Financial Economics [Hardcover]

Financial Economics has quickly established itself as a strong and growing market. Introduction to Financial Economics by Frank Fabozzi, Ted Neave, and Gaofu Zhou presents an introduction to basic financial ideas through a strong grounding in microeconomic theory. This calculus based text explores the theoretical framework for analyzing the decisions by individuals and managers of firms, and area which is common to both the financial economics and microeconomics. It also explores the interplay of these decisions on the prices of financial assets.Preface ix

Acknowledgments xv

About the Authors xvii

CHAPTER 1 Introduction 1

PART I FINANCE IN A CERTAINTY WORLD WITH A PERFECT CAPITAL MARKET 13

CHAPTER 2 Consumer Financial Decisions 15

CHAPTER 3 Creating Wealth by Investing in Productive Opportunities 31

CHAPTER 4 How Investors Value Firms 50

CHAPTER 5 Firm Financing Decisions in a Perfect Capital Market 78

CHAPTER 6 Firm Investment Decisions 102

PART II FINANCIAL SYSTEM 119

CHAPTER 7 Financial Systems, Governance, and Organization 121

CHAPTER 8 Market, Intermediary, and Internal Governance 151

PART III TOOLS FOR COPING WITH RISK 177

CHAPTER 9 The Microeconomic Foundations of Financial Economics 179

CHAPTER 10 Contingent Claims and Contingency Strategies 199

CHAPTER 11 Risk and Risk Management 216

CHAPTER 12 On Choosing Risk Measures 234

PART IV SELECTION AND PRICING OF RISKY ASSETS 255

CHAPTER 13 Mean-Variance Portfolio Choice 257

CHAPTERl3ˆ