Modern Portfolio Theory and Investment Analysis [Paperback]

An excellent resource for investors, Modern Portfolio Theory and Investment Analysis, 9th Edition examines the characteristics and analysis of individual securities as well as the theory and practice of optimally combining securities into portfolios. A chapter on behavioral finance is included, aimed to explore the nature of individual decision making. A chapter on forecasting expected returns, a key input to portfolio management, is also included. In addition, investors will find material on value at risk and the use of simulation to enhance their understanding of the field.

Part 1 Introduction 1

Chapter 1 Introduction 2

Outline of the Book 2

The Economic Theory of Choice: An Illustration under Certainty 4

Conclusion 8

Multiple Assets and Risk 8

Questions and Problems 9

Bibliography 10

Chapter 2 Financial Securities 11

Types of Marketable Financial Securities 11

The Return Characteristics of Alternative Security Types 19

Stock Market Indexes 21

Bond Market Indexes 22

Conclusion 23

Chapter 3 Financial Markets 24

Trading Mechanics 24

Margin 27

Markets 30

Trade Types and Costs 36

Conclusion 38

Part 2 PORTFOLIO ANALYSIS 39

Section 1 Mean Variance Portfolio Theory 41

Chapter 4 The Characteristics of The Opportunity Set Under Risk 42

Determining the Average Outcome 43

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