Finance and accounting Books

Book SynopsisCorporate actions are events that affect large corporations through to the individual investor - even those that own a single-share! All organizations that hold equity and debt securities for themselves and/or on behalf of others are affected when the issuer of a security announces an income or corporate action event.Table of ContentsIntroduction xvii Acknowledgements xxi About the Authors xxiii Part I Introductory Elements 1 1 Basic Corporate Action Concepts 3 1.1 Introduction 3 1.2 Definition of Corporate Actions 3 1.3 Purpose of Corporate Actions 3 1.4 Impact of Corporate Actions 5 1.5 The Lifecycle of a Corporate Action 6 1.6 Summary 8 2 Event Description and Classification 9 2.1 Introduction 9 2.2 Event Descriptions 9 2.3 Event Classification 19 2.4 Event Combinations 20 2.5 Event Variations and Terminology 22 2.6 Summary 22 3 The Securities (and Corporate Actions) Market Place 23 3.1 Introduction 23 3.2 The Securities Market Place – Overview 23 3.3 Participants – The Corporate Actions Perspective 31 3.4 Summary 36 4 Static Data 37 4.1 Introduction 37 4.2 Securities Static Data 37 4.3 Participant Static Data 41 4.4 Sources and Maintenance of Static Data 45 4.5 Summary 47 5 Securities Position Management 49 5.1 Introduction 49 5.2 The STO’S Risk 49 5.3 Fundamentals of Securities Position Management 50 5.4 Generic Securities Accounting Principles 52 5.5 Extended Securities Position Management 53 5.6 Disparate Trade and Position Records 54 5.7 Reconciliation 54 5.8 Summary 55 Part II Mandatory Events 57 6 Overview of the Generic Corporate Action Lifecycle 59 6.1 Introduction 59 6.2 Issuer Communicates Event Data 60 6.3 Event Terms Capture and Cleansing 60 6.4 Determining Entitlement 60 6.5 Communication of Event Information 60 6.6 Calculation of Resultant Entitlements 60 6.7 Passing of Internal Entries 61 6.8 Collection and Disbursement of Resultant Entitlements 61 6.9 Updating of Internal Entries 61 7 Straight Through Processing 63 7.1 Introduction 63 7.2 STP and Corporate Actions 64 8 Event Terms Capture and Cleansing 67 8.1 Introduction 67 8.2 Event Terms 68 8.3 Sources of Event Terms 72 8.4 Availability of Event Terms 73 8.5 Cleansing of Event Terms 74 8.6 When to Apply Event Terms 76 8.7 Managing Changes to Event Terms Throughout the Lifecycle 76 8.8 Summary 77 9 Determining Entitlement 79 9.1 Introduction 79 9.2 The STO’s Risk 80 9.3 Types of Entitled Positions (Including Unsettled Trades) 80 9.4 Links Between Ownership Positions and Location Positions 84 9.5 Equity Event Entitlement Business Principles 84 9.6 Equity Event – Itemized Trading and Settlement Scenarios 92 9.7 Bonds Event Entitlement Business Principles 94 9.8 Applying the Business Principles in Practice 97 9.9 Balancing of Positions and Unsettled Trades 105 9.10 Reconciliation of Positions and Unsettled Trades 109 9.11 Summary 111 10 Communication of Event Information 113 10.1 Introduction 113 10.2 The STO’s Risk 114 10.3 Communicating with Position Holders 114 10.4 Communicating with Interested Parties 120 10.5 Summary 121 11 Calculation of Resultant Entitlements 123 11.1 Introduction 123 11.2 The STO’s Risk 124 11.3 Calculation of Resultant Cash Entitlements 125 11.4 Calculation of Resultant Securities Entitlements 126 11.5 Calculation of Resultant Entitlements Against Ownership Positions 130 11.6 Balancing Resultant Entitlements 132 11.7 Reconciliation of Resultant Entitlements 134 11.8 Determination of Collectible and Disbursable Accounts 136 11.9 Summary 136 12 Passing of Internal Entries 139 12.1 Introduction 139 12.2 The STO’s Risk 139 12.3 Mechanisms for Passing Internal Entries 140 12.4 Types of Internal Entries 141 12.5 Review of Required Internal Entries 149 12.6 Summary 150 13 Collection/Disbursement of Resultant Entitlements 151 13.1 Introduction 151 13.2 The STO’s Risk 152 13.3 Collection of Resultant Entitlements from the Custodian 153 13.4 Disbursement of Resultant Entitlements to Position Holders 154 13.5 Settlement of Claims 157 13.6 Write-Offs 160 13.7 Summary 160 14 Updating of Internal Entries 161 14.1 Introduction 161 14.2 The STO’s Risk 161 14.3 Mechanisms for Passing Internal Entries 162 14.4 Settlement Date Entries 162 14.5 Settlement of Claims and Transformations 166 14.6 Summary 166 15 Examples of Mandatory Events 167 15.1 Introduction 167 15.2 Bonus Issue 167 15.3 Share Split 174 15.4 Bond Maturity 179 Part III Events with Elections 185 16 Concepts of Events with Elections 187 16.1 Introduction 187 16.2 The STO’s Risk 188 16.3 Impact of Events with Elections 188 16.4 Events with Elections Lifecycle 190 16.5 Summary 191 17 Management of Mandatory with Options Events 193 17.1 Introduction 193 17.2 Mandatory with Options Event Terms 194 17.3 Determining Entitlement to Mandatory with Options Events 196 17.4 Communication of Mandatory with Options Event Information 196 17.5 Receipt of Election Decisions 198 17.6 Recording and Validating Received Election Decisions 200 17.7 Managing Overdue Election Decisions 202 17.8 Issue of Election Decisions 203 17.9 Over-Elections 209 17.10 Calculation of Resultant Entitlements 211 17.11 Passing of Internal Entries 214 17.12 Collection and Disbursement of Resultant Entitlements 217 17.13 Updating of Internal Entries 217 17.14 Summary 217 18 Management of Voluntary Events 219 18.1 Introduction 219 18.2 Voluntary Event Terms 220 18.3 Determining Entitlement to Voluntary Events 221 18.4 Communication of Voluntary Event Information 222 18.5 Receipt of Election Decisions 222 18.6 Recording and Validating Received Election Decisions 223 18.7 Managing Overdue Election Decisions 224 18.8 Issue of Election Decisions 225 18.9 Over-elections 225 18.10 Calculation of Resultant Entitlements 225 18.11 Passing of Internal Entries 227 18.12 Collection and Disbursement of Resultant Entitlements 231 18.13 Updating of Internal Entries 231 18.14 Summary 231 Part IV Multi-stage Events 233 19 Concepts of Multi-Stage Events 235 19.1 Introduction 235 19.2 The Life of a Multi-stage Event 235 19.3 The STO’s Risk 239 19.4 Impact of Multi-stage Events 239 19.5 Lifecycle Elements of the Multi-stage Event 241 19.6 Summary 246 20 Management of a Rights Issue 247 20.1 Introduction 247 20.2 The Operational Life of a Rights Issue 247 20.3 Rights Issue Event Terms 248 20.4 Nil Paid Rights Distribution 250 20.5 Nil Paid Rights Subscription 253 20.6 Un-subscribed Nil Paid Rights Expiry 258 20.7 Summary 259 21 Example of a Rights Issue 261 21.1 Introduction 261 21.2 Event Terms 261 21.3 Nil Paid Rights Distribution 262 21.4 Nil Paid Rights Trading 266 21.5 Nil Paid Rights Subscription 266 21.6 Unsubscribed Nil Paid Rights Expiry 272 21.7 Final Securities Positions 273 22 Concepts of Takeover Events 275 22.1 Introduction 275 22.2 The STO’s Risk 276 22.3 Features of Takeovers 276 22.4 Impact of Takeover Events 281 22.5 Takeover Event Lifecycle 284 22.6 Summary 284 23 Management of Takeover Events 285 23.1 Takeover Event Terms 285 23.2 Determining Entitlement to Takeover Events 288 23.3 Communication of Event Information 289 23.4 Management of Election Decisions 290 23.5 Managing Unsuccessful Takeovers 291 23.6 Over-Acceptances 291 23.7 Calculation of Resultant Entitlements 293 23.8 Passing of Internal Entries 296 23.9 Collection and Disbursement of Resultant Entitlements 297 23.10 Updating of Internal Entries 298 23.11 Summary 298 Part V Taxation 299 24 Concepts and Management of Taxation 301 24.1 Introduction 301 24.2 Taxable and Non-Taxable Events 301 24.3 Introduction to Capital Gains Tax and Income Tax 302 24.4 The STO’s Risk 305 24.5 Summary 305 25 Management of Income Tax 307 25.1 Introduction 307 25.2 Gross Income 308 25.3 Foreign Witholding Tax 309 25.4 Net Income After Deduction of Foreign Withholding Tax 310 25.5 Position Holder’s Domestic Income Tax 310 25.6 Net Income After Deduction of Foreign Withholding Tax and Position Holder’s Domestic Income Tax 313 25.7 Determining Tax Rates for Position Holders 318 25.8 Ensuring Correct Withholding Tax is Deducted by the Location 321 25.9 The STO as Collector of Taxes 322 25.10 Tax Reclaims and Tax Rebates 323 25.11 Communicating Income and Tax Details 326 25.12 Summary 329 Part VI Issuer Notices 331 26 Concepts and Management of Issuer Notices 333 26.1 Introduction 333 26.2 The STO’s Risk 333 26.3 Information Only Events 334 26.4 Issuer Meetings with Proxy Voting Events 335 26.5 Summary 339 Part VII Objectives and Initiatives 341 27 Objectives and Initiatives 343 27.1 Introduction 343 27.2 Objectives 343 27.3 Initiatives to Achieve the Stated Objectives 345 27.4 Challenges in Achieving the Stated Objectives 351 Glossary of Terms 353 Index 383

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Book SynopsisTakes readers through the stages of a successful outsourcing solution - from evaluating providers and contracting, through transition planning and risk management. This book features advice from the CFOs of major companies worldwide, including BP, Procter & Gamble, Dell, and Exel.Trade Review“…offers a detailed strategic look…. A highly readable book, laden with case studies…compulsory reading for any business considering outsourcing…” (Financial Director, July 2004) “…a highly readable book, laden with case studies…compulsory reading for any business considering outsourcing…” (Financial Director, 1st July 2004) “…brings together frontline advice from the chief financial officers of a number of high-profile companies…” (Accounting Today, 23 August – 5th September 2004)Table of ContentsAbbreviations. 1. The Finance Outsourcing Landscape. Transforming the finance function through outsourcing. The impact of finance BPO on the corporate agenda. The CFO and finance transformation. Why move to shared services? Outsourcing: Who is doing what? CFO concerns. The outsourcing promise. CFO insights. 2. Creating an Operating Model for High Performance. Changing to a global business model based on brands and technology. What is a ‘high-performance’ company? Differentiated operating models. Innovation in consumer goods and retail. Coping with major upheaval. The pharmaceutical networked model. So what do you outsource – and why? Strategies for change and innovation. CFO insights. 3. Suppliers: Options for Service Delivery. Considering future business partners. Trends in business process outsourcing. How far should you go with outsourcing? The move to multisourcing. Choosing your supplier combination. Shaping the outsourcing relationship. Planning a delivery strategy. CFO insights. 4. Scoping: Deciding What to Outsource. Developing a high-performance finance function with superior alignment to the competitive imperatives of the business. Where to cut the process. Purchase-to-pay. Order-to-cash. Credit and receivables management. General accounting, reporting, and decision support. The integrated F&A outsource proposition. CFO insights. 5 Global Sourcing of Service Delivery. Migrating to a global delivery network. Three ways to source globally. Mapping the offshore landscape. Using geography to mitigate risk. Sourcing choices. Outsourcing due diligence. Emerging global shared service center networks. Technology shapes the future. CFO insights. 6.Pricing and Shaping Your Deal. Shaping the deal for a co-sourcing. Pulling the levers of shareholder value. Shaping the contractual relationship. Pricing options. Pricing and contracting principles. Tax considerations. The negotiation lifecycle. CFO insights. 7. Stakeholders: Achieving Buy-In. Reaching stakeholders through open and honest communications. Lead from the top: The CEO and CFO working together. Your new stakeholder: Your outsource partner. Third-party advisors. Employees: Treating them with care and integrity. The role of HR in outsourcing. Communications strategy. CFO insights. 8. Ensuring a Successful Transition. Transitioning to a European outsourced shared service center. Transition framework. Transition management. Detailed implementation planning. People strategy. Communication strategies. Leading the transition. CFO insights. 9. Reducing Risk with Outsourcing. Weighing up risk and outsourcing. Identifying the risks. What can go wrong in the contracting phase? Setting up the right governance structure and relationships. The risks of going global. Financial, legal, and tax risk. Sarbanes-Oxley and European International Accounting Standards (IAS). CFO insights. 10. Continuous Improvement: Keeping the Deal Working. Building on success over time. Getting things right from the start. Making the commercials match the intent. Outsourcing is about relationships. Keep focusing on service management. Integration and service management. Pushing for continuous improvement. Refreshment through contract renewal. Keeping score. CFO insights. 11. Finance BPO – the Future. Innovation insights. Accenture finance solutions: Worldwide interconnectivity. The impact of next-generation technologies. Finance and performance mastery in the future. CFO insights. Biographies. Index.

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Book SynopsisThe guide for reading long-term trends in the foreign currency market To thrive in the marketplace traders must anticipate, enter, and stay with trends in the foreign exchange market. In this much-needed guide top forex, expert Greg Michalowski clearly explains the attributes of successful traders, and shows how traders can set themselves up for success by drafting an explicit mission statement and game plan. The book also contains the tools and techniques traders need to read the markets and identify when a market is in a trend. Michalowski shows traders how to enter an emerging trend, how to manage the position, and how to exit the position most effectively. Includes the technical tools needed to invest in the foreign exchange market: moving averages, trendlines, and Fibonacci levels Shows how to identify a trend and stick with the trend through its duration Written by Greg Michalowski who was cited by SmartMoney magazine as a goTable of ContentsAcknowledgments xi Introduction 1 PART I The Foundation for Success 19 CHAPTER 1 Stereotyping the Retail Currency Trader 21 They Think Trading Currencies Is Easy 22 They Have Too Much Fear 27 They Lose Money 29 They Are Too Fundamental (Not Technical Enough) 31 They Don’t Know Enough about Key Fundamental Requirements 34 They Fail to Anticipate Trends 45 Don’t Be Like the Rest ... Change! 46 CHAPTER 2 The Six Attributes of a Successful Currency Trader 47 What Are You Good at Doing? 47 There Will Always Be Peaks and Valleys 49 1. Skill or Aptitude 49 2. Practice, Practice, Practice 52 3. Know Your Risk 54 4. Create and Execute a Plan 58 5. Control Your Fear 61 6. Be Greedy Enough 63 A Foundation for Success 66 CHAPTER 3 The Mission Statement 67 A Team of One 68 A Two-Part Mission Statement 70 Finding Trades That Satisfy Your Mission Statement 76 The Importance of Staying on Trend 80 CHAPTER 4 What’s Your Game Plan? 85 Every Mission Statement Needs a Game Plan 86 Trade the Trends 86 Keep Fear to a Minimum 91 Never Underestimate a Strong Foundation 97 CHAPTER 5 Rules for Attacking the Trend 99 Rule 1: Keep It Simple (but Stay Positive) 100 Rule 2: Have a Reason to Place a Trade 105 Rule 3: Be Picky about Your Tools 107 Rule 4: The “If . . . Should” Rule 115 Rule 5: Look Ahead, but Not Too Far Ahead 117 Rules Rule 120 CHAPTER 6 The Trader’s Toolbox 121 Rules for the Tools 122 How to Use Fundamental Analysis 122 The One Thing We Can Agree On: Price 125 The Tools 131 If I Had a Hammer 146 PART II Tools and Strategies 147 CHAPTER 7 Moving Averages 149 What Is a Moving Average? 150 How to Use Moving Averages 151 Time Frames for Analysis 156 Anticipating a Trend 164 Managing a Trend 167 Managing Profits 169 Trade Setups 171 The Push That Gets the Market Going 177 CHAPTER 8 Trend Lines and Remembered Lines 179 Bullish Trend Lines 180 Bearish Trend Lines 183 Channels: Highways to Ride the Trend 186 Flags and Pennants 190 Finding the Golden Ticket 192 Remembered Lines 197 Simple but Effective 204 CHAPTER 9 Fibonacci Retracements: The Hybrid Tool 205 Introduction to Fibonacci 206 Placing Retracements on a Chart 210 Using Fibonacci Retracements 214 Trading Shorter-Term Corrections 227 Using the Tools to Your Best Advantage 231 CHAPTER 10 Preparing for the Trade 233 First Things First 234 Analyzing the Charts 236 A Composite View of the Clues 249 “Is Ita Boy ora Girl, Doc?” 251 CHAPTER 11 Executing the Game Plan 253 The Kickoff: The Entry Trade 254 Managing the Trade 256 Finding Clues in the Consolidation Phase 264 A Borderline: Always a Low-Risk, Unambiguous Level 266 Another Trend Reentry 267 The Key Role of Borderlines in Hourly and Daily Charts 271 Attack the Currency Trend 275 About the Author 277 Index 279

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Book SynopsisA how-to guide for the discovery and prevention of the illegal transfer of money Written for the private sectorwhere most money laundering takes placethis book clearly explains shows business professionals how to deter, detect, and resolve financial fraud cases internally. It expertly provides an understanding of the mechanisms, tools to detect issues, and action lists to recover hidden funds. Provides action-oriented material that will show how to deter, detect, and resolve financial fraud cases Offers an understanding of the mechanisms, tools to detect issues, and action list to recover hidden funds Covers mechanisms for moving money, identifying risk exposures, and investigating money movement Arming auditors, investigators, and compliance personnel with the guidance that, up until now, has been restricted to criminal investigators, Money Laundering Prevention provides nuts-and-bolts information needed to fully understanTrade Review"Turner uses his professional experience as a Certified Fraud Examiner and financial investigator to present a clear historic and modern-day explanation of what constitutes money laundering and who engages in the global crime. The reader will learn what the act of money laundering is, why it takes place, the basic activities and operations, and geographic "hot spots" for this illegal enterprise. Given the detailed explanation of the subject matter, this book will have a long shelf life, making it a solid investment." (Security Management, September 2012)Table of ContentsPreface xi Acknowledgments xix CHAPTER 1 Understanding the Process of Money Laundering 1 What Is Money Laundering? 1 Money Laundering Defined 2 Why Do People Launder Money? 4 The Money Laundering Cycle 6 Money Laundering Is a Criminal Business 10 Money Laundering Is Global 11 Money Launderers Adapt Technology 13 The Role of Technology 14 The Role of Banks 15 The Role of Nations 17 Regional Hotspots 18 The Birth of the Financial Action Task Force (FATF) 20 Conclusion 22 CHAPTER 2 Motivations for Getting Involved 23 Involvement Is Personal 23 People Weigh the Odds of Success 24 Where Do Laundered Funds Come From? 26 The Impact of Corruption 27 Why Is Corruption Increasing? 28 Corruption Always Begins Small 30 Bribery and Corruption of Your Employees 31 Bribery and Corruption by Your Employees 33 Evolution of Government Attitudes 34 Official Corruption Impacts Individual Corruption 35 Tax Evasion as a Gateway to Money Laundering 36 Moving from Taxes to Criminal Activity 37 The Rise of Regional and Multinational AML Organizations 38 The Connection between Fraud and Money Laundering 40 Money Laundering as a Do-It-Yourself Activity 42 The Service Providers: Bankers, Accountants, and Lawyers 42 Conclusion 45 CHAPTER 3 Mechanisms for Moving Money 47 Money Laundering Requires Movement through the System 47 Broken Windows Encourage Other Crimes 48 Look Local, Think Global 49 Expanding International Requirements 51 Financial Havens Are Expanding 52 Money Laundering Is a Growth Industry 53 Law Enforcement Gets a Big Boost 54 Profit Drives Criminal Activity 56 Structuring the Scheme to Succeed 57 Why Use a Bank, When You Can Own One? 58 Learning from the Big Fraud Schemes 59 Confronting the Inevitable 60 Balancing Security and Cost 61 Effective Fraud Prevention Strategies 62 The Fraud Triangle 63 Where to Start 64 Mitigating Improper Behavior 67 Conclusion 68 CHAPTER 4 Going Global 71 Taking Money around the World 71 Moving the Money Offshore 72 Avoiding Detection 74 Historical Basis for Money Laundering 75 Role of Private Banking 76 Enhanced Regulations 77 The Black Market Peso Exchange 79 Increasing Cooperation in Regulation 80 Regional Distinctions 81 Global Efforts 83 The Law Enforcement Focus 84 Conclusion 87 CHAPTER 5 Technology and Tomorrow 89 The Impact of Technology 89 The Next Phase of Money Laundering 91 Everything Old Becomes New Again 92 Being Anybody You Want to Be 93 Welcome to the Future 94 So What Is the AML Response? 94 Evolution of AML Controls 96 Adjusting to Rapidly Increasing Scale 97 A Highly Flexible Methodology Results in Processes that Are Difficult to Stop 99 AML Is a Process, Not a Destination 100 All Countries’ Regulatory Programs Are Not Equal 101 Technology and Offshore Havens Intersect 103 The Cost vs. the Benefit 104 Consider the Pace of Change and Progress 105 Conclusion 106 CHAPTER 6 Discovery and Prevention 109 Early Warning Is Essential to AML 109 Proactive Means Active 110 By the Numbers 111 Paradigm Shift 112 Testing Your Own AML Systems 114 Expanding the Business Comparison 115 The Regulatory Framework 116 High-Risk Areas 117 Money Laundering Meets Terror Financing 119 Hiding in Plain Sight 121 Criminalizing the Concealment Activities 122 Creating Financial Fronts 124 Keeping the Money Moving 125 Keeping the Tax Man Happy 126 Conclusion 128 CHAPTER 7 Terror Financing 131 Terrorists Use Money Laundering Techniques 131 Similarities and Distinctions 132 Application of the Methodology to Terror Financing 133 Global Impact of Financial Crimes 135 Alternative Laundering Mechanisms 137 Regulatory Responses 139 Conclusion 141 CHAPTER 8 Identifying Risk Exposures 143 AML Exposures: Assessing Financial Institution Risk 143 Language, Culture, and Ethnicity 144 The Legal Landscape 145 Geography: Distance Matters 147 The Goal of the Launderer Is to Hide 147 The United States Takes a Different Approach 149 Laundering Groups Seek to Evade Detection 151 A Fractured Enforcement and Regulatory Picture 152 The Regulatory Position on Cyber Risks 152 Simple Fraud, Still Successful 154 Conclusion 158 CHAPTER 9 Investigating Money Movement 159 Money Laundering Is Now Transnational Organized Crime 159 Succeeding in the Investigative Process 160 Government Access to Information 161 Mining Data for Money Laundering 163 Some Products Help the Perpetrators 164 Investigating Virtual Payment Technologies 165 Looking to the Future Investigative Issues 167 Putting an Investigative Plan in Motion 169 People Are Essential to Proof 170 Finding Money Laundering Abroad 172 Money Laundering Exposure during the Financial Industry Consolidation 173 Conclusion 177 CHAPTER 10 Reporting and Recovery 179 Reporting to Law Enforcement 179 Honest People Act Differently 180 Anticipating Challenges with Cyber Recoveries 181 Building Appropriate Controls into Online Payment Systems 183 Global Coordination on Future Issues 185 Weighing Access vs. Privacy 185 Compliance Issues 187 Putting Recovery Plans into Action 188 Conclusion 191 CHAPTER 11 Conclusion 193 About the Author 197 Index 199

