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Investments Analysis and Management

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ISBN-10: 0471645303

ISBN-13: 9780471645306

Edition: 1999

Authors: W. Sean Cleary, Charles P. Jones

List price: $38.38
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Investments: Analysis and Management, Canadian Edition by W. Sean Cleary and Charles P. Jones is an introductory text that prepares Canadian college and university students for a career in the investments industry. Its unique coverage provides both the theoretical foundation and practical applications students will need to make real-life investment decisions. Several key features distinguish Investments such as an accessible approach to topics, introducing students to the how, and not just the why, of investment management. The text steps beyond concepts by focusing on the realities of the Canadian Investment community. In addition, Investments places great emphasis on topics that are…    
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Book details

List price: $38.38
Copyright year: 1999
Publisher: John Wiley & Sons, Incorporated
Publication date: 9/27/1999
Binding: Hardcover
Pages: 784
Size: 7.00" wide x 9.00" long x 1.00" tall
Weight: 1.188
Language: English

Understanding Investments
The Purpose of this Textbook
The Nature of Investments
Some Definitions
Investing as a Part of Personal Financial Planning
Why Do We Invest?
The Importance of Studying Investments
Understanding the Investment Decision Process
The Basis of Investment Decisions
The Expected Risk-Return Trade-Off
Structuring the Decision Process
Important Considerations in the Investment Decision Process
The Great Unknown
The Global Investments Arena
The New Economy versus The Old Economy
The Rise of the Internet
Institutional Investors
The Issue of Market Efficiency
Corporate Governance
Professional Educational Alternatives
The Canadian Securities Course (CSC)
The Chartered Financial Analyst Program
Investment Alternatives
Organizing Financial Assets
An International Perspective
Non-Marketable Financial Assets
Money Market Securites
Capital Market Securites
Fixed-Income Securities
Asset-Backed Securities
Equity Securities
Derivative Securites
Futures Contracts
Taxation of Investment Income in Canada
Investment Funds
Investing Indirectly
Investing Indirectly through Investment Funds
What Is an Investment Fund?
Types of Investment Funds Unit Investment Trust
Closed-End Investment Funds
Open-End Investment Funds (Mutual Funds)
Major Types of Mutual Funds
Money Market Funds
Equity and Bond & Income Funds
Indirect Investment Transactions
Closed-End Funds
Mutual Funds
Exchange-Traded Funds (ETFs)
Distinguishing among ETFs, Closed-End Funds, and Mutual Funds
Segregated Funds
Labour Sponsored Venture Capital Corporations (LSVCCs)
Investment Funds and Performance
How Important Are Expenses?
Mutual Fund Ratings
Consistency of Performance
Investing Internationally through Investment Funds
New Developments in International Investing
The Future of Indirect Investing
Securities Markets
The Importance of Financial Markets
The Primary Markets
Investment Dealers
The Underwriting Process
The Prompt Offering Qualification (POP) System
The Listing Process
Global Security Issues
Private Placements
The Secondary Markets
Equity Securities - Auction Markets
Equity Securities - Negotiated Markets
The Third and Fourth Markets
After-Hours Trading
In-House Trading
Comparison of International Equity Markets
Stock Market Indicators
Bond Markets
Derivatives Markets
The Changing Securites
The Globalization of Securities Markets
Stock Market Indexes
How Securities are Traded
Brokerage Transactions
Brokerage Firms
Stockbrokers or Financial Consultants?
Types of Brokerage Accounts
Electronic Trading and the Internet
Investing without a Broker
How Orders Work
Orders on the Organized Exchanges
Orders in the Over-the-Counter Market
Types of Orders
Clearing Procedures
Investor Protection in the Securities Markets
The Canadian Regulatory Environment
Short Sales
Trading on the NYSE
Securites Regulation in the United States
The Returns and Risks from Investing
The Components of Return
Sources of Risk
Types of Risk
Measuring Returns
Total Return
Return Relative
Cumulative Wealth Index
International Returns
Summary Statistics for Returns
Measuring Risk
Standard Deviation
Risk Premiums
Realized Returns and Risks from Investing
Total Returns and Standard Deviations
Cumulative Wealth Indexes
Important Investment Concepts
Expected Return and Risk
Future Return and Risk
