Stocks, Bonds, Options, Futures

by Veale, Stuart R.

• ISBN13: 9780735201750
• ISBN10: 0735201757
• Format: Paperback
• Copyright: 2001-01-01
• Publisher: Prentice Hall Press

Summary

(New York Institute of Finance) A text for individual investors as well as financial professionals, comparing methods of analyzing stocks and giving readers the tools to create a portfolio that balances risk and returns. Includes charts and graphics as well as Internet listings for tools and additional research. Softcover. DLC: Investments: United States.

Table of Contents

Preface	xiii
Acknowledgments	xix
The Securities Industry	1	(14)
Investment Banking Department	1	(2)
Venture Capital/Private Equity	3	(1)
Sales Divisions	4	(3)
Trading Department	7	(1)
Research Department	8	(1)
Technology Department	9	(1)
Operations Department	10	(1)
Money Management Department	11	(1)
Wealth Preservation/Insurance Division	11	(1)
Retirement Planning Department	11	(1)
Trust Company/Bank	11	(1)
Derivatives Department	12	(1)
Compliance Department	13	(1)
Recent Industry Performance	13	(2)
Common Stock	15	(18)
How Much of the Company Do I Own?	16	(3)
Corporate Governance and Organization	19	(1)
Advantages of Common Stock as an Investment	20	(2)
Disadvantages of Common Stock as an Investment	22	(1)
Types of Common Stocks	23	(3)
Dividend Debate	26	(2)
Stock Splits	28	(1)
Price Quotes	28	(1)
Types of Orders	29	(1)
Margin	30	(1)
Shorting Stock	31	(2)
Analyzing Stocks	33	(29)
The Fundamentalist School	33	(13)
Ratio Analysis	46	(3)
Trend Analysis	49	(6)
The Technical School	55	(3)
Analysis of Bar Charts	58	(2)
The Academic School	60	(2)
Underwriting Stocks	62	(9)
Why Companies Go Public	62	(1)
Selecting Investment Banking Firms	63	(8)
Preferred Stocks	71	(7)
Why Do Companies Issue Preferreds?	73	(1)
Why Do Investors Buy Preferreds?	74	(1)
What Are the Common Embedded Options?	75	(3)
Trading Securities	78	(23)
How a Trade Is Executed	78	(3)
Broker/Dealers	81	(1)
Market Making	82	(3)
Posting Quotes	85	(2)
Types of Quotations	87	(2)
Third Market Transactions	89	(1)
Fourth Market Transactions	89	(2)
The National Association of Security Dealers (NASD)	91	(3)
NASD Rules of Fair Practice	94	(2)
NASD Uniform Practice Code	96	(5)
Operations	101	(23)
Operations Departments	103	(20)
In Closing	123	(1)
The Money Market	124	(7)
Insured Certificates of Deposit	125	(1)
Negotiable Certificates of Deposit	125	(1)
Bankers Acceptances	125	(1)
Commercial Paper	126	(1)
Repurchase Aggreements	127	(1)
Floating Rate Notes	128	(1)
Adjustable Rate Preferreds	129	(1)
Money Market Preferreds	130	(1)
Introduction to Fixed Income	131	(10)
Buying Bonds	132	(1)
Quoting Bond Yield	133	(1)
Accrued Interest	134	(1)
Embedded Options	135	(5)
In Closing	140	(1)
U.S. Treasury Bonds	141	(14)
Advantages of U.S. Treasury Securities	141	(3)
Types of U.S. Treasuries	144	(6)
Treasury Yield Curve	150	(1)
Investment Strategies	150	(5)
Corporate Bonds	155	(12)
Why Companies Issue Bonds	155	(2)
Corporate Bonds and Credit Ratings	157	(3)
Types of Corporate Bonds	160	(1)
Expressing the Yield of Corporates	161	(2)
