{"product_id":"the-theory-and-practice-of-investment-management-isbn-9780470929902","title":"The Theory and Practice of Investment Management","description":"\u003cb\u003eAn updated guide to the theory \u003ci\u003eand\u003c\/i\u003e practice of investment management\u003c\/b\u003e  \u003cp\u003eMany books focus on the theory of investment management and leave the details of the implementation of the theory up to you. This book illustrates how theory is applied in practice while stressing the importance of the portfolio construction process.\u003c\/p\u003e \u003cp\u003eThe \u003ci\u003eSecond Edition\u003c\/i\u003e of \u003ci\u003eThe Theory and Practice of Investment Management\u003c\/i\u003e is the ultimate guide to understanding the various aspects of investment management and investment vehicles. Tying together theoretical advances in investment management with actual practical applications, this book gives you a unique opportunity to use proven investment management techniques to protect and grow a portfolio under many different circumstances.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eContains new material on the latest tools and strategies for both equity and fixed income portfolio management\u003c\/li\u003e \u003cli\u003eIncludes key take-aways as well as study questions at the conclusion of each chapter\u003c\/li\u003e \u003cli\u003eA timely updated guide to an important topic in today's investment world\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eThis comprehensive investment management resource combines real-world financial knowledge with investment management theory to provide you with the practical guidance needed to succeed within the investment management arena.\u003c\/p\u003e \u003cp\u003eAbout the Editors xiii\u003c\/p\u003e \u003cp\u003eContributing Authors xv\u003c\/p\u003e \u003cp\u003eForeword xvii\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART ONE Instruments, Asset Allocation, Portfolio Selection, and Asset Pricing 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 1 Overview of Investment Management 3\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eFrank J. Fabozzi and Harry M. Markowitz\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eSetting Investment Objectives 4\u003c\/p\u003e \u003cp\u003eEstablishing an Investment Policy 4\u003c\/p\u003e \u003cp\u003eSelecting a Portfolio Strategy 6\u003c\/p\u003e \u003cp\u003eConstructing the Portfolio 6\u003c\/p\u003e \u003cp\u003eMeasuring and Evaluating Performance 7\u003c\/p\u003e \u003cp\u003eKey Points 14\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 2 Asset Classes, Alternative Investments, Investment Companies, and Exchange-Traded Funds 15\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eMark J. P. Anson, Frank J. Fabozzi, and Frank J. Jones\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eAsset Classes 15\u003c\/p\u003e \u003cp\u003eOverview of Alternative Asset Products 21\u003c\/p\u003e \u003cp\u003eInvestment Companies 31\u003c\/p\u003e \u003cp\u003eExchange-Traded Funds 36\u003c\/p\u003e \u003cp\u003eMutual Funds vs. ETFs: Relative Advantages 39\u003c\/p\u003e \u003cp\u003eKey Points 41\u003c\/p\u003e \u003cp\u003eQuestions 44\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 3 Portfolio Selection 45\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eFrank J. Fabozzi, Harry M. Markowitz, Petter N. Kolm, and Francis Gupta\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eSome Basic Concepts 47\u003c\/p\u003e \u003cp\u003eMeasuring a Portfolio’s Expected Return 49\u003c\/p\u003e \u003cp\u003eMeasuring Portfolio Risk 52\u003c\/p\u003e \u003cp\u003ePortfolio Diversification 56\u003c\/p\u003e \u003cp\u003eChoosing a Portfolio of Risky Assets 60\u003c\/p\u003e \u003cp\u003eIssues in Portfolio Selection 68\u003c\/p\u003e \u003cp\u003eKey Points 76\u003c\/p\u003e \u003cp\u003eQuestions 78\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 4 Capital Asset Pricing Models 