Investments » (9th Edition)

Zvi Bodie is Professor of Finance and Economics at the Boston University School of Management. He is the director of Boston University’s Chartered Financial Analysts Examination Review Program and has served as consultant to many private and governmental organizations. Professor Bodie is a research associate of the National Bureau of Economic Research, where he was director of the NBER Project on Financial Aspects of the U.S. Pension System, and he is a member of the Pension Research Council of The Wharton School. He is widely published in leading professional journals, and his previous books include Pensions in the U.S. Economy, Issues in Pension Economics, and Financial Aspects of the U.S. Pension System.

Alex Kane is professor of finance and economics at the Graduate School of International Relations and Pacific Studies at the University of California, San Diego. He was visiting professor at the Faculty of Economics, University of Tokyo; Graduate School of Business, Harvard; Kennedy School of Government, Harvard; and research associate, National Bureau of Economic Research. An author of many articles in finance and management journals, Professor Kane’s research is mainly in corporate finance, portfolio management, and capital markets, most recently in the measurement of market volatility and the pricing of options. Professor Kane is the developer of the International Simulation Laboratory (ISL) for training and experimental research in executive decision making.

Alan Marcus is professor of finance in the Wallace E. Carroll School of Management at Boston College. He received his PHD in Economics from MIT in 1981. Professor Marcus recently has been a visiting professor at the Athens Laboratory of Business Administration and at MIT’s Sloan School of Management and has served as a research associate at the National Bureau of Economic Research. He also established the Chartered Financial Analysts Review Program at Boston College. Professor Marcus has published widely in the fields of capital markets and portfolio management, with an emphasis on applications of futures and options pricing models. His consulting work has ranged from new product development to provision of expert testimony in utility rate proceedings. He also spend two years at the Federal Home Loan Mortgage Corporation (Freddie Mac), where he developed models of mortgage pricing and credit risk, and he currently serves on the Advisory Council for the Currency Risk Management Alliance of State Street Bank and Windham Capital Management Boston.

New edition of a text that presents the basic principles of investing and also addresses many of the changes in the investment environment. The 27 chapters are organized around the idea that well-developed security markets are, for the most part, efficient. They also emphasize that higher expected returns come at the price of bearing greater risk, and present techniques for managing this risk such as diversification and asset allocation. Topics include modern portfolio theory and its implications for the equilibrium structure of expected rates of return on risky assets, security valuation, equity securities, and derivative assets. Annotation c. Book News, Inc., Portland, OR (booknews.com)

Pt. I Introduction 1

1 The Investment Environment 1

2 Asset Classes and Financial Instruments 23

3 How Securities Are Traded 54

4 Mutual Funds and Other Investment Companies 88

Pt. II Portfolio Theory and Practice 113

5 Learning about Return and Risk from the Historical Record 113

6 Risk Aversion and Capital Allocation to Risky Assets 156

7 Optimal Risky Portfolios 194

8 Index Models 244

Pt. III Equilibrium in Capital Markets 279

9 The Capital Asset Pricing Model 279

10 Arbitrage Pricing Theory and Multifactor Models of Risk and Return 319

11 The Efficient Market Hypothesis 344

12 Behavioral Finance and Technical Analysis 384

13 Empirical Evidence on Security Returns 410

Pt. IV Fixed-Income Securities 445

14 Bond Prices and Yields 445

15 The Term Structure of Interest Rates 484

16 Managing Bond Portfolios 512

Pt. V Security Analysis 553

17 Macroeconomic and Industry Analysis 553

18 Equity Valuation Models 586

19 Financial Statement Analysis 631

Pt. VI Options, Futures, and Other Derivatives 671

20 Options Markets: Introduction 671

21 Option Valuation 715

22 Futures Markets 759

23 Futures, Swaps, and Risk Management 788

Pt. VII Applied Portfolio Management 823

24 Portfolio Performance Evaluation 823

25 International Diversification 867

26 Hedge Funds 902

27 The Theory of Active Portfolio Management 924

28 Investment Policy and the Framework of the CFA Institute 950

References to CFA Problems 989

Glossary

Name Index

Subject Index