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Investments: Analysis and Management, 12th Edition

Book Description

In today's economy, it's critical for investors to have a strong understanding of the strategies needed to make the best decisions. Jones arms them with the most up-to-date information in the field while offering a proper balance between investment opportunities, techniques and analytics. He includes new discussions on the rapid rise and interest in exchange-traded funds, the new NYSE-Euronext market, the merger of the NYSE and Amex, and more. Expanded coverage is also presented in behavioral finance and the bond markets. In addition, investors will benefit from the updated problems and questions that really make them think of the most effective moves before acting.

Table of Contents

  1. Cover Page
  2. Title Page
  3. Copyright
  4. Brief Contents
  5. Contents
  6. Preface
    1. Organization Of The Text
    2. Special Features
    3. Changes In The Twelfth Edition
    4. Supplements
    5. Acknowledgments
  7. Chapter 1: Understanding Investments
    1. An Overall Perspective on Investing
    2. Establishing a Framework for Investing
    3. A Perspective on Investing
    4. The Importance of Studying Investments
    5. Understanding the Investment Decision Process
    6. Checking Your Understanding
    7. Structuring the Decision Process
    8. Important Considerations in the Investment Decision Process for Today's Investors
    9. Checking Your Understanding
    10. Organizing the Text
    11. Summary
    12. Questions
    13. Spreadsheet Exercises
    14. Checking Your Understanding
  8. Chapter 2: Investment Alternatives
    1. Organizing Financial Assets
    2. Nonmarketable Financial Assets
    3. Money Market Securities
    4. Checking Your Understanding
    5. Capital Market Securities
    6. Fixed-Income Securities
    7. Checking Your Understanding
    8. Equity Securities
    9. Checking Your Understanding
    10. Derivative Securities
    11. A Final Note
    12. Summary
    13. Questions
    14. Problems
    15. Spreadsheet Exercises
    16. Checking Your Understanding
  9. Chapter 3: Indirect Investing
    1. Investing Indirectly
    2. What is an Investment Company?
    3. Three Major Types of Investment Companies
    4. Checking Your Understanding
    5. Types of Mutual Funds
    6. Checking Your Understanding
    7. The Net Asset Value Per Share
    8. The Details of Indirect Investing
    9. Checking Your Understanding
    10. Investment Company Performance
    11. Investing Internationally Through Investment Companies
    12. The Future of Indirect Investing
    13. Hedge Funds
    14. Summary
    15. Questions
    16. Computational Problems
    17. Spreadsheet Exercises
    18. Checking Your Understanding
  10. Chapter 4: Securities Markets and Market Indices
    1. The Importance of Financial Markets
    2. The Primary Markets
    3. Checking Your Understanding
    4. The Secondary Markets
    5. Checking Your Understanding
    6. Stock Market Indexes
    7. Checking Your Understanding
    8. Bond Markets
    9. Derivatives Markets
    10. The Globalization of Markets
    11. Summary
    12. Questions
    13. Problems
    14. Computational Problems
    15. Spreadsheet Exercises
    16. Checking Your Understanding
  11. Chapter 5: How Securities are Traded
    1. Introduction
    2. Brokerage Transactions
    3. How Orders Work
    4. Checking Your Understanding
    5. Investor Protection in The Securities Markets
    6. Checking Your Understanding
    7. Margin
    8. Short Sales
    9. Checking Your Understanding
    10. Summary
    11. Questions
    12. Problems
    13. Computational Problems
    14. Spreadsheet Exercises
    15. Checking Your Understanding
  12. Chapter 6: The Returns and Risks from Investing
    1. An Overview
    2. Return
    3. Measuring Returns
    4. A Global Perspective
    5. Checking Your Understanding
    6. Summary Statistics for Returns
    7. Checking Your Understanding
    8. Risk
    9. Measuring Risk
    10. Checking Your Understanding
    11. Realized Returns and Risks From Investing
    12. Compounding and Discounting
    13. Summary
    14. Questions
    15. Demonstration Problems
    16. Problems
    17. Computational Problems
    18. Spreadsheet Exercises
    19. Checking Your Understanding
  13. Chapter 7: Portfolio Theory
    1. Dealing With Uncertainty
    2. Checking Your Understanding
    3. Introduction to Modern Portfolio Theory