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Book SynopsisA comprehensive primer for executives and managers on working capital management With limited access to credit and short term funding, it is increasingly important that companies focus on working capital management to free up funds and optimize liqidity.Table of ContentsPreface xi Acknowledgments xv Chapter 1 Concepts in Working Capital Management 1 Working Capital Concepts 1 Ratio Analysis 7 Working Capital Ratios 7 Significance of Working Capital 12 Applying These Ideas to a Real Business 15 Summary 18 Part I Cash—Transactions, Banking and Credit, and Financial Instruments 19 Comprehensive Case: Widget Manufacturing Case I 19 Chapter 2 Cash: Management and Fraud Prevention 25 Forms of Cash 26 Lockboxing 30 Controlled Disbursement 34 Bank Products Used for Electronic Transactions 37 Summary Chapter 3 Cash, Credit, and Short-Term Financial Instruments 43 Developing a Short-Term Forecast 44 Preparing a Cash Budget 45 Credit Financing 48 Short-Term Investments 54 Summary 59 Chapter 4 Concentration Banking and Financial Institution Relationships 61 Changing Financial Landscape 62 Bank Relationship Management 63 Concentration Banking 64 Request-for-Proposals 69 RFP Evaluation 75 Bank Relationship Reviews 78 Summary 80 Part II Other Working Capital Accounts— Receivables, Inventory, and Payables 81 Comprehensive Case: Widget Manufacturing Case II 81 Chapter 5 Accounts Receivable and Working Capital Issues 89 Elements of Receivables Management 90 Receivables Cycle Monitoring: Ratios 94 Receivables Cycle Monitoring: The Aging Schedule 96 Sales Financing 98 Credit Reporting 99 Terms of Sale 103 Invoice Generation 104 Asset-Based Financing: Receivables 107 Debt Collection Agencies 109 Summary 109 Chapter 6 Inventory and Working Capital Issues 111 Elements of Inventory Management 112 Inventory Cycle Monitoring: Ratios 113 Inventory Cycle Monitoring: Metrics 115 Purchasing 117 EOQ and JIT 122 Work-in-Process 124 Asset-Based Financing: Inventory 129 Summary 131 Chapter 7 Payables and Working Capital Issues 132 Elements of Payables Management 133 Payables Cycle Monitoring: Ratios 134 Accounts Payable Function 136 Payables Using Internal Processes 139 Payables Outsourcing 140 Payroll Alternatives 145 Summary 149 Part III Issues in Working Capital Management 151 Comprehensive Case: Widget Manufacturing Case III 151 Chapter 8 International Working Capital 155 Capitalism Goes Global 156 Elements of International Working Capital 157 Financing of International Transactions 158 Foreign Exchange Markets 160 Analysis of Country Risk 167 Other Significant Issues in International Working Capital 169 Cultural and Corporate Practices Affecting Working Capital 171 Summary 174 Chapter 9 Information and Working Capital 175 Information Technology 176 Bank Information Technology 178 Internet Bank Technology 182 Enterprise Resource Planning: An Alternative Approach 188 Choosing Working Capital Information Systems 191 Summary 197 Chapter 10 Managing the Working Capital Cycle 199 Risk and Working Capital 200 Enterprise Risk Management 202 Efficiency and Working Capital 204 Liquidity and Working Capital 207 Suggested Actions 210 Developments in Working Capital Management 215 The Cost of a Transaction 217 Summary 221 Appendix A: Suggested Solutions to Widget Manufacturing Company Case—Parts I, II, and III 223 Appendix B: Basic Financial Concepts 233 Appendix C: Web Sites of Working Capital Market Participants 238 Appendix D: Glossary 241 About the Author 262 Index 263

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Book SynopsisThe definitive, must-have guide for the forensic accounting professional Financial Forensics Body of Knowledge is the unique, innovative, and definitive guide and technical reference work for the financial forensics and/or forensic accounting professional, including nearly 300 forensic tools, techniques, methods and methodologies apply to virtually all civil, criminal and dispute matters. Many of the tools have never before been published. It defines the profession: The Art & Science of Investigating People & Money. It defines Forensic Operators: financial forensics-capable personnel possess unique and specific skills, knowledge, experience, education, training, and integrity to function in the financial forensics discipline. It defines why: If you understand financial forensics you understand fraud, but not vice versa by applying financial forensics to all aspects of the financial comTable of ContentsPreface xi Acknowledgments xv Introduction 1 What Is a Methodology? 1 Why Was This Book Written? 4 How to Use This Book 10 About the Book’s Website 10 How This Book Is Organized 11 PART ONE Financial Forensics Tools, Techniques, Methods, and Methodologies CHAPTER 1 Foundational Phase 21 Assignment Development Stage 21 Scoping Stage 36 Conclusion 54 CHAPTER 2 Interpersonal Phase 55 Interviews and Interrogation Stage 56 Behavior Detection 62 Background Research Stage 73 Conclusion 77 CHAPTER 3 Data Collection and Analysis Phase: Part I 79 Data Collection Stage 79 Surveillance Stage 111 Confidential Informants Stage 114 Undercover Stage 117 Laboratory Analysis Stage 119 Confirmation Bias: Clinical Thinking 122 Aberrant Pattern Detection: What’s the Difference? 131 Forensic Lexicology: How to Analyze Words Like Numbers 150 Conclusion 172 CHAPTER 4 Data Collection and Analysis Phase: Part II 173 Analysis of Transactions Stage 173 The Myth of Internal Control 175 Financial Statements—Written Confessions 181 60-Second Method 185 Forensic Indices 204 Forensic Financial Analysis 212 Conclusion 252 CHAPTER 5 Data Collection and Analysis Phase: Part III 255 FSAT—Financial Status Audit Techniques 255 Applying Digital Analysis Techniques in Financial Forensics Investigations 270 Valuation & Forensics—Why & How 287 Valuation’s Orphan 294 Conclusion 314 CHAPTER 6 Trial and Reports Phase 315 Trial Preparation Stage 315 Testimony and Exhibits 318 Weapon (WPN) 320 Reports and Exhibits: Tips and Techniques 325 Post-Assignment 333 Conclusion 334 PART TWO Financial Forensics Special Topics CHAPTER 7 Counterterrorism: Conventional Tools for Unconventional Warfare 337 Stop the Money—Stop the Terrorists 337 Civil Tools Used by Federal Law Enforcement 338 The Civil Statutes as Counterterrorism Weapons 339 Why Use Civil Laws in Addition to Criminal Laws? 341 Discussion of Alter Ego 343 Alter Ego Literature 348 Alter Ego Jurisdictional Examples 358 The Challenges of Alter Ego Investigation 361 Fraudulent Transfer 372 Solvency 374 Forensic Accounting Techniques 378 Alter Ego, Fraudulent Conveyance, and Solvency Matters in Action 384 What Target-Rich Scenarios Can Be Exploited? 386 Forensic Accounting: Counterterrorism Weaponry 391 Financial Statements—The Sources of Data 395 When Financial Statements Contain Laundered Money 403 When No Records Have Been Prepared by the Terrorist 408 Summary of Forensic Accounting Observations 413 A Forensic Accounting Methodology to Support Counterterrorism 415 Summary 421 Conclusion 423 CHAPTER 8 Civil versus Criminal Law Comparison 445 Comparison 457 What If You Suspect Embezzlement?—The Three Big Don’ts and Several Do’s 457 Conclusion 469 Appendix Forensic Inventory: Forensic Tools, Techniques, Methods, and Methodologies 471 Bibliography 517 About the Authors and Contributors 521 Index 529

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Book SynopsisThe ultimate guide to maximizing shareholder value through ERM The first book to introduce an emerging approach synthesizing ERM and value-based management, Corporate Value of Enterprise Risk Management clarifies ERM as a strategic business management approach that enhances strategic planning and other decision-making processes.Table of ContentsForeword ix Preface xi Acknowledgments xix Part I: Basic ERM infrastructure Chapter 1: Introduction 3 Evolution of ERM 4 Basel Accords 4 September 11th 5 Corporate Accounting Fraud 7 Hurricane Katrina 9 Rating Agency Scrutiny 10 Financial Crisis 11 Rare Events 13 Long-Term Trends 14 Challenges to ERM 15 Summary 16 Notes 16 Chapter 2: Defining ERM 18 Definition of Risk 18 Definition of ERM 24 Summary 58 Notes 59 Chapter 3: ERM Framework 61 Value-Based ERM Framework 63 Challenges of Traditional ERM Frameworks 63 Value-Based ERM Framework 65 Overcoming the Challenges by Using a Value-Based ERM Framework 83 Summary 109 Notes 110 Part II: ERM Process Cycle Chapter 4: Risk Identification 113 Components of Risk Identification 113 Five Keys to Successful Risk Identification 114 Risk Categorization and Definition 114 Qualitative Risk Assessment 129 Emerging Risk Identification 153 Killer Risks 155 Summary 166 Notes 167 Chapter 5: Risk Quantification 168 Practical Modeling 169 Components of Risk Quantification 174 Calculate Baseline Company Value 174 Quantify Individual Risk Exposures 185 Quantify Enterprise Risk Exposure 207 Summary 223 Notes 224 Chapter 6: Risk Decision Making 226 Defining Risk Appetite and Risk Limits 227 Integrating ERM into Decision Making 239 Summary 269 Notes 270 Chapter 7: Risk Messaging 271 Internal Risk Messaging 271 External Risk Messaging 280 Summary 292 Notes 293 Part III: Risk Governance And Other Topics Chapter 8: Risk Governance 297 Focusing on Common Themes 298 Components of Risk Governance 298 Roles and Responsibilities 298 Organizational Structure 319 Policies and Procedures 325 Summary 327 Notes 327 Chapter 9: Financial Crisis Case Study 329 Summary of the Financial Crisis 330 Evaluating Bank Risk Management Practices 332 Summary 342 Notes 343 Chapter 10: ERM for Non-Corporate Entities 344 Generalizing the Value-Based ERM Approach 344 Complexities of Objectives-Based ERM 350 Examples of NCEs 351 Summary 369 Conclusion 369 Notes 369 Glossary 371 About the Author 389 Index 391

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Book SynopsisThe handy problem-solver with helpful information for today''s busy bookkeepers Bookkeeping Essentials: How to Succeed as a Bookkeeper is the handy problem-solver that gives today''s busy bookkeepers and accountants the helpful information they need in a quick-reference format. Whether in public practice or private industry, professionals will always have this reliable reference tool at their fingertips. Packed with practical techniques and rules of thumb for analyzing, evaluating, and solving the day-to-day problems every accountant faces Helps bookkeepers and accountants quickly pinpoint what to look for, what to watch out for, what to do, and how to do it Offers hundreds of explanations supported by a multitude of examples, tables, charts, and ratios Filled with dozens of accounting best practices, Bookkeeping Essentials is a powerful companion for the ever-changing world of today''s accountant and bookkeeper.Table of ContentsPreface ix Part One The Basics of Bookkeeping 1 Chapter 1 Bookkeeping Basics 3 Chapter 2 Chart of Accounts 15 Chapter 3 General Ledger and Subledgers 29 Part Two Daily Activities 37 Chapter 4 Payroll 39 Chapter 5 Purchasing and Payments 79 Chapter 6 Billing and Collections 99 Chapter 7 Cash Management 121 Chapter 8 Inventory 135 Chapter 9 Fixed Assets 155 Chapter 10 Debt Accounting 169 Part Three Creating Financial statements 173 Chapter 11 The Trial Balance 175 Chapter 12 Closing the Books 185 Chapter 13 Balance Sheet 193 Chapter 14 Income Statement 205 Part Four Controls 219 Chapter 15 Budgeting 221 Chapter 16 Control Systems 247 Part Five Other Topics 265 Chapter 17 Record Keeping 267 Chapter 18 Cost Reduction Opportunities 277 Appendices 297 Appendix A Journal Entries 299 Appendix B Beginning Bookkeeper Checklist 317 Glossary 321 About the Author 327 Index 329

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Book SynopsisThe comprehensive guide for CFOs who need an overview of leadership basics from strategies to management improvement tips Filled with pragmatic insights and proactive strategies, The New CFO Financial Leadership Manual, Third Edition is destined to become your essential desktop companion. This thorough guidebook is filled with best practices to help you, as CFO, to improve efficiency, mitigate risks, and keep your organization competitive. Includes updated information on the relationship of the CFO with the Treasurer, registration statements and Fedwire payments, acquisitions integration, legal types of acquisitions, and government regulations Contains control flowcharts for the main accounting cycles Provides new chapters on Investor Relations and Risk Management for Foreign Exchange and Interest Rates Features an itemized list of the key tasks every new CFO should complete when first entering the position, a checklist of 100 performaTable of ContentsPreface xiii Part One: Overview Chapter 1: CFO’s Place in the Corporation 3 First Days in the Position 3 Specific CFO Responsibilities 4 Overview of the Change Management Process 8 Differences between the Controller and CFO Positions 9 Relationship of the Controller to the CFO 12 Other Direct Reports: The Treasurer 13 Other Direct Reports: The Investor Relations Officer 13 Summary 14 Chapter 2: Financial Strategy 15 Cash 15 Investments 17 Working Capital 19 Inventory: Inventory Reduction Decision 21 Fixed Assets: Lease versus Buy Decisions 23 Payables 23 Debt 26 Equity 28 Products: Product Elimination Decisions 32 Fixed Expenses: Step Costing Decisions 35 Payroll Expenses: Temporary Labor versus Permanent Staffing Decisions 36 Entities: Divestiture Decisions 38 Systems: When to Use Throughput Costing 39 High-Volume, Low-Price Sale Decisions Using Throughput Costing 43 Capital Budgeting Decisions Using Throughput Costing 44 Make versus Buy Decisions Using Throughput Costing 46 Summary 47 Chapter 3: Tax Strategy 48 Accumulated Earnings Tax 49 Cash Method of Accounting 50 Inventory Valuation 51 Mergers and Acquisitions 51 Net Operating Loss Carryforwards 52 Nexus 53 Project Costing 54 S Corporation 55 Sales and Use Taxes 56 Transfer Pricing 57 Unemployment Taxes 59 Summary 60 Chapter 4: Information Technology Strategy 61 Reasons for Devising an Information Technology Strategy 61 Developing the Information Technology Strategy 62 Technical Strategies 65 Specific Applications 67 Summary 70 Part Two: Accounting Chapter 5: Performance Measurement Systems 73 Creating a Performance Measurement System 73 Asset Utilization Measurements 74 Operating Performance Measurements 79 Cash Flow Measurements 82 Liquidity Measurements 85 Solvency Measurements 90 Return on Investment Measurements 91 Market Performance Measurements 97 Summary 99 Chapter 6: Control Systems 100 Need for Control Systems 100 Types of Fraud 101 Key Controls 103 When to Eliminate Controls 118 Summary 119 Chapter 7: Audit Function 121 Composition of the Audit Committee 121 Role of the Audit Committee 122 Purpose of the External Auditors 124 Dealing with External Auditors 125 Impact of the Sarbanes-Oxley Act on the Audit Function 126 Role of the Internal Audit Function 128 Managing the Internal Audit Function 131 Summary 133 Part Three: Financial Analysis Chapter 8: Cost of Capital 137 Components 137 Calculating the Cost of Debt 138 Calculating the Cost of Equity 140 Calculating the Weighted Cost of Capital 142 Incremental Cost of Capital 144 Using the Cost of Capital in Special Situations 146 Modifying the Cost of Capital to Enhance Shareholder Value 148 Strategizing Cost of Capital Reductions 151 Summary 152 Chapter 9: Capital Budgeting 153 Hurdle Rate 153 Payback Period 154 Net Present Value 156 Internal Rate of Return 158 Throughput-Based Capital Budgeting 161 Problems with the Capital Budget Approval Process 162 Cash Flow Modeling Issues 164 Funding Decisions for Research and Development Projects 165 Capital Investment Proposal Form 167 Post-Completion Project Analysis 170 Summary 172 Chapter 10: Other Financial Analysis Topics 173 Risk Analysis 173 Capacity Utilization 177 Breakeven Analysis 183 Business Cycle Forecasting 188 Summary 194 Part Four: Funding Chapter 11: Cash Management and Consolidation 197 Cash Forecasting Model 197 Information Sources for the Cash Forecast 201 Measuring Cash Forecast Accuracy 201 Cash Forecasting Automation 202 Cash Concentration Overview 204 Physical Sweeping 204 Notional Pooling 206 Comparison of Account Sweeping and Notional Pooling 207 Cash Management Controls 208 Summary 212 Chapter 12: Investing Excess Funds 213 Investment Criteria 213 Investment Restrictions 214 Investment Options 214 Investment Strategies 216 Summary 219 Chapter 13: Obtaining Debt Financing 220 Management of Financing Issues 220 Bank Relations 221 Accounts Payable Payment Delay 222 Accounts Receivable Collection Acceleration 223 Credit Cards 224 Employee Trade-Offs 224 Factoring 224 Field Warehouse Financing 225 Floor Planning 226 Inventory Reduction 226 Lease 227 Line of Credit 228 Loans 228 Merchant Card Advances 234 Preferred Stock 234 Sale and Leaseback 235 Summary 235 Chapter 14: Obtaining Equity Financing 238 Types of Stock 238 Private Placement of Stock 239 Layout of the Offering Memorandum 240 Establishing a Valuation for the Offering Memorandum 252 Swapping Stock for Expenses 253 Swapping Stock for Cash 254 Stock Warrants 254 Stock Subscriptions 255 Private Investment in Public Equity 255 Buying Back Shares 256 Rule 144 257 Rule 10b5-1 258 Summary 261 Part Five: Publicly Held Company Chapter 15: Initial Public Offering 265 Reasons to Go Public 265 Reasons Not to Go Public 266 Cost of an IPO 268 Preparing for the IPO 269 Finding an Underwriter 271 Registering for and Completing the IPO 274 Alternatives for Selling Securities 277 Trading on an Exchange 279 American Stock Exchange 280 Overview of the NASDAQ 282 New York Stock Exchange 283 Comparing the Stock Exchanges 285 Over-the-Counter Stocks 287 Summary 287 Chapter 16: Reports to the Securities and Exchange Commission 288 Overview 288 Form 8-K 289 Form 10-Q and Form 10-K 294 Form S-1 297 Form S-3 299 Form S-8 300 Shelf Registration 300 Declaring a Registration Statement Effective 301 Reporting Insider Securities Ownership and Trading 302 EDGAR Filing System 306 Fedwire Payments 308 Summary 310 Chapter 17: Investment Community 311 Introduction 311 Analyst’s Perspective 311 Finding the Right Analyst 313 Sell Side: Analysts 314 Negative Analyst Report 316 Sell Side: Brokers 316 Sell Side: Investment Bankers 318 Sell Side: Investor Relations Specialists 318 Buy Side: Types of Investors 319 Buy Side: Institutional Investors 319 Buy Side: Individual Investors 321 Buy Side: Presentations to Investors 323 Summary 323 Chapter 18: Taking a Company Private 325 Going Private Transaction 325 Rule 13e-3 325 Filling Out Schedule 13E-3 326 300-Shareholder Limit 329 Form 15 330 Summary 330 Part Six: Management Chapter 19: Risk Management—General Concepts 333 Risk Management Policies 334 Risk Management Planning 335 Manager of Risk Management 337 Risk Management Procedures 338 Types of Insurance Companies 341 Evaluating the Health of an Insurance Carrier 343 Claims Administration 344 Insurance Files 345 Annual Risk Management Report 346 Summary 347 Chapter 20: Risk Management: Foreign Exchange 348 Foreign Exchange Quote Terminology 348 Nature of Foreign Exchange Risk 349 Data Collection for Foreign Exchange Risk Management 350 Foreign Exchange Hedging Strategies 351 Accept the Risk 352 Insist on Home Currency Payment 352 Currency Surcharges 353 Get Paid on Time 353 Foreign Currency Loans 353 Sourcing Changes 353 Foreign Currency Accounts 354 Unilateral, Bilateral, and Multilateral Netting Arrangements 354 Forward Exchange Contracts 355 Currency Futures 357 Currency Options 358 Currency Swaps 360 Proxy Hedging 362 Summary 362 Chapter 21: Outsourcing the Accounting and Finance Functions 363 Advantages and Disadvantages of Outsourcing 363 Contractual Issues 368 Transition Issues 370 Controlling Supplier Performance 372 Measuring Outsourced Activities 373 Managing Suppliers 379 Dropping Suppliers 379 Summary 381 Chapter 22: Mergers and Acquisitions 382 Evaluating Acquisition Targets 382 Complexity Analysis 400 Evaluate Acquisition Targets with Alliances 401 Valuing an Acquisition Target 402 Alternative Valuation Methods 402 Control Premium 406 Synergy Gains 406 Discounted Cash Flow (DCF) Model 407 Constructing Cash Flow Scenarios 409 Cash Flow Adjusting Factors 410 Earnout 412 Qualitative Factors 413 Which Valuation Method Is Best? 414 Method of Payment 415 Types of Acquisitions 416 Tax Implications of an Acquisition 416 Asset Acquisition 418 Type ‘‘A’’ Reorganization 419 Type ‘‘B’’ Reorganization 420 Type ‘‘C’’ Reorganization 421 Type ‘‘D’’ Reorganization 422 Triangular Merger 423 Reverse Triangular Merger 423 Terms of the Acquisition Agreement 424 When to Use an Investment Banker 424 Summary 425 Part Seven: Other Topics Chapter 23: Employee Compensation 429 Deferred Compensation 429 Life Insurance 431 Stock Appreciation Rights 432 Stock Options 432 Restricted Stock Units 435 Bonus Sliding Scale 435 Cut Benefit Costs with a Captive Insurance Company 436 Summary 436 Chapter 24: BANKRUPTCY 437 Applicable Bankruptcy Laws 437 Players in the Bankruptcy Drama 438 Creditor and Shareholder Payment Priorities 439 Bankruptcy Sequence of Events 440 Tax Liabilities in a Bankruptcy 446 Special Bankruptcy Rules 447 Bankruptcy Act of 2005 448 Alternatives to Bankruptcy 448 Summary 449 Appendix A: New CFO Checklist 451 Appendix B: Performance Measurement Checklist 456 Appendix C: Due Diligence Checklist 465 About the Author 474 Index 477

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Book SynopsisThe definitive guide to all things IFRS IFRS Made Easy provides complete, easy-to-navigate coverage of all International Financial Reporting Standards (IFRSs) with concise explanations and hundreds of supporting examples.Table of ContentsPreface vii About the Author ix PART I – REVENUE AND EXPENSES Chapter 1 Revenue Recognition 3 Chapter 2 Employee Benefits 17 Chapter 3 Share-Based Payments 33 Chapter 4 Income Taxes 43 PART II – ASSETS AND LIABILITIES Chapter 5 Financial Instruments 61 Chapter 6 Interests in Joint Ventures 81 Chapter 7 Investments in Associates 87 Chapter 8 Inventory 93 Chapter 9 Property, Plant, and Equipment 103 Chapter 10 Intangible Assets 117 Chapter 11 Asset Impairment 129 Chapter 12 Provisions and Contingencies 143 PART III – THE FINANCIAL STATEMENTS Chapter 13 Financial Statements Presentation 153 Chapter 14 Consolidated and Separate Financial Statements 169 Chapter 15 Related Party Disclosures 175 Chapter 16 Events after the Reporting Period 179 Chapter 17 Financial Reporting in Hyperinflationary Economies 183 PART IV – PUBLIC COMPANY REPORTING Chapter 18 Operating Segments 189 Chapter 19 Earnings per Share 197 Chapter 20 Interim Financial Reporting 205 PART V – BROAD TRANSACTIONS Chapter 21 Business Combinations 215 Chapter 22 Changes in Accounting Policies, Estimates, and Errors 225 Chapter 23 Discontinued Operations and Non-Current Assets Held for Sale 233 Chapter 24 Effects of Foreign Exchange Rate Changes 241 Chapter 25 Leases 247 Index 261

