Summary

A comprehensive guide to investment analysis and portfolio management by an expert team from the CFA Institute In a world of specialization, no other profession likely requires such broad, yet in-depth knowledge than that of financial analyst. Financial analysts must not only possess a broad understanding of the financial markets-including structure, organization, efficiency, portfolio management, risk and return, and planning and construction-but they must also have a strong sense of how to evaluate industries and companies prior to engaging in an analysis of a specific stock. Investments: Principles of Portfolio and Equity Analysis provides the broad-based knowledge professionals and students of the markets need to manage money and maximize return. The book Details market structure and functions, market anomalies, secondary market basics, and regulation Describes investment assets and asset classes, types of positions and orders, as well as forecasting methodologies Discusses return and risk characteristics, portfolio diversification and management, the basics of both technical analysis and major technical indicators, and much more A companion Workbook, which includes learning outcomes, summary overviews, and problems and solutions sections is available and sold separately Investments provides readers unparalleled access to the best in professional quality information on investment analysis and portfolio management.

Author Biography

MICHAEL G. MCMILLAN, CFA, is Director, Ethics and Professional Standards in the Education Division of CFA Institute. Dr. McMillan joined CFA Institute in 2008 after more than a decade as a professor of accounting and finance at Johns Hopkins University's Carey Business School and The George Washington University's School of Business. He has a doctorate in accounting and finance from The George Washington University, an MBA from Stanford University, and a BA from the University of Pennsylvania. Dr. McMillan is a member of the CFA Society of Washington, DC and the East African Society of Investment Professionals.

JERALD E. PINTO, CFA is Director, Curriculum Projects, in the Education Division of CFA Institute. Before coming to CFA Institute in 2002, he consulted to corporations, foundations, and partnerships in investment planning, portfolio analysis, and quantitative analysis. He has also worked in the investment and banking industries in New York City and taught finance at New York University's Stern School of Business. He holds an MBA from Baruch College, a PhD in finance from the Stern School, and earned his CFA charter in 1992.

Foreword.

Acknowledgments.

Introduction.

Chapter 1 Market Organization and Structure.

Learning Outcomes.

1 Introduction.

2 The Functions of the Financial System.

3 Assets and Contracts.

4 Financial Intermediaries.

5 Positions.

6 Orders.

7 Primary Security Markets.

8 Secondary Security Market and Contract Market Structures.

9 Well-Functioning Financial Systems.

10 Market Regulation.

11 Summary.

Problems.

Chapter 2 Security Market Indices.

Learning Outcomes.

1 Introduction.

2 Index Definition and Calculations of Value and Returns.

3 Index Construction and Management.

4 Uses of Market Indices.

5 Equity Indices.

6 Fixed-Income Indices.

7 Indices for Alternative Investments.

8 Summary.

Problems.

Chapter 3 Market Efficiency.

Learning Outcomes.

1 Introduction.

2 The Concept of Market Efficiency.

3 Forms of Market Efficiency.

4 Market Pricing Anomalies.

5 Behavioral Finance.

6 Summary.

Problems.

Chapter 4 Portfolio Management: An Overview.

Learning Outcomes.

1 Introduction.

2 A Portfolio Perspective on Investing.

3 Investment Clients.

4 Steps in the Portfolio Management Process.

5 Pooled Investments.

6 Summary.

Problems.

Chapter 5 Portfolio Risk and Return: Part I.

Learning Outcomes.

1 Introduction.

2 Investment Characteristics of Assets.

3 Risk Aversion and Portfolio Selection.

4 Portfolio Risk.

5 Efficient Frontier and Investor's Optimal Portfolio.

6 Summary.

Problems.

Chapter 6 Portfolio Risk and Return: Part II.

Learning Outcomes.

1 Introduction.

2 Capital Market Theory.

3 Pricing of Risk and Computation of Expected Return.

4 The Capital Asset Pricing Model.

5 Beyond the Capital Asset Pricing Model.

6 Summary.

Problems.

Chapter 7 Basics of Portfolio Planning and Construction.

Learning Outcomes.

1 Introduction.

2 Portfolio Planning.

3 Portfolio Construction.

4 Summary.

Problems.

Chapter 8 Overview of Equity Securities.

Learning Outcomes.

1 Introduction.

2 Equity Securities in Global Financial Markets.

3 Types and Characteristics of Equity Securities.

4 Private versus Public Equity Securities.

5 Investing in Non-Domestic Equity Securities.

6 Risk and Return Characteristics of Equity Securities.

7 Equity Securities and Company Value.

8 Summary.

Problems.

Chapter 9 Introduction to Industry and Company Analysis.

Learning Outcomes.

1 Introduction.

2 Uses of Industry Analysis.

3 Approaches to Identifying Similar Companies.

4 Industry Classification Systems.

5 Describing and Analyzing an Industry.

6 Company Analysis.

7 Summary.

Problems.

Chapter 10 Equity Valuation: Concepts and Basic Tools.

Learning Outcomes.

1 Introduction.

2 Estimated Value and Market Price.

3 Major Categories of Equity Valuation Models.

4 Present Value Models: The Dividend Discount Model.

5 Multiplier Models.

6 Asset-Based Valuation.

7 Summary.

Problems.

Chapter 11 Equity Market Valuation.

Learning Outcomes.

1 Introduction.

2 Estimating a Justified P/E Ratio.

3 Top-down and Bottom-up Forecasting.

4 Relative Value Models.

5 Summary.

Problems.

Chapter 12 Technical Analysis.

Learning Outcomes.

1 Introduction.

2 Technical Analysis: Definition and Scope.

3 Technical Analysis Tools.

4 Elliott Wave Theory.

5 Intermarket Analysis.

6 Summary.

Problems.

Glossary.

References.

About the Authors.

About the CFA Program.

Index.

Supplemental Materials

What is included with this book?

The New copy of this book will include any supplemental materials advertised. Please check the title of the book to determine if it should include any access cards, study guides, lab manuals, CDs, etc.

The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.