79\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eFrank J. Fabozzi and Harry M. Markowitz\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eSharpe-Lintner CAPM 79\u003c\/p\u003e \u003cp\u003eRoy CAPM 81\u003c\/p\u003e \u003cp\u003eConfusions Regarding the CAPM 82\u003c\/p\u003e \u003cp\u003eTwo Meanings of Market Efficiency 83\u003c\/p\u003e \u003cp\u003eCAPM Investors Do Not Get Paid for Bearing Risk 94\u003c\/p\u003e \u003cp\u003eThe “Two Beta” Trap 95\u003c\/p\u003e \u003cp\u003eKey Points 100\u003c\/p\u003e \u003cp\u003eQuestions 101\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 5 Factor Models 103\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eGuofu Zhou and Frank J. Fabozzi\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eArbitrage Pricing Theory 104\u003c\/p\u003e \u003cp\u003eTypes of Factor Models 105\u003c\/p\u003e \u003cp\u003eFactor Model Estimation 112\u003c\/p\u003e \u003cp\u003eKey Points 118\u003c\/p\u003e \u003cp\u003eAppendix: Principal Component Analysis in Finance 119\u003c\/p\u003e \u003cp\u003eQuestions 124\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 6 Modeling Asset Price Dynamics 125\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eDessislava A. Pachamanova and Frank J. Fabozzi\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eFinancial Time Series 125\u003c\/p\u003e \u003cp\u003eBinomial Trees 127\u003c\/p\u003e \u003cp\u003eArithmetic Random Walks 128\u003c\/p\u003e \u003cp\u003eGeometric Random Walks 134\u003c\/p\u003e \u003cp\u003eMean Reversion 142\u003c\/p\u003e \u003cp\u003eAdvanced Random Walk Models 148\u003c\/p\u003e \u003cp\u003eStochastic Processes 152\u003c\/p\u003e \u003cp\u003eKey Points 157\u003c\/p\u003e \u003cp\u003eQuestions 158\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 7 Asset Allocation and Portfolio Construction 159\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eNoël Amenc, Felix Goltz, Lionel Martellini, and Vincent Milhau\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eAsset Allocation and Portfolio Construction Decisions in the Optimal Design of the Performance-Seeking Portfolio 161\u003c\/p\u003e \u003cp\u003eAsset Allocation and Portfolio Construction Decisions in the Optimal Design of the Liability-Hedging Portfolio 173\u003c\/p\u003e \u003cp\u003eDynamic Allocation Decisions to the Performance-Seeking and Liability-Hedging Portfolios 179\u003c\/p\u003e \u003cp\u003eKey Points 195\u003c\/p\u003e \u003cp\u003eAppendix 196\u003c\/p\u003e \u003cp\u003eQuestions 202\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART TWO Equity Analysis and Portfolio Management 205\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 8 Fundamentals of Common Stock 207\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eFrank J. Fabozzi, Frank J. Jones, Robert R. Johnson, and Pamela P. Drake\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eEarnings 208\u003c\/p\u003e \u003cp\u003eDividends 210\u003c\/p\u003e \u003cp\u003eThe U.S. Equity Markets 213\u003c\/p\u003e \u003cp\u003eTrading Mechanics 215\u003c\/p\u003e \u003cp\u003eTrading Costs 220\u003c\/p\u003e \u003cp\u003eStock Market Indicators 222\u003c\/p\u003e \u003cp\u003eKey Points 224\u003c\/p\u003e \u003cp\u003eQuestions 226\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 9 Common Stock Portfolio Management Strategies 229\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eFrank J. Fabozzi, James L. Grant, and Raman Vardharaj\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eIntegrating the Equity Portfolio Management Process 229\u003c\/p\u003e \u003cp\u003eCapital Market Price Efficiency 230\u003c\/p\u003e \u003cp\u003eTracking Error and Related Measures 233\u003c\/p\u003e \u003cp\u003eActive vs. Passive Portfolio Management 239\u003c\/p\u003e \u003cp\u003eEquity Style Management 240\u003c\/p\u003e \u003cp\u003ePassive Strategies 245\u003c\/p\u003e \u003cp\u003eActive Investing 247\u003c\/p\u003e \u003cp\u003ePerformance Evaluation 264\u003c\/p\u003e \u003cp\u003eKey Points 267\u003c\/p\u003e \u003cp\u003eQuestions 268\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 10 Approaches to Common Stock Valuation 271\u003cbr\u003e\u003c\/b\u003e\u003ci\u003ePamela P. Drake, Frank J. Fabozzi, and Glen A. Larsen Jr.