Estimating Security Return and Risk
Dealing with Uncertainty
Calculating Expected Return
Calculating Risk
Portfolio Return and Risk
Portfolio Expected Return
Portfolio Risk
Analyzing Portfolio Risk
Risk Reduction in Stock Portfolios
Markowitz Diversification
Measuring Co-Movements in Security Returns
The Correlation Coefficient
Calculating the Portfolio Risk
The Two-Security Case
The n-Security Case
Simplifying the Markowitz Calculations
The Single-Index Model
Portfolio Selection
Introducing Riskless Assets
Building a Portfolio
Step 1: Use the Markowitz Portfolio Selection Model
Efficient Portfolios
Selecting an Optimal Portfolio of Risky Assets
Alternative Methods of Obtaining the Efficient Frontier
Selecting Optimal Asset Classes
Step 2: Consider Borrowing and Lending Possibilities
Risk-Free Borrowing and Lending
The New Efficient Set
Step 3: Choose the Final Portfolio Based on Preferences
The Separation Theorem
The Implications of Portfolio Selection
Systematic and Non-Systematic Risk
Modern Portfolio Theory and the Portfolio Management Process
Capital Market Theory
Introduction to Capital Market Theory
The Assumptions of the CAPM
Equilibrium in the Capital Markets
The Market Portfolio
The Importance of the Market Portfolio
Composition of the Market Portfolio
The Equilibrium Risk - Return Trade-Off
The Capital Market Line
The Security Market Line
Estimating the SML
Estimating Beta
Tests of the CAPM
The Fama and French Studies
Difficulties in Testing the CAPM
Arbitrage Pricing Theory
Understanding the APT Model
Using APT in Investment Decisions
Some Conclusions about Asset Pricing
Market Efficiency
The Concept of an Efficient Market
What is an Efficient Market?
Why the Market Can Be Expected to Be Efficient
Forms of Market Efficiency
Evidence on Market Efficiency
Weak-Form Evidence
Semi-Strong-Form Evidence
Strong-Form Evidence
Implications of the Efficient Market Hypothesis
For Technical Analysis
For Fundamental Analysis
For Money Management
Evidence of Market Anomalies
Momentum in Stock Returns
Earnings Announcements
Value Stocks
The Size Effect
Seasonality in Stock Returns
The Value Line Ranking System
Other Anomalies
Some Conclusions about Market Efficiency
Fixed-Income Securities: Analysis, Valuation, and Management
Bond Yields and Prices
Bond Prices
The Valuation Principle
Bond Valuation
Bond Yields
The Basic Components of Interest Rates
Measuring Bond Yields
Bond Price Changes
Bond Price Changes Over Time
Bond Price Changes as a Result of Interest Rate Changes
Measuring Bond Price Volatility: Duration
Treasury Bill Yields and Prices
Effective Duration and Effective Convexity
Convertible Bonds
Bonds: Analysis and Strategy
Why Buy Bonds?
Buying Foreign Bonds
Important Considerations in Managing a Bond Portfolio
Understanding the Bond Market
The Term Structure of Interest Rates
The Risk Structure of Interest Rates - Yield Spread
Bond Strategies
Passive Management Strategies
Active Management Strategies
Immunization - A Hybrid Strategy
Building a Fixed-Income Portfolio
Conservative Investors
Aggressive Investors
The International Perspective
Common Stocks: Analysis, Valuation, and Management
Common Stock Valuation
The Present Value Approach
The Required Rate of Return
The Expected Cash Flows
The Dividend Discount Model
The Multiple-Growth Case
Dividends, Dividends - What about Capital Gains?
Intrinsic Value
The Dividend Discount Model in Practice
Relative Valuation Approaches
The P/E Ratio Approach
Market-to-Book Ratio (M/B)
Price/Sales Ratio (P/S)
Other Relative Valuation Approaches
Other Valuation Issues
Economic Value Added
Market Value Added
Which Valuation Method to Use?
Bursting the Bubble of New Economy Stocks - A Lesson in Valuation
Some Final Thoughts on Valuation
The Analysis and Valuation of Preferred Stock
The Free Cash Flow Valuation Approach
Common Stocks: Analysis and Strategy
Taking a Global Perspective
Some Important Issues Involving Common Stocks
The Impact of the Overall Market on Individual Stocks
The Required Rate of Return
Building Stock Portfolios
The Passive Strategy
Buy-and-Hold Strategy
Index Funds and Exchange-Traded Funds
The Active Strategy
Security Selection
Sector Rotation
Market Timing
Efficient Markets and Active Strategies
Ways of Analyzing and Selecting Stocks
Technical Analysis
Fundamental Analysis
Efficient Market and Behavioural Finance
A Framework for Fundamental Analysis
Bottom-Up Fundamental Analysis
Top-Down Fundamental Analysis
The Framework for Fundamental Analysis in Perspective
Security Analysis
Analysis of The Economy and The Stock Market
The Economy and the Stock Market