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Book SynopsisThis book is a comprehensive and insightful overview of international real estate focusing on three of the BRICs: China, India and Brazil. I was pleasantly surprised to find useful market data and industry profiles for each of the countries that were very consistent with my first hand experience. The book has a wealth of information for the real estate investment analyst and practitioner and will be very useful to those seeking guidance on what to expect in emerging markets. Joseph F. Azrack, Managing Partner, Real Estate, Apollo Global Management David Lynn has set the bar with respect to real estate investment in the most compelling emerging markets. Lynn provides a framework for thinking about highly dynamic markets characterized by youthful populations, extraordinary demand, capital inefficiency and, most importantly, aspiration. This book will enlighten institutional investors and entrepreneurs alike. I look forward to another work by David Lynn addressing the froTable of ContentsPreface vii Characterizing Emerging Market Real Estate x China, India and Brazil x Outline of the Book xvi Note xvi Disclaimer xvii Acknowledgments xix CHAPTER 1 Fundamentals of Real Estate Investment 1 Investing by Property Sector 3 Investing by Style 7 Investing by Phase 9 Asset Allocation 10 Notes 10 CHAPTER 2 Investing in International Real Estate 13 Why Invest in International Real Estate? 13 Risks in International Real Estate 22 Mitigating Country Risks 23 Notes 26 CHAPTER 3 China 27 Introduction 27 Overview of the Market Environment 29 The Real Estate Market 48 Property Sectors 56 Primary Markets 66 Secondary Markets 80 Investment Strategies 84 Notes 98 CHAPTER 4 India 101 Introduction 101 Overview of the Market Environment 102 The Real Estate Market 111 Property Sectors 115 Primary Markets 128 Secondary Markets 136 Investment Strategies 140 Notes 152 CHAPTER 5 Brazil 153 Introduction 153 Overview of the Market Environment 153 The Real Estate Market 171 Property Sectors 174 Primary Markets 200 Investment Strategies 203 Notes 209 APPENDIX A Country Risk 211 APPENDIX B Property Market Practice in China 213 Bibliography 217 About the Authors 219 Index 221

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Book SynopsisGame-theoretic probability and finance come of age Glenn Shafer and Vladimir Vovk's Probability and Finance, published in 2001, showed that perfect-information games can be used to define mathematical probability. Based on fifteen years of further research, Game-Theoretic Foundations for Probability and Finance presents a mature view of the foundational role game theory can play. Its account of probability theory opens the way to new methods of prediction and testing and makes many statistical methods more transparent and widely usable. Its contributions to finance theory include purely game-theoretic accounts of Ito's stochastic calculus, the capital asset pricing model, the equity premium, and portfolio theory. Game-Theoretic Foundations for Probability and Finance is a book of research. It is also a teaching resource. Each chapter is supplemented with carefully designed exercises and notes relating the new theory to its historical contextTable of ContentsPreface xi Acknowledgments xv Part I Examples in Discrete Time 1 1 Borel’s Law of Large Numbers 5 1.1 A Protocol for Testing Forecasts 6 1.2 A Game-Theoretic Generalization of Borel’s Theorem 8 1.3 Binary Outcomes 16 1.4 Slackenings and Supermartingales 18 1.5 Calibration 19 1.6 The Computation of Strategies 21 1.7 Exercises 21 1.8 Context 24 2 Bernoulli’s and De Moivre’s Theorems 31 2.1 Game-Theoretic Expected Value and Probability 33 2.2 Bernoulli’s Theorem for Bounded Forecasting 37 2.3 A Central Limit Theorem 39 2.4 Global Upper Expected Values for Bounded Forecasting 45 2.5 Exercises 46 2.6 Context 49 3 Some Basic Supermartingales 55 3.1 Kolmogorov’s Martingale 56 3.2 Doléans’s Supermartingale 56 3.3 Hoeffding’s Supermartingale 58 3.4 Bernstein’s Supermartingale 63 3.5 Exercises 66 3.6 Context 67 4 Kolmogorov’s Law of Large Numbers 69 4.1 Stating Kolmogorov’s Law 70 4.2 Supermartingale Convergence Theorem 73 4.3 How Skeptic Forces Convergence 80 4.4 How Reality Forces Divergence 81 4.5 Forcing Games 82 4.6 Exercises 86 4.7 Context 89 5 The Law of the Iterated Logarithm 93 5.1 Validity of the Iterated-Logarithm Bound 94 5.2 Sharpness of the Iterated-Logarithm Bound 99 5.3 Additional Recent Game-Theoretic Results 100 5.4 Connections with Large Deviation Inequalities 104 5.5 Exercises 104 5.6 Context 106 Part II Abstract Theory in Discrete Time 109 6 Betting on a Single Outcome 111 6.1 Upper and Lower Expectations 113 6.2 Upper and Lower Probabilities 115 6.3 Upper Expectations with Smaller Domains 118 6.4 Offers 121 6.5 Dropping the Continuity Axiom 125 6.6 Exercises 127 6.7 Context 131 7 Abstract Testing Protocols 135 7.1 Terminology and Notation 136 7.2 Supermartingales 136 7.3 Global Upper Expected Values 142 7.4 Lindeberg’s Central Limit Theorem for Martingales 145 7.5 General Abstract Testing Protocols 146 7.6 Making the Results of Part I Abstract 151 7.7 Exercises 153 7.8 Context 155 8 Zero-One Laws 157 8.1 Lévy’s Zero-One Law 158 8.2 Global Upper Expectation 160 8.3 Global Upper and Lower Probabilities 162 8.4 Global Expected Values and Probabilities 163 8.5 Other Zero-One Laws 165 8.6 Exercises 169 8.7 Context 170 9 Relation to Measure-Theoretic Probability 175 9.1 Ville’s Theorem 176 9.2 Measure-Theoretic Representation of Upper Expectations 180 9.3 Embedding Game-Theoretic Martingales in Probability Spaces 189 9.4 Exercises 191 9.5 Context 192 Part III Applications in Discrete Time 195 10 Using Testing Protocols in Science and Technology 197 10.1 Signals in Open Protocols 198 10.2 Cournot’s Principle 201 10.3 Daltonism 202 10.4 Least Squares 207 10.5 Parametric Statistics with Signals 212 10.6 Quantum Mechanics 215 10.7 Jeffreys’s Law 217 10.8 Exercises 225 10.9 Context 226 11 Calibrating Lookbacks and p-Values 229 11.1 Lookback Calibrators 230 11.2 Lookback Protocols 235 11.3 Lookback Compromises 241 11.4 Lookbacks in Financial Markets 242 11.5 Calibrating p-Values 245 11.6 Exercises 248 11.7 Context 250 12 Defensive Forecasting 253 12.1 Defeating Strategies for Skeptic 255 12.2 Calibrated Forecasts 259 12.3 Proving the Calibration Theorems 264 12.4 Using Calibrated Forecasts for Decision Making 270 12.5 Proving the Decision Theorems 274 12.6 From Theory to Algorithm 286 12.7 Discontinuous Strategies for Skeptic 291 12.8 Exercises 295 12.9 Context 299 Part IV Game-Theoretic Finance 305 13 Emergence of Randomness in Idealized Financial Markets 309 13.1 Capital Processes and Instant Enforcement 310 13.2 Emergence of Brownian Randomness 312 13.3 Emergence of Brownian Expectation 320 13.4 Applications of Dubins–Schwarz 325 13.5 Getting Rich Quick with the Axiom of Choice 331 13.6 Exercises 333 13.7 Context 334 14 A Game-Theoretic Itô Calculus 339 14.1 Martingale Spaces 340 14.2 Conservatism of Continuous Martingales 348 14.3 Itô Integration 350 14.4 Covariation and Quadratic Variation 355 14.5 Itô’s Formula 357 14.6 Doléans Exponential and Logarithm 358 14.7 Game-Theoretic Expectation and Probability 360 14.8 Game-Theoretic Dubins–Schwarz Theorem 361 14.9 Coherence 362 14.10 Exercises 363 14.11 Context 365 15 Numeraires in Market Spaces 371 15.1 Market Spaces 372 15.2 Martingale Theory in Market Spaces 375 15.3 Girsanov’s Theorem 376 15.4 Exercises 382 15.5 Context 382 16 Equity Premium and CAPM 385 16.1 Three Fundamental Continuous I-Martingales 387 16.2 Equity Premium 389 16.3 Capital Asset Pricing Model 391 16.4 Theoretical Performance Deficit 395 16.5 Sharpe Ratio 396 16.6 Exercises 397 16.7 Context 398 17 Game-Theoretic Portfolio Theory 403 17.1 Stroock–Varadhan Martingales 405 17.2 Boosting Stroock–Varadhan Martingales 407 17.3 Outperforming the Market with Dubins–Schwarz 413 17.4 Jeffreys’s Law in Finance 414 17.5 Exercises 415 17.6 Context 416 Terminology and Notation 419 List of Symbols 425 References 429 Index 455

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Book SynopsisThe definitive new edition of the most trusted book on municipal bonds As of the end of 1998, municipal bonds, issued by state or local governments to finance public works programs, such as the building of schools, streets, and electrical grids, totaled almost $1.Table of ContentsPreface ix Writer’s Acknowledgments xi CHAPTER 1 Overview of the Municipal Bond Market 1 Introduction 1 The Issuers 4 Municipal Bond Dealers 7 The Lawyers 10 Financial Advisors, Specialists, and Other Consultants 11 The Rating Agencies 12 Bond Brokers 13 The Credit Enhancers 13 The Trustees and Paying Agents 17 The Investors 17 Information and Technology 18 The Regulators 19 Other Participants 21 CHAPTER 2 The Basics of Municipal Securities 23 Description of Municipal Securities 23 Yield and Price 26 Types of Yields 28 Tax Exemption of Municipal Bonds 29 Types of Municipal Bonds 35 Short-Term Securities 36 Other Characteristics of Municipal Bonds 45 CHAPTER 3 The Issuers 55 Introduction 55 Authorities and Special Districts 56 The Theory of Municipal Debt: Pay-As-You-Use versus Pay-As-You-Go 57 The Uses of Municipal Debt 59 The Security for Municipal Bonds 61 The Financing Process 68 The Financing Documents 71 Structuring the Debt 81 State and Local Government Accounting 87 CHAPTER 4 The Primary Market 93 Issuance Trends in the Primary Market 93 The Basics of Underwriting 96 Negotiated Underwriting 101 Competitive Underwriting 105 Orders and Procedures 111 CHAPTER 5 The Secondary Market 117 Introduction 117 The Over-the-Counter Market 117 E-Commerce, Information, and Technology 119 Selling Municipal Bonds 121 The Basics of Municipal Bond Trading 123 Municipal Bond Trading 124 How a Trade Is Done 128 Municipal Futures 130 Providers of Data in the Municipal Market 131 Market Statistics and Indexes 132 MSRB Record-Keeping Rules 136 CHAPTER 6 Investing in Bonds 139 Introduction 139 The Basic Principles of Investing in Bonds 139 Measures of Yield and Return 143 Yield to Maturity and Price 145 Investment Objectives 147 Risk Factors 148 Investor Strategies 150 Taxation of Municipal Bonds 152 Other Investment Factors 161 Investor Categories 163 CHAPTER 7 Credit Analysis 173 Introduction 173 The Rating Agencies 175 The Rating Process 176 General Obligation Bonds 179 Revenue Bonds 197 Other Factors Affecting Credit 207 CHAPTER 8 Understanding Interest Rates 211 Introduction 211 Determinants of the Overall Level of Interest Rates 212 Term Structure of Interest Rates 216 Municipal Bond Rates 221 CHAPTER 9 Regulatory and Disclosure Requirements 225 Introduction 225 The Basis of Federal Tax Exemption 226 History of Federal Tax Legislation Affecting Municipal Securities 228 The Current Statutory Exemption 230 Application of Federal Securities Laws to Municipal Securities 233 The Municipal Securities Rulemaking Board 239 CHAPTER 10 Financial Products 247 Introduction 247 Interest Rate Swaps 247 Interest Rate Caps, Floors, and Collars 252 Other Swap Products 253 Managing the Asset Side 253 Credit Default Swaps 254 APPENDIX Municipal Securities Rulemaking Board Rule G-33 257 Glossary 265 Bibliography 283 Web Sites 283 Books and Publications 284 About the Writer 285 Index 287

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Book SynopsisPractical trading tools and techniques developed by Zacks Investment Research While there are many stock trading systems on the market today, that use a variety of different approaches and indicators, the approach used by Zacks Investment Research is built around the number one driver of stock prices: company earnings.Table of ContentsAcknowledgments xiii Introduction xv Chapter 1 The Importance of Screening and Backtesting 1 Why Should I Use a Stock Screener? 1 Backtesting! 2 Chapter 2 Identifying What Kind of Trader You Are 5 Question 1: What Kinds of Stocks Do You Want to Invest In? 5 Question 2: What Characteristics Do You Want Your Stocks to Have? 6 Question 3: What Do You Want Your Stocks to Do for You? 7 Chapter 3 Defining the Basic Trading Styles 9 Momentum Style 9 Aggressive Growth Style 11 Value Style 12 Growth and Income Style 12 “All Style” Style 13 Technical Analysis 14 Winning in Style 14 Chapter 4 Trading the Zacks Rank 15 The Zacks Rank versus the Market 15 About Len Zacks 17 Calculating the Zacks Rank 18 What the Rankings Mean 20 Four Factors of the Zacks Rank 24 Chapter 5 Beyond the Zacks Rank 27 Filtering the Zacks Rank 27 How Many Stocks are Right for You? 32 Chapter 6 How to Trade the Strategies 33 Once a Month 33 Once a Week 35 Combining Holding Periods 35 Chapter 7 Winning Momentum Strategies 37 Big Money 37 Earnings Acceleration 42 Increasing Earnings 44 New Highs 46 Using New Highs for Sector and Industry Analysis 50 Summary 53 Chapter 8 Winning Aggressive Growth Strategies 55 Small-Cap Growth 55 All-Cap Growth 61 Sizing Up the Markets 64 Zacks Rank 5 or 4 to 1 66 First Profit 68 Summary 70 Chapter 9 Winning Value Strategies 71 Value and Spark 71 R-Squared Growth 78 ROE for Your ROI 82 Cash is King 83 Price to Cash Flow 84 Statistical Analysis of P/CF, P/E, P/S, P/B, and PEG 85 Combined Valuation Screen 94 Summary 95 Chapter 10 Winning Growth and Income Strategies 97 Growth and Income Winners 97 Growth and Income Method 1 102 Modifying Your Strategies 103 Dividend Attraction 104 Summary 108 Chapter 11 Winning “All Style” Strategies (and Other Stuff That Works) 109 Finding Growth and Value Stocks the Right Way 110 Sales and Margins 113 Relative Price Strength 115 Broker Rating Upgrades 118 New Analyst Coverage 121 Top Stocks, Top Industries 122 Combining Two Great Ways for Identifying the Best Sectors and Industries 124 Earnings Yield 125 Calculating Price Targets 127 Summary 129 Chapter 12 Applying Technical Analysis 131 Increasing Price and Volume 132 TA and FA Winners 133 3 Days Up, Price and Volume 135 Moving Averages 139 Summary 148 Chapter 13 Identifying Chart Patterns 149 Symmetrical Triangles 150 Ascending Triangles 154 Descending Triangles 158 Flags and Pennants 162 Rectangles 171 Wedges 176 Head and Shoulders 182 Inverted Head and Shoulders 184 Screening for Chart Patterns and Consolidation Areas 192 The Pattern That Called the Market Top and Bottom in 2007 and 2009 195 Summary 198 Chapter 14 The Right Tools for the Job 199 A Good Ranking System 200 Screeners and Backtesters 201 Research Wizard: A Complete Research Tool 204 Chapter 15 Getting Started Screening and Backtesting 207 Screening for Stocks 207 Backtesting Your Screens 211 Advanced Screening and Backtesting 221 Summary 233 Chapter 16 Short Selling Strategies for Bear Markets 235 Toxic Stocks 236 Decreasing Earnings Two Years Out 239 Summary 241 Chapter 17 Managing Risk and Cutting Losses 243 Using Stop Losses 243 Diversification and Portfolio Weighting 245 Summary 247 Chapter 18 Know Your Options 249 The Option is Yours 249 Buying Calls and Puts 252 Straddles and Strangles 258 Spreads 260 Covered Call Writing 262 Uncovered Call Writing 267 Put Option Writing 268 Stock Screening for Options 273 Summary 277 Chapter 19 Investing in ETFs 279 ETFs for Any Market and Any Direction 279 Screening for the Right Sector and Industry ETFs 281 Chapter 20 Putting It All Together 283 Disclaimer 285 Free Trials and Other Resources 287 Index 289

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Book SynopsisA timely guide to making the best investment strategies even better A wide variety of strategies have been identified over the years, which purportedly outperform the stock market. Some of these include buying undervalued stocks while others rely on technical analysis techniques. It''s fair to say no one method is fool proof and most go through both up and down periods. The challenge for an investor is picking the right method at the right time. The Little Book of Stock Market Profits shows you how to achieve this elusive goal and make the most of your time in today''s markets. Written by Mitch Zacks, Senior Portfolio Manager of Zacks Investment Management, this latest title in the Little Book series reveals stock market strategies that really work and then shows you how they can be made even better. It skillfully highlights earnings-based investing strategies, the hallmark of the Zacks process, but it also identifies strategies based on valuations, seasonal paTable of ContentsIntroduction vii Chapter One The Crystal Ball of Wall Street 1 Chapter Two Size Matters 19 Chapter Three Once More Unto the Breach 37 Chapter Four The Big Mo 59 Chapter Five The Inside Story 77 Chapter Six Song of the Shares 93 Chapter Seven Cash Is King 111 Chapter Eight It’s Worth What?! 127 Chapter Nine Earnings Surprises: The Gift that Keeps on Giving 145 Chapter Ten A Time to Plant and a Time to Reap 165 Chapter Eleven The More the Merrier 185 Acknowledgments 203

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Book SynopsisVery few of the decision makers involved in a venture backed company have a definitive understanding of how valuation techniques are being applied to their financial statements and their decision making process. This casebook provides a quick and accurate road map on how valuation techniques used for tax, financial reporting and deal structure impact a company''s past, present and future. The book includes real world case studies to simplify this complex subject for the practitioners serving companies, the founders and executives running the companies, and the investors that fund the companies.Table of ContentsAcknowledgments ix Introduction What You Don’t Know About Valuation Will Cost You Money 1 Chapter 1 Using Facebook, Twitter, and LinkedIn to Explain VC Valuation Gains and Losses: How VCs, Angels, Founders, and Employees Give Up Investment Cash Flow Every Day 13 Did Valuation Ignorance Cost ConnectU (and the Winklevosses) $50MM? 14 An Expert Doesn’t Need a 409A Valuation When He or She Has a Certificate and Basic Math 15 Valuing Facebook’s Common Stock Compared to Preferred Stock in Minutes 16 What the Winklevosses Would Have Seen in Any 409A Valuation Report 19 Deriving a Discount for Lack of Marketability for Valuations 27 Facebook at $80 Billion Valuation versus Enron at $80 Billion Valuation 35 Deal Terms, Waterfalls, and the Pre-Money Myth 36 The Pre-Money Myth 44 Summary 56 Chapter 2 Should Venture-Backed Companies Even Consider a DCF Model?: Introducing the Life Science Valuation Case: Zogenix 57 Zogenix: Company Background Summary and Highlights 58 Leaping Forward Just 20 Months, the Company Files for an IPO 64 Order of Valuations Presented in This Case 67 Chapter 3 Valuation Methods versus Allocation Methods Regarding Zogenix 69 Separating Enterprise Value from the Allocation of That Value 69 Valuing Total Equity 72 Using Future Value (FV) and Present Value (PV) to Value Future Cash Flows Today 79 Summary 82 Chapter 4 Applying the Typical DCF Model to a Venture-Backed Company Hardly Ever Works 85 The Gordon Growth Model 85 High Growth Limits the Gordon Growth Model 87 Dividend Irrelevance and Capital Structure Irrelevance 90 Using Comparables (Generally Market Multiples) to Generate a Terminal Value 91 Actual Differences between Angels and VCs versus Perceived Differences 100 Applying Valuation Methods and Allocation Methods at Inception 102 Summary 104 Chapter 5 “Enterprise Value” + “Allocation Methods” = Value Destruction: Undervaluing Companies and Overvaluing Employee Options 107 Most 409A Valuations Undervalue the Company and Simultaneously Overvalue Employee Stock Options 107 Did Auditors Drive Valuators to Overvalue Employee Stock Options? 109 Most 409A Enterprise Value Calculations Ignore the “Takeover” Value of Preferred 113 The Realistic Range of Possibilities Depends on Who the Investors Are 119 Overstating Returns and Understating Returns on the Same Asset (Simultaneously) 125 What Happens to Fund IRRs When You Assume Book Value Equals Market Value? 128 The Real Cost of Fair Value, Fair Market Value, and Enterprise Value 132 Yahoo! Case 137 Chapter 6 Why You Should D.O.W.T. (Doubt) Venture Capital Returns—Option Pool Reserve 159 Unissued Option Pools 159 Value Conclusion Elements Impacted by Option Pool Reserve Assumptions 161 Impact on Parties Relying on Assumptions of VC Investments 176 Chapter 7 If Valuation Can’t Make You Money, Do You Really Need It?: Learning Practical Applications from Kayak.com 183 Applying Studies to Real-World Cases 186 Important Questions to Ask 213 Summary 223 Chapter 8 Don’t Hate the Appraiser (Blame the Auditor Instead) 225 Interview with Jeff Faust, AVA 226 Summary 236 Chapter 9 Don’t Blame the Auditors (Blame the Practice Aid Instead): 409A Valuation Professionals Discussing Topic 820 (FAS 157) with VC CFOs 237 Introduction to the Expert Panelists 238 The Auditor’s Valuation “Bible” 239 SAS101 Tests, PWERMS, and OPMs 240 PWERMS and rNPV/eNPV Models 243 Subjectivity and the PWERM (or “Power”) Method 243 Finding Inputs for the OPM Model 245 Enterprise Values versus Allocations 246 Next Round Pricing and Topic 820 248 Different Ways of Treating Granted, Unvested, and Reserved Options 250 Valuing Warrants in Venture-Backed Companies 252 Quantifying Qualitative Inputs to Value Conclusions for VC-Funded Companies 253 Discounts for Lack of Marketability (DLOM) and Venture-Fund Portfolios 254 Sharespost, SecondMarket as Market Inputs 258 Summary 262 Chapter 10 Now That You Understand Venture Capital Valuation, Share It 263 About the Author 269 Index 271

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Book SynopsisMake more informed project investment decisions by knowing what issues to examine in the planning process and how to analyze their impacts Poor or insufficient planning is primarily responsible for the inordinate number of idle and rusting capital facilities around the world, with investment decisions often made on the basis of either intuition or inadequate analysis. Investment Project Design: A Guide to Financial and Economic Analysis with Constraints alerts potential investors and other stakeholders to precipitous changes in the investment milieu as a result of constraints on resources and infrastructure, economic and political turmoil, and population growth. The guide Includes descriptions of specific methods of financial and economic analysis for new investments and for expansion of an existing enterprise Covers project risk assessment, mitigation and avoidance Provides real-life case studies, adapted for prTable of ContentsAcknowledgments xi Symbols and Most Frequently Used Acronyms xiii Introduction 1 CHAPTER 1 Investment Environment 9 Systematic Project Analysis 10 Project Environment and Strategy 11 Project Development Process 33 Planning Horizon and Project Life 43 Project Scope 44 Preinvestment Studies 46 Investment Planning Infrastructure 58 Appendix 1.1: Elements of Commercial and Wider Domains 60 Appendix 1.2: Outline of Business Plan for a Manufacturing Enterprise 62 Appendix 1.3: Outline of Design/Study Report 63 Appendix 1.4: Information Flow Details 67 Notes 69 References 74 CHAPTER 2 Preparing Pro-Forma Financial Statements 75 Accounting System 77 Process of Financial Analysis 81 Financial Costs and Benefits 84 Investment Costs 87 Production Cost 116 Operating Cost, Factory Cost, and Cost of Product Sold 122 Financial Statements 127 Appendix 2.1: Depreciation Methods 142 Appendix 2.2: Starting Inventory Balance 148 Notes 150 CHAPTER 3 Financial Indicators and Criteria 155 Static Indicators 155 Types of Static Indicators 156 Dynamic Indicators 169 Financial Criteria for Investment Decisions 188 Analysis of Joint Ventures 203 Project of an Ongoing Enterprise 206 Appendix 3.1: Example of Cost of Capital Calculations 219 Notes 225 References 228 CHAPTER 4 Financing the Project 231 Capital Structure 232 Cost of Capital 249 Notes 255 References 256 CHAPTER 5 The Economic Perspective 257 Private Sector 259 Public Sector 259 General Rationale for Economic Evaluation—Who Needs It? 260 Macroeconomic View—Impact on the National Economy 262 Price Distortions 266 Applicability and Scope 272 Economic Pricing Principles 278 Shadow Prices of Primary Resources (National Parameters) 292 Conversion and Adjustment Factors 297 Appendix 5.1: Costs and Benefits of Revenue Projects 299 Appendix 5.2: Global Pricing Framework—Importable Input Forgone 301 Notes 303 References 307 CHAPTER 6 Economic Cost/Benefit Analysis 309 Adjustments for the Wider Domain 311 Valuation at Market Prices 311 Define the Accounting Unit 317 Value-Added 343 Notes 354 References 358 CHAPTER 7 Investment Decisions under Uncertainty and Risk 359 Forecasting 359 Risk—Dealing with Uncertainty 364 Quantitative Risk Assessment 369 Qualitative Risk Assessment 380 Risk Management 380 Risk Immunization for Financiers 383 International Investors and Risk 385 Appendix 7.1: Discrete Probability Analysis—Multivariate 386 Notes 387 References 390 CHAPTER 8 Project Appraisal 391 Macro-Micro Appraisal 392 SWOT Analysis 393 Stakeholder Perspectives 396 Appraisal Report 399 Caveats for the Appraiser 406 Notes 407 References 408 CHAPTER 9 Implementation Planning and Budgeting 409 Implementation Planning 410 Project Management 412 Conducting the Implementation Project 416 Implementation Budget 437 Appendix 9.1: Sample Responsibility Matrix for a Portion of a Project 438 Appendix 9.2: Checklist of Project Implementation Costs 438 Notes 442 References 443 About the Authors 445 Index 447

