Equity Markets and Portfolio Analysis

In recent years, changes have swept through the investment industry like wildfire. Academia has followed along and provided new lenses for viewing this transformation, as well as new strategies for gaining a true understanding and knowledge of investment and financial markets. Now, Equity Markets and Portfolio Analysis has been created to further inform investment professionals and finance students on the basic concepts and strategies of investments, and to provide more detailed discussions on advanced strategies and models. The concepts covered in this book will help readers gain a better understanding of the markets and uses for an increasing number of securities, strategies, and methodologies.

Equity Markets and Portfolio Analysis is the only core investment book that covers the functionality of Bloomberg terminals, increasingly critical tools both in the classroom and on the trading floor. As Bloomberg terminals now play a key role in the research, teaching, and managing of student investment funds, understanding the system's information and analytical functions has become more important than ever.

• In-depth coverage of fundamentals through more detailed concepts for students and professionals who want to better understand the evaluation, selection, and management of securities
• One-of-a-kind training and instructional course, introduction to Bloomberg investment subjects, and reference for CFA preparation
• Bloomberg material provided in an appendix accompanying each chapter, a useful option for professors
• Ideal for finance practitioners, investment bankers, and academics

This unique resource will give readers both the foundational knowledge and the analytical tools necessary for investment success, both in the classroom and in the real world.

R. STAFFORD JOHNSON is Professor of Finance at the Williams College of Business, Xavier University. He is the author of five books: Options and Futures, Introduction to Derivatives, two editions of Bond Evaluation, Selection, and Management, and Debt Markets and Analysis. He has also written articles appearing in journals such as Applied Economics, Journal of Financial Education, International Review of Economics & Business, Journal of Economics, The Financial Review, and the Review of Quantitative Finance and Accounting.

Preface ix

Acknowledgments xiii

CHAPTER 1 Overview of the Financial System 1

CHAPTER 2 Overview and Guide to the Bloomberg System 29

CHAPTER 3 Stock and Bond Valuation and Return 73

CHAPTER 4 Equity Securities, Markets, and Trading 131

CHAPTER 5 Investment Funds, Intermediate Securities, and Global Equity Markets 179

CHAPTER 6 Expected Rate of Return and Risk—Stock 221

CHAPTER 7 Portfolio Evaluation 267

CHAPTER 8 Portfolio Selection—Markowitz Model 303

CHAPTER 9 The Capital Asset Pricing Model 347

CHAPTER 10 The Arbitrage Pricing Theory 365

CHAPTER 11 The Financial Anatomy of a Company—Fundamental Analysis 385

CHAPTER 12 Applied Fundamental Analysis 437

CHAPTER 13 Market and Industrial Analysis: Top-Down Approach 487

CHAPTER 14 Technical Analysis 537

CHAPTER 15 Efficient Markets 581

CHAPTER 16 Options Markets 623

CHAPTER 17 Futures Markets 669

Index 695

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