Taking a Global Perspective
Measures of Economic Activity
The Business Cycle
Other Factors Affecting the Aggregate Economy
The Relationship between the Bond Market and the Stock Market
Macroeconomic Forecasts of the Economy
Understanding the Stock Market
What Do We Mean by the Market?
The Determinants of Stock Prices
Valuing the Market
The Earnings Stream
The Multiplier
Putting the Two Together
Forecasting Changes in the Market
Using the Business Cycle to Make Market Forecasts
Using Key Variables to Make Market Forecasts
Using Valuation Models to Make Market Forecasts
Industry Analysis
The Importance of Industry Analysis
Performance of Industries Over Time
What Is an Industry?
Classifying Industries
Analyzing Industries
The Industry Life Cycle
Qualitative Aspects of Industry Analysis
Industry Rotation
Evaluating Future Industry Prospects
Assessing Longer-Term Prospects
Picking Industries for Next Year
Business Cycle Analysis
Company Analysis
Fundamental Analysis
The Accounting Aspects of Earnings
The Financial Statements
The Problem with Reported Earnings
The Global Arena - International Accounting
Analyzing a Company's Profitability
Analyzing Return on Equity (ROE)
Estimating the Internal (Sustainable) Growth Rate
Earnings Estimates
A Forecast of EPS
The Accuracy of Earnings Forecasts
Earnings Surprises
The Earnings Game
Useful Information for Investors about Earnings Estimates
Sales Growth - An Alternative to Earnings
The P/E Ratio
Determinants of the P/E Ratio
Why P/E Ratios Vary among Companies
Fundamental Security Analysis in Practice
Putting All the Pieces Together
Financial Ratio Analysis: An Overview
Technical Analysis
What Is Technical Analysis?
A Framework for Technical Analysis
Stock Price and Volume Techniques
The Dow Theory
Charts of Price Patterns
Moving Averages
Relative Strength
Obtaining Charts to Use in Technical Analysis
Technical Indicators
Breadth Indicators
Sentiment Indicators
Testing Technical Analysis Strategies
Some Conclusions about Technical Analysis
Derivative Securities
Why Options Markets?
Understanding Options
Options Terminology
How Options Work
The Mechanics of Trading
Some Basic Options Characteristics
In the Money, At the Money, and Out of the Money
Intrinsic Values
Payoffs and Profits from Basic Option Positions
Some Observations on Buying and Selling Options
Some Basic Options Strategies
Covered Calls
Protective Puts
Portfolio Insurance
Option Valuation
A General Framework
Time Values
Boundaries on Option Prices
The Black-Scholes Model
Put Option Valuation
Summarizing the Factors Affecting Options Prices
Hedge Ratios
Using the Black-Scholes Model
An Investor's Perspective on Puts and Calls
What Puts and Calls Mean to Investors
The Evolutionary Use of Options
Other Types of Options
The Basics of Stock-Index Options
Strategies with Stock-Index Options
The Popularity of Stock-Index Options
Spreads and Combinations
Rights and Warrants
Put-Call Parity: The No-Arbitrage Argument
Understanding Futures Markets
Why Futures Markets?
Current Futures Markets
International Futures Markets
Futures Contracts
The Structure of Futures Markets
Futures Exchanges
The Clearing Corporation
The Mechanics of Trading
Basic Procedures
Using Futures Contracts
How to Hedge with Futures
Financial Futures
Interest Rate Futures
Stock-Index Futures
Speculating with Stock-Index Futures
Futures Options
Other Derivative Securities
Investment Management
Portfolio Management
Portfolio Management as a Process
Individual Versus Institutional Investors
Formulate an Appropriate Investment Policy
Constraints and Preferences
Determine and Quantify Capital Market Expectations
Forming Expectations
Rate of Return Assumptions
Constructing the Portfolio
Asset Allocation
Portfolio Optimization
Monitor Market Conditions and Investor Circumstances
Monitoring Market Conditions
Changes in Investor's Circumstances
Make Portfolio Adjustments as Necessary
Performance Measurement
Illustrative Examples
Evaluation of Investment Performance
The Bottom Line
Framework for Evaluating Portfolio Performance
Differential Risk Levels
Differential Time Periods
Appropriate Benchmarks
Constraints on Portfolio Managers
Other Considerations
CFA Institute's Global Investment Performance Standards (GIPS�)
Return and Risk Considerations
Measures of Return
Risk Measures
Risk-Adjusted Measures of Performance
The Sharpe Performance Measure
The Treynor Performance Measure
Jensen's Differential Return Measure
Problems with Portfolio Measurement
Other Issues in Performance Evaluation
Monitoring Performance
Performance Attribution
Can Performance Be Predicted?
Appendix: Tables