Investment analysis and portfolio management.

Cover
Contents
Part 1 INTRODUCTION
	1. Overview; A Broad Map of the Territory
		1.1 Investment versus Speculation
		1.2 Investment Alternatives and Their Evaluation
		1.3 Financial Markets
		1.4 Portfolio Management Process
		1.5 Approaches to Investment Decision Making
		1.6 Common Errors in Investment Management
		1.7 Qualities for Successful Investing
		1.8 Proverbial Investment Wisdom
			Summary
			Questions
			Appmdix lA: Three Approaches to Succeed as an Investor
	2. Investment Alternatives; Choices Galore
		2.1 Non-marketable Financial Assets
		2.2 Money Market Instruments
		2.3 Bonds or Debentures
		2.4 Equity Shares
		2.5 Mutual Fund Schemes
		2.6 Financial Derivatives
		2.7 Life Insurance
		2.8 Real Assets
			Summary
			Questions
	3. Securities Market: The Battlefield
		3.1 Participants in the Securities Market
		3.2 Primary Equity Market
		3.3 Secondary Equity Market (Stock Market)
		3.4 Trading and Settlement
		3.5 Buying and Selling Shares
		3.6 Buying on Margin and Short Sale
		3.7 Stock Market Quotations and Indices
		3.8 SEBI and Future Challenges
		3.9 Stock Market Abroad
		3.10 Should Trading Be Regulated?
		3.11 Government Securities Market
		3.12 Corporate Debt Market
		3.13 Money Market
			Summary
			Questions
			Solved Problem
			Problems
Part 2 BASIC CONCEPTS AND METHODS
	4. Risk and Return: Two Sides of the Investment Coin
		4.1 Return
		4.2 Risk
		4.3 Measuring Historical Return
		4.4 Measuring Historical Risk
		4.5 Measuring Expected (Ex Ante) Return and Risk
			Summary
			Questions
			Solved Problems
			Problems
	5. The Time Value of Money: The Magic of Compounding
		5.1 Time Lines and Notation
		5.2 Future Value of A Single Amount
		5.3 Present Value of A Single Amount
		5.4 Future Value of an Annuity
		5.5 Present Value of an Annuity
		5.6 Present Value of A Perpetuity
		5.7 Intra-year Compounding and Discounting
			Summary
				Questions
				Solved Problcrns
				Problems
				Minicase
	6. Financial Statement Analysis: The Information Maze
		6.1 Financial Statements
		6.2 Generally Accepted Accounting Principles
		6.3 Financial Ratios
		6.4 Du Pont Analysis
		6.5 Standardised Financial Statements
		6.6 Applications of Financial Statement Analysis
		6.7 Using Financial Statement Analysis
		6.8 Going Beyond the Numbers
			Summary
				Questions
				Solved Problcrns
				Problcrns
				Minicase
Part 3 MODERN PORTFOLIO THEORY
	7. Portfolio Theory: The Benefits of Diversification
		7.1 Diversification and Portfolio Risk
		7.2 Portfolio Return and Risk
		7.3 Measurement of Comovements in Security Returns
		7.4 Calculation of Portfolio Risk
		7.5 Efficient Frontier
		7.6 Optimal Portfolio
		7.7 Riskless Lending and Borrowing
		7.8 The Single Index Model
			Summary
				Questions
				Solved Problems
				Problems
	8. Capital Asset Pricing Model and Arbitrage Pricing Theory : The Risk Reward Relationship
		8.1 Capital Asset Pricing Model (CAPM)
		8.2 Inputs Required for Applying CAPM
		8.3 Empirical Evidence on Capital Asset Pricing Model
		8.4 Arbitrage Pricing Theory and Multifactor Models
		8.5 Stock Market as a Complex Adaptive System
			Summary
			Questions
			Solved Problems
			Problems
			Minicase
			Appendix 8A: Derivation of the Security Market Line Relationship (SML)
	9. Efficient Market Hypothesis: The Collective Wisdom
		9.1 Random Walk and Efficient Market Hypothesis
			9.2 Empirical Evidence
			9.3 What is the Verdict 286 . 9.4 Implications for Investment Analysis
				.. Summary
					.. Questions
	10. Behavioural Finance: The Irrational Influences
		10.1 Heuristic-driven Biases
		10.2 Frame Dependence
		10.3 Emotional and Social Influences
		10.4 Market Inefficiency
		10.5 Critique of Behavioural Finance
		10.6 Strategies for Overcoming Psychological Biases
			Summary
			Questions
Part 4 FIXED INCOME SECURITIES
	11. Bond Prices and Yields: Figuring out the Assured Returns
		11.1 Bond Characteristics
		11.2 Bond Prices
		11.3 Bond Yields
		11.4 Risks in Bonds
		11.5 Rating of Bonds
		11.6 The Yield Curve
		11.7 Determinants of Interest Rates
		11.8 Analysis of Convertible Bonds
			Summary
			Questions
			Solved Problems
			Problems
			Minicase
	12. Bond Portfolio Management: The Passive and Active Stances
		12.1 Interest Rate Risk
		12.2 Passive Strategies
		12.3 Immunisation: A Hybrid Strategy
		12.4 Active Strategies
		12.5 Interest Rate Swaps
			Summary
			Questions
			Solved Problems
			Problems
			Minicase
Part 5 EQUITY SHARES
	13. Equity Valuation: How to Find Your Bearings
		13.1 Balance Sheet Valuation
		13.2 Dividend Discount Model
		13.3 Free Cash Flow Model
		13.4 Earnings Multiplier Approach
