocate consumption over time.  It introduces the principles of sustainable finance.  It is highly relevant for anyone considering a future career in the financial services industry or related career.

Workload

Texbooks and Required Resources 

The textbooks for this module are:

1. Schoenmaker & Schramade, Principles of Sustainable Finance, Oxford University Press. You can rent the ebook https://www.vitalsource.com/ie/products/principles-of-sustainable-finance-dirk-schoenmaker-willem-v9780192561244?term=9780192561244 or purchase a hard copy using the discount code in this attachment Principles of Sustainable Finance.pdf for Principles of Sustainable Finance by Schoenmaker and Schramade, this text is also available in ebook and hardcopy from the TCD library. 
2. Bodie, Kane & Marcus, Investments, McGraw-Hill. Any recent edition of this textbook will suffice. Alternatively the college library contains many other excellent textbooks on Investments which may also be consulted.

 To access the Financial Times app for free on your phone create an account using your tcd login: https://www-ft-com.elib.tcd.ie/join/licence/f36c268d-3e6d-4c28-b451-3a143c5b9660/details or access the FT website https://libguides.tcd.ie/az.php?q=financial%20times.  You can access the Economist at https://www-proquest-com.elib.tcd.ie/publication/publications_41716?accountid=14404.

Student preparation for the module 

If you have not used Excel previously, I would strongly recommend that you complete this linked-in-learning course before the end of the first week of the module, https://www.linkedin.com/learning/excel-essential-training-office-365-microsoft-365/getting-started-with-excel-for-office-365?u=2217001.  You can access all linked in learning courses for free using your tcd login, you may want to do other or more advanced excel courses, or choose an alternative excel course for your version of excel.  You will be expected from the start of term to be able to use excel.

Assessment:

Assessment for this course will be based as follows:

• 30% Group Assignment
• 70% Exam

Each group will have a maximum of four members.  You may choose your own group and self-enrol your group on blackboard.  Further details on the project will be available in the assignments folder on blackboard, and will be discussed in class.

A penalty for late submission will apply.  Students unable to submit an assignment for medical reasons must produce a medical certificate within three working days of the missed submission date. Certificates received after that time will not be accepted.

Students who fail the module will sit a supplemental exam.  The supplemental exam will count for 100% of the grade

https://www.tcd.ie/teaching-learning/academic-policies/