FINC 340 at the University of Maryland Global Campus (formerly BMGT 343) is a three-credit introduction to financial investments and portfolio management. UMGC lists FINC 330 and FINC 335 as prerequisites.
The aim, per the catalog, is to evaluate and critically analyze asset selection and allocation and perform basic portfolio management. Topics include types of securities and markets, investment risks, returns and constraints, portfolio policies and management, and institutional investment policies.
FINC 340 is also the prerequisite for several upper-level courses, so a solid grasp matters. Students often find it hard to move from formulas to judgment about what a portfolio should hold.
Course at a Glance
| Item | Details |
|---|---|
| University | University of Maryland Global Campus (UMGC) |
| Course code | FINC 340 (formerly BMGT 343) |
| Credits | 3 |
| Level | Undergraduate |
| Prerequisites | FINC 330 and FINC 335 |
| Credit restriction | Only one of BMGT 343 or FINC 340 |
What FINC 340 Covers
| Catalog topic | What it means |
|---|---|
| Types of securities and markets | Stocks, bonds and others, and where they trade |
| Investment risks and returns | Measuring reward and uncertainty |
| Constraints | Time horizon, liquidity, tax and legal limits |
| Portfolio policies | Setting objectives and allocation rules |
| Portfolio management | Selecting, monitoring and adjusting holdings |
| Institutional investment policies | How pension funds and similar investors set rules |
Key Concepts with Worked Examples
Return and Risk of a Portfolio
A portfolio's expected return is the weighted average of its assets' returns. Its risk depends on how assets move together.
Example: A portfolio holds 60 percent in stocks expected to return 9 percent and 40 percent in bonds at 4 percent. Expected return = 0.6 x 9 + 0.4 x 4 = 5.4 + 1.6 = 7.0 percent.
Diversification
Combining assets that do not move perfectly together lowers portfolio risk without necessarily lowering expected return. Only market-wide risk remains when a portfolio is well diversified.
Measuring Risk-Adjusted Performance
The Sharpe ratio is the portfolio return minus the risk-free rate, divided by the standard deviation.
Example: A portfolio returns 8 percent with a standard deviation of 10 percent while the risk-free rate is 3 percent. Sharpe = (8 - 3) / 10 = 0.5. A portfolio returning 10 percent with 20 percent standard deviation scores (10 - 3) / 20 = 0.35, so it is worse per unit of risk.
Typical Assignments and How to Approach Them
UMGC's public page lists no assessments. These are common kinds of work in an investments course; follow your syllabus.
| Assignment type | What it tests | Approach |
|---|---|---|
| Return and risk calculations | Quantitative skill | Show formulas and units; round at the end |
| Portfolio construction project | Allocation and rationale | Tie the allocation to a stated investor profile |
| Security or market analysis | Evaluation | Use current, cited data and state limits |
| Investment policy statement | Objectives and constraints | Cover return goal, risk tolerance, horizon, liquidity, tax |
Writing an Investment Policy Statement
An investment policy statement links an investor to a portfolio. The elements below are standard in the field and make a clear outline for a project.
| Element | Example of what to state |
|---|---|
| Return objective | A target that fits the goal and time frame |
| Risk tolerance | Willingness and ability to bear losses |
| Time horizon | When the money is needed |
| Liquidity needs | How much may be needed at short notice |
| Tax and legal factors | Account types, rules that affect choices |
| Allocation | Percentages in each asset class, with reasons |
Complete the first five rows before choosing any asset. The allocation then follows from the profile instead of from habit.
A Second Example: Two-Asset Portfolio Risk
Asset A has a standard deviation of 20 percent and asset B 10 percent. A portfolio has 50 percent in each. If the correlation is 1, risk is the simple average, 15 percent. If the correlation is 0, the variance is 0.25 x 0.04 + 0.25 x 0.01 = 0.0125, so risk is about 11.2 percent.
The drop from 15 to 11.2 percent, with expected return unchanged, is the diversification benefit. Quote the correlation you assume and where it came from.
Where Students Get Stuck
- Past returns as promises. Historic data does not guarantee future results.
- Standard deviation versus beta. Total risk and market risk are different measures.
- A portfolio without an investor. Allocation must follow the investor's goals and limits.
- Arithmetic slips. Keep percentages and decimals consistent.
Study Tips for FINC 340
- Practice weighted averages and standard deviation by hand before using Excel.
- Write a short investor profile before choosing any asset.
- Keep a one-page list of risk and return measures and their meaning.
- Review FINC 330 valuation of bonds and shares first.
How We Help with FINC 340
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Frequently Asked Questions
UMGC lists FINC 330 and FINC 335.
Yes, the catalog says so.
UMGC lists FINC 340 as a prerequisite for FINC 421, FINC 430, FINC 440, FINC 450, FINC 460 and FINC 490, among others.
No. It teaches concepts and portfolio management methods.
Moderate: returns, weighted averages, standard deviation and ratios.
Yes. Send the work and we review steps and explain any corrections.