Investments Book

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