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Investment Analysis and Portfolio Management

By Frank K. Reilly, Keith C. Brown, Sanford J. Leeds

11th Edition © 2019
Discipline:Finance
Course:Investments
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Used extensively by professionals, organizations and schools across the country, Reilly/Brown/Leeds' INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT, 11th Edition, combines solid theory with practical applications to help students learn how to manage their money to maximize their earning potential. Now streamlined into a succinct 18 chapters, the text has been thoroughly revised to present content that is vital to a thorough understanding of investment management in the most effective way. It uses real-world illustrations and hands-on exercises to bring investment concepts to life for students. The 11th edition continues its tradition of unparalleled international coverage. It also offers expanded discussions of the impact of changes in both technology and regulations on the functioning and organization of global security markets and devotes three chapters to derivatives securities.

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About this product

Used extensively by professionals, organizations and schools across the country, Reilly/Brown/Leeds' INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT, 11th Edition, combines solid theory with practical applications to help students learn how to manage their money to maximize their earning potential. Now streamlined into a succinct 18 chapters, the text has been thoroughly revised to present content that is vital to a thorough understanding of investment management in the most effective way. It uses real-world illustrations and hands-on exercises to bring investment concepts to life for students. The 11th edition continues its tradition of unparalleled international coverage. It also offers expanded discussions of the impact of changes in both technology and regulations on the functioning and organization of global security markets and devotes three chapters to derivatives securities.

Ethics Emphasis: Insightful discussions of codes of ethics highlight the importance--and sometimes lack--of ethics in today's financial markets, prompting students to examine and shore up their personal principles and values and make the important decisions well before they actually have to face them.

Concise Presentation: More streamlined than ever, the 11th edition delivers comprehensive yet succinct coverage, providing just the right amount of detail to ensure solid student understanding while giving you the flexibility to cover more ground in the span of the course.

Global Perspective: INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT, 11th edition, continues to lead the market with the most comprehensive coverage of international issues available.

Table of contents

Chapters

Cover Page
Title Page
Copyright Page
Dedication
Preface
Acknowledgments
About the Authors
Part 1. The Investment Background
Part 2. Developments in Investment Theory
Part 3. Valuation and Management of Common Stocks
Part 4. Valuation and Management of Bonds
Part 5. Derivative Security Analysis
Part 6. Analysis and Evaluation of Asset Management
Appendix A. The CFA® Charter
Appendix B. Code of Ethics and Standards of Professional Conduct
Appendix C. Interest Tables
Appendix D. Standard Normal Probabilities
Comprehensive References List.
Show more

Part 1. The Investment Background

Chapter 1. The Investment Setting
Preview this section ↗
1.1. What Is an Investment? ↗
1.1.1. Investment Defined ↗
1.2. Measures of Return and Risk ↗
1.2.1. Measures of Historical Rates of Return ↗
1.2.2. Computing Mean Historical Returns ↗
1.2.3. Calculating Expected Rates of Return ↗
1.2.4. Measuring the Risk of Expected Rates of Return ↗
1.2.5. Risk Measures for Historical Returns ↗
1.3. Determinants of Required Rates of Return ↗
1.3.1. The Real Risk-Free Rate ↗
1.3.2. Factors Influencing the Nominal Risk-Free Rate (NRFR) ↗
1.3.3. Risk Premium ↗
1.3.4. Risk Premium and Portfolio Theory ↗
1.3.5. Fundamental Risk versus Systematic Risk ↗
1.3.6. Summary of Required Rate of Return ↗
1.4. Relationship between Risk and Return ↗
1.4.1. Movements along the SML ↗
1.4.2. Changes in the Slope of the SML ↗
1.4.3. Changes in Capital Market Conditions or Expected Inflation ↗
1.4.4. Summary of Changes in the Required Rate of Return ↗
Summary ↗
Suggested Readings ↗
Questions ↗
Problems ↗
Chapter 1. Appendix ↗
Chapter 2. Asset Allocation and Security Selection
2.1. Individual Investor Life Cycle
2.1.1. The Preliminaries
2.1.2. Investment Strategies Over an Investor’s Lifetime
2.1.3. Life Cycle Investment Goals
2.2. The Portfolio Management Process
2.3. The Need for a Policy Statement
2.3.1. Understanding and Articulating Realistic Investor Goals
2.3.2. Standards for Evaluating Portfolio Performance
2.3.3. Other Benefits
2.4. Input to the Policy Statement
2.4.1. Investment Objectives
2.4.2. Investment Constraints
2.5. Constructing the Policy Statement
2.5.1. General Guidelines
2.5.2. Some Common Mistakes
2.6. The Importance of Asset Allocation
2.6.1. Investment Returns after Taxes and Inflation
2.6.2. Returns and Risks of Different Asset Classes
2.6.3. Asset Allocation Summary
2.7. The Case for Global Investments
2.7.1. Relative Size of U.S. Financial Markets
2.7.2. Rates of Return on U.S. and Foreign Securities
2.7.3. Risk of Diversified Country Investments
2.8. Historical Risk-Returns on Alternative Investments
2.8.1. World Portfolio Performance
2.8.2. Art and Antiques
2.8.3. Real Estate
Summary
Suggested Readings
Questions
Problems
Chapter 2. Appendix
Chapter 3. Organization and Functioning of Securities Markets
3.1. What Is a Market?
3.1.1. Characteristics of a Good Market
3.1.2. Decimal Pricing
3.1.3. Organization of the Securities Market
3.2. Primary Capital Markets
3.2.1. Government Bond Issues
3.2.2. Municipal Bond Issues
3.2.3. Corporate Bond Issues
3.2.4. Corporate Stock Issues
3.2.5. Private Placements and Rule 144A
3.3. Secondary Financial Markets
3.3.1. Why Secondary Markets Are Important
3.3.2. Secondary Bond Markets
3.3.3. Financial Futures
3.3.4. Secondary Equity Markets
3.3.5. Exchange Market-Makers
3.4. Classification of U.S. Secondary Equity Markets
3.4.1. Primary Listing Markets
3.4.2. The Significant Transition of the U.S. Equity Markets
3.5. Alternative Types of Orders Available
3.5.1. Market Orders
3.5.2. Limit Orders
3.5.3. Special Orders
3.5.4. Margin Transactions
3.5.5. Short Sales
3.5.6. Exchange Merger Mania
Summary
Suggested Readings
Questions
Problems
Chapter 4. Security Markets Indexes and Index Funds
4.1. Uses of Security Market Indexes
4.2. Differentiating Factors in Constructing Market Indexes
4.2.1. The Sample
4.2.2. Weighting Sample Members
4.2.3. Computational Procedure
4.3. Stock Market Indexes
4.3.1. Price-Weighted Index
4.3.2. Value-Weighted Index
4.3.3. Unweighted Index
4.3.4. Fundamental Weighted Index
4.3.5. Style Indexes
4.3.6. Global Equity Indexes
4.4. Bond Market Indexes
4.4.1. U.S. Investment-Grade Bond Indexes
4.4.2. High-Yield Bond Indexes
4.4.3. Global Government Bond Indexes
4.5. Composite Stock–Bond Indexes
4.6. Comparison of Indexes Over Time
4.6.1. Correlations between Monthly Equity Price Changes
4.6.2. Correlations between Monthly Bond Index Returns
4.7. Investing in Security Market Indexes
Index Funds
Summary
Suggested Readings
Questions
Problems
Chapter 4. Appendix

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