A thoroughly revised and updated edition of a textbook for graduate students in finance, with new coverage of global financial institutions.
This thoroughly revised and updated edition of a widely used textbook for graduate students in finance now provides expanded coverage of global financial institutions, with detailed comparisons of U.S. systems with non-U.S. systems. A focus on the actual practices of financial institutions prepares students for real-world problems.
After an introduction to financial markets and market participants, including asset management firms, credit rating agencies, and investment banking firms, the book covers risks and asset pricing, with a new overview of risk; the structure of interest rates and interest rate and credit risks; the fundamentals of primary and secondary markets; government debt markets, with new material on non-U.S. sovereign debt markets; corporate funding markets, with new coverage of small and medium enterprises and entrepreneurial ventures; residential and commercial real estate markets; collective investment vehicles, in a chapter new to this edition; and financial derivatives, including financial futures and options, interest rate derivatives, foreign exchange derivatives, and credit risk transfer vehicles such as credit default swaps. Each chapter begins with learning objectives and ends with bullet point takeaways and questions.
Overview of the Book.
Part 1. Financial Markets and Players.
2. Role of Governments in Financial Markets.
3. Financial Institutions, Finaacial Intermediaries, and Asset Management Firms.
4. Overview of Private Market Participants.
5. Credit Rating Agencies and Their Role in Financial Markets.
6. Depository Institutions: Activities and Characteristics.
7. Central Banks.
8. Insurance Companies.
9. Investment Banking Firms.
Part 2. Understanding Risks and Asset Pricing.
10. Overview of Risks and Their Management.
11. Properties and Pricing of Financial Assets.
12. Return Distributions, Risk Measures, and Risk-Return Ratios.
13. Portfolio Selection Theory.
14. Asset Pricing Theories.
Part 3. Interest Rates, Interest Rate Risk, and Credit Risk.
15. The Theory of Interest Rates.
16. The Structure of Interest Rates.
Part 4. Primary and Secondary Markets.
17. Primary Markets.
18. Secondary Markets.
19. The Foreign Exchange Markets.
Part 5. Global Government Debt Market.
20. Sovereign Debt Markets.
21. Subnational (Municipal) Government Debt Markets.
Part 6. Corporate Funding Markets.
22. The Structure and Trading Venues of the Equity Market.
23. U.S Common Stock Market: Pricing Efficiency, Trading, and Investment Strategies.
24. Non-U.S. Equity Markets.
25. Global Short-Term Funding Investing Markets.
26. Corporate Debt Markets.
27. Market for Asset-Backed Securities.
28. Financing Market for Small, Medium-Sized, and Entrepreneurial Enterprises.
Part 7. Real Estate Markets.
29. The Residential Mortgage Market.
30. Residential Mortgage-Backed Securities Market.
31. Commercial Real Estate Markets.
Part 8. Collective Investment Vehicles and Financial Derivatives Markets.
32. Market for Collective Investment Vehicles.
33. Financial Futures Markets.
34. Options Markets.
35. Pricing Futures and Options Contracts.
36. Applications of Futures and Options Contracts.
37. Over-the-Counter Interest Rate Derivatives: Forward Rate Agreements, Swaps,Caps, and Floors.
38. Market for Foreign Exchange Derivatives.
39. Market for Credit Risk Transfer Vehicles.
Frank J. Fabozzi
Professor of Finance at EDHEC Business School, France.
Frank J. Jones
Professor of Finance and Accounting at San Jose State College of Business.
with Francesco A. Fabozzi & Steven V. Mann