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Book SynopsisA comprehensive guide to investment analysis and portfolio management by an expert team from the CFA Institute In a world of specialization, no other profession likely requires such broad, yet in-depth knowledge than that of financial analyst. Financial analysts must not only possess a broad understanding of the financial markets-including structure, organization, efficiency, portfolio management, risk and return, and planning and construction-but they must also have a strong sense of how to evaluate industries and companies prior to engaging in an analysis of a specific stock. Investments: Principles of Portfolio and Equity Analysis provides the broad-based knowledge professionals and students of the markets need to manage money and maximize return. The book Details market structure and functions, market anomalies, secondary market basics, and regulation Describes investment assets and asset classes, types of positions and orders, as well as forTable of ContentsForeword xiii Acknowledgments xv Introduction xvii Chapter 1 Market Organization and Structure 1 Learning Outcomes 1 1. Introduction 1 2. The Functions of the Financial System 2 2.1. Helping People Achieve Their Purposes in Using the Financial System 3 2.2. Determining Rates of Return 8 2.3. Capital Allocation Efficiency 9 3. Assets and Contracts 10 3.1. Classifications of Assets and Markets 11 3.2. Securities 13 3.3. Currencies 16 3.4. Contracts 16 3.5. Commodities 22 3.6. Real Assets 22 4. Financial Intermediaries 24 4.1. Brokers, Exchanges, and Alternative Trading Systems 25 4.2. Dealers 26 4.3. Securitizers 27 4.4. Depository Institutions and Other Financial Corporations 29 4.5. Insurance Companies 30 4.6. Arbitrageurs 31 4.7. Settlement and Custodial Services 33 4.8. Summary 35 5. Positions 35 5.1. Short Positions 36 5.2. Levered Positions 38 6. Orders 41 6.1. Execution Instructions 42 6.2. Validity Instructions 45 6.3. Clearing Instructions 47 7. Primary Security Markets 47 7.1. Public Offerings 48 7.2. Private Placements and Other Primary Market Transactions 50 7.3. Importance of Secondary Markets to Primary Markets 51 8. Secondary Security Market and Contract Market Structures 51 8.1. Trading Sessions 51 8.2. Execution Mechanisms 52 8.3. Market Information Systems 56 9. Well-Functioning Financial Systems 56 10. Market Regulation 58 11. Summary 61 Problems 63 Chapter 2 Security Market Indices 73 Learning Outcomes 73 1. Introduction 73 2. Index Definition and Calculations of Value and Returns 75 2.1. Calculation of Single-Period Returns 75 2.2. Calculation of Index Values over Multiple Time Periods 77 3. Index Construction and Management 78 3.1. Target Market and Security Selection 79 3.2. Index Weighting 79 3.3. Index Management: Rebalancing and Reconstitution 88 4. Uses of Market Indices 90 4.1. Gauges of Market Sentiment 90 4.2. Proxies for Measuring and Modeling Returns, Systematic Risk, and Risk-Adjusted Performance 90 4.3. Proxies for Asset Classes in Asset Allocation Models 90 4.4. Benchmarks for Actively Managed Portfolios 91 4.5. Model Portfolios for Investment Products 91 5. Equity Indices 91 5.1. Broad Market Indices 91 5.2. Multimarket Indices 92 5.3. Sector Indices 92 5.4. Style Indices 93 6. Fixed-Income Indices 94 6.1. Construction 94 6.2. Types of Fixed-Income Indices 95 7. Indices for Alternative Investments 96 7.1. Commodity Indices 98 7.2. Real Estate Investment Trust Indices 98 7.3. Hedge Fund Indices 98 8. Summary 101 Problems 102 Chapter 3 Market Efficiency 109 Learning Outcomes 109 1. Introduction 109 2. The Concept of Market Efficiency 111 2.1. The Description of Efficient Markets 111 2.2. Market Value versus Intrinsic Value 113 2.3. Factors Contributing to and Impeding a Market’s Efficiency 114 2.4. Transaction Costs and Information-Acquisition Costs 117 3. Forms of Market Efficiency 118 3.1. Weak Form 119 3.2. Semistrong Form 119 3.3. Strong Form 122 3.4. Implications of the Efficient Market Hypothesis 122 4. Market Pricing Anomalies 124 4.1. Time-Series Anomalies 125 4.2. Cross-Sectional Anomalies 127 4.3. Other Anomalies 128 4.4. Implications for Investment Strategies 130 5. Behavioral Finance 131 5.1. Loss Aversion 131 5.2. Overconfidence 132 5.3. Other Behavioral Biases 132 5.4. Information Cascades 133 5.5. Behavioral Finance and Efficient Markets 133 6. Summary 134 Problems 134 Chapter 4 Portfolio Management: An Overview 139 Learning Outcomes 139 1. Introduction 139 2. A Portfolio Perspective on Investing 140 2.1. Portfolio Diversification: Avoiding Disaster 140 2.2. Portfolios: Reduce Risk 142 2.3. Portfolios: Composition Matters for the Risk–Return Tradeoff 145 2.4. Portfolios: Not Necessarily Downside Protection 145 2.5. Portfolios: The Emergence of Modern Portfolio Theory 148 3. Investment Clients 149 3.1. Individual Investors 149 3.2. Institutional Investors 150 4. Steps in the Portfolio Management Process 156 4.1. Step One: The Planning Step 156 4.2. Step Two: The Execution Step 156 4.3. Step Three: The Feedback Step 159 5. Pooled Investments 160 5.1. Mutual Funds 160 5.2. Types of Mutual Funds 164 5.3. Other Investment Products 167 6. Summary 172 Problems 172 Chapter 5 Portfolio Risk and Return: Part I 175 Learning Outcomes 175 1. Introduction 175 2. Investment Characteristics of Assets 176 2.1. Return 176 2.2. Other Major Return Measures and Their Applications 185 2.3. Variance and Covariance of Returns 189 2.4. Historical Return and Risk 192 2.5. Other Investment Characteristics 197 3. Risk Aversion and Portfolio Selection 200 3.1. The Concept of Risk Aversion 201 3.2. Utility Theory and Indifference Curves 202 3.3. Application of Utility Theory to Portfolio Selection 206 4. Portfolio Risk 209 4.1. Portfolio of Two Risky Assets 210 4.2. Portfolio of Many Risky Assets 215 4.3. The Power of Diversification 216 5. Efficient Frontier and Investor’s Optimal Portfolio 222 5.1. Investment Opportunity Set 222 5.2. Minimum-Variance Portfolios 223 5.3. A Risk-Free Asset and Many Risky Assets 225 5.4. Optimal Investor Portfolio 228 6. Summary 234 Problems 234 Chapter 6 Portfolio Risk and Return: Part II 243 Learning Outcomes 243 1. Introduction 243 2. Capital Market Theory 244 2.1. Portfolio of Risk-Free and Risky Assets 244 2.2. The Capital Market Line 248 3. Pricing of Risk and Computation of Expected Return 256 3.1. Systematic Risk and Nonsystematic Risk 257 3.2. Calculation and Interpretation of Beta 259 4. The Capital Asset Pricing Model 267 4.1. Assumptions of the CAPM 267 4.2. The Security Market Line 269 4.3. Applications of the CAPM 272 5. Beyond the Capital Asset Pricing Model 284 5.1. The CAPM 284 5.2. Limitations of the CAPM 284 5.3. Extensions to the CAPM 286 5.4. The CAPM and Beyond 287 6. Summary 287 Problems 288 Chapter 7 Basics of Portfolio Planning and Construction 295 Learning Outcomes 295 1. Introduction 295 2. Portfolio Planning 296 2.1. The Investment Policy Statement 296 2.2. Major Components of an IPS 297 2.3. Gathering Client Information 309 3. Portfolio Construction 312 3.1. Capital Market Expectations 312 3.2. The Strategic Asset Allocation 313 3.3. Steps toward an Actual Portfolio 321 3.4. Additional Portfolio Organizing Principles 325 4. Summary 326 Problems 327 Chapter 8 Overview of Equity Securities 331 Learning Outcomes 331 1. Introduction 331 2. Equity Securities in Global Financial Markets 332 3. Types and Characteristics of Equity Securities 338 3.1. Common Shares 339 3.2. Preference Shares 343 4. Private versus Public Equity Securities 345 5. Investing in Nondomestic Equity Securities 347 5.1. Direct Investing 348 5.2. Depository Receipts 349 6. Risk and Return Characteristics of Equity Securities 353 6.1. Return Characteristics of Equity Securities 353 6.2. Risk of Equity Securities 354 7. Equity Securities and Company Value 356 7.1. Accounting Return on Equity 356 7.2. The Cost of Equity and Investors’ Required Rates of Return 361 8. Summary 362 Problems 363 Chapter 9 Introduction to Industry and Company Analysis 369 Learning Outcomes 369 1. Introduction 370 2. Uses of Industry Analysis 370 3. Approaches to Identifying Similar Companies 371 3.1. Products and/or Services Supplied 371 3.2. Business-Cycle Sensitivities 372 3.3. Statistical Similarities 374 4. Industry Classification Systems 374 4.1. Commercial Industry Classification Systems 374 4.2. Governmental Industry Classification Systems 378 4.3. Strengths and Weaknesses of Current Systems 380 4.4. Constructing a Peer Group 380 5. Describing and Analyzing an Industry 385 5.1. Principles of Strategic Analysis 386 5.2. External Influences on Industry Growth, Profitability, and Risk 405 6. Company Analysis 412 6.1. Elements That Should Be Covered in a Company Analysis 413 6.2. Spreadsheet Modeling 416 7. Summary 417 Problems 420 Chapter 10 Equity Valuation: Concepts and Basic Tools 425 Learning Outcomes 425 1. Introduction 426 2. Estimated Value and Market Price 426 3. Major Categories of Equity Valuation Models 428 4. Present Value Models: The Dividend Discount Model 430 4.1. Preferred Stock Valuation 434 4.2. The Gordon Growth Model 436 4.3. Multistage Dividend Discount Models 441 5. Multiplier Models 445 5.1. Relationships among Price Multiples, Present Value Models, and Fundamentals 445 5.2. The Method of Comparables 449 5.3. Illustration of a Valuation Based on Price Multiples 452 5.4. Enterprise Value 454 6. Asset-Based Valuation 457 7. Summary 461 Problems 462 Chapter 11 Equity Market Valuation 469 Learning Outcomes 469 1. Introduction 469 2. Estimating a Justified P/E Ratio 470 2.1. Neoclassical Approach to Growth Accounting 470 2.2. The China Economic Experience 472 2.3. Quantifying China’s Future Economic Growth 474 2.4. Equity Market Valuation 476 3. Top-Down and Bottom-Up Forecasting 484 3.1. Portfolio Suitability of Each Forecasting Type 485 3.2. Using Both Forecasting Types 487 3.3. Top-Down and Bottom-Up Forecasting of Market Earnings per Share 488 4. Relative Value Models 491 4.1. Earnings-Based Models 491 4.2. Asset-Based Models 502 5. Summary 506 Problems 508 Chapter 12 Technical Analysis 515 Learning Outcomes 515 1. Introduction 515 2. Technical Analysis: Definition and Scope 516 2.1. Principles and Assumptions 516 2.2. Technical and Fundamental Analysis 518 3. Technical Analysis Tools 520 3.1. Charts 520 3.2. Trend 530 3.3. Chart Patterns 532 3.4. Technical Indicators 544 3.5. Cycles 562 4. Elliott Wave Theory 563 5. Intermarket Analysis 566 6. Summary 568 Problems 570 Glossary 575 References 589 About the Authors 595 About the CFA Program 601 Index 603

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Book Synopsis* Financial analysts must have a broad understanding of the financial markets from structure, organization, and efficiency to portfolio management, risk and return, and planning and construction.Table of ContentsPART I: Learning Outcomes, Summary Overview, and Problems CHAPTER 1: Market Organization and Structure 3 Learning Outcomes 3 Summary Overview 3 Problems 5 CHAPTER 2: Security Market Indices 13 Learning Outcomes 13 Summary Overview 13 Problems 14 CHAPTER 3: Market Efficiency 21 Learning Outcomes 21 Summary Overview 21 Problems 22 CHAPTER 4: Portfolio Management: An Overview 27 Learning Outcomes 27 Summary Overview 27 Problems 28 CHAPTER 5: Portfolio Risk and Return: Part I 31 Learning Outcomes 31 Summary Overview 31 Problems 32 CHAPTER 6: Portfolio Risk and Return: Part II 39 Learning Outcomes 39 Summary Overview 39 Problems 40 CHAPTER 7: Basics of Portfolio Planning and Construction 47 Learning Outcomes 47 Summary Overview 47 Problems 48 CHAPTER 8: Overview of Equity Securities 53 Learning Outcomes 53 Summary Overview 53 Problems 54 CHAPTER 9: Introduction to Industry and Company Analysis 59 Learning Outcomes 59 Summary Overview 59 Problems 62 CHAPTER 10: Equity Valuation: Concepts and Basic Tools 67 Learning Outcomes 67 Summary Overview 67 Problems 68 CHAPTER 11: Equity Market Valuation 75 Learning Outcomes 75 Summary Overview 75 Problems 77 CHAPTER 12: Technical Analysis 85 Learning Outcomes 85 Summary Overview 85 Problems 87 PART II: Solutions CHAPTER 1: Market Organization and Structure 95 Solutions 95 CHAPTER 2: Security Market Indices 99 Solutions 99 CHAPTER 3: Market Efficiency 103 Solutions 103 CHAPTER 4: Portfolio Management: An Overview 105 Solutions 105 CHAPTER 5: Portfolio Risk and Return: Part I 107 Solutions 107 CHAPTER 6: Portfolio Risk and Return: Part II 111 Solutions 111 CHAPTER 7: Basics of Portfolio Planning and Construction 115 Solutions 115 CHAPTER 8: Overview of Equity Securities 119 Solutions 119 CHAPTER 9: Introduction to Industry and Company Analysis 121 Solutions 121 CHAPTER 10: Equity Valuation: Concepts and Basic Tools 123 Solutions 123 CHAPTER 11: Equity Market Valuation 127 Solutions 127 CHAPTER 12: Technical Analysis 131 Solutions 131 About the CFA Program 134

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Book SynopsisThe quick and easy way to manage money and achieve financial goals The recent economic meltdown has left people in terrible financial shape with little idea of how to turn things around. Using Morningstar''s time-tested strategies and sensible approach to money management, Morningstar''s 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances breaks down important financial tasks into do-able chunks, each of which can be accomplished in 30 minutes or less. The practical, no-nonsense book Lays out the tools to get organized, including how to create a filing and bill paying system Details how to find the best uses for one''s money, as well as how to properly invest for savings, college, and retirement Other titles by Benz: Morningstar Guide to Mutual Funds: Five Star Strategies for Success These are uncertain times. Morningstar''s 30-Minute Money Solutions provides expert guidance on all aspectTable of ContentsForeword. Preface. Acknowledgments. Part One. Find Your Baseline. Chapter 1. Calculate Your Net Worth. Chapter 2. See Where Your Money Goes. Chapter 3. Set Your Financial Goals. Chapter 4. Create a Budget. Part Two. Get Organized. Chapter 5. Create a Bill-Paying System. Chapter 6. Create A Filing System. Chapter 7. Create a Master Directory. Part Three. Find the Best Use of Your Money. Chapter 8. Determine Whether to Pay Down Debt or Invest. Chapter 9. Decide Where to Invest for Retirement. Part Four. Get Started in Investing. Chapter 10. Create an Emergency Fund. Chapter 11. Find the Right Stock/Bond Mix. Chapter 12. Create an Investment Policy Statement. Chapter 13. Invest for Short- and Intermediate-Term Goals. Chapter 14. Create a Hands-Off Long-Term Portfolio. Part Five. Invest in Your Company Retirement Plan. Chapter 15. Determine How Good Your Company Retirement Plan Is. Chapter 16. Decide between a Traditional and Roth 401(k). Chapter 17. Select the Best Investments for Your Company Retirement Plan. Chapter 18. Make the Most of a Subpar 401(k) Plan. Part Six. Invest in an IRA. Chapter 19. Determine What Type of IRA Is Best for You. Chapter 20. Identify the Best Investments for Your IRA. Chapter 21. Determine Whether to Convert Your IRA. Chapter 22. Roll Over Your Retirement Plan into an IRA. Part Seven. Invest for College. Chapter 23. Find the Right College Savings Vehicle. Chapter 24. Find the Right 529 Plan. Chapter 25. Select the Right Investments for Your College Savings Plan. Part Eight. Invest in Your Taxable Account. Chapter 26. Identify the Best Investments for Taxable Accounts. Chapter 27. Manage Your Portfolio for Tax Efficiency. Chapter 28. Harvest Tax Losses. Part Nine. Invest During Retirement. Chapter 29. Determine Your Portfolio Withdrawal Rate. Chapter 30. Build an In-Retirement Portfolio. Chapter 31. Find the Right Sequence of In-Retirement Withdrawals. Part Ten. Monitor Your Investments. Chapter 32. Conduct a Portfolio Checkup. Chapter 33. Rebalance Your Portfolio. Part Eleven. Cover Your Base on Estate Planning. Chapter 34. Get Started on Your Estate Plan. Chapter 35. Handle Beneficiary Designations. Chapter 36. Create a Personal Legacy. About the Author. Index.

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Book SynopsisFrom the investment experts at Weiss Research, the ultimate guide to preparing for and profiting during a disaster of any kind Life is unpredictable. Economic and natural disasters can happen anytime and anywhere. The Ultimate Suburban Survivalist Guide: The Smartest Money Moves to Prepare for Any Crisis describes the simple things people can do today to prepare for anything and everything that life might throw at them tomorrow. It also offers comprehensive advice on how to profit during a market collapse, energy crisis, or natural disaster. The guide Explains how to invest in today''s new, more turbulent financial landscape Reveals what can be used as money should the dollar lose its value How to cut home energy costs, and why it''s prudent to stock up on supplies in preparation for natural disasters Panicking during a disaster won''t solve anything. Be prepared for any number of potential economic calamities and natural dTable of ContentsForeword vii Acknowledgments ix Introduction xi Part I The End of the World as We Know It Chapter 1 The Most Likely Disasters You’ll Face 3 Chapter 2 The Quick and the Dead—and the Survivors 23 Part II Money—Personal Finance, Cash, and Precious Metals Chapter 3 Personal Finance 39 Chapter 4 Gold, Hard Assets, and Alternative Currencies 59 Chapter 5 Investing for the Five Emergencies 87 Part III Be Prepared—Grub and Gear Chapter 6 Water 127 Chapter 7 Food Storage for Couch Potatoes 137 Chapter 8 Smart Shopping—How to Plan Ahead for Next Week’s Meals (and Save Significant Money) 163 Chapter 9 Gardening 175 Part IV Health, Home, and Education Chapter 10 Health, Medicine, and Disease 193 Chapter 11 Your House, Home Security, and Power 217 Chapter 12 Education and Entertainment 253 Part V Transportation and Evacuation Chapter 13 Transportation 277 Chapter 14 The Final Option—Evacuate 297 Notes 317 About the Author 323 Index 325

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Book SynopsisTo truly be successful, today's financial advisor must strike the right balance between effectively engaging with his or her clients and finding meaningful ways to maintain their financial security. By framing your mission in this way, you can help your clients clarify their vision, build a plan to achieve it, and manage that plan so they stay on track. Nobody understands this better than authors Timothy Noonan and Matt Smithtwo seasoned financial professionals with over five decades of combined experience working in the asset management business. And now, in Someday Rich, they show financial advisors with clients who are rich, or have the opportunity to become rich, how to sustain a client's desired lifestyle to, and through, retirement. Engaging and informative, Someday Rich provides the context, description, and implementation suggestions for the Personal Asset Liability Modela process that will allow you to determine a client's funded status relative to their future spenTable of ContentsForeword ix Preface xi Acknowledgments xv Introduction 1 Chapter 1 Time for a Real Conversation 11 Chapter 2 How We Got Here 27 Chapter 3 The Right Clients 43 Chapter 4 Connecting the Dots 61 Chapter 5 The Personal Asset Liability Model—Funded Status 79 Chapter 6 The Personal Asset Liability Model—Investment Plan 101 Chapter 7 Making a Good Business of Giving Good Advice 133 Chapter 8 Investor Archetypes 161 Chapter 9 Tripping Over the Finish Line 171 Chapter 10 On Shaping One’s Future 191Albert Bandura Chapter 11 Building a Simple and Powerful Solution for Retirement Saving—Russell’s Approach to Target Date Funds 203Grant W. Gardner and Yuan-An Fan Chapter 12 Investment Aspects of Longevity Risk 223Don Ezra Chapter 13 Mismeasurement of Risk in Financial Planning—A Lesson in Risk Decomposition 237Richard K. Fullmer Chapter 14 Modern Portfolio Decumulation—A New Strategy for Managing Retirement Income 249Richard K. Fullmer Appendix A Lessons Learned from Retirement Income Research 273 Appendix B The New Language of Retirement 277 About the Authors 283 Index 285