    4. Portfolio Return and Risk
    5. Analyzing Portfolio Risk
    6. Checking Your Understanding
    7. The Components of Portfolio Risk
    8. Checking Your Understanding
    9. Calculating Portfolio Risk
    10. Checking Your Understanding
    11. Obtaining the Data
    12. Summary
    13. Questions
    14. Problems
    15. Computational Problems
    16. Spreadsheet Exercises
    17. Checking Your Understanding
  14. Chapter 8: Portfolio Selection and Asset Allocation
    1. Building a Portfolio using Markowitz Principles
    2. The Global Perspective—International Diversification
    3. Some Important Conclusions about the Markowitz Model
    4. Checking Your Understanding
    5. Alternative Methods of Obtaining the Efficient Frontier
    6. Selecting Optimal Asset Classes—The Asset Allocation Decision
    7. Asset Allocation and the Individual Investor
    8. Checking Your Understanding
    9. The Impact of Diversification on Risk
    10. The Implications of Reducing Risk by Holding Portfolios
    11. Summary
    12. Questions
    13. Problems
    14. Spreadsheet Exercises
    15. Checking Your Understanding
  15. Chapter 9: Capital Market Theory and Asset Pricing Models
    1. Capital Market Theory
    2. Checking Your Understanding
    3. The Equilibrium Return-Risk Tradeoff
    4. Checking Your Understanding
    5. Checking Your Understanding
    6. Estimating the SML
    7. Tests of the CAPM
    8. Arbitrage Pricing Theory
    9. Checking Your Understanding
    10. Some Conclusions about Asset Pricing
    11. Summary
    12. Questions
    13. Demonstration Problems
    14. Problems
    15. Computational Problems
    16. Spreadsheet Problems
    17. Checking Your Understanding
  16. Chapter 10: Common Stock Valuation
    1. Overview
    2. Discounted Cash Flow Models
    3. The Dividend Discount Model
    4. Checking Your Understanding
    5. Checking Your Understanding
    6. Other Discounted Cash Flow Approaches
    7. Checking Your Understanding
    8. The Earnings Multiplier Approach
    9. Relative Valuation Metrics
    10. Which Approach To Use?
    11. Bursting the Bubble on New Economy Stocks—A Lesson in Valuation
    12. Checking Your Understanding
    13. Some Final Thoughts on Valuation
    14. Summary
    15. Questions
    16. Demonstration Problems
    17. Problems
    18. Computational Problems
    19. Spreadsheet Exercises
    20. Checking Your Understanding
  17. Chapter 11: Common Stocks: Analysis and Strategy
    1. A Global Perspective
    2. The Impact of the Overall Market on Stocks
    3. Building Stock Portfolios
    4. Checking Your Understanding
    5. The Passive Strategy
    6. Checking Your Understanding
    7. The Active Strategy
    8. Checking Your Understanding
    9. Rational Markets and Active Strategies
    10. A Simple Strategy—The Coffeehouse Portfolio
    11. Summary
    12. Questions
    13. Problems
    14. Computational Problems
    15. Spreadsheet Exercises
    16. Checking Your Understanding
  18. Chapter 12: Market Efficiency
    1. Overview
    2. The Concept of an Efficient Market
    3. Checking Your Understanding
    4. How to Test for Market Efficiency
    5. Checking Your Understanding
    6. Market Anomalies
    7. Checking Your Understanding
    8. Behavioral Finance
    9. Checking Your Understanding
    10. Some Conclusions About Market Efficiency
    11. Summary
    12. Questions
    13. Problems
    14. Checking Your Understanding
  19. Chapter 13: Economy/Market Analysis
    1. Introduction
    2. Taking a Global Perspective
    3. Assessing the Economy
    4. Checking Your Understanding
    5. The Stock Market and the Economy
    6. The Economy and Stock Market Booms
    7. Checking Your Understanding
    8. Understanding the Stock Market
    9. Checking Your Understanding
    10. Making Market Forecasts
    11. Checking Your Understanding
    12. Summary
    13. Questions
    14. Problems
    15. Computational Problems
    16. Spreadsheet Exercises
    17. Checking Your Understanding
  20. Chapter 14: Sector/Industry Analysis
    1. Introduction
    2. What Is An Industry?
    3. The Importance Of Sector/Industry Analysis
    4. Checking Your Understanding
    5. Analyzing Sectors/Industries
    6. Checking Your Understanding
    7. Using Sector/Industry Analysis As An Investor
    8. Summary
    9. Questions
    10. Checking Your Understanding
  21. Chapter 15: Company Analysis
    1. Fundamental Analysis
