Strengthen students' knowledge and skills in traditional investments information as well as portfolio theory with the latest edition of this unique applications-oriented text. Strong'sPORTFOLIO CONSTRUCTION, MANAGEMENT, AND PROTECTION, 5E, transitions students from theory to practice with a straightforward approach that balances coverage of both the small and large investor. This edition addresses unique topics not found in other texts, such as fiduciary duty and investment policy. The book's blend of theory and applications covers the objectives of both the traditional investments course and portfolio theory course, making it an ideal solution for schools without a dedicated portfolio course. Abundant references to the CFA exam and questions drawn from the CFA exam help students prepare for future success.
PORTFOLIO MEMOS EMPHASIZE APPLICATION: Portfolio Memo boxes throughout the book demonstrate how students can apply the finance concepts they have just learned to real-world situations.
MARGIN NOTES AND WEB REFERENCES REINFORCE CONCEPTS: Key Margin Notes throughout the book amplify important concepts and help students remember terms and concepts as they review for exams. Web references in the margins provide convenient resources to use for studying additional information.
EXTENSIVE FIGURES AND TABLES PROVIDE QUICK REFERENCE: This edition's extensive collection of figures and tables summarizes chapter content for quick student reference and ease in studying.
VARIETY OF PRACTICAL APPLICATIONS HELP IN PREPARING FOR CFA EXAM:End-of-chapter summaries, questions, problems, and Internet-based exercises help students practice and apply chapter concepts. Many of the problems are linked to the CFA exam to provide critical practice in taking the exam. Excel files for solving many of the problems are available on the book's companion site: academic.cengage.com/finance/strong.
APPENDICES OFFER IN-DEPTH COVERAGE OF ADDITIONAL TOPICS: Three appendices provide in-depth coverage and analysis of additional topics of interest. The first appendix, found after Chapter 3, details a term-length student project on mutual funds
New to This Edition
NEW CHAPTERS ADDRESS RECENT INVESTMENT CHANGES: In response to feedback from instructors like you as well as to changes in today's investment world, two new chapters have been added: "Stock Selection Models" (Chapter 10) and "Alternative Investments" (Chapter 14).
NEW CHAPTER (CHAPTER 10) PROVIDES IMPORTANT FINANCIAL BACKGROUND:Building on the material presented in Chapter 9, Chapter 10 emphasizes a general understanding of the selection process once stocks have been evaluated, which is useful for everyone studying finance. This content is particularly valuable for students who have not taken a preliminary investments course.
NEW CHAPTER (CHAPTER 14) EXPLORES ALTERNATIVE ASSETS AND EMERGING TREND: Students examine the increasing role of alternative assets in investment portfolios, especially those of institutional investors. Students gain an understanding of emerging trends such as hedge funds, infrastructure investing, and long-short portfolios. The chapter's broad overview of this asset class examines why it is important.
NEW TOPICS REFLECT MOST RECENT INDUSTRY DEVELOPMENTS: This edition reflects the latest data and numerous new market-driven topics such as Volume Weighted Average Price (VWAP) and implementation shortfall as an evaluation measure. Students examine online services such as the Value Line Investment Analyzer and stock screeners available at Yahoo! and Morningstar. New discussion highlights single stock futures as a hedging tool (Chapter 22).
Table of Contents PART I: BACKGROUND, BASIC PRINCIPLES, AND INVESTMENT POLICY.
1. The Process of Portfolio Management.
2. Valuation, Risk, Return, and Uncertainty.
3. Setting Portfolio Objectives.
4. Investment Policy.
PART II: PORTFOLIO CONSTRUCTION.
5. The Mathematics of Diversification.
6. Why Diversification Is a Good Idea.
7. International Investment and Diversification.
8. The Capital Markets and Market Efficiency.
9. Picking the Equity Players.
10. Stock Selection Models.
11. Security Screening.
12. Bond Pricing and Selection.
13. The Role of Real Assets.
14. Alternative Investments.
PART III: PORTFOLIO MANAGEMENT.
15. Revision of the Equity Portfolio.
16. Revision of the Fixed Income Portfolio.
17. Principles of Options and Option Pricing.
18. Option Overwriting.
19. Performance Evaluation.
20. Fiduciary Duties and Responsibilities.
PART IV: PORTFOLIO PROTECTION AND EMERGING TOPICS.
21. Principles of the Futures Market.
22. Benching the Equity Players.
23. Removing Interest Rate Risk.
24. Integrating Derivative Assets and Portfolio Management.
25. Contemporary Issues in Portfolio Management.