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Book SynopsisA straightforward guide to successfully trading options Options provide traders and investors with a wide range of strategies to lock in profits, reduce risk, generate income, or speculate on market direction. However, they are complex instruments and can be difficult to master if misunderstood.Table of ContentsAcknowledgments xi Introduction xiii Part 1 The Foundations of Options Trading 1 Chapter 1 Option Basics 3 Definitions of Calls and Puts 3 Are You Long or Short? 4 Option Contract Size 4 Is My Option In- or Out-of-the-Money? 5 Option Trade Orders 5 Option Expiration 6 LEAPS Options 7 Option Settlement 7 Options Cycles 8 Chapter 2 Probability Distributions 11 The Gaussian Distribution 11 Application to the Real World 12 Risk-Adjusted Returns 15 High-Probability Trading 17 Low-Probability Trading 18 Options Trading Myths 20 What Is a Conservative Trade? 21 Exercises 22 Chapter 3 Options Pricing and Implied Volatility 25 The Black-Scholes Pricing Model 25 The Greeks 26 Implied Volatility 27 Building the Price of an Option 28 A Closer Look at the Greeks 29 How Will We Use the Greeks? 31 Exercises 32 Chapter 4 Vertical Spreads 33 Building the Vertical Spread 33 Effects of Implied Volatility 35 Early Exercise 41 Expiration and Exercise 43 Margin Requirements 44 Application of Probability Calculations 45 Risk/Reward and Probability of Success 46 Exercises 47 Part 2 Options Strategies for Income Generation 49 Chapter 5 Using Options to Boost Income in a Stock Portfolio 51 The Classic Covered Call Strategy 52 Strategic Considerations 53 The Notorious Selling Naked Puts Strategy 53 Selling Naked Puts for Income 54 Buying Stocks at a Discount 56 Combining the Covered Call with Selling Naked Puts 56 Early Exercise 58 Risk Management 60 The Achilles’ Heel of Directional Strategies 61 Exercises 62 Chapter 6 Calendar and Double Calendar Spreads 63 Vega Risk and Calendar Spreads 66 Volatility Skews 67 Searching for Calendar Candidates 70 Entering and Managing the Trade 71 Early Exercise 71 Adjustments 72 Out-of-the-Money Calendar Spreads 73 Double Calendar Spreads 73 Determining the Optimal Strike Prices 76 Trade Management and Adjustments 82 Multiple Calendar Spread Positions 83 Exercises 83 Chapter 7 Double Diagonal Spreads 85 Diagonal Spreads 85 Double Diagonal Spreads 87 Managing the Trade 90 Double Diagonals vs. Double Calendars 91 Exercises 92 Chapter 8 Butterfly Spreads 95 At-the-Money and Out-of-the-Money Butterfly Spreads 95 Iron Butterfly Spreads 99 The Broken-Wing Butterfly 99 Margin Requirements 101 Trade Management 103 Closing Butterfly Spreads 106 Butterfly Spreads as Adjustments 111 Exercises 112 Chapter 9 Condor Spreads 113 The Basic Condor Spread 113 The Opportunistic Model 116 The Insurance Model 119 Iron Condor Spreads 121 Vega Risk and the Condor 124 The Short-Term Iron Condor 128 The Long-Term Iron Condor 129 Capital Management 131 Risk Management 131 Adjustment Techniques 132 Adjustment Pros and Cons 134 Adjustment Case Studies 135 Managing the Iron Condor with the Greeks 138 Advanced Adjustment Techniques 140 Iron Condor Trading Systems 140 Butterflies and Condors are Cousins 144 Exercises 146 Chapter 10 Delta-Neutral Trading Strategies 149 Risk Management Systems 151 Challenging Markets for the Delta-Neutral Trader 152 Two Distinct Trading Philosophies 153 The “Secret” of Success 155 Chapter 11 Make Your Trading a Business 157 Getting Started 157 Managing Losses 159 The Trading Plan 159 Money Management 160 The Psychology of Trading 161 Living with the Two-Headed Monster 163 Required Tools for This Business 164 What’s Next? 165 Appendix: Answers to the Chapter Exercises 169 Glossary 185 Index 193

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Book SynopsisAn intelligent analysis of the dangers, opportunities, and consequences of global sovereign debt Sovereign debt is growing internationally at a terrifying rate, as nations seek to prop up their collapsing economies. One only needs to look at the sovereign risk pressures faced by Greece, Spain, and Ireland to get an idea of how big this problem has become. Understanding this dilemma is now more important than ever, that''s why Robert Kolb has compiled Sovereign Debt. With this book as your guide, you''ll gain a better perspective on the essential issues surrounding sovereign debt and default through discussions of national defaults, systemic risk, associated costs, and much more. Historical studies are also included to provide a realistic framework of reference. Contains up-to-date research and analysis on sovereign debt from today''s leading practitioners and academics Details the dangers of defaults and their associated systemic risks ExploresTable of ContentsIntroduction. Acknowledgments. Part I: The Political Economy of Sovereign Debt. 1 Sovereign Debt: Theory, Defaults, and Sanctions (Robert W. Kolb). 2 The Institutional Determinants of Debt Intolerance (Raffaela Giordano and Pietro Tommasino). 3 Output Costs of Sovereign Default (Bianca De Paoli, Glenn Hoggarth, and Victoria Saporta). 4 Spillovers of Sovereign Default Risk: How Much is the Private Sector Affected (Udaibir S. Das, Michael G. Papaioannou, and Christoph Trebesch). 5 Sovereign Debt Problems and Policy Gambles (Samuel W. Malone). 6 Sovereign Debt and the Resource Curse (Mare Sarr, Erwin Bulte, Chris Meissner, and Tim Swanson). 7 Sovereign Debt and Military Conflict (Zane M. Kelly). Part II: Making Sovereign Debt Work. 8 Fiscal Policy, Government Institutions, and Sovereign reditworthiness (Bernardin Akitoby and Thomas Stratmann). 9 Corruption and Creditworthiness: Evidence from Sovereign Credit Ratings (Craig A. Depken, II, Courtney L. LaFountain, and Roger B. Butters). 10 Institutions, Financial Integration, and Complementarity (Nicola Gennaioli, Alberto Martin, and Stefano Rossi). 11 Loans versus Bonds: The Importance of Potential Liquidity Problems for Sovereign Borrowers (Issam Hallak and Paul Schure). 12 First-Time Sovereign Bond Issuers: Considerations in Accessing International Capital Markets (Udaibir S. Das, Michael G. Papaioannou, and Magdalena Polan). 13 A Note on Sovereign Debt Auctions: Uniform or Discriminatory (Menachem Brenner, Dan Galai, and Orly Sade)? 14 Pension Reform and Sovereign Credit Standing (Alfredo Cuevas, María González, Davide Lombardo, and Arnoldo López-Marmolejo). Part III: Sovereign Defaults, Restructurings, and the Resumption of Borrowing. 15 Understanding Sovereign Default (Juan Carlos Hatchondo, Leonardo Martinez, and Horacio Sapriza). 16 Are Sovereign Defaulters Punished?: Evidence from Foreign Direct Investment Flows (Michael Fuentes and Diego Saravia). 17 Supersanctions and Sovereign Debt Repayment (Kris James Mitchener and Marc D. Weidenmier). 18 Debt Restructuring Delays: Measurement and Stylized Facts (Christoph Trebesch). 19 IMF Interventions in Sovereign Debt Restructurings (Javier Díaz-Cassou and Aitor Erce). 20 Resuming Lending to Countries following a Sovereign Debt Crisis (Luisa Zanforlin). Part IV: Legal and Contractual Dimensions of Restructurings and Defaults. 21 A Code of Conduct for Sovereign Debt Restructuring: An Important Component of the International Financial Architecture (Kathrin Berensmann)? 22 Governing Law of Sovereign Bonds and Legal Enforcement (Issam Hallak). 23 Sovereign Debt Restructuring: The Judge, the Vultures and Creditor Rights (Marcus H. Miller and Dania Thomas). 24 Sovereign Debt Documentation and the Pari Passu Clause (Umakanth Varottil). 25 Collective Action Clauses in Sovereign Bonds (Sönke Häseler). 26 Sovereignty, Legitimacy, and Creditworthiness (Odette Lienau). 27 Odious Debts or Odious Regimes? (Patrick Bolton and David A. Skeel, Jr.) 28 Insolvency Principles: The Missing Link in the Odious Debt Debate (Mechele Dickerson). Part V: Historical Perspectives. 29 The Baring Crisis and the Great Latin American Meltdown of the 1890s (Kris James Mitchener and Marc D. Weidenmier). 30 How Government Bond Yields Reflect Wartime Events: The Case of the Nordic Market (Daniel Waldenström and Bruno S. Frey). 31 How Important Are the Political Costs of Domestic Default?: Evidence from World War II Bond Markets (Daniel Waldenström). 32 Emerging Market Spreads at the Turn of the Twenty-First Century: A Roller Coaster (Sergio Godoy). Part VI: Sovereign Debt in Emerging Markets. 33 Sovereign Default Risk and Implications for Fiscal Policy (Gabriel Cuadra and Horacio Sapriza). 34 Default Traps (Luis A.V. Catão, Ana Fostel, and Sandeep Kapur). 35 Self-Fulfilling and Self-Enforcing Debt Crises (Daniel Cohen and Sebastien Villemot). 36 The Impact of Economic and Political Factors on Sovereign Credit Ratings (Constantin Mellios and Eric Paget-Blanc). 37 Sovereign Bond Spreads in the New European Union Countries (Ioana Alexopoulou, Irina Bunda, and Annalisa Ferrando). 38 Can Sovereign Credit Ratings Promote Financial Sector Development and Capital Inflows to Emerging Markets (Suk-Joong Kim and Eliza Wu)? 39 Country Debt Default Probabilities in Emerging Markets: Were Credit Rating Agencies Wrong (Angelina Georgievska, Ljubica Georgievska, Dr Aleksandar Stojanovic, and Dr Natasa Todorovic)? 40 The International Stock Market Impact of Sovereign Debt Ratings News (Miguel A. Ferreira and Paulo M. Gama). Part VII: Sovereign Debt and Financial Crises. 41 Equity Market Contagion and Co-movement: Industry Level Evidence (Kate Phylaktis and Lichuan Xia). 42 An Insolvency Procedure for Sovereign States: A Viable Instrument for Preventing and Resolving Debt Crises (Kathrin Berensmann and Angélique Herzberg)? 43 From Banking to Sovereign Debt Crisis in Europe (Bertrand Candelon and Franz C. Palm). 44 From Financial Crisis to Sovereign Risk (Carlos Caceres, Vincenzo Guzzo, and Miguel Segoviano). 45 Sovereign Spreads and Perceived Risk of Default Re-Visited (Abolhassan Jalilvand and Jeannette Switzer). 46 What Explains the Surge in Euro Area Sovereign Spreads During the Financial Crisis of 2007-09 (Maria-Grazia Attinasi, Cristina Checherita, and Christiane Nickel)? 47 Euro Area Sovereign Risk During the Crisis (Silvia Sgherri and Edda Zoli). 48 Facing the Debt Challenge of Countries That Are “Too Big To Fail” (Steven L. Schwarcz). Index.

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Book SynopsisThe private capital markets are the venue where debt and private equity investments are made, and private business interests are exchanged. Valuation is the common language uniting them, enabling participants in private capital markets to communicate and exchange interests.Table of ContentsForeword xv Preface xix Acknowledgments xxiii CHAPTER 1 Capital Markets 1 Market Structure 2 Information 2 Why Are Markets Segmented? 8 CHAPTER 2 Middle-Market Finance 17 Middle-Market Finance Theory 18 Triadic Logic 19 Middle-Market Finance Theory in Practice 19 Owner Motives 27 Authority 28 Triangulation 29 PART ONE Business Valuation CHAPTER 3 Private Business Valuation: Introduction 35 Private Investor Expectations Drive Private Valuation 36 Private Business Valuation Can Be Viewed through Value Worlds 39 Valuation as a Range Concept 51 Triangulation 54 CHAPTER 4 Market Value 57 Levels of Private Ownership 61 Triangulation 67 CHAPTER 5 Asset Subworld of Market Value 69 Steps to Derive Net Asset Value 73 Triangulation 73 CHAPTER 6 Financial Subworld of Market Value 75 Specific Investor Return 82 Specific Industry Return 84 General Investor Returns 87 Triangulation 90 CHAPTER 7 Synergy Subworld of Market Value 93 Synergies 97 Capitalization of Benefit Streams 104 Discounting of Benefit Streams 104 Seller/Buyer Market Valuation 105 Nonenterprise Market Valuations 108 Triangulation 108 CHAPTER 8 Fair Market Value 111 Appraisal Organizations 113 Business Appraisal Standards 114 Fair Market Value Process 115 Key Steps to Derive Fair Market Value 125 Does the Fair Market Value Process Make Sense? 126 Tearing Down the Buildup Models 129 Triangulation 130 CHAPTER 9 Fair Value 133 Dissenting and Oppressed Shareholders 133 Triggering Events 134 Determination of Fair Value 137 Triangulation 140 CHAPTER 10 Incremental Business Value 143 Nature of Incremental Business Value 144 Problems with Using Traditional Methods 146 Value-Based Approaches 146 Net Present Value 146 Incremental Business Value 148 Private Cost of Capital Model 151 Ramifications of Using PCOC 155 Investment 156 Project Decision Making 158 Problems with Incremental Business Value 158 Value-Creation Strategies 158 Increase Recast EBITDA 159 Reduce Risk 160 Employ High-Yielding Capital 160 Incremental Business Value versus Market Value 161 Triangulation 162 CHAPTER 11 Insurable Value 165 Risk and Insurance 165 Buy/Sell Agreements 167 Valuation Mechanics 168 Triggering Events 170 Key Person Insurance 172 Business Interruption 174 Triangulation 177 CHAPTER 12 FASB Value Worlds 179 FASB Fair Value (ASC 820, Formerly FAS 157) 179 Business Combinations (ASC 805, Formerly FAS 141R) 184 Impaired Goodwill (ASC 350-20) 186 Valuation 189 Triangulation 192 CHAPTER 13 Intangible Asset Value 195 Subworlds 197 Intellectual Property 201 Intellectual Capital 204 Triangulation 206 CHAPTER 14 Other Value Worlds 209 Investment Value World 209 Owner Value World 210 Collateral Value World 212 Early Equity Value World 215 Bankruptcy Value World 216 Public Value World 217 Triangulation 219 CHAPTER 15 Private Business Valuation: Conclusion 223 Private Investor Return Expectations 223 Value Worlds 225 Private Business Valuation Is a Range Concept 230 Triangulation 231 Final Thoughts on Valuation 232 PART TWO Capital Structure CHAPTER 16 Capital Structure: Introduction 235 Public Capital Markets 235 Private Capital Markets 240 Pepperdine Private Capital Market Line 244 Key Issues Regarding the Pepperdine Private Capital Market Line 249 Capital Structure Treatment 250 Triangulation 252 CHAPTER 17 Bank Lending 255 Types of Facilities 255 Interest Rates 259 Interest Rate Hedges 262 Loan Covenants 265 How Banks Deal with Covenant Violations 266 Loan Costs 266 Risk Ratings 270 Negotiating Points 270 Triangulation 274 CHAPTER 18 Government Lending Programs 275 Industrial Revenue Bonds 276 Business and Industry Loan Program 279 Small Business Administration Programs 281 7(a) Loan Guaranty Program 282 Certified Development Company 504 Loan Program 286 CAPLines Loan Program 289 Export Working Capital Program 291 Negotiating Points 294 Triangulation 294 CHAPTER 19 Equipment Leasing 297 Types of Leases 297 Lease Rate Factors 301 Lessor Types 302 Comparison of Leasing and Purchasing 306 Negotiating Points 310 Triangulation 312 CHAPTER 20 Asset-Based Lending 315 How Asset-Based Lending Works 315 Asset-Based Lenders 320 Tier 1 Asset-Based Lenders 322 Tier 2 Asset-Based Lenders 325 Tier 3 Asset-Based Lenders 328 Negotiating Points 331 Triangulation 333 CHAPTER 21 Factoring 335 How Factoring Works 335 Mechanics of Factoring 337 Fees and Terms 338 Negotiating Points 343 Triangulation 345 CHAPTER 22 Mezzanine Capital 347 Loan Structure 347 Mezzanine Investors 351 Targeted Investments 353 Pricing 354 Debt Mezzanine Capital 354 Equity Mezzanine Capital 356 Other Deal Terms 358 Negotiating Points 360 Triangulation 363 CHAPTER 23 Owners, Angels, and Venture Capitalists 365 Stages of Private Equity Investor Involvement 366 Private Placements 368 Financial Barn Raisings 368 Within Existing Business Relationships 369 Why Private Placements Fail 369 Pre- and Postmoney Valuation 379 Negotiating Points 380 Triangulation 383 CHAPTER 24 Private Equity 385 Stages of Private Equity Investor Involvement 386 Hedge Funds 392 Family Offices 394 Term Sheet 396 Negotiating Points 397 Triangulation 399 CHAPTER 25 Capital Structure: Conclusion 401 Capital Providers Manage Risk and Return in Their Portfolios 401 The Pepperdine Private Capital Market Line Comprises Expected Returns 402 Private Cost of Capital Emanates from the Private Capital Markets 404 High Cost of Capital Limits Private Company Value Creation 405 Intermediation Is Relatively Ineffective in the Middle Market 406 Triangulation 407 PART THREE Business Transfer CHAPTER 26 Business Transfer: Introduction 411 Public Manager and Owner Motives 411 Private Business Ownership Transfer Spectrum 413 Employee Transfer Channel 415 Charitable Trusts Transfer Channel 416 Family Transfer Channel 417 Co-Owner Transfer Channel 418 Outside, Retire, Transfer Channel 418 Outside, Continue, Transfer Channel 419 Going Public, Going Private Transfer Channel 419 Exit Planning 420 Triangulation 421 CHAPTER 27 Employee Stock Ownership Plans 423 Overview 424 Leveraged ESOPs 429 ESOPs in S Corporations 431 Setting Up an ESOP 431 Points to Consider 436 Bottom Line on ESOPs 438 Triangulation 438 CHAPTER 28 Management Transfers 441 Differences between Management Buyouts and Management Buy-Ins 443 Likely Deal Structures 444 Deals 447 Points to Consider 456 Triangulation 459 CHAPTER 29 Charitable Trusts 461 Structure of Charitable Trusts 461 Charitable Remainder Trusts 461 Points to Consider for CRTs 466 Charitable Lead Trusts 468 Points to Consider for CLTs 471 Comparison of CRTs and CLTs 473 Triangulation 473 CHAPTER 30 Family Transfers 475 Stock Gifts 476 Private Annuities 480 Self-Canceling Installment Notes 482 Grantor-Retained Annuity Trusts 483 Family Limited Partnerships 487 Intentionally Defective Grantor Trusts 489 Comparison of Family Transfer Methods 492 Role of Insurance in Family Transfers 493 Triangulation 493 CHAPTER 31 Co-Owner Transfers 495 Buy/Sell Agreements 495 Buy/Sell Types 497 Triggering Events 499 Funding Techniques 501 Ways to Handle Deadlocks 502 When No Buy/Sell Agreement Exists 502 Triangulation 503 CHAPTER 32 Outside Transfers: Retire 505 Preparation for a Transfer 506 Transfer Players 507 Marketing Processes 508 Negotiated Transfers 509 Private Auctions 512 Two-Step Private Auctions 517 Closing the Deal 519 After the Transfer 521 Triangulation 521 CHAPTER 33 Outside Transfers: Continue 523 Consolidations 523 Roll-Ups 526 Buy and Build or Recapitalizations 528 Recapitalization Points to Consider 533 Triangulation 533 CHAPTER 34 Going Public, Going Private 535 Direct Public Offerings 536 Which Companies Are Public? 538 Initial Public Offering Team 539 IPO Process 541 Advantages of Going Public 544 Disadvantages of Going Public 544 Going Public Key Points to Consider 545 Going Public on Foreign Exchanges 546 Reverse Mergers 547 Going Private 548 Going Private Key Points to Consider 549 Triangulation 551 CHAPTER 35 Business Transfer: Conclusion 553 Segmented Transfer Activity and Arbitrage 553 Owner Motives Choose the Range of Values 556 Creating Value in a Private Business Requires Planning 560 Triangulation 566 CHAPTER 36 Conclusion 569 Theme 1 569 Theme 2 570 Theme 3 571 Theme 4 571 Theme 5 572 Private Capital Markets 573 What We Do Not Know 575 A Final Thought 578 APPENDIX A Corporate Finance Theory: Application to Private Capital Markets 579 APPENDIX B Principle of Substitution www.wiley.com/go/privatecapital APPENDIX C IBA Standards: Business Appraisal Standards www.wiley.com/go/privatecapital APPENDIX D Private Equity Securities www.wiley.com/go/privatecapital APPENDIX E Sample Preferred Stock Offering Term Sheet www.wiley.com/go/privatecapital APPENDIX F Private Placements www.wiley.com/go/privatecapital APPENDIX G Sample Management Buyout Letter of Intent www.wiley.com/go/privatecapital About the Web Site 597 Index 599

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Book SynopsisAn updated guide to the theory and practice of investment management Many books focus on the theory of investment management and leave the details of the implementation of the theory up to you. This book illustrates how theory is applied in practice while stressing the importance of the portfolio construction process.Table of ContentsAbout the Editors xiii Contributing Authors xv Foreword xvii PART ONE Instruments, Asset Allocation, Portfolio Selection, and Asset Pricing 1 CHAPTER 1 Overview of Investment Management 3Frank J. Fabozzi and Harry M. Markowitz Setting Investment Objectives 4 Establishing an Investment Policy 4 Selecting a Portfolio Strategy 6 Constructing the Portfolio 6 Measuring and Evaluating Performance 7 Key Points 14 CHAPTER 2 Asset Classes, Alternative Investments, Investment Companies, and Exchange-Traded Funds 15Mark J. P. Anson, Frank J. Fabozzi, and Frank J. Jones Asset Classes 15 Overview of Alternative Asset Products 21 Investment Companies 31 Exchange-Traded Funds 36 Mutual Funds vs. ETFs: Relative Advantages 39 Key Points 41 Questions 44 CHAPTER 3 Portfolio Selection 45Frank J. Fabozzi, Harry M. Markowitz, Petter N. Kolm, and Francis Gupta Some Basic Concepts 47 Measuring a Portfolio’s Expected Return 49 Measuring Portfolio Risk 52 Portfolio Diversification 56 Choosing a Portfolio of Risky Assets 60 Issues in Portfolio Selection 68 Key Points 76 Questions 78 CHAPTER 4 Capital Asset Pricing Models 79Frank J. Fabozzi and Harry M. Markowitz Sharpe-Lintner CAPM 79 Roy CAPM 81 Confusions Regarding the CAPM 82 Two Meanings of Market Efficiency 83 CAPM Investors Do Not Get Paid for Bearing Risk 94 The “Two Beta” Trap 95 Key Points 100 Questions 101 CHAPTER 5 Factor Models 103Guofu Zhou and Frank J. Fabozzi Arbitrage Pricing Theory 104 Types of Factor Models 105 Factor Model Estimation 112 Key Points 118 Appendix: Principal Component Analysis in Finance 119 Questions 124 CHAPTER 6 Modeling Asset Price Dynamics 125Dessislava A. Pachamanova and Frank J. Fabozzi Financial Time Series 125 Binomial Trees 127 Arithmetic Random Walks 128 Geometric Random Walks 134 Mean Reversion 142 Advanced Random Walk Models 148 Stochastic Processes 152 Key Points 157 Questions 158 CHAPTER 7 Asset Allocation and Portfolio Construction 159Noël Amenc, Felix Goltz, Lionel Martellini, and Vincent Milhau Asset Allocation and Portfolio Construction Decisions in the Optimal Design of the Performance-Seeking Portfolio 161 Asset Allocation and Portfolio Construction Decisions in the Optimal Design of the Liability-Hedging Portfolio 173 Dynamic Allocation Decisions to the Performance-Seeking and Liability-Hedging Portfolios 179 Key Points 195 Appendix 196 Questions 202 PART TWO Equity Analysis and Portfolio Management 205 CHAPTER 8 Fundamentals of Common Stock 207Frank J. Fabozzi, Frank J. Jones, Robert R. Johnson, and Pamela P. Drake Earnings 208 Dividends 210 The U.S. Equity Markets 213 Trading Mechanics 215 Trading Costs 220 Stock Market Indicators 222 Key Points 224 Questions 226 CHAPTER 9 Common Stock Portfolio Management Strategies 229Frank J. Fabozzi, James L. Grant, and Raman Vardharaj Integrating the Equity Portfolio Management Process 229 Capital Market Price Efficiency 230 Tracking Error and Related Measures 233 Active vs. Passive Portfolio Management 239 Equity Style Management 240 Passive Strategies 245 Active Investing 247 Performance Evaluation 264 Key Points 267 Questions 268 CHAPTER 10 Approaches to Common Stock Valuation 271Pamela P. Drake, Frank J. Fabozzi, and Glen A. Larsen Jr. Discounted Cash Flow Models 271 Relative Valuation Methods 278 Key Points 284 Questions 285 CHAPTER 11 Quantitative Equity Portfolio Management 287Andrew Alford, Robert Jones, and Terence Lim Traditional and Quantitative Approaches to Equity Portfolio Management 289 Forecasting Stock Returns, Risks, and Transaction Costs 292 Constructing Portfolios 298 Trading 300 Evaluating Results and Updating the Process 302 Key Points 304 Questions 305 CHAPTER 12 Long-Short Equity Portfolios 307Bruce I. Jacobs and Kenneth N. Levy Constructing a Market-Neutral Portfolio 308 The Importance of Integrated Optimization 312 Adding Back a Market Return 316 Some Concerns Addressed 321 Evaluating Long-Short 323 Key Points 324 Questions 325 CHAPTER 13 Multifactor Equity Risk Models 327Frank J. Fabozzi, Raman Vardharaj, and Frank J. Jones Model Description and Estimation 328 Risk Decomposition 330 Applications in Portfolio Construction and Risk Control 336 Key Points 341 Questions 343 CHAPTER 14 Fundamentals of Equity Derivatives 345Bruce M. Collins and Frank J. Fabozzi The Role of Derivatives 345 Listed Equity Options 348 Futures Contracts 366 Pricing Stock Index Futures 370 OTC Equity Derivatives 375 Structured Products 380 Key Points 381 Questions 382 CHAPTER 15 Using Equity Derivatives in Portfolio Management 383Bruce M. Collins and Frank J. Fabozzi Equity Investment Management 384 Portfolio Applications of Listed Options 386 Portfolio Applications of Stock Index Futures 390 Applications of OTC Equity Derivatives 399 Risk and Expected Return of Option Strategies 410 Key Points 413 Questions 414 PART THREE Bond Analysis and Portfolio Management 415 CHAPTER 16 Bonds, Asset-Backed Securities, and Mortgage- Backed Securities 417Frank J. Fabozzi General Features of Bonds 417 U.S. Treasury Securities 421 Federal Agency Securities 423 Corporate Bonds 424 Municipal Securities 428 Asset-Backed Securities 430 Residential Mortgage-Backed Securities 434 Commercial Mortgage-Backed Securities 450 Key Points 453 Questions 456 CHAPTER 17 Bond Analytics 457Frank J. Fabozzi Basic Valuation of Option-Free Bonds 457 Conventional Yield Measures 463 Total Return 468 Measuring Interest Rate Risk 471 Key Points 484 Questions 486 CHAPTER 18 Bond Analytics 489Frank J. Fabozzi and Steven V. Mann Arbitrage-Free Bond Valuation 489 Yield Spread Measures 496 Forward Rates 498 Overview of the Valuation of Bonds with Embedded Options 505 Lattice Model 507 Valuation of MBS and ABS 522 Key Points 531 Questions 533 CHAPTER 19 Bond Portfolio Strategies for Outperforming a Benchmark 535Bülent Baygün and Robert Tzucker Selecting the Benchmark Index 536 Creating a Custom Index 539 Beating the Benchmark Index 544 Key Points 553 Questions 554 CHAPTER 20 The Art of Fixed Income Portfolio Investing 557Chris P. Dialynas and Ellen J. Rachlin The Global Fixed Income Portfolio Manager 558 The Global Challenge 565 Portfolio Parameters 565 Regulatory Changes, Demographic Trends, and Institutional Bias 568 Information in the Markets 569 Duration and Yield Curve 573 Volatility 574 International Corporate Bonds 577 International Investing and Political Externalities 579 Foreign Investment Selection 579 Currency Selection 582 Key Points 583 Questions 584 CHAPTER 21 Multifactor Fixed Income Risk Models and Their Applications 585Anthony Lazanas, António Baldaque da Silva, Radu Găbudean, and Arne D. Staal Approaches Used to Analyze Risk 587 Applications of Risk Modeling 615 Key Points 621 Questions 622 CHAPTER 22 Interest Rate Derivatives and Risk Control 623Frank J. Fabozzi Interest Rate Futures and Forward Contracts 623 Interest Rate Swaps 634 Interest Rate Options 640 Interest Rate Agreements (Caps and Floors) 642 Key Points 643 Questions 644 CHAPTER 23 Credit Default Swaps and the Indexes 647Stephen J. Antczak, Douglas J. Lucas, and Frank J. Fabozzi What Are Credit Default Swaps? 648 Credit Default Swaps Indexes 654 Key Points 658 Questions 658 About the Web Site 661 Index 663

