Publisher: Thomson, 1999, 1001 pages

ISBN: 0-538-87737-5

Keywords: Finance

**Part I: The Investment Environment**- Introduction
- Factors Affecting Assets Price
- The Difference between Corporate Finance and Investments
- The Difference between Physical and Financial Assets
- The Benefits of Studying Investments
- The Investment Process
- Where Do We Go From Here? A Brief Over of the Book
- Appendix 1A: A Review of Time Value Concepts
- Bonds, Stocks, and Other Financial Securities
- Bonds
- Stocks
- Derivative Securities
- Risks of Bonds and Stocks
- International Securities
- Mutual Funds
- Appendix 2A: Taxes
- Security Markets
- The Role of Security Markets
- The Primary Security Market
- The Secondary Security Market
- Trading Mechanics
- World Security Markets
- Regulation and Ethics
- History of Securities Regulation
- Securities Law and Financial Innovation
- Corporate Governance
- Ethics and Fraud
**Part II: Return and Risk**- Calculating Rates of Return
- Using Rates of Return
- Rate-of-Return Calculations
- After-Tax Rates of Return
- Inflation-Adjusted Rates of Return
- Foreign Exchange and Rates of Return
- Average Rate of Return
- Adjusted Rate of Return
- Indexes
- Tracking Rates of Return over Time
- Appendix 5A: Dollar-Weighted Average Rate of Return
- Foundation of Risk Analysis
- The Case of Certainty
- The Nature of Risk
- Alternative Investment Criteria
- Risk Aversion
- Calculating Variance
- The Mean-Variance Criterion
- Other Attitudes Towards Risk
- Portfolio Mean and Variance
- The Portfolio
- An Asset's Risk When Held with Other Assets in a Portfolio
- The Expected Rate of Return on a Portfolio
- Covariances
- Correlation Coefficient
- The Portfolio Variance
- Another Look at Mutual Funds
- The Variance of a Portfolio Composed of n Assets
- Appendix 7A: The Variance of a Portfolio Composed of n Assets
- The Gain From Portfolio Diversification
- The Effect of Correlation on a Portfolio's Risk Reduction
- Efficient and Inefficient Investment Strategies
- The Gain from Diversification in Unrelated Firms in Practice
- Appendix 8A: Calculating the Efficient Frontier
**Part III: Equilibrium Prices: Expanding the Portfolio Universe**- Return and Risk: The Linear Relationships and CAPM
- Indifference Curves
- Efficient Investment Opportunities with Risk-Free Borrowing and Lending and a Single Risky Asset
- The Capital Market Line (CML)
- The Separation Property
- The Security Market Line (SML) and the Capital Asset Pricing Model (CAPM)
- Systematic and Unsystematic Risk
- A Proof of the CAPM
- Using the CAPM for Stock Selection
- Using Alpha and Beta in Practice
- Shortcomings of the CAPM
- Index Models and The Arbitrage Pricing Theory
- The Single Index Model
- The Arbitrage Pricing Theory
- The APT and the CAPM
- Multifactor APT Model
- International Investment
- Risks and Returns in International Investments
- International Parity Relationships
**Part IV: Efficient Markets and Portfolio Performance**- Efficient Markets: Theory and Evidence
- Efficient Market Defined
- What Constitutes the Appropriate Information Set?
- Investment Strategy in an Efficient Market
- Investment Strategy in an Inefficient Market
- Empirical Evidence Related to the EMT
- Market Anomalies
- Technical Analysis
- In Defense of Technical Analysis
- Charting
- Theoretical Basis of Technical Analysis
- Technical Indicators
- Investment Companies and Mutual Funds
- Types of Funds
- Benefits and Costs of Investing in Mutual Funds
- Performance Measurement
- How to Measure Risk
- Performance Indexes
- Empirical Evidence of the Performance of Mutual Funds
- Timing of the Market
- A Word of Caution about Performance Indexes in Practice
- Performance Attribution
- Indexing and International Diversification
**Part V: Security Analysis**- Interest Rates and Bond Valuation
- Interest Rate Changes
- The Yield Curve
- Explaining the Shape of the Yield Curve
- Other Measures on Bond Yields
- Pricing Bonds in Practice
- Spreads over Treasuries
- The Impact of Embedded Options
- Appendix 16A: Simple Equations for Bond Pricing
- Appendix 16B: Incorporating Accrued Interest and Partial Periods
- Appendix 16C: Methods of Compounding Interest Rates
- Bonds: Analysis and Management
- Bond Pricing Principles
- Duration and Convexity
- Immunization
- Passive versus Active Bond Managenment Strategies
- Appendix 17A: Computational Equation for Duration
- Common Stocks — Valuation
- Uses of Stock Valuation Models
- The Discounted Cash Flow Principle
- The Constant Dividend Growth Model
- Sources of Growth
- Constant Dividend Growth Model Valuations when All the Earnings are Paid as Cash Dividends
- Finding the Cost of Equity Capital with the Constant Dividend Growth Model
- Picking Stocks Using the P/E Ratio
- Appendix 18A: Free Cash Flow Model (FCFM) for Normal-Growth Firms
- Appendix 18B: Picking Stocks with EVA
- Common Stocks Selection
- The Anatomy of a Stock Market Winner
- How Analysts View the Stock Valuation Process
- Managing a Stock Portfolio
- Estimating Dividend Discount Model Inputs
- Implementing Dividend Discount Models
- Appendix 19A: Estimating the Growth Rate of Dividends
- Market and Industry Analysis
- Macroeconomics Evaluation
- The Economy and the Financial Markets
- Valuing the Overall Stock Market
- Industry Analysis
- Financial Statement Analysis
- Financial Statements
- Earnings Per Share (EPS)
- Ratio Analysis
**Part VI: Options, Futures and Financial Engineering**- Forward and Futures Contracts
- Forward Contracts
- Futures Contracts
- Buying and Selling Futures Contracts
- Investment Strategies with Futures Contracts
- Pricing Futures Contracts
- Options: Basic Concepts and Strategies
- The Development of Modern Option Trading
- Buying and Selling Options
- Overview of Option Markets
- Option Values at Expiration
- Investment Strategies Using Options
- Appendix 23A: Taxes
- Appendix 23B: Margin Requirements
- Appendix 23C: Other Option Strategies
- Valuing Options
- Option Boundaries
- Black-Scholes Option Pricing Model (BSOPM)
- Applications of the BSOPM
- Appendix 24A: Binomal Option Pricing Model
- Appendix 24B: An Example Using the Black-Scholes Option Pricing Model
- Appendix 24C: Continuously Compounded Interest Rates
- Appendix 24D: Calculating Continuously Compounded Standard Deviations
- Financial Engineering
- What Is Financial Engineering?
- Why Pursue Financial Engineering Strategies?
- Swaps
- Recent Financial Engineering Innovations
- The Value at Risk (VaR)
- Appendix A: Information Markets
- Appendix B: Code of Ethics and Standards of Professional Conduct

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