\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eDiscounted Cash Flow Models 271\u003c\/p\u003e \u003cp\u003eRelative Valuation Methods 278\u003c\/p\u003e \u003cp\u003eKey Points 284\u003c\/p\u003e \u003cp\u003eQuestions 285\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 11 Quantitative Equity Portfolio Management 287\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eAndrew Alford, Robert Jones, and Terence Lim\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eTraditional and Quantitative Approaches to Equity Portfolio Management 289\u003c\/p\u003e \u003cp\u003eForecasting Stock Returns, Risks, and Transaction Costs 292\u003c\/p\u003e \u003cp\u003eConstructing Portfolios 298\u003c\/p\u003e \u003cp\u003eTrading 300\u003c\/p\u003e \u003cp\u003eEvaluating Results and Updating the Process 302\u003c\/p\u003e \u003cp\u003eKey Points 304\u003c\/p\u003e \u003cp\u003eQuestions 305\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 12 Long-Short Equity Portfolios 307\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eBruce I. Jacobs and Kenneth N. Levy\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eConstructing a Market-Neutral Portfolio 308\u003c\/p\u003e \u003cp\u003eThe Importance of Integrated Optimization 312\u003c\/p\u003e \u003cp\u003eAdding Back a Market Return 316\u003c\/p\u003e \u003cp\u003eSome Concerns Addressed 321\u003c\/p\u003e \u003cp\u003eEvaluating Long-Short 323\u003c\/p\u003e \u003cp\u003eKey Points 324\u003c\/p\u003e \u003cp\u003eQuestions 325\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 13 Multifactor Equity Risk Models 327\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eFrank J. Fabozzi, Raman Vardharaj, and Frank J. Jones\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eModel Description and Estimation 328\u003c\/p\u003e \u003cp\u003eRisk Decomposition 330\u003c\/p\u003e \u003cp\u003eApplications in Portfolio Construction and Risk Control 336\u003c\/p\u003e \u003cp\u003eKey Points 341\u003c\/p\u003e \u003cp\u003eQuestions 343\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 14 Fundamentals of Equity Derivatives 345\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eBruce M. Collins and Frank J. Fabozzi\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eThe Role of Derivatives 345\u003c\/p\u003e \u003cp\u003eListed Equity Options 348\u003c\/p\u003e \u003cp\u003eFutures Contracts 366\u003c\/p\u003e \u003cp\u003ePricing Stock Index Futures 370\u003c\/p\u003e \u003cp\u003eOTC Equity Derivatives 375\u003c\/p\u003e \u003cp\u003eStructured Products 380\u003c\/p\u003e \u003cp\u003eKey Points 381\u003c\/p\u003e \u003cp\u003eQuestions 382\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 15 Using Equity Derivatives in Portfolio Management 383\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eBruce M. Collins and Frank J. Fabozzi\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eEquity Investment Management 384\u003c\/p\u003e \u003cp\u003ePortfolio Applications of Listed Options 386\u003c\/p\u003e \u003cp\u003ePortfolio Applications of Stock Index Futures 390\u003c\/p\u003e \u003cp\u003eApplications of OTC Equity Derivatives 399\u003c\/p\u003e \u003cp\u003eRisk and Expected Return of Option Strategies 410\u003c\/p\u003e \u003cp\u003eKey Points 413\u003c\/p\u003e \u003cp\u003eQuestions 414\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART THREE Bond Analysis and Portfolio Management 415\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 16 Bonds, Asset-Backed Securities, and Mortgage- Backed Securities 417\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eFrank J. Fabozzi\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eGeneral Features