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Book SynopsisA detailed look at equity valuation and portfolio management Equity valuation is a method of valuing stock prices using fundamental analysis to determine the worth of the business and discover investment opportunities. In Equity Valuation and Portfolio Management Frank J. Fabozzi and Harry M.Table of ContentsPreface xiii About the Editors xxiii Contributing Authors xxv Chapter 1 An Introduction to Quantitative Equity Investing 1Paul Bukowski Equity Investing 1 Fundamental vs. Quantitative Investor 2 The Quantitative Stock Selection Model 7 The Overall Quantitative Investment Process 9 Research 9 Portfolio Construction 18 Monitoring 21 Current Trends 22 Key Points 23 Questions 24 Chapter 2 Equity Analysis Using Traditional and Value-Based Metrics 25James L. Grant and Frank J. Fabozzi Overview of Traditional Metrics 25 Price Multiples 32 Fundamental Stock Return 36 Traditional Caveats 38 Overview of Value-Based Metrics 39 Key Points 58 Appendix: Case Study 60 Questions 69 Chapter 3 A Franchise Factor Approach to Modeling P/E Orbits 71Stanley Kogelman and Martin L. Leibowitz Background 72 Historical Data Observations 75 Formulation of the Basic Model 81 P/E Myopia: The Fallacy of a Stable P/E 85 Two-Phase P/E Orbits 91 Franchise Valuation under Q-Type Competition 96 Franchise Labor 97 Key Points 101 Questions 102 Chapter 4 Relative Valuation Methods for Equity Analysis 105Glen A. Larsen Jr., Frank J. Fabozzi, and Chris Gowlland Basic Principles of Relative Valuation 106 Hypothetical Example 115 Key Points 123 Questions 124 Chapter 5 Valuation over the Cycle and the Distribution of Returns 125Anders Ersbak Bang Nielsen and Peter C. Oppenheimer The Link Between Earnings and Returns 126 The Phases Can Be Interpreted in Relationship to the Economy 132 Asset Class Performance Varies across the Phases 137 Incorporating Cyclicality into Valuations 139 Appendix: Dates and Returns of the Phases 142 Key Points 146 Questions 146 Chapter 6 An Architecture for Equity Portfolio Management 147Bruce I. Jacobs and Kenneth N. Levy Architectural Building Blocks 148 Traditional Active Management 151 Passive Management 156 Engineered Management 157 Expanding Opportunities 160 The Risk-Return Continuum 163 The Ultimate Objective 167 Key Points 168 Questions 169 Chapter 7 Equity Analysis in a Complex Market 171Bruce I. Jacobs and Kenneth N. Levy An Integrated Approach to a Segmented Market 172 Disentangling 176 Constructing, Trading, and Evaluating Portfolios 184 Profiting from Complexity 186 Key Points 187 Questions 188 Chapter 8 Survey Studies of the Use of Quantitative Equity Management 189Frank J. Fabozzi, Sergio M. Focardi, and Caroline L. Jonas 2003 Intertek European Study 189 2006 Intertek Study 197 2007 Intertek Study 205 Challenges for Quantitative Equity Investing 224 Modeling After the 2007–2009 Global Financial Crisis 226 Key Points 228 Questions 229 Chapter 9 Implementable Quantitative Equity Research 231Frank J. Fabozzi, Sergio M. Focardi, and K. C. Ma The Rise of Econophysics 233 A General Framework 235 Select a Sample Free from Survivorship Bias 238 Select a Methodology to Estimate the Model 239 Risk Control 246 Key Points 248 Questions 249 Chapter 10 Tracking Error and Common Stock Portfolio Management 251Raman Vardharaj, Frank J. Fabozzi, and Frank J. Jones Definition of Tracking Error 251 Components of Tracking Error 254 Forward-Looking vs. Backward-Looking Tracking Error 255 Information Ratio 256 Determinants of Tracking Error 257 Marginal Contribution to Tracking Error 261 Key Points 262 Questions 263 Chapter 11 Factor-Based Equity Portfolio Construction and Analysis 265Petter N. Kolm, Joseph A. Cerniglia, and Frank J. Fabozzi Factor-Based Trading 266 Developing Factor-Based Trading Strategies 269 Risk to Trading Strategies 271 Desirable Properties of Factors 273 Sources for Factors 273 Building Factors from Company Characteristics 274 Working with Data 275 Analysis of Factor Data 283 Key Points 287 Questions 289 Chapter 12 Cross-Sectional Factor-Based Models and Trading Strategies 291Joseph A. Cerniglia, Petter N. Kolm, and Frank J. Fabozzi Cross-Sectional Methods for Evaluation of Factor Premiums 292 Factor Models 300 Performance Evaluation of Factors 310 Model Construction Methodologies for a Factor-based Trading Strategy 317 Backtesting 328 Backtesting Our Factor Trading Strategy 330 Key Points 331 Appendix: The Compustat Point-in-Time, IBES Consensus Databases and Factor Definitions 333 Questions 337 Chapter 13 Multifactor Equity Risk Models and Their Applications 339Anthony Lazanas, António Baldaque da Silva, Arne D. Staal, and Cenk Ural Motivation 340 Equity Risk Factor Models 342 Applications of Equity Risk Models 350 Key Points 370 Questions 371 Chapter 14 Dynamic Factor Approaches to Equity Portfolio Management 373Dorsey D. Farr Methods of Active Management 376 Modeling 385 Implementation 392 Key Points 395 Questions 395 Chapter 15 A Factor Competition Approach to Stock Selection 397Joseph Mezrich and Junbo Feng The Problem 397 The Solution 403 Which Factors Get Picked? 407 Does the Alpha Repair Process Work? 408 Key Points 411 Questions 412 Chapter 16 Avoiding Unintended Country Bets in Global Equity Portfolios 413Michele Aghassi, Cliff Asness, Oktay Kurbanov, and Lars N. Nielsen Country Membership and Individual Stock Returns 414 Ways to Build Active Global Portfolios 416 Studying the Naive Portfolio 419 Empirical Results 420 Why Does the Naive Stock Selection Portfolio Make Country Noise Bets? 422 Key Points 423 Questions 424 Chapter 17 Modeling Market Impact Costs 425Petter N. Kolm and Frank J. Fabozzi Market Impact Costs 426 Liquidity and Transaction Costs 427 Market Impact Measurements and Empirical Findings 430 Forecasting and Modeling Market Impact 433 Key Points 439 Questions 440 Chapter 18 Equity Portfolio Selection in Practice 441Dessislava A. Pachamanova and Frank J. Fabozzi Portfolio Constraints Commonly Used in Practice 442 Benchmark Exposure and Tracking Error Minimization 450 Incorporating Transaction Costs 454 Incorporating Taxes 460 Multi-Account Optimization 465 Robust Parameter Estimation 469 Portfolio Resampling 471 Robust Portfolio Optimization 474 Key Points 480 Questions 481 Chapter 19 Portfolio Construction and Extreme Risk 483Jennifer Bender, Jyh-Huei Lee, and Dan Stefek Measures of Extreme Loss 484 Constraining Shortfall 485 Performance 485 Imposing Benchmark Neutrality 487 Analysis 489 Key Points 493 Appendix: Constructing Out-of-Sample Shortfall Betas 494 Questions 495 Chapter 20 Working with High-Frequency Data 497Irene Aldridge What is High-Frequency Data? 497 How is High-Frequency Data Recorded? 499 Properties of High-Frequency Data 500 High-Frequency Data are Voluminous 501 High-Frequency Data are Subject to Bid-Ask Bounce 503 High-Frequency Data are Irregularly Spaced in Time 509 Equity Correlations Decay at High Frequencies 517 Key Points 519 Questions 520 Chapter 21 Statistical Arbitrage 521Brian J. Jacobsen Pairs Trading 523 General Models 532 Key Points 534 Questions 534 About the Website 535 Index 537

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Book SynopsisHow to build a framework for forecasting interest rate market movements With trillions of dollars worth of trades conducted every year in everything from U.S. Treasury bonds to mortgage-backed securities, the U.S. interest rate market is one of the largest fixed income markets in the world.Table of ContentsAcknowledgments xiii Introduction xv CHAPTER 1 Tools of the Trade 1 Basic Statistics 2 Regression: The Fundamentals 6 Regression: How Good a Fit? 11 Principal Components Analysis 14 Scaling through Time 15 Backtesting Strategies 16 Summary 17 CHAPTER 2 Bonds 19 Basics of Bonds 19 Risks Embedded in Fixed Income Instruments 22 Discounting 27 Bond Pricing 28 Yield Curve 32 Duration 34 Convexity 37 Repo Markets 42 Bid Offer 44 Calculating Profit/Loss of a Bond 45 Carry 45 Forward Rates 47 Rolldown/Slide 51 Curves and Spreads 53 Butterfly Trades 55 Summary 56 CHAPTER 3 Fixed Income Markets 59 Federal Reserve 60 Treasuries 67 Strips 70 Tips 71 Mortgages 73 Agency Debt 77 Corporate Bonds 79 Municipal Bonds 82 Summary 84 CHAPTER 4 Interest Rate Futures 85 Basics of Futures Transactions 86 Eurodollar Futures 89 Convexity (or Financing) Bias 92 Creating Longer-Dated Assets Using Eurodollar Futures 93 Treasury Futures 94 Fed Funds Futures 101 Futures Positioning Data 104 Summary 105 CHAPTER 5 Interest Rate Swaps 107 Basic Principles 108 Duration and Convexity 111 Uses of Swaps 112 Counterparty Risk 115 Other Types of Swaps 115 Summary 124 CHAPTER 6 Understanding Drivers of Interest Rates 125 Supply and Demand for Borrowing 126 Components of Fixed Income Supply and Demand 141 Treasury Supply 141 Other Sources of Fixed Income Supply 145 Fixed Income Demand 148 Short-Term Yield Drivers 157 Summary 172 CHAPTER 7 Carry and Relative Value Trades 173 Carry Trades 173 Carry Trade Setup and Evaluation 175 Pitfalls of the Carry Trade 178 Carry-Efficient Directional Trades 182 Relative Value Trades 183 Setting Up Relative Value Trades 185 Treasury Bond Relative Value—Par Curve 191 Other Treasury Relative Value Trades 193 Summary 194 CHAPTER 8 Hedging Risks in Interest Rate Products 197 Principles of Hedging 198 Choices of Instruments for Hedging 202 Calculating Hedge Ratios 210 Yield Betas 215 Convexity Hedging 218 Summary 223 CHAPTER 9 Trading Swap Spreads 225 How Swap Spreads Work 225 Why Trade Swap Spreads? 230 Directionality of Swap Spreads to Yields 240 Futures Asset Swaps 241 Spread Curve Trades 243 Summary 245 CHAPTER 10 Interest Rate Options and Trading Volatility 247 Option Pricing and Fundamentals 249 Modifications for the Interest Rate Markets 254 Quoting Volatility 256 Measuring Risks in Option Positions 257 Put/Call Parity 266 Implied and Realized Volatility 268 Skew 270 Delta Hedging 270 Interest Rate Options 275 Embedded Options and Hedging 280 More Exotic Structures 283 Yield Curve Spread Options 284 Forward Volatility 285 Volatility Trading 286 Interest Rate Skew 293 Volatility Spread Trades 294 Caps versus Swaptions 297 Summary 298 CHAPTER 11 Treasury Futures Basis and Rolls 299 The Futures Delivery Option 299 Calculating the Delivery Option Value 309 Option-Adjusted and Empirical Duration 311 Treasury Futures Rolls 313 Summary 318 CHAPTER 12 Conditional Trades 319 Conditional Curve Trades 320 Conditional Spread Trades 324 Summary 328 References 329 About the Author 331 About the Web Site 333 Index 335

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a huge range and FREE tracked UK delivery on ALL orders.

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Book SynopsisA guide to using the VIX to forecast and trade markets Known as the fear index, the VIX provides a snapshot of expectations about future stock market volatility and generally moves inversely to the overall stock market. Trading VIX Derivatives will show you how to use the Chicago Board Options Exchange''s S&P 500 volatility index to gauge fear and greed in the market, use market volatility to your advantage, and hedge stock portfolios. Engaging and informative, this book skillfully explains the mechanics and strategies associated with trading VIX options, futures, exchange traded notes, and options on exchange traded notes. Many market participants look at the VIX to help understand market sentiment and predict turning points. With a slew of VIX index trading products now available, traders can use a variety of strategies to speculate outright on the direction of market volatility, but they can also utilize these products in conjunction with other instruments tTrade Review"For those wanting to take the next step in learning or portfolio modeling, Trading VIX Derivatives will be a logical step in progression. For investors considering trading the VIX in any of many products available I recommend getting a copy of Trading VIX Derivatives with the great return on investment this book offers." (SeekingAlpha, April 2012)Table of ContentsPreface xiii Acknowledgments xv Chapter 1 Understanding Implied Volatility 1 Historical versus Forward-Looking Volatility 1 Put-Call Parity 4 Estimating Price Movement 6 Valuing Options: Pricing Calculators and Other Tools 6 Fluctuations Based on Supply and Demand 9 The Impact on Option Prices 13 Implied Volatility and the VIX 14 Chapter 2 About the VIX Index 15 History of the VIX 15 Calculating the VIX 17 The VIX and Put-Call Parity 18 The VIX and Market Movement 22 Equity Market Volatility Indexes 24 Chapter 3 VIX Futures 31 Steady Growth of New Products 31 Contract Specifications 33 Mini-VIX Futures 42 Pricing Relationship between VIX Futures and the Index 42 Futures’ Relationship to Each Other 46 VIX Futures Data 47 Chapter 4 VIX Options 49 Contract Specifications 51 Relationship to VIX Index 56 Relationship to VIX Futures 57 VIX Binary Options 58 Chapter 5 Weekly Options on CBOE Volatility Index Futures 61 Contract Specifications 62 Weekly Options and Index Options 63 Weekly Option Strategy 65 Chapter 6 Volatility-Related Exchange-Traded Notes 69 What are Exchange-Traded Notes? 69 iPath S&P 500 VIX Short-Term Futures ETN 70 iPath S&P 500 VIX Mid-Term Futures ETN 73 Comparing the VXX and VXZ Performance 76 Barclays ETN+ Inverse S&P 500 VIX Short-Term Futures ETN 80 Barclays ETN+ S&P VEQTOR ETN 82 S&P 500 VIX Futures Source ETF 82 Chapter 7 Alternate Equity Volatility and Strategy Indexes 83 CBOE S&P 500 3-Month Volatility Index (VXV) 83 VIX Premium Strategy Index (VPD) 88 Capped VIX Premium Strategy Index (VPN) 90 S&P 500 VARB-X Strategy Benchmark 93 S&P 500 Implied Correlation Index 95 Chapter 8 Volatility Indexes on Alternative Assets 99 CBOE Gold Volatility Index 100 CBOE Crude Oil Volatility Index 102 CBOE EuroCurrency Volatility Index 104 CBOE/NYMEX Crude Oil (WTI) Volatility Index 107 CBOE/COMEX Gold Volatility Index 107 CBOE/CBOT Grain Volatility Indexes 109 FX Realized Volatility Indexes 109 Chapter 9 The VIX as a Stock Market Indicator 113 The Inverse Relationship between the VIX and the S&P 500 114 VIX Index as an Indicator 115 VIX Futures as an Indicator 118 A Modified VIX Futures Contract 121 Combining VIX Futures and the VIX Index 122 VIX Index and Gold Price Indicator 124 VIX Option Put-Call Ratio 127 Chapter 10 Hedging with VIX Derivatives 133 Hedging with VIX Options 133 Hedging with VIX Futures 143 University of Massachusetts Study 147 Chapter 11 Speculating with VIX Derivatives 149 VIX Futures Trading 150 VIX Option Trading 153 VIX ETN Trading 161 Comparing VIX Trading Instruments 166 Chapter 12 Calendar Spreads with VIX Futures 169 Comparing VIX Futures Prices 170 The Mechanics of a Calendar Spread 175 Patterns in the Data 178 Trade Management 189 Other Parameters 193 Chapter 13 Calendar Spreads with VIX Options 195 VIX Option Pricing 195 Calendar Spread with Put Options 196 Calendar Spread with Call Options 205 Diagonal Spread with Put Options 209 Diagonal Spread with Call Options 212 Chapter 14 Calendar Spreads with VIX Options and Futures 217 Comparing Options and Futures 217 Calendar Spread Examples 219 Chapter 15 Vertical Spreads with VIX Options 229 Vertical Spread Examples 229 Chapter 16 Iron Condors and Butterflies with VIX Options 251 What is an Iron Condor? 251 Iron Condor with VIX Options 255 What Is an Iron Butterfly? 257 Iron Butterfly with VIX Options 261 About the Author 265 Index 267

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Book SynopsisA comprehensive look at financial statement fraud from the experts who actually investigated them This collection of revealing case studies sheds clear insights into the dark corners of financial statement fraud. Includes cases submitted by fraud examiners across industries and throughout the world Fascinating cases hand-picked and edited by Joseph T. Wells, the founder and Chairman of the world''s leading anti-fraud organization ? the Association of Certified Fraud Examiners (ACFE) ? and author of Corporate Fraud Handbook Outlines how each fraud was engineered, how it was investigated and how the perpetrators were brought to justice Providing an insider''s look at fraud, Financial Statement Fraud Casebook illuminates the combination of timing, teamwork and vision necessary to understand financial statement fraud and prevent it from happening in the first place.Table of ContentsPreface xi Chapter 1 Keep On Trucking 1Ralph Wilson Chapter 2 Too Good to Be True? 13Carolyn Conn Chapter 3 Trust Us . . . We Wouldn’t Lie to You 25Stephen Pedneault Chapter 4 Rotten from the Core 35Paul Pocalyko and Colleen Vallen Chapter 5 The Broken Trust 45Aaron Lau Chapter 6 The Perfect Family Business 57Alejandro Morales Chapter 7 Auditor’s Loyalty 67Jyoti Khetarpal Chapter 8 Easy Come, Easy Go 75Brad Mroski Chapter 9 Organized Crime Is Not Just for the Usual Suspects 83David Shapiro Chapter 10 The Spinster and the Investment 95Eric Sumners Chapter 11 This Might Sound Familiar . . . 103James M. Brown Chapter 12 Pulling the Strings 113Jay Dawdy Chapter 13 A Tale of Two Books 123John Beard Chapter 14 The Family Man Behind Bars 131Antonio Ivan Aguirre Chapter 15 Net Capital Requirements 141Kevin G. Breard Chapter 16 Delaying the Inevitable 149JoLynn Runolfson Chapter 17 Power and Corruption in the Publishing Industry 159Kenneth Biddick Chapter 18 It Starts and Ends at the Top 169Kimiharu Chatani Chapter 19 The Triple-Three 177Leonard Rang’ala Lari Chapter 20 What Is 1 þ 1? What Do You Want It to Be? 187Robert Barr Chapter 21 Take Two 197Matthias Kopetzky Chapter 22 Wade’s WMD 207Michael Spindler Chapter 23 Fraud Under the Sun 217Oscar Hernández Hernández Chapter 24 Franklin County Contractors: A Case of Concealed Liabilities 227Patricia A. Patrick Chapter 25 The Fall Man 237Nearchos A. Ioannou Chapter 26 The Happy Life 245Tamer Fouad Gheith Chapter 27 A Very Merry Fraud 255Clive Tomes Chapter 28 Missing Ingots 265Prabhat Kumar Chapter 29 When Silver Spoons Are Not Enough 273Walter Pagano and Deborah Kovalik Chapter 30 Sales Commission and Fraud Perpetration 283Tarek El S.M. El Meaddawy Chapter 31 Like Two Sides of the Same Coin 291Patrick Wellens Chapter 32 A President Illuminated 301Theodore G. Phelps and Cindy Park Chapter 33 Trouble in Tallahassee 313Dr. Tim Naddy Glossary 325 Index 329

