This book on Financial Economics – Theory and Practice is intended to be a text book on the subject to all Students of Economics and Finance, at either Graduate and Postgraduate level. This subject has gained an importance with the growth of market-oriented economies and the growing role for finance and integration of finance with the main-stream of Economics. With the initiation of a wide range, of – economic and financial reforms since 1992, liberalization, deregulation, privatization and globalization of the economy have been gaining ground with the result that we are moving into a free market, open, competitive globalised environment. To meet these emerging trends, all students of Arts, Commerce, Management and Engineering faculties should be well exposed to Financial Economics as a subject of compulsory study in either graduation or post-graduation level. More universities are in the process of adopting this subject in all social and behavioural sciences, as a compulsory paper.
This book focuses on more important aspects of Theory of Financial Economics. Part I contains a few introductory chapters, giving the needed background of Finance and Accounting to all categories of students. Part II deals with Investment and Security Analysis in an exhaustive manner. Portfolio Theory and Analysis finds a place in Part III with emphasis on both theoretical and practical aspects. Lastly, Part IV present Risk Managements Aspects of Investment and Portfolio Management Operations. Options, futures, swaps and contingent claims and their valuation and role are exhaustively dealt with in the part. The tenor of treatment is simple and crisp, suitable to all categories of students.
Contents –
Part – I Analytical Background
1. Introduction
2. Financial Accounting
3. Financial Analysis
4. Basic Financial Ratio Analysis
5. Valuation and Pricing Models
6. Financial Arithmetics
Part – II Investment and Security Analysis
7. Security Market Analysis
8. Investment Analysis and Theory
9. Investment Avenues
10. Features of Investment Avenues
11. Sources of Investment Information
12. Investment Decision-Marking
Part – III Portfolio Theory and Models
13. Introduction to Portfolio Theory
14. Risk and Return in Portfolio Management
15. Portfolio Analysis
16. Diversification and Techniques of Risk Reduction
17. Markowitz Model
18. Modern Portfolio Theory
19. Efficient Market Theory (Random Walk Hypothesis)
20. Capital Market Theory
21. Capital Asset Pricing Model (CAPM)
22. Portfolio Selection
Part – VI Risk Management (Derivatives)
23. Derivative Markets
24. Options Trading
25. Valuation of Rights, Warrants, Etc.
26. Futures Trading
27. Swap Market