of Bonds 417\u003c\/p\u003e \u003cp\u003eU.S. Treasury Securities 421\u003c\/p\u003e \u003cp\u003eFederal Agency Securities 423\u003c\/p\u003e \u003cp\u003eCorporate Bonds 424\u003c\/p\u003e \u003cp\u003eMunicipal Securities 428\u003c\/p\u003e \u003cp\u003eAsset-Backed Securities 430\u003c\/p\u003e \u003cp\u003eResidential Mortgage-Backed Securities 434\u003c\/p\u003e \u003cp\u003eCommercial Mortgage-Backed Securities 450\u003c\/p\u003e \u003cp\u003eKey Points 453\u003c\/p\u003e \u003cp\u003eQuestions 456\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 17 Bond Analytics 457\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eFrank J. Fabozzi\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eBasic Valuation of Option-Free Bonds 457\u003c\/p\u003e \u003cp\u003eConventional Yield Measures 463\u003c\/p\u003e \u003cp\u003eTotal Return 468\u003c\/p\u003e \u003cp\u003eMeasuring Interest Rate Risk 471\u003c\/p\u003e \u003cp\u003eKey Points 484\u003c\/p\u003e \u003cp\u003eQuestions 486\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 18 Bond Analytics 489\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eFrank J. Fabozzi and Steven V. Mann\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eArbitrage-Free Bond Valuation 489\u003c\/p\u003e \u003cp\u003eYield Spread Measures 496\u003c\/p\u003e \u003cp\u003eForward Rates 498\u003c\/p\u003e \u003cp\u003eOverview of the Valuation of Bonds with Embedded Options 505\u003c\/p\u003e \u003cp\u003eLattice Model 507\u003c\/p\u003e \u003cp\u003eValuation of MBS and ABS 522\u003c\/p\u003e \u003cp\u003eKey Points 531\u003c\/p\u003e \u003cp\u003eQuestions 533\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 19 Bond Portfolio Strategies for Outperforming a Benchmark 535\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eBülent Baygün and Robert Tzucker\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eSelecting the Benchmark Index 536\u003c\/p\u003e \u003cp\u003eCreating a Custom Index 539\u003c\/p\u003e \u003cp\u003eBeating the Benchmark Index 544\u003c\/p\u003e \u003cp\u003eKey Points 553\u003c\/p\u003e \u003cp\u003eQuestions 554\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 20 \u003c\/b\u003e\u003cb\u003eThe Art of Fixed Income Portfolio Investing 557\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eChris P. Dialynas and Ellen J. Rachlin The Global Fixed Income Portfolio Manager 558\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eThe Global Challenge 565\u003c\/p\u003e \u003cp\u003ePortfolio Parameters 565\u003c\/p\u003e \u003cp\u003eRegulatory Changes, Demographic Trends, and Institutional Bias 568\u003c\/p\u003e \u003cp\u003eInformation in the Markets 569\u003c\/p\u003e \u003cp\u003eDuration and Yield Curve 573\u003c\/p\u003e \u003cp\u003eVolatility 574\u003c\/p\u003e \u003cp\u003eInternational Corporate Bonds 577\u003c\/p\u003e \u003cp\u003eInternational Investing and Political Externalities 579\u003c\/p\u003e \u003cp\u003eForeign Investment Selection 579\u003c\/p\u003e \u003cp\u003eCurrency Selection 582\u003c\/p\u003e \u003cp\u003eKey Points 583\u003c\/p\u003e \u003cp\u003eQuestions 584\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 21 Multifactor Fixed Income Risk Models and Their Applications 585\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eAnthony Lazanas, António Baldaque da Silva, Radu Găbudean, and Arne D. Staal\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eApproaches Used to Analyze Risk 587\u003c\/p\u003e \u003cp\u003eApplications of Risk Modeling 615\u003c\/p\u003e \u003cp\u003eKey Points 621\u003c\/p\u003e \u003cp\u003eQuestions 622\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 22 Interest Rate Derivatives and Risk Control 623\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eFrank J. Fabozzi\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eInterest Rate Futures and Forward Contracts 623\u003c\/p\u003e \u003cp\u003eInterest Rate Swaps 634\u003c\/p\u003e \u003cp\u003eInterest Rate Options 640\u003c\/p\u003e \u003cp\u003eInterest Rate Agreements (Caps and Floors) 642\u003c\/p\u003e \u003cp\u003eKey Points 643\u003c\/p\u003e \u003cp\u003eQuestions 644\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 23 Credit Default Swaps and the Indexes 647\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eStephen J. Antczak, Douglas J. Lucas, and Frank J. Fabozzi\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003eWhat Are Credit Default Swaps? 