    2. The Accounting Aspects of Earnings
    3. Checking Your Understanding
    4. Checking Your Understanding
    5. Using the Financial Statements to Analyze a Company's ROE and EPS
    6. Checking Your Understanding
    7. Earnings Estimates
    8. The P/E Ratio
    9. Fundamental Security Analysis in Practice
    10. Summary
    11. Questions
    12. Problems
    13. Computational Problems
    14. Spreadsheet Exercises
    15. Checking Your Understanding
  22. Chapter 16: Technical Analysis
    1. Introduction
    2. What is Technical Analysis?
    3. Checking Your Understanding
    4. Stock Price and Volume Techniques
    5. Checking Your Understanding
    6. Technical Indicators
    7. Testing Technical Analysis Strategies
    8. The Ebb and Flow of Technical Analysis
    9. Some Conclusions about Technical Analysis
    10. Summary
    11. Questions
    12. Computational Problems
    13. Checking Your Understanding
  23. Chapter 17: Bond Yields and Prices
    1. Introduction
    2. Bond Yields and Interest Rates
    3. Measuring Bond Yields
    4. Checking Your Understanding
    5. Checking Your Understanding
    6. Bond Prices
    7. Bond Price Changes
    8. Checking Your Understanding
    9. Summary
    10. Questions
    11. Problems
    12. Computational Problems
    13. Spreadsheet Exercises
    14. Checking Your Understanding
  24. Chapter 18: Bonds: Analysis and Strategy
    1. Why Buy Bonds?
    2. Important Considerations in Managing a Bond Portfolio
    3. Checking Your Understanding
    4. Bond Strategies and Techniques
    5. Passive Management Strategies
    6. Active Management Strategies
    7. Managing Price Volatility
    8. Checking Your Understanding
    9. Immunization
    10. Summary
    11. Questions
    12. Problems
    13. Computational Problems
    14. Spreadsheet Exercises
    15. Checking Your Understanding
  25. Chapter 19: Options
    1. Why Have Derivative Securities?
    2. Introduction to Options
    3. Understanding Options
    4. Checking Your Understanding
    5. Checking Your Understanding
    6. Payoffs and Profits from Basic Option Positions
    7. Some Basic Options Strategies
    8. Checking Your Understanding
    9. Option Valuation
    10. Checking Your Understanding
    11. An Investor's Perspective on Puts and Calls
    12. Stock-Index Options
    13. Summary
    14. Questions
    15. Problems
    16. Computational Problems
    17. Spreadsheet Exercises
    18. Checking Your Understanding
  26. Chapter 20: Futures Contracts
    1. An Overview of Futures Markets
    2. The Structure of Futures Markets
    3. Checking Your Understanding
    4. The Mechanics of Trading
    5. Checking Your Understanding
    6. Using Futures Contracts
    7. Checking Your Understanding
    8. Financial Futures
    9. Single Stock Futures
    10. Summary
    11. Questions
    12. Problems
    13. Computational Problems
    14. Checking Your Understanding
  27. Chapter 21: Managing Your Financial Assets
    1. A Perspective on Investing in Financial Assets
    2. Managing Your Financial Assets
    3. Checking Your Understanding
    4. Formulate an Appropriate Investment Strategy
    5. Investor Objectives
    6. Checking Your Understanding
    7. What Issues Do Investors Face in Their Financial Planning?
    8. Investor Expectations as a Part of Financial Planning
    9. Checking Your Understanding
    10. Implementing Investing Strategies
    11. Financial Planning on an Ongoing Basis
    12. Checking Your Understanding
    13. Rebalancing a Portfolio of Financial Assets
    14. Determining the Success of Your Financial Planning
    15. Minimize Costs and Effort, and Improve Performance, When Managing a Portfolio of Financial Assets
    16. Summary
    17. Questions
    18. Spreadsheet Exercises
    19. Checking Your Understanding
  28. Chapter 22: Evaluation of Investment Performance
    1. A Framework for Evaluating and Assessing Portfolio Performance
    2. Performance Measurement Issues
    3. Checking Your Understanding
    4. Risk-adjusted Measures of Performance
    5. Checking Your Understanding
    6. Checking Your Understanding
    7. Style Analysis and Performance Attribution
    8. Money Managers and Performance Presentations
    9. Checking Your Understanding
    10. An Overview on Performance Evaluation
    11. Summary
    12. Questions
    13. Problems
    14. Computational Problems
    15. Spreadsheet Problems
    16. Checking Your Understanding
  29. Glossary
  30. Index