*Completely updated edition of classic textbook that fills a gap between MBA level texts and PHD level texts
*Focuses on clear explanations of key concepts and requires limited mathematical prerequisites
*Online solutions manual available
* Updates includes new structure emphasizing the distinction between the equilibrium and the arbitrage perspectives on valuation and pricing, as well as a new chapter on asset management for the long term investor
The second edition of this authoritative textbook continues the tradition of providing clear and concise descriptions of the new and classic concepts in financial theory. The authors keep the theory accessible by requiring very little mathematical background.
First edition published by Prentice-Hall in 2001- ISBN 0130174467.
The second edition includes new structure emphasizing the distinction between the equilibrium and the arbitrage perspectives on valuation and pricing, as well as a new chapter on asset management for the long term investor.
"This book does admirably what it sets out to do - provide a bridge between MBA-level finance texts and PhD-level texts....
many books claim to require little prior mathematical training, but this one actually does so.
This book may be a good one for Ph.D students outside finance who need some basic training in financial theory or for those looking for a more user-friendly introduction to advanced theory.
The exercises are very good."
--Ian Gow, Student, Graduate School of Business, Stanford University
Primary audience: Students in master's or Ph.D. programs in Finance
Intermediate Financial Theory, 2nd Edition
PART I : INTRODUCTION
Chapter 1: On the Role of Financial Markets and Institutions
Chapter 2: The Challenges of Asset Pricing: A Roadmap
PART II: THE DEMAND FOR FINANCIAL ASSETS
Chapter 3: Making Choices in Risky Situations
Chapter 4: Measuring Risk and Risk Aversion
Chapter 5: Risk Aversion and Investment Decisions, Part I
Chapter 6: Risk Aversion and Investment Decisions, Part II: Modern Portfolio Theory
PART III: EQUILIBRIUM PRICING
Chapter 7: The Capital Asset Pricing Model: Another View about Risk
Chapter 8: Arrow-Debreu Pricing I
Chapter 9: The Consumption Capital Asset Pricing Model (CCAPM)
PART IV: ARBITRAGE PRICING
Chapter 10: Arrow-Debreu Pricing II: the Arbitrage Perspective
Chapter 11: The Martingale Measure : Part I
Chapter 12: The Martingale Measure : Part II
Chapter 13: The Arbitrage Pricing Theory (APT)
PART V: EXTENSIONS
Chapter 14: Portfolio Management in the long run
Chapter 15: Financial Structure and Firm Valuation in Incomplete Markets
Chapter 16: Financial Equilibrium with Differential Information
Quotes and reviews
"This is an excellent book that introduces financial asset pricing theory as a natural extension of microeconomic and general equilibrium theory. The exposition of classic and recent results is clear, thorough and accessible to any economist or graduate student who has a good grounding in microeconomic theory. Having mastered this material the reader is well equipped to tackle the many variations of asset pricing models in the literature."
--Frank Milne, Queen’s University, Professor of Economics and Finance
"This book is ideally suited to students wishing to gain a deeper understanding of the basic concepts of financial economics beyond those presented in a typical MBA program without having to deal with unnecessary mathematical details. The exposition is superb and enriching of intuition. The book, written by two of the professions leading experts, is unique."
-- Rajnish Mehra, Professor of Finance, University of California, Santa Barbara