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Book SynopsisBeating the Odds is the improbable, inspiring autobiography of financial guru Eddie C. Brown, one of the nation''s top stock pickers and money managers. It details how Brown skillfully kept Brown Capital Management afloat through the dot-com bust, 9/11 and the Great Recession. Born to a 13-year-old unwed mother in the rural South, this African-American investment whiz created a Baltimore-based financial firm that amassed more than $6 Billion under management. Brown delves into the profound heartbreak and disorientation upon the death of his beloved grandmother who was his surrogate mother -- and recounts how Brown''s moonshine-running Uncle Jake subsequently became the dominant adult figure in Brown''s life. His unflinchingly honest, easy-to-read memoir details how intellectual curiosity, abiding self-belief, hard work and divine providence helped Brown earn an electrical engineering degree, become an Army officer, and later a civilian IBM engineer. Readers will learn of thTable of ContentsPrologue xi Chapter 1 Who Says Talk Is Cheap? 1 Chapter 2 The Big Three to the Rescue 7 Chapter 3 The Prince of Apopka 13 Chapter 4 Death and a Kidnapping 23 Chapter 5 Magnificent, Mysterious Lady B. 33 Chapter 6 Engineering a New Existence 43 Chapter 7 Europe on Five Dollars a Day 51 Chapter 8 “Ed, We’re Already Doing Okay!” 57 Chapter 9 A Famished Lion in a Butcher Shop 69 Chapter 10 The Height of Duplicity and Betrayal? 79 Chapter 11 A Window on the Top 1 Percent 91 Chapter 12 Pulling the Trigger on Investments 105 Chapter 13 Swimming with Sharks 121 Chapter 14 Aren’t You That Financial Guy From TV? 131 Chapter 15 Walking a Racial Tightrope 141 Chapter 16 “Go For It, Dad!” 145 Chapter 17 Everyone’s Medical Nightmare 155 Chapter 18 My Biggest Business Mistake 163 Chapter 19 A Horror Movie without Sound 171 Chapter 20 The Art and Science of Stock Picking 177 Chapter 21 “God, I Owe You One!” 181 Chapter 22 Impressive Progress, Baffling Lethargy 185 Chapter 23 To Heir Is Human 191 Chapter 24 Anyone Care for a Can of New Coke? 197 Epilogue 203 Index 205

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Book SynopsisThe good, the bad, and the scary of Washington''s attempt to reform Wall Street The Dodd-Frank Wall Street Reform and Consumer Protection Act is Washington''s response to America''s call for a new regulatory framework for the twenty-first century. In The New Financial Deal, author David Skeel offers an in-depth look at the new financial reforms and questions whether they will bring more effective regulation of contemporary finance or simply cement the partnership between government and the largest banks. Details the goals of the legislation, and reveals that how they are handled could dangerously distort American finance, making it more politically charged, less vibrant, and further removed from basic rule of law principles Provides an inside account of the legislative process Outlines the key components of the new law To understand what American financial life is likely to look like in five, ten, or twenty years, andTable of ContentsForeword ix Introduction xi A Few Major Characters xv Chapter 1 The Corporatist Turn in American Regulation 1 The Path to Enactment 3 The Two Goals of the Dodd-Frank Act 4 A Brief Tour of Other Reforms 6 Two Themes That Emerge 8 Fannie Mae Effect 11 Covering Their Tracks 12 Is There Anything to Like? 14 Part I Relearning the Financial Crisis Chapter 2 The Lehman Myth 19 The Stock Narrative 20 Lehman in Context 23 Lehman’s Road to Bankruptcy 26 Lehman in Bankruptcy 29 Bear Stearns Counterfactual 31 Road to Chrysler 33 Chrysler Bankruptcy 35 General Motors “Sale” 38 From Myths to Legislative Reality 39 Part II The 2010 Financial Reforms Chapter 3 Geithner, Dodd, Frank, and the Legislative Grinder 43 The Players 44 TARP and the Housing Crisis 47 Road to an East Room Signing 49 Channeling Brandeis: The Volcker Rule 54 The Goldman Moment 56 Chapter 4 Derivatives Reform: Clearinghouses and the Plain-Vanilla Derivative 59 Basic Framework 61 Derivatives and the New Finance 63 The Stout Alternative 66 New Clearinghouses and Exchanges 68 Regulatory Dilemmas of Clearinghouses 69 Disclosure and Data Collection 74 Making It Work? 75 Chapter 5 Banking Reform: Breaking Up Was Too Hard to Do 77 Basic Framework 78 New Designator and Designatees 79 Will the New Capital Standards Work? 82 Contingent Capital Alternative 84 Volcker Rule 85 What Do the Brandeisian Concessions Mean? 91 Office of Minority and Women Inclusion 93 Institutionalizing the Government-Bank Partnership 94 A Happier Story? 95 Repo Land Mine 96 Chapter 6 Unsafe at Any Rate 99 Basic Framework 100 Who is Elizabeth Warren? 102 Toasters and Credit Cards 105 The New Consumer Bureau 106 Mortgage Broker and Securitization Rules 109 Consequences: What to Expect from the New Bureau 111 What It Means for the Government-Bank Partnership 114 Chapter 7 Banking on the FDIC (Resolution Authority I) 117 Does the FDIC Play the Same Role in Both Regimes? 118 How (and How Well) Does FDIC Resolution Work? 122 Moving Beyond the FDIC Analogy 126 Chapter 8 Bailouts, Bankruptcy, or Better? (Resolution Authority II) 129 Basic Framework 130 The Trouble with Bailouts 132 Who Will Invoke Dodd-Frank Resolution, and When? 135 Triggering the New Framework 137 Controlling Systemic Risk 142 Third Objective: Haircuts 145 All Liquidation, All the Time? 148 Part III The Future Chapter 9 Essential Fixes and the New Financial Order 155 What Works and What Doesn’t 156 Staying Derivatives in Bankruptcy 158 ISDA and Its Discontent 163 Other Bankruptcy Reforms for Financial Institutions 168 Plugging the Chrysler Hole in Bankruptcy 170 Bankruptcy to the Rescue 173 Chapter 10 An International Solution? 175 Basic Framework 176 Problems of Cross-Border Cases 177 Scholarly Silver Bullets 181 Dodd-Frank’s Contribution to Cross-Border Issues 182 New Living Wills 185 A Simple Treaty Might Do 186 Risk of a Clearinghouse Crisis 188 Reinvigorating the Rule of Law 189 Conclusion 191 Notes 195 Bibliography 205 Acknowledgments 211 About the Author 212 Index 213

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Book SynopsisAn executive overview of the new Financial Regulations Act This book provides an executive summary of the newly passed Financial Regulations Act. It examines the most important sections of the Act, how it impacts the financial industry, as well as what executives must know and do in order to comply with the Act. One of the first books to provide an executive summary from a compliance perspective Presents responsibilities of senior level executives regarding this new Act Reveals what has changed within the regulatory environment Provides tips and techniques throughout Describing the government regulation of securities, securities markets, and securities transactions in the United States, this timely book succinctly defines, describes, and explains domestic securities regulation for compliance officers, accountants, and broker-dealers.Table of ContentsForeword. Preface. Acknowledgments. 1 Introduction to the Dodd-Frank Act. 2 History and Background. Financial Instability. Scope. Architects of the Dodd-Frank Act. The Plan and Proposal. Time Line. Key Goals of the Act. Summary. Notes. 3 Key Titles and Sections. Title I: Financial Stability. Title II: Orderly Liquidation Authority. Title III: Transfer of Powers to the Office of Comptroller of the Currency, Corporation, and Board of Governors. Title IV: Regulation of Advisers to Hedge Fund and Others. Title V: Insurance. Title VI: Improvements to the Regulation of Bank and Savings Association Holding Companies and Depository Institutions. Title VII: Wall Street Transparency and Accountability. Title VIII: Payment, Clearing and Settlement Supervision. Title IX: Investor Protections and Improvements to the Regulation of Securities. Title X: Bureau of Consumer Financial Protection. Title XI: Federal Reserve System Provisions. Title XII: Improving Access to Mainstream Financial Institutions. Title XIII: Pay It Back Act. Title XIV: Mortgage Reform and Anti-Predatory Lending Act. Title XV: Miscellaneous Provisions. Title XVI: Section 1256 Contracts. Summary. 4 Institutions Impacted. Foreign Banking Organizations. Derivatives. Insurance companies. Consumers and Mortgage Banking. Brokers-Dealers. Banks, Thrifts, and Bank Holding Companies. Summary. Note. 5 Dodd-Frank Act Rulemakings. SEC and Rulemaking. Corporate Governance. Investment Advisers. Securities Lending. Arbitration. Swaps. Credit Rating Agencies. Securitization. Other Legislation. Summary. 6 Role of New and Existing Agencies. Financial Stability Oversight Council. Office of Financial Research. Bureau of Consumer Financial Protection. Bank Holding Companies. Non-bank Financial Companies. Depository institutions. Office of Thrift Supervision. Federal Deposit Insurance Corporation. Office of Comptroller of the Currency. Orderly Liquidation Authority. Securities Investor Protection Corporation. Securities and Exchange Commission. Federal Reserve Board. Commodity Futures Trading Commission. Government Accountability Office. Summary. Notes. 7 Global Impact and Implications. Banking Industry. Investment Industry. Summary. Note. 8 Advice for Specific Professions. Executive Management. Municipal Securities Markets. Brokers-Dealers. Investment Advisers. Insurers. Summary. 9 Relationship with SOX and the Basel Accords. The Dodd-Frank Act and SOX. The Dodd-Frank Act and the Basel Accords. Summary. Appendix A Contents of the Dodd-Frank Act. Appendix B Effective Dates and Deadlines. Glossary of Key Acronyms. About SOX Institute and the GRC Group. Index.

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Book SynopsisHelping project managers figure out how costs interact with the general ledger as well as make decisions about whether to continue with the project as planned, this book reveals how project expensing should be capitalized or expensed in order to keep the budget on track and improve profitability.Table of ContentsPreface xi Acknowledgments xv Chapter 1 Project Management and Accounting 1 Mission, Objectives, Strategy 2 Project Planning 6 Project Execution and Control 11 Notes 21 Chapter 2 Finance, Strategy, and Strategic Project Management 23 DuPont Method 24 Note 44 Chapter 3 Accounting, Finance, and Project Management 45 Project Team and Financial Success 46 Calculating Return on Investment 53 STO Solution Model 59 Implementing Strategy throughout the Company 61 Conclusion 68 Notes 69 Chapter 4 Cost 71 Definition and Purpose of Cost 73 Cost Classifications 74 Cost Decisions 80 Cost of Quality 83 Cost and Industry 85 Manufacturing Industry 89 Conclusion 90 Note 91 Chapter 5 Project Financing 93 Debt Financing 93 Corporate Bonds 95 Equity 97 Income Tax Effect 99 Cost Implications of the Funding Methodology 100 Conclusion 112 Chapter 6 Project Revenue and Cash Flows 115 Role of the Financial Manager 115 How to Calculate the Statement of Cash Flows for a Company 119 Free Cash Flows 127 Methods for Calculating a Project’s Viability 128 Conclusion 137 Notes 139 Chapter 7 Creating the Project Budget 141 Introduction 141 Case Study: Pontrelli Recycling, Inc. 142 Planning for the Future 147 Creating a Project Budget 157 Review Project Financials 161 Project Cash Flow 162 Conclusion 168 Note 169 Chapter 8 Risk Assessment 171 Risk to Your Reputation 175 Competency 176 Integrity and Honesty 177 Organizational Structure 178 Human Resources 179 Reports on Financial Statements 180 Project Specific Risk 197 Engagement Acceptance 199 Conclusion 200 About the Web Site 201 Index 203

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Book SynopsisBringing a unique joint practitioner and academic perspective to the topic, this is the only available text on private equity truly international in focus.Table of ContentsPreface. Abbreviations. About the authors. Part 1 Overview and fund-level analysis. 1 Introduction and overview. 1.1 Introduction. 1.2 Cyclicality of the private equity industry. 1.3 Statistics on the private equity industry. 1.4 Recent regulatory activity. 1.5 The outlook of the private equity industry. 1.6 References. 2 Private equity fund economics. 2.1 Overview. 2.2 Private equity firms or general partners (GPs). 2.3 Investors in private equity funds or limited partners (LPs). 2.4 Private equity funds or limited partnerships. 2.5 Advisors and agents. 2.6 References. 3 Performance measurement in private equity. 3.1 Overview. 3.2 Measures of private equity fund performance. 3.3 Benchmarking private equity performance. 3.4 Academic findings on the performance of private equity funds. 3.5 Why the performance assessment of private equity remains difficult. 3.6 Conclusions. 3.7 References. 4 Private equity investing in emerging markets. 4.1 Introduction. 4.2 Investment landscape. 4.3 Drivers for PE investments in emerging economies. 4.4 Risks of investing in emerging economies. 4.5 Market structure and investment characteristics. 4.6 Comparative landscape of emerging markets. 4.7 Summary. 4.7 References. 5 Fund due diligence. 5.1 What is fund due diligence? 5.2 LP investment process. 5.3 Fund due diligence in detail. 5.4 Summary. 6 Private equity fund accounting. 6.1 What is happening in private equity accounting? 6.2 Current major issues and complexities. 6.3 Interpreting fund accounts. 7 Gatekeepers. 7.1 Introduction. 7.2 Main types of professional advisors. 7.3 In-house or outsourcing? 7.4 Outsourcing to a fund of funds. 7.5 Fund-of-funds economics. 7.6 Selecting a fund of funds. 7.7 Outlook. 7.8 Bibliography. 8 Listed private equity. 8.1 Introduction. 8.2 Benefits and disadvantages of listed private equity. 8.3 Economic and organizational forms. 8.4 Legal forms. 8.5 Estimated risk profile of listed private equity. 8.6 LPE indexes. 8.7 References. 9 Secondary fund transactions. 9.1 Introduction. 9.2 Secondary market development. 9.3 Parties involved in secondary transactions. 9.4 Secondary transactions. 9.5 The pricing of secondary transactions. 9.6 Conclusion. 9.7 References. Part 2 Deal-level analysis. 10 Valuation of private equity companies. 10.1 Introduction. 10.2 Valuation guidelines. 10.3 Implementation of the main valuation methods: multiples and DCF. 10.4 Pitfalls to be wary of when valuing private companies. 10.A Pueblo Clothing SpA. 10.B Chariot Skates Plc. 10.C References. 11 Deal analysis and due diligence. 11.1 Introduction. 11.2 The sale process. 11.3 Circumstances influence the due diligence process. 11.4 Deal analysis and due diligence during the sale process. 11.5 Motives/Perspectives of stakeholders. 12 Leveraged buyout transactions. 12.1 Introduction. 12.2 LBO execution: The deal process. 12.3 LBO stakeholders. 12.4 Value creation in an LBO. 12.5 References. 13 Leveraged buyout modeling: An Excel application. 13.1 Overview. 13.2 Build a pre–transaction structure model. 13.3 Determine transaction structure: Uses of funds. 13.4 Determine transaction structure: Sources of funds. 13.5 Build a post–transaction structure model. 13.6 Determine exit and compute returns. 13.7 Optimization and analysis of the LBO model. 13.8 Analysis of the Toys R Us LBO. 13.9 Reference. 14 Post-deal operational improvements. 14.1 What operational improvements are made post deal? 14.2 Identifying the opportunity. 14.3 EBITDA growth. 14.4 Maximizing assets—human capital. 14.5 When things go wrong. 14.6 Conclusion. 14.7 References. 15 Harvesting private equity investments. 15.1 Introduction. 15.2 Steps to exiting a private equity investment. 15.3 Exit strategies. 15.4 Summary. 15.5 References. Part 3 Early-stage investing. 16 Angel investing. 16.1 What is angel investing? 16.2 What motivates business angels? 16.3 Angel investment process. 16.4 Recent developments and trends. 16.5 Summary. 16.6 References. 17 Venture capital. 17.1 Introduction. 17.2 What is venture capital. 17.3 The VC investment process. 17.4 The VC contract. 17.5 Alternative sources of VC financing. 17.6 Conclusion. 17.7 References. Part 4 Case studies. 18 Realza Capital. December 2006. December 2008. 19 Swicorp: Private equity in the MENA region 2009. Swicorp—A Short History. The MENA region. The MENA Private Equity Landscape. The role of sovereign wealth funds (SWFs). Swicorp's Intaj Investment Strategy. Deal selection process. Step Carpet Group. Jordan Aviation LLC. 20 Founding Mekong Capital. Vietnam and the private equity industry. MEF I and the initial investment philosophy. MEF I case study: AA Corporation. MEF II and a new investment philosophy. MEF II case study: International Consumer Products. Vietnam Azalea Fund. 2007—searching for answers from within. The corporate transformation process. Will it work? 21 Bloomsbury Capital: June 2007. 22 Edcon: Going shopping in South Africa. Edcon: A Leading South African Retailer. Bain Capital: Background. Opportunity Knocks. South Africa. Currency risk. The deal. The bid. 23 FiberNet Communications. Hungarian history and economy. Hungarian television broadcasting market. Cable TV industry. FiberNet's key competitors. The FiberNet opportunity. 24 Seat SpA. Chronology of Seat transaction. Bain Capital: background. The global and European directory market. The Italian directory market. Seat business description. Market entry of Pagine Utili. The Internet: Threat or opportunity? Due diligence. Italian economic and political landscape. Privatization process in Italy. The deal. 25 Ducati and Investindustrial: Racing out of the pits and over the finish line. Investindustrial acquisition of Ducati. Improving the company (2006–2008). The world motorcycle industry in 2008. Raising a new fund. A "wild ride" for Ducati's stock. June 2010. 26 Styles & Wood: Behind the scenes of retail. Styles & Wood: The history. Gerard Quiligotti and the turnaround years. The MBO: The fall of Wembley Stadium Group. Styles & Wood since 1996: Managing the growth strategy. Project Oak in 2001: Management incentives and reaping rewards. Project Oval in 2004: From 3i to Aberdeen—secondary buyout decision. Market and competition. Investing decision. 27 SunRay Renewable Energy: Private equity in the sunshine. SunRay's choice of solar technology. The value chain of a solar PV developer. The European renewable market in 2006–2008. SunRay's business model. Building the management team. Learning the solar PV game the hard way. Scaling up the business across Southern Europe. Under the umbrella of private equity. Montalto di Castro: Building the largest solar power park in Europe. The decision to exit. SunRay's spirit still alive. 28 Debenhams. Post deal and going public again. 29 Optos: A sight worth seeing. Douglas Anderson and the vision. Scottish business landscape and funding for early-stage startups. Product development. Diseases of the back of the eye and Optos's target market. Manufacturing. Competition. Business model: The "razor/razor blade" concept. Profit and loss implications. Cash flow implications. Financing 1995–2001. Geographic expansion. Financing in 2002. 30 Capital for Enterprise U.K.: Bridging the SME early-stage finance gap. An "equity gap"? Previous attempts by the U.K. government to tackle the "equity gap". Limits of previous programs. Launching enterprise capital funds. Key questions and options for the ECF program design. The first years of operation of the ECF program. A few years on: A first assessment. Where next? Glossary. Index.

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Book SynopsisPrinciples of External Auditing has become established as one of the leading textbooks for students studying auditing. Striking a careful balance between theory and practice, the book describes and explains, in non-technical language, the nature of the audit function and the principles of the audit process.Table of ContentsAbout the Authors xi Preface xiii Structure of the Financial Reporting Council xvii Glossary of Terms xix 1 What is Auditing? 1 1.1 Introduction 1 1.2 What is an audit? 2 1.3 Types of audit 3 1.4 Auditing vs Accounting 8 1.5 Why are external fi nancial statement audits needed? 8 1.6 Benefi ts derived from external fi nancial statement audits 11 1.7 Summary 18 Self-review questions 18 References 19 Additional reading 20 2 The Development of Auditing and Its Objectives 23 2.1 Introduction 23 2.2 Overview of the development of company auditing 23 2.3 Development of auditing in the period up to 1844 26 2.4 Development of company auditing 1844–1920s 27 2.5 Development of company auditing 1920s–1960s 32 2.6 Development of company auditing 1960s–1990s 36 2.7 Development of company auditing 1990s–present 39 2.8 Summary 51 Self-review questions 52 References 53 Additional reading 55 3 A Framework of Auditing Concepts 57 3.1 Introduction 57 3.2 Social purpose, postulates and framework for concepts of auditing 59 3.3 Concepts relating to the credibility of auditors’ work 60 3.4 Concepts relating to the audit process 70 3.5 Concept relating to auditors’ communication: reporting 86 3.6 Concepts relating to the standard of auditors’ performance 90 3.7 Summary 94 Self-review questions 95 References 95 Additional reading 98 4 Threats to, and Safeguarding of, Auditors’ Independence 99 4.1 Introduction 99 4.2 Threats to auditors’ independence 100 4.3 Steps taken by parliament and regulators to safeguard auditors’ independence 104 4.4 Other proposals to strengthen auditors’ independence 140 4.5 Role and responsibilities of audit committees 143 4.6 Summary 151 Self-review questions 152 References 153 Additional reading 157 5 Auditors’ Legal, Regulatory and Professional Responsibilities 161 5.1 Introduction 161 5.2 Reporting and auditing requirements of companies 165 5.3 Appointment, remuneration and removal of company auditors 181 5.4 Auditor–client relationship 189 5.5 Auditors’ duties and rights 191 5.6 Audit fi rms’ transparency reports and governance code 207 5.7 Summary 211 Self-review questions 212 References 213 Additional reading 216 6 Auditors’ Duties with Respect to Fraud and Non-compliance with Laws and Regulations 217 6.1 Introduction 217 6.2 Defi nition of fraud 218 6.3 Development of auditors’ responsibility to detect and report fraud 220 6.4 Auditors’ current responsibilities to detect and report fraud 229 6.5 Aggressive earnings management 241 6.6 Auditors’ responsibility to detect and report non-compliance with laws and regulations 242 6.7 Auditors’ duty of confi dentiality to their clients 250 6.8 Summary 253 Self-review questions 254 References 255 Additional reading 257 Appendix: Examples of fraud risk factors 258 7 Overview of the Audit Process, Audit Evidence, Staffing and Documenting an Audit 261 7.1 Introduction 261 7.2 Overview of the audit process 262 7.3 Clarification of some jargon 265 7.4 Audit evidence 271 7.5 Staffi ng an audit 277 7.6 Documenting an audit 289 7.7 Summary 306 Self-review questions 307 References 309 Additional reading 310 8 Commencing an Audit: Engagement Procedures, Understanding the Client and Identifying Risks 311 8.1 Introduction 311 8.2 Pre-engagement investigation 312 8.3 Audit engagement letters 320 8.4 Understanding the client, its business and its industry and how it evaluates its performance 325 8.5 Identifying and assessing risks of material misstatement in the financial statements 332 8.6 Analytical procedures 336 8.7 Summary 340 Self-review questions 341 References 342 Additional reading 342 9 Planning the Audit; Materiality and Audit Risk 345 9.1 Introduction 345 9.2 Phases of planning an audit 346 9.3 Impact of materiality on planning an audit 350 9.4 Desired level of audit risk (desired level of assurance) 362 9.5 Impact of audit risk on planning the audit 366 9.6 Summary 375 Self-review questions 377 References 377 Additional reading 378 10 Internal Control and the External Audit 381 10.1 Introduction 381 10.2 The accounting system 382 10.3 Conceptual aspects of internal control 385 10.4 Reviewing the accounting system and evaluating its internal controls 402 10.5 Developing the audit plan 411 10.6 Compliance testing 415 10.7 Reporting internal control deficiencies to management 419 10.8 Summary 420 Self-review questions 421 References 422 Additional reading 423 11 Testing Financial Statement Assertions: Substantive Testing 425 11.1 Introduction 425 11.2 Significance of substantive testing in the audit process 426 11.3 Objectives of, and approaches to, substantive testing 428 11.4 Substantive audit procedures 433 11.5 Requirements of auditors when misstatements are detected 441 11.6 Introduction to substantive testing of inventory and accounts receivable 443 11.7 Signifi cant aspects of auditing inventory 444 11.8 Signifi cant aspects of auditing accounts receivable 452 11.9 Initial engagements 462 11.10 Summary 463 Self-review questions 463 References 464 Additional reading 465 12 Audit Sampling and Computer Assisted Auditing Techniques (CAATs) 467 12.1 Introduction 467 12.2 Meaning and importance of sampling in auditing 468 12.3 Basic terminology relating to sampling 470 12.4 Judgmental sampling vs statistical sampling and sampling methods 472 12.5 Designing and selecting samples 474 12.6 Judgmental sampling 481 12.7 Statistical sampling of attributes and variables, and pps sampling 482 12.8 Following up sample results 490 12.9 Computer assisted audit techniques 491 12.10 Summary 495 Self-review questions 496 References 497 Additional reading 497 13 Completion and Review 499 13.1 Introduction 499 13.2 Review for contingent liabilities and commitments 501 13.3 Review for subsequent events 503 13.4 (re)Assessment of the going concern assumption 508 13.5 Written representations 520 13.6 Final review of the fi nancial statements 527 13.7 Evaluation of audit evidence gathered and formation of the audit opinion 530 13.8 Review of unaudited information 533 13.9 Final conference 537 13.10 Summary 537 Self-review questions 538 References 539 Additional reading 540 14 Auditors’ Reports to Users of Financial Statements and to Management 543 14.1 Introduction 543 14.2 Auditors’ reporting obligations under the companies act 2006 544 14.3 Format and content of audit reports 549 14.4 Types of audit opinion 564 14.5 Different forms of modifi ed audit opinion 566 14.6 Emphasis of matter and other matter paragraphs 576 14.7 The audit report – the auditor’s chance to communicate 580 14.8 Auditors’ communication with those charged with governance 590 14.9 Summary 603 Self-review questions 604 References 605 Additional reading 609 15 Legal Liability of Auditors 611 15.1 Introduction 611 15.2 Overview of auditors’ legal liability 612 15.3 Auditors’ contractual liability to their clients 615 15.4 Liability to third parties under the common law 622 15.5 The effect of out-of-court settlements 661 15.6 Summary 663 Self-review questions 663 References 664 Additional reading 666 Appendix 1 667 Appendix 2 669 16 Avoiding and Limiting Auditors’ Liability 673 16.1 Introduction 673 16.2 Importance of, and responsibility for, quality control of audits 675 16.3 The profession’s measures to secure high quality audits 676 16.4 Regulators’ measures for securing high quality audits 689 16.5 Proposals for limiting auditors’ liability 708 16.6 Summary 720 Self-review questions 721 References 722 Additional reading 725 17 Corporate Responsibility Reporting and Assurance 727 17.1 Introduction 727 17.2 Development of corporate responsibility reporting 729 17.3 Why do companies publish corporate responsibility reports? 733 17.4 Corporate responsibility reporting guidelines 743 17.5 Corporate responsibility assurance engagements 746 17.6 Why do some companies have their corporate responsibility reports independently assured while others do not? 763 17.7 Relevance of corporate responsibility issues to external financial statement audits 766 17.8 Summary 772 Self-review questions 773 References 774 Additional reading 777 Appendix: Brief descriptions of ‘responsible investment’ indices 777 18 The Audit Expectation-Performance Gap and Proposals for Reforming the External Audit Function 783 18.1 Introduction 783 18.2 The audit expectation-performance gap 784 18.3 Overview of proposed reforms following the global financial crisis 798 18.4 Enhancing auditors’ reporting responsibilities 799 18.5 Audit market concentration and strengthening auditors’ independence 816 18.6 Emergence of competition from china 837 18.7 Inherent conflicts in the current audit model 839 18.8 Summary 841 Self-review questions 842 References 843 Additional reading 849 Index 851

