312 pages | 63 B/W Illus.
The textbook is designed as a core text for finance courses that cover market investments, portfolio formation and the management of investment portfolios. As such, the text seeks to convey insight and actual wisdom as to the nature of these activities. When combined with a commitment to thinking independently, the text offers the student a rigorous preparation for entry to the funds management industry.
The text is presented in three parts. In Part A, the text introduces the fundamental techniques of investment analysis: a "bottom-up" and "top-down" analysis of the firm aimed at an evaluation of the underlying share as a "buy", "hold", or a "sell" recommendation. Part B offers the reader an intuitive grasp of the nature of investment growth, both across time and across assets. Part C introduces the reader to the technicalities of portfolio construction and portfolio management. The text concludes with an assessment of the funds management industry.
The text builds in step-by-step stages with illustrative examples that consolidate the student’s progress and understanding through each chapter. Each of parts A, B, and C (above) has sufficient material to justify a separate course. If the student has exposure to a more foundational course in finance, parts A and B can be covered as a single course. If from other courses, the student is familiar with the essence of parts A and B and with statistical concepts, the text can be covered as a single course. The text can therefore be presented readily at either an undergraduate or postgraduate level at a pace appropriate to the student’s prior exposure to the concepts.
"This book offers a comprehensive, yet intuitive, overview of portfolio theory and investment analysis for a student with little background in these subjects. I especially like how self-contained and accessible the book is. A beginning student with a little mathematics background should have no difficulty following the arguments and formulae." — Professor Raghavendra Rau, Sir Evelyn de Rothschild Professor of Finance, Cambridge Judge Business School, University of Cambridge, Cambridge
"This book is organized in three excellent parts. The author, Michael Dempsey, not only provides a great depth of knowledge about the foundations of investments, portfolio analysis and management, but also shows carefully how the techniques acquired can be used and implemented in various business situations. Students and professionals who want to excel in the financial services industry would greatly benefit from reading this interesting book." — Duc Khuong Nguyen, Professor of Finance, Head, Department of Finance, Auditing and Accounting, Deputy Director for Research, IPAG Business School, Paris.
"Professor Dempsey does an excellent job in explaining investment and portfolio management in a clear and easy-to-understand style. The illustrative examples in the text will surely help students better understand complexities and bring more clarity to the analysis. I highly encourage anyone with an interest in finance, students and professionals alike, to read this book and to have it on their shelves." — Sabri Boubaker, Ph.D., Professor of Finance, South Champagne Business School & University of Paris Est
2. The Nature of Growth (the exponential function)
3. Prediction of Returns (the normal distribution)
4. Predicting Portfolio Performance (standard deviations and co-variances)
5. Predicting Returns over many Periods (binomial trees)
6. Growth with Many Independent Assets
7. The Fundamentals of Growth, Asset Pricing, and Portfolio Allocation
8. A Fundamental Model of Asset Pricing and Portfolio Allocation
9. Stock Mispricing
10. Portfolio Algorithms
11. Institutional Portfolio Management