Components of Spread	163	(1)
Option Adjusted Spread	164	(3)
Municipal Bonds	167	(5)
Tax Treatment of Municipals	167	(2)
General Obligation Versus Revenue Bonds	169	(2)
Underwriting Municipal Bonds	171	(1)
Mortgage-Backed Securities	172	(22)
Problems Associated With Selling Individual Mortgages	173	(3)
Role of the Mortgage Agencies	176	(1)
Creation of a Pool of Mortgages	176	(3)
Analyzing Pools	179	(2)
Quoting Prepayment Speed	181	(1)
Whole Loan Pools	182	(1)
Collateralized Mortgage Obligations	182	(2)
Sequentials	184	(3)
PACs and Companions	187	(3)
Floaters and Inverse Floaters	190	(1)
Strip Securities	191	(1)
New Developments	192	(2)
Forward Contracts	194	(15)
Terms of a Forward Contract	195	(2)
Pricing Forward Contracts	197	(2)
Advantages of Forward Contracts	199	(1)
Interest Rate Forwards	199	(5)
Foreign Exchange Forwards	204	(4)
Summary of Forward Contracts	208	(1)
Futures Contracts	209	(23)
Margin Requirements	212	(5)
The T-Bond Futures Contract	217	(3)
Eurodollar Futures	220	(3)
Applications of These Contracts	223	(4)
Hedgers	227	(1)
Structure and Operation of a Futures Exchange	228	(4)
Swap Contracts	232	(15)
Applications of Swaps	234	(4)
Asset Swaps	238	(3)
Index Swaps	241	(2)
Role of the Dealer	243	(1)
Quoting Swaps	244	(1)
Credit Risk of Interest Rate Swaps	244	(3)
Option Contracts	247	(15)
In, At, and Out of the Money Options	249	(1)
Option Premium	249	(1)
Option Markets	250	(1)
Over-the-Counter Options	251	(3)
Option Pricing	254	(5)
Option Sensitivities	259	(3)
Exotic Options	262	(15)
Look-back Options	262	(2)
Binaries (AKA Digitals)	264	(2)
Bermuda Options	266	(1)
Barrier Options	266	(3)
Restrikes	269	(1)
Asian Options	270	(2)
Compound Options	272	(1)
Perpetual Zero Options	273	(1)
Delay Options	273	(1)
Chooser Options	274	(1)
Contingent Premium Option	274	(3)
Equity-Related Investments	277	(8)
Index Securities	277	(1)
Warrants	277	(1)
Long Dated Equity Participation Securities	278	(1)
Convertible Securities	278	(1)
Convertible Vocabulary and Ratios	279	(1)
Conversion Premium	279	(2)
Why Invest in Converts?	281	(1)
Disadvantage of Convertible Securities	282	(2)
Why Do Issuers Issue Convertibles	284	(1)
Mutual Funds	285	(14)
Diversification	285	(1)
Stacking the Deck	286	(1)
Investment Monitoring	286	(1)
Why Mutual Funds?	286	(1)
What Is a Mutual Fund?	287	(2)
Advantages of Mutual Funds	289	(2)
Disadvantages of Mutual Funds	291	(4)
Other Issues Mutual Fund Investors Need to Consider	295	(4)
Global Investing	299	(24)
Faster Rate of Economic Growth	300	(1)
Less Government Regulation	301	(1)
Lower Labor Costs	301	(1)
Better Educated Work Force	302	(1)
Favorable Political Environment	302	(1)
Disadvantages of Overseas Markets	302	(2)
The Influence of Globalization on U.S. Companies	304	(4)
Factors that Cause FX Rates to Change	308	(5)
U.S. Investors and Non-dollar Investments	313	(4)
Influence of the Euro	317	(1)
Alternative Ways of Investing in Non-dollar Equities	318	(1)
Equity-linked Notes	319	(1)
World Equity Benchmark Securities	320	(1)
Mutual Funds	321	(1)
Investing in Non-dollar Fixed Income	322	(1)
About the Author	323	(2)
Index	325