Modern Investment Theory

The fifth edition of this widely used text is fully updated to equip students with a deep understanding of the theory of investment management, as applied in the real-world, by proceeding through topics in a logical and cohesive fashion. It explains the tools and techniques needed to manage investment risk, detect mispriced securities, minimize taxes, and measure the performance of investment managers. In addition, the text presents exhaustive discussions of capital asset pricing, arbitrage pricing, interest rates, pricing of derivative securities, bond management, stock valuation, estimating future earnings and dividends, and fixed income markets. While the mathematical content is kept mini-mal, the basic statistical concepts required for an understanding of the text are introduced in a background chapter to help students review this material quickly and easily.