Financial Economics

by Fabozzi, Frank J.; Neave, Edwin H.; Zhou, Guofu

• ISBN13: 9780470596203
• ISBN10: 0470596201
• Edition: 1st
• Format: Hardcover
• Copyright: 2011-11-15
• Publisher: Wiley

Summary

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.

Author Biography

Dr. Frank J. Fabozzi PhD, CFA, CPA serves as Senior Advisor of IndexIQ, Inc. Dr. Fabozzi serves as Principal of Information Management Network, LLC. He has been Professor in the Practice of Finance at Yale University, School of Management since 2006. Dr. Fabozzi was a Visiting Professor of Finance and Accounting at the Sloan School of Management, Massachusetts Institute of Technology from 1986 to August 1992. He was Adjunct Professor of Finance at Yale University from 1994 to 2006. He co-authored with Franco Modigliani the textbooks Foundations of Financial Markets and Capital Markets: Institutions and Instruments and co edited with Harry Markowitz The Theory and Practice of Investment Management. He is a widely published author on topics such as risk management and structured finance. He has been a Becton Fellow, Yale University, School of Management since 1994. Dr. Fabozzi was inducted into the Fixed Income Analysts Society's Hall of Fame and is the 2007 recipient of the C. Stewart SheppardAward given by the CFA Institute. He is a Chartered Financial Analyst and Certified Public Accountant. Dr. Fabozzi holds B.A., M.A. and Ph.D. from City University of New York.

Table of Contents

Preface	p. ix
Acknowledgments	p. xv
About the Authors	p. xvii
Introduction	p. 1
Finance In A Certainty World With A Perfect Capital Market	p. 13
Consumer Financial Decisions	p. 15
Creating Wealth by Investing in Productive Opportunities	p. 31
How Investors Value Firms	p. 50
Firm Financing Decisions in a Perfect Capital Market	p. 78
Firm Investment Decisions	p. 102
Financial System	p. 119
Financial Systems, Governance, and Organization	p. 121
Market, Intermediary, and Internal Governance	p. 151
Tools For Coping With Risk	p. 177
The Microeconomic Foundations of Financial Economics	p. 179
Contingent Claims and Contingency Strategies	p. 199
Risk and Risk Management	p. 216
On Choosing Risk Measures	p. 234
Selection And Pricing Of Risky Assets	p. 255
Mean-Variance Portfolio Choice	p. 257
Capital Asset Pricing Model	p. 287
The APTand Factor Models	p. 317
General Principles of Asset Pricing	p. 339
Pricing Corporate Securities	p. 366
Derivative Instruments	p. 383
Pricing Derivatives by Arbitrage: Linear Payoff Derivatives	p. 385
Pricing Derivatives by Arbitrage: Nonlinear Payoff Derivatives	p. 414
Capital Market Imperfections And The Limits To Arbitrage	p. 449
Capital Market Imperfections and Financial Decision Criteria	p. 451
Impediments to Arbitrage	p. 479
Capital Structure Decisions In Imperfect Capital Markets	p. 499
When Capital Structure Decisions Matter	p. 501
Financing Decisions in Practice	p. 522
Financial Contracting and Deal Terms	p. 545
Incorporating Risk In Capital Budgeting Decisions	p. 577
Capital Expenditure Plans in a Risky World	p. 579
Evaluating Project Risk in Capital Budgeting	p. 607
Subject Index	p. 639
Author Index	p. 650
Finance Appendices
Deal Terms	p. 653
Corporate Debt Funding Instruments	p. 658
Investment Bankers and the Issuance of Securities	p. 665
Credit Risk	p. 668
Financial Statements	p. 677
Financial Ratio Analysis	p. 682
Estimating Cash Flows of Capital Budgeting Projects	p. 692
Merger and Acquisition Strategies	p. 697
Conglomerates as a Means of Overcoming Capital Market Imperfections	p. 701
Lease Financing	p. 705
Mathematical And Statistical Appendices
Taylor Series Approximation	p. 716
Some Elementary Concepts Involving Probability	p. 717
Continuous Probability Distributions	p. 722
Continuous Interest Rates	p. 730
Fundamentals of Matrix Algebra	p. 733
Principal Component Analysis in Finance	p. 745
Subject Index (Web-Appendix A To P)	p. 751
Author Index (Web-Appendix A To P)	p. 754
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