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Book SynopsisA guide to the validation and risk management of quantitative models used for pricing and hedging Whereas the majority of quantitative finance books focus on mathematics and risk management books focus on regulatory aspects, this book addresses the elements missed by this literature--the risks of the models themselves. This book starts from regulatory issues, but translates them into practical suggestions to reduce the likelihood of model losses, basing model risk and validation on market experience and on a wide range of real-world examples, with a high level of detail and precise operative indications.Table of ContentsPreface xi Acknowledgements xix Part I Theory and Practice of Model Risk Management 1 Understanding Model Risk 3 1.1 What Is Model Risk? 3 1.1.1 The Value Approach 4 1.1.2 The Price Approach 6 1.1.3 A Quant Story of the Crisis 9 1.1.4 A Synthetic View on Model Risk 17 1.2 Foundations of Modelling and the Reality of Markets 22 1.2.1 The Classic Framework 22 1.2.2 Uncertainty and Illiquidity 30 1.3 Accounting for Modellers 38 1.3.1 Fair Value 38 1.3.2 The Liquidity Bubble and the Accountancy Boards 40 1.3.3 Level 1, 2, 3 .go? 41 1.3.4 The Hidden Model Assumptions in ‘vanilla’ Derivatives 42 1.4 What Regulators Said After the Crisis 48 1.4.1 Basel New Principles: The Management Process 49 1.4.2 Basel New Principles: The Model, The Market and The Product 51 1.4.3 Basel New Principles: Operative Recommendations 52 1.5 Model Validation and Risk Management: Practical Steps 53 1.5.1 A Scheme for Model Validation 54 1.5.2 Special Points in Model Risk Management 59 1.5.3 The Importance of Understanding Models 60 2 Model Validation and Model Comparison: Case Studies 63 2.1 The Practical Steps of Model Comparison 63 2.2 First Example: The Models 65 2.2.1 The Credit Default Swap 66 2.2.2 Structural First-Passage Models 67 2.2.3 Reduced-Form Intensity Models 69 2.2.4 Structural vs Intensity: Information 72 2.3 First Example: The Payoff. Gap Risk in a Leveraged Note 74 2.4 The Initial Assessment 77 2.4.1 First Test: Calibration to Liquid Relevant Products 77 2.4.2 Second Test: a Minimum Level of Realism 78 2.5 The Core Risk in the Product 81 2.5.1 Structural Models: Negligible Gap Risk 82 2.5.2 Reduced-Form Models: Maximum Gap Risk 82 2.6 A Deeper Analysis: Market Consensus and Historical Evidence 85 2.6.1 What to Add to the Calibration Set 85 2.6.2 Performing Market Intelligence 86 2.6.3 The Lion and the Turtle. Incompleteness in Practice 86 2.6.4 Reality Check: Historical Evidence and Lack of it 87 2.7 Building a Parametric Family of Models 88 2.7.1 Understanding Model Implications 93 2.8 Managing Model Uncertainty: Reserves, Limits, Revisions 95 2.9 Model Comparison: Examples from Equity and Rates 99 2.9.1 Comparing Local and Stochastic Volatility Models in Pricing Equity Compound and Barrier Options 99 2.9.2 Comparing Short Rate and Market Models in Pricing Interest Rate Bermudan Options 105 3 Stress Testing and the Mistakes of the Crisis 111 3.1 Learning Stress Test from the Crisis 111 3.1.1 The Meaning of Stress Testing 112 3.1.2 Portfolio Stress Testing 113 3.1.3 Model Stress Testing 116 3.2 The Credit Market and the ‘Formula that Killed Wall Street’ 118 3.2.1 The CDO Payoff 118 3.2.2 The Copula 119 3.2.3 Applying the Copula to CDOs 122 3.2.4 The Market Quotation Standard 124 3.3 Portfolio Stress Testing and the Correlation Mistake 125 3.3.1 From Flat Correlation Towards a Realistic Approach 126 3.3.2 A Correlation Parameterization to Stress the Market Skew 131 3.4 Payoff Stress and the Liquidity Mistake 136 3.4.1 Detecting the Problem: Losses Concentrated in Time 137 3.4.2 The Problem in Practice 139 3.4.3 A Solution. From Copulas to Real Models 145 3.4.4 Conclusions 150 3.5 Testing with Historical Scenarios and the Concentration Mistake 151 3.5.1 The Mapping Methods for Bespoke Portfolios 152 3.5.2 The Lehman Test 156 3.5.3 Historical Scenarios to Test Mapping Methods 157 3.5.4 The Limits of Mapping and the Management of Model Risk 164 3.5.5 Conclusions 168 4 Preparing for Model Change. Rates and Funding in the New Era 171 4.1 Explaining the Puzzle in the Interest Rates Market and Models 171 4.1.1 The Death of a Market Model: 9 August 2007 173 4.1.2 Finding the New Market Model 174 4.1.3 The Classic Risk-free Market Model 178 4.1.4 A Market Model with Stable Default Risk 182 4.1.5 A Market with Volatile Credit Risk 192 4.1.6 Conclusions 200 4.2 Rethinking the Value of Money: The Effect of Liquidity in Pricing 201 4.2.1 The Setting 204 4.2.2 Standard DVA: Is Something Missing? 206 4.2.3 Standard DVA plus Liquidity: Is Something Duplicated? 207 4.2.4 Solving the Puzzle 207 4.2.5 Risky Funding for the Borrower 208 4.2.6 Risky Funding for the Lender and the Conditions for Market Agreement 209 4.2.7 Positive Recovery Extension 210 4.2.8 Two Ways of Looking at the Problem: Default Risk or Funding Benefit? The Accountant vs the Salesman 211 4.2.9 Which Direction for Future Pricing? 214 Part II Snakes in the Grass: Where Model Risk Hides 5 Hedging 219 5.1 Model Risk and Hedging 219 5.2 Hedging and Model Validation: What is Explained by P&L Explain? 221 5.2.1 The Sceptical View 222 5.2.2 The Fundamentalist View and Black and Scholes 222 5.2.3 Back to Reality 224 5.2.4 Remarks: Recalibration, Hedges and Model Instability 226 5.2.5 Conclusions: from Black and Scholes to Real Hedging 228 5.3 From Theory to Practice: Real Hedging 229 5.3.1 Stochastic Volatility Models: SABR 231 5.3.2 Test Hedging Behaviour Leaving Nothing Out 232 5.3.3 Real Hedging for Local Volatility Models 238 5.3.4 Conclusions: the Reality of Hedging Strategies 241 6 Approximations 243 6.1 Validate and Monitor the Risk of Approximations 243 6.2 The Swaption Approximation in the Libor Market Model 245 6.2.1 The Three Technical Problems in Interest Rate Modelling 245 6.2.2 The Libor Market Model and the Swaption Market 247 6.2.3 Pricing Swaptions 250 6.2.4 Understanding and Deriving the Approximation 253 6.2.5 Testing the Approximation 257 6.3 Approximations for CMS and the Shape of the Term Structure 264 6.3.1 The CMS Payoff 265 6.3.2 Understanding Convexity Adjustments 266 6.3.3 The Market Approximation for Convexity Adjustments 267 6.3.4 A General LMM Approximation 269 6.3.5 Comparing and Testing the Approximations 271 6.4 Testing Approximations Against Exact. Dupire’s Idea 276 6.4.1 Perfect Positive Correlation 278 6.4.2 Perfect Negative Correlation 280 6.5 Exercises on Risk in Computational Methods 283 6.5.1 Approximation 283 6.5.2 Integration 285 6.5.3 Monte Carlo 285 7 Extrapolations 287 7.1 Using the Market to Complete Information: Asymptotic Smile 288 7.1.1 The Indetermination in the Asymptotic Smile 288 7.1.2 Pricing CMS with a Smile: Extrapolating to Infinity 292 7.1.3 Using CMS Information to Transform Extrapolation into Interpolation and Fix the Indetermination 293 7.2 Using Mathematics to Complete Information: Correlation Skew 295 7.2.1 The Expected Tranched Loss 295 7.2.2 Properties for Interpolation 298 7.2.3 Properties for Turning Extrapolation into Interpolation 298 8 Correlations 303 8.1 The Technical Difficulties in Computing Correlations 303 8.1.1 Correlations in Interest Rate Modelling 305 8.1.2 Cross-currency Correlations 307 8.1.3 Stochastic Volatility Correlations 312 8.2 Fundamental Errors in Modelling Correlations 315 8.2.1 The Zero-correlation Error 316 8.2.2 The 1-Correlation Error 319 9 Calibration 323 9.1 Calibrating to Caps/Swaptions and Pricing Bermudans 324 9.1.1 Calibrating Caplets 325 9.1.2 Understanding the Term Structure of Volatility 326 9.1.3 Different Parameterizations 329 9.1.4 The Evolution of the Term Structure of Volatility 332 9.1.5 The Effect on Early-Exercise Derivatives 334 9.1.6 Reducing Our Indetermination in Pricing Bermudans: Liquid European Swaptions 335 9.2 The Evolution of the Forward Smiles 340 10 When the Payoff is Wrong 347 10.1 The Link Between Model Errors and Payoff Errors 347 10.2 The Right Payoff at Default: The Impact of the Closeout Convention 348 10.2.1 How Much Will be Paid at Closeout, Really? 350 10.2.2 What the Market Says and What the ISDA Says 352 10.2.3 A Quantitative Analysis of the Closeout 353 10.2.4 A Summary of the Findings and Some Conclusions on Payoff Uncertainty 360 10.3 Mathematical Errors in the Payoff of Index Options 362 10.3.1 Too Much Left Out 364 10.3.2 Too Much Left In 365 10.3.3 Empirical Results with the Armageddon Formula 365 10.3.4 Payoff Errors and Armageddon Probability 367 11 Model Arbitrage 371 11.1 Introduction 371 11.2 Capital Structure Arbitrage 373 11.2.1 The Credit Model 373 11.2.2 The Equity Model 375 11.2.3 From Barrier Options to Equity Pricing 377 11.2.4 Capital-structure Arbitrage and Uncertainty 381 11.3 The Cap-Swaption Arbitrage 391 11.4 Conclusion: Can We Use No-Arbitrage Models to Make Arbitrage? 394 12 Appendix 397 12.1 Random Variables 397 12.1.1 Generating Variables from Uniform Draws 397 12.1.2 Copulas 397 12.1.3 Normal and Lognormal 398 12.2 Stochastic Processes 399 12.2.1 The Law of Iterated Expectation 399 12.2.2 Diffusions, Brownian Motions and Martingales 400 12.2.3 Poisson Process 403 12.2.4 Time-dependent Intensity 404 12.3 Useful Results from Quantitative Finance 405 12.3.1 Black and Scholes (1973) and Black (1976) 405 12.3.2 Change of Numeraire 407 Bibliography 409 Index 417

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Book SynopsisThe ongoing turbulence in the global financial markets has drawn attention to an alternative system of financial intermediation: Islamic banking and finance. This is now one of the fastest growing sectors within the market place and has, so far, remained on the sidelines of this unrest. Since the inception of Islamic banking thirty years ago the number and reach of Islamic financial institutions worldwide has risen significantly. Institutions offering Islamic financial services constitute a significant and growing share of the financial system in several countries, and market participants everywhere are joining the race to study and be a part of this emerging financial system. The Islamic Banking and Finance Workbook is a one-of-a-kind workbook on the topic, enabling readers to test their understanding of Islamic banking and finance concepts. Although suitable as a standalone learning tool, the book is designed to test the information covered in the companion book, IntroTable of ContentsPreface. About the Author. 1 What Do You Know About Islam? 1.1 Learning Outcomes, Summary Overview and Problems. 1.1.1 Learning Outcomes. 1.1.2 Summary Overview. 1.2 Questions. 1.3 Answers. 2 Sources of Sharia'a Law and the Role of Sharia'a Boards. 2.1 Learning Outcomes, Summary Overview and Problems. 2.1.1 Learning Outcomes. 2.1.2 Summary Overview. 2.1.3 Sharia'a Supervisory Board. 2.2 Questions. 2.2.1 General. 2.2.2 Responsibilities of the Parties to the Sharia'a Contracts. 2.2.3 Islamic Finance Terminology Quiz. 2.3 Answers. 2.3.1 General. 2.3.2 Responsibilities of the Parties to the Sharia'a Contracts. 2.3.3 Islamic Finance Terminology Quiz. 3 Principles of Islamic Banking and Finance. 3.1 Learning Outcomes, Summary Overview and Problems. 3.1.1 Learning Outcomes. 3.1.2 Summary Overview. 3.1.3 History of Islamic Banking. 3.1.4 Islamic Banking Principles. 3.2 Questions. 3.2.1 General. 3.2.2 Islamic Banking Principles. 3.3 Answers. 3.3.1 General. 4 The Murabaha Contract as a Mode of Islamic Finance. 4.1 Learning Outcomes, Summary Overview and Problems. 4.1.1 Learning Outcomes. 4.1.2 Summary Overview. 4.2 Questions. 4.2.1 What are the Features of the Murabaha Contract? 4.2.2 The Murabaha Contract. 4.2.3 Risks with the Murabaha Contract. 4.3 Answers. 4.3.1 What are the Features of the Murabaha Contract? 4.3.2 The Murabaha Contract. 4.3.3 Risks with the Murabaha Contract. 5 The Mudaraba Contract as a Mode of Islamic Finance. 5.1 Learning Outcomes, Summary Overview and Problems. 5.1.1 Learning Outcomes. 5.1.2 Summary Overview. 5.2 Questions. 5.2.1 What are the Features of the Mudaraba Contract? 5.2.2 The Mudaraba Contract. 5.2.3 Musharaka versus the Mudaraba Contract. 5.2.4 Risks with the Mudaraba Contract. 5.3 Answers. 5.3.1 What are the Features of the Mudaraba Contract? 5.3.2 The Mudaraba Contract. 5.3.3 Musharaka versus the Mudaraba Contract. 5.3.4 Risks with the Mudaraba Contract. 6 The Musharaka Contract as a Mode of Islamic Finance. 6.1 Learning Outcomes, Summary Overview and Problems. 6.1.1 Learning Outcomes. 6.1.2 Summary Overview. 6.1.3 Criticism of Musharaka. 6.2 Questions. 6.2.1 What are the Features of the Musharaka Contract? 6.2.2 The Musharaka Contract. 6.2.3 Risks with the Musharaka Contract. 6.3 Answers. 6.3.1 What are the Features of the Musharaka Contract? 6.3.2 The Musharaka Contract. 6.3.3 Risks with the Musharaka Contract. 7 The Ijara Contract as a Mode of Islamic Finance. 7.1 Learning Outcomes, Summary Overview and Problems. 7.1.1 Learning Outcomes. 7.1.2 Summary Overview. 7.2 Questions. 7.2.1 What are the Features of the Ijara Contract? 7.2.2 The Ijara Contract. 7.2.3 The Ijara wa Iqtina Contract. 7.2.4 The Ijara Contract in more detail. 7.2.5 Risks with the Ijara Contract. 7.3 Answers. 7.3.1 What are the Features of the Ijara Contract? 7.3.2 The Ijara Contract. 7.3.3 The Ijara Wa Iqtina Contract. 7.3.4 The Ijara Contract in more detail. 7.3.5 Risks with the Ijara Contract. 8 The Istisna'a Contract as a Mode of Islamic Finance. 8.1 Learning Outcomes, Summary Overview and Problems. 8.1.1 Learning Outcomes. 8.1.2 Summary Overview. 8.2 Questions. 8.2.1 What are the Features of the Istisna'a Contract? 8.2.2 The Istisna'a Contract. 8.2.3 Istisna'a and Salam Contracts. 8.2.4 Risks with the Istisna'a Contract. 8.3 Answers. 8.3.1 What are the Features of the Istisna'a Contract? 8.3.2 The Istisna'a Contract. 8.3.3 Istisna'a and Salam Contracts. 8.3.4 Risks with the Istisna'a Contract. 9 The Salam Contract as a Mode of Islamic Finance. 9.1 Learning Outcomes, Summary Overview and Problems. 9.1.1 Learning Outcomes. 9.1.2 Summary Overview. 9.2 Questions. 9.2.1 What are the Features of the Salam Contract. 9.2.2 The Salam Contract. 9.2.3 Istisna’a and Salam Contracts. 9.2.4 Risks with the Salam Contract. 9.3 Answers. 9.3.1 What are the Features of the Salam Contract. 9.3.2 The Salam Contract. 9.3.3 Istisna’a and Salam Contracts. 9.3.4 Risks with the Salam Contract. 10 Takaful: Islamic Insurance. 10.1 Learning Outcomes, Summary Overview and Problems. 10.1.1 Learning Outcomes. 10.1.2 Summary Overview. 10.1.3 Takaful Products are Based on Three Main Business Models. 10.2 Questions. 10.2.1 Takaful Terminology and Concepts. 10.2.2 Takaful Principles. 10.3 Answers. 10.3.1 Takaful Terminology and Concepts. 10.3.2 Takaful Principles. Glossary. Bibliography. Index.

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Book SynopsisFletcher and Gardner have created a comprehensive resource that will be of interest not only to those working in the field of finance, but also to those using numerical methods in other fields such as engineering, physics, and actuarial mathematics. By showing how to combine the high-level elegance, accessibility, and flexibility of Python, with the low-level computational efficiency of C++, in the context of interesting financial modeling problems, they have provided an implementation template which will be useful to others seeking to jointly optimize the use of computational and human resources. They document all the necessary technical details required in order to make external numerical libraries available from within Python, and they contribute a useful library of their own, which will significantly reduce the start-up costs involved in building financial models. This book is a must read for all those with a need to apply numerical methods in the valuation of financial claims.<Table of Contents1 Welcome to Python. 1.1 Why Python? 1.2 Common misconceptions about Python. 1.3 Roadmap for this book. 2 The PPF Package. 2.1 PPF topology. 2.2 Unit testing. 2.3 Building and installing PPF. 3 Extending Python from C++. 3.1 Boost.Date Time types. 3.2 Boost.MultiArray and special functions. 3.3 NumPy arrays. 4 Basic Mathematical Tools. 4.1 Random number generation. 4.2 N(.) 4.3 Interpolation. 4.4 Root finding. 4.5 Linear algebra. 4.6 Generalised linear least squares. 4.7 Quadratic and cubic roots. 4.8 Integration. 5 Market: Curves and Surfaces. 5.1 Curves. 5.2 Surfaces. 5.3 Environment. 6 Data Model. 6.1 Observables. 6.2 Flows. 6.3 Adjuvants. 6.4 Legs. 6.5 Exercises. 6.6 Trades. 6.7 Trade utilities. 7 Timeline: Events and Controller. 7.1 Events. 7.2 Timeline. 7.3 Controller. 8 The Hull–White Model. 8.1 A component-based design. 8.2 The model and model factories. 8.3 Concluding remarks. 9 Pricing using Numerical Methods. 9.1 A lattice pricing framework. 9.2 A Monte-Carlo pricing framework. 9.3 Concluding remarks. 10 Pricing Financial Structures in Hull–White. 10.1 Pricing a Bermudan. 10.2 Pricing a TARN. 10.3 Concluding remarks. 11 Hybrid Python/C++ Pricing Systems. 11.1 nth imm of year revisited. 11.2 Exercising nth imm of year from C++. 12 Python Excel Integration. 12.1 Black–scholes COM server. 12.2 Numerical pricing with PPF in Excel. Appendices. A Python. A.1 Python interpreter modes. A.2 Basic Python. A.3 Conclusion. B Boost.Python. B.1 Hello world. B.2 Classes, constructors and methods. B.3 Inheritance. B.4 Python operators. B.5 Functions. B.6 Enums. B.7 Embedding. B.8 Conclusion. C Hull–White Model Mathematics. D Pickup Value Regression. Bibliography. Index.

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Book SynopsisFinancial Modelling in Practice: A Concise Guide for Intermediate and Advanced Level is a practical, comprehensive and in-depth guide to financial modelling designed to cover the modelling issues that are relevant to facilitate the construction of robust and readily understandable models.Table of ContentsBackground, Objectives and Approach. About the Author. Acknowledgements. 1 Building Blocks: Selected Excel Functions and Tools. 2 Principles of Modelling. 3 Financial Statement, Cash Flow and Valuation Modelling. 4 Risk Modelling. 5 Introduction to Options and Real Options Modelling. 6 VBA for Financial Modelling. Further Reading. Index.

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Book SynopsisGiving IT professionals in financial services firms a rounded and comprehensive grounding in their knowledge of their industry, this book offers a primer on the major financial instruments, transactions, and processes, as well as a sound knowledge of the principles of good IT management in the industry. The book gives readers a clear understanding of equities, bonds, currencies, listed derivatives and OTC derivatives. It explains transactions in those instruments and the requirements of business systems that process these transactions. Transactions covered include (inter-alia) agency and principal purchases and sales, loans and deposits, repos and reverse repos, stock loans; and also the Sharia-compliant ''Islamic'' transactions that may be used as alternatives to interest bearing transactions. Andrew Bradford gives an introduction to how investment firms are regulated; offers an understanding of the STP (Straight-through-Processing) concept follTable of ContentsIntroduction. Acknowledgements. PART ONE: INVESTMENTS AND SECURITIES EXPLAINED. 1 An Introduction to Financial Instruments. 1.1 Introduction. 2 Equities. 2.1 Listed and unlisted equities. 2.2 Multi-listed securities. 2.3 The issuance of listed equities â?? the primary market. 2.4 The secondary market in equities. 3 Debt Instruments. 3.1 Types