Investments, BKM Ch 1
Zvi Wiener
02-588-3049
mswiener@mscc.huji.ac.il
Spring-03
http://pluto.mscc.huji.ac.il/~mswiener/zvi.html
Investments
Main Textbook
Bodie, Kane, Marcus, Investments,
Irwin McGraw-Hill, 5 edition
Following economic and financial news is
important!
Zvi Wiener
BKM Ch 1
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Part 1: Introduction
1. The Investment Environment
2. Markets and Instruments
3. How Securities are Traded
4. Mutual Funds and Other
Investment Companies
5. History of Interest Rates and Risk
Premiums
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BKM Ch 1
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Part 2: Portfolio Theory
6. Risk and Risk Aversion
7. Capital Allocation Between the
Risky Asset and the Risk-Free Asset
8. Optimal Risky Portfolios
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BKM Ch 1
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Part 3: Equilibrium in Capital
Markets
9. The Capital Asset Pricing Model
10. Single-Index and Multifactor
Models
11. Arbitrage Pricing Theory
12. Market Efficiency
13. Empirical Evidence on Security
Returns
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BKM Ch 1
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Part 4: Fixed-Income Securities
14. Bond Prices and Yields
15. The Term Structure of Interest Rates
16. Fixed-Income Portfolio Management
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BKM Ch 1
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Part 5: Security Analysis
17. Macroeconomic and Industry Analysis
18. Equity Valuation Models
19. Financial Statement Analysis
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BKM Ch 1
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Part 6: Options, Futures, and
Other Derivatives
20. Options Markets: Introduction
21. Option Valuation
22. Futures Markets
23. Futures and Swaps: A Closer Look
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BKM Ch 1
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Part 7: Applied Portfolio
Management
24. Portfolio Performance Evaluation
25. International Diversification
26. The Process of Portfolio Management
27. The Theory of Active Portfolio
Management
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BKM Ch 1
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If you need additional Assistance
1. Look in the book/slides.
2. Send an e-mail to the TA.
3. Request a further explanation in the help session.
4. Send an e-mail to me with a copy of the answer you
got from the TA.
If you need to meet with me, please send me an e-mail
with your name and a short description of the question
you have. I will set up an appointment and try to resolve
the problem.
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BKM Ch 1
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Common courses:
math, accounting, law, economics
Introduction to Finance
Corporate Finance
Investments
Financial Intermediaries
Derivatives
Government and Finance
Risk Management
Investment Banking
Banking
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BKM Ch 1
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Real assets
are used to produce goods and services.
Land, building, machines, knowledge,
goodwill, etc.
Financial assets
are claims on real assets or their income.
Stock, money, bond, option.
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BKM Ch 1
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Groups of Users
Individuals (Households)
Companies (Business Sector)
Government and Agencies
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BKM Ch 1
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Companies
Non Financial Companies
Financial Intermediaries
both assets and liabilities are financial assets
exists because small investors are limited
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BKM Ch 1
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Financial Intermediaries
Commercial Banks
Investment Banks
Exchanges
Pension Funds
Insurance Companies
Credit Card Companies
Mortgage Companies
S&L,
Credit
Unions
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BKM Ch 1
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Government
Budget Spending
Regulator of Banks
Interest Rates (FED)
Tax Authorities
Insurance
very good credit rating - low risk
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BKM Ch 1
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Types of Markets
Direct Search Markets
Brokered Markets
Dealer Markets
Auction Markets
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BKM Ch 1
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Ongoing Trends
Globalization
Securitization
Credit Enhancement
Financial Engineering
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BKM Ch 1
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Summary
real assets and financial assets
households, businesses, and government
diverse risk and tax preferences
financial intermediaries
direct search, brokered, dealer, auction
stockholders own the companies, bondholders
lend money
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BKM Ch 1
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Markets and Instruments
Money Market (up to 1 year to maturity)
The Fixed-Income Capital Market
Equity Securities
Stock and Bond Market Indexes
Derivative Markets
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BKM Ch 1
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Home Assignment
Chapter 1
Questions 2, 10, 14
Visits the Internet site of the TA stock
exchange. What is MAYA? What type of
information one can find there?
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BKM Ch 1
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