		13.5 Earnings - Price Ratio, Expected Return, and Growth
		13.6 Other Comparative Valuation Ratios
		13.7 Sum of the Parts Method
		13.8 Equity Portfolio Management
		13.9 Forecasting the Aggregate Stock Market Returns
			Summary
			Questions
			Solved Problems
			Problems
			Minicase
	14. Macroeconomic and Industry Analysis: . Understanding the Broad Picture
		14.1 The Global Economy
		14.2 Central Government Policy
		14.3 Macroeconomic Analysis
		14.4 Industry Analysis
			Summary
			Questions
	15. Company Analysis: Establishing the Value Benchmark
		15.1 Strategy Analysis
		15.2 Accounting Analysis
		15.3 Financial Analysis
		15.4 Going Beyond the Numbers
		15.5 Estimation of Intrinsic Value
		15.6 Tools for Judging Undervaluation or Overvaluation
		15.7 Obstacles in the Way of an Analyst
		15.8 Excellent Versus Unexcellent Companies
		15.9 Equity Research in India
			Summary
			Questions
			Solved Minicase
			Problems
			Minicase
			Appendix 15A: An lllustrative Equity Research Report
	16. Technical Analysis: The Visual Clue
		16.1 What Is Technical Analysis
		16.2 Charting Techniques
		16.3 Technical Indicators
		16.4 Testing Technical Trading Rules
		16.5 Evaluation of Technical Analysis
			Summary
			Questions
Part 6 DERIVATIVES
	17. Options: The Upside without the Downside
		17.1 How Options Work
		17.2 Equity Options in India
		17.3 Options and Their Payoffs Just Before E"'Piration
		17.4 Option Strategies
		17.5 Factors DeternUning Option Values
		17.6 Binomial Model for Option Valuation
		17.7 Black-Scholes Model
			Summary
			Questions
			Solved Problems
			Problems
			Minicase
	18. Futures: Where the Hedgers and the Speculators Meet
		18.1 Futures Contracts
		18.2 Mechanics of Trading
		18.3 Financial Futures
		18.4 Equity Futures in India
		18.5 Commodity Futures in India
		18.6 Pricing of Futures Contracts
		18.7 Use of Futures Contracts
		18.8 Assessment
			Summary
			Questions
			Solved Problems
			Problems
Part 7 OTHER INVESTMENT OPTIONS
	19. Mutual Funds: Indirect Investing
		19.1 Entities in a Mutual Fund Operation
		19.2 Investment-orientation of Mutual Fund Schemes
		19.3 Open-ended Schemes versus Closed-ended Schemes
		19.4 Regulation on the Investments of a Mutual Fund
		19.5 Tax Aspects of Mutual Fund Investment
		19.6 Mutual Fund Evaluation
		19.7 Costs of Investing in a Mutual Fund
		19.8 Options and Value-added Services
		19.9 Pros, Cons, and the Choice
			Summary
			Questions
			Solved Problems
			Problems
	20. Investment in Real Assets: The Tangible Thing
		20.1 Pros and Cons of Investing in Real Assets
			20.2 Residential House
			20.3 Other Forms of Real Estate
			20.4 Financial Evaluation of Investment in Real Estate for Purpose of Renting
			20.5 Precious Metals
			20.6 Precious Stones
			20.7 Art Objects
				III Summary
					l!I Questions
						l!I Problems
Part 8 PORTFOLIO MANAGEMENT
	21. Portfolio Management Framework: The Grand Design
		21.1 Specification of Investment Objectives and Constraints
		21.2 Selection of Asset Mix
		21.3 Formulation of Portfolio Strategy
		21.4 Selection of Securities "
		21.5 Portfolio Execution
		21.6 Portfolio Revision
		21.7 Performance Evaluation
			Summary
			Questions
			Solved Problems
			Problems
			Minicase
			Appendix 21A : Asset Allocation
			Questions
			Problem
			Appendix 21B : Fama's Measure of Net Selectivity
			Problem
	22. Guidelines for Investment Decisions: What it All Comes To
		22.1 Basic Guidelines: The Ten Commandments
		22.2 Guidelines for Equity Investing
			Summary
			Questions
			Miniease
	23. Strategies of the Great Masters: The Timeless Wisdom
		23.1 Benjamin Graham: The Quantitative Navigator
		23.2 Philip Fisher: The Investigative Growth Stock Investor
		23.3 Wa:rren Buffett: The Ultimate Businessman
		23.4 John Templeton: The Bargain Hunter
		23.5 Peter Lynch: The Relentless Chaser
		23.6 George Soros : The Global Speculator
		23.7 David Dreman : The Contrarian Investor
		23.8 Charles Ellis: Playing the Loser's Game
		23.9 John Bogle: Twelve Pillars of Investment Wisdom
		23.10 The Zurich Axioms: The Swiss Wisdom
		23.11 India's Money Monarchs
			Summary
			Questions
	24. International Investing: The Global Search
		24.1 Benefits and Risks of Global Investing
		24.2 Measuring the Return and Risk of Foreign Investments
		24.3 Equilibrium in International Capital Markets
		24.4 Growing Importance of Global Factors -
		24.5 Where to Invest and How to Invest
		24.6 Tracking Global Markets
			Summary
				Questions
				Solved Problems
				Problems
Appendix A: Tables
Appendix B: Understanding Regression
Appendix C: Tax Aspects of Investments
Select Bibliography
Investment Related Websites
Index