648\u003c\/p\u003e \u003cp\u003eCredit Default Swaps Indexes 654\u003c\/p\u003e \u003cp\u003eKey Points 658\u003c\/p\u003e \u003cp\u003eQuestions 658\u003c\/p\u003e \u003cp\u003eAbout the Web Site 661\u003c\/p\u003e \u003cp\u003eIndex 663\u003c\/p\u003e \u003cb\u003eFRANK J. FABOZZI\u003c\/b\u003e, PhD, CFA, CPA, is Professor in the Practice of Finance and Becton Fellow at the Yale School of Management, Editor of the Journal of Portfolio Management, and an Associate Editor of the \u003ci\u003eJournal of Fixed Income\u003c\/i\u003e. He is on the Advisory Council for the Department of Operations Research and Financial Engineering at Princeton University. \u003cp\u003e\u003cb\u003eHARRY M. MARKOWITZ\u003c\/b\u003e, PHD, is a consultant in the area of finance. In 1990, he was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his groundbreaking work in portfolio theory. In 1989, he received the John von Neumann Theory Prize from the Operations Research Society of America for his work in portfolio theory and other applications of mathematics and computers to business practice.\u003c\/p\u003e   \u003cp\u003e\u003cb\u003eTHE THEORY AND PRACTICE OF INVESTMENT MANAGEMENT\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003eSECOND EDITION \u003c\/p\u003e\u003cp\u003eIn the challenging post–financial crisis environment, investment managers require an understanding of a multitude of different issues, from how investment objectives are determined to the best way to construct a portfolio given an investment strategy. The \u003ci\u003eSecond Edition\u003c\/i\u003e of\u003ci\u003e The Theory and Practice of Investment Management\u003c\/i\u003e recognizes these needs and addresses them with innovative insights from some of the most respected experts in the field of investment management. \u003c\/p\u003e\u003cp\u003eLed by financial experts Frank Fabozzi and Harry Markowitz, the contributors to this book—successful practitioners with hands-on expertise—combine real-world financial knowledge with investment management theory to provide you with the practical guidance needed to succeed within today's investment management arena. \u003c\/p\u003e\u003cp\u003eDivided into three comprehensive parts—(I) Instruments, Asset Allocation, Portfolio Selection, and Asset Pricing; (II) Equity Analysis and Portfolio Management; (III) Bond Analysis and Portfolio Management—this comprehensive investment management resource offers valuable insights and analysis of all pertinent investment products while exploring a wide range of investment strategies. \u003c\/p\u003e\u003cp\u003eEngaging and informative, the \u003ci\u003eSecond Edition\u003c\/i\u003e of \u003ci\u003eThe Theory and Practice of Investment Management\u003c\/i\u003e skillfully covers some of the most important aspects of this discipline along with the investment vehicles associated with it. Essential reading for practitioners and students alike, this valuable guide—which contains key points and challenging questions in each chapter—will help you use proven investment management techniques to protect and grow a portfolio within today's dynamic financial environment.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990353035493,"sku":"NP9780470929902","price":100.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780470929902.jpg?v=1761787478","url":"https:\/\/k12savings.com\/es\/products\/the-theory-and-practice-of-investment-management-isbn-9780470929902","provider":"K12savings","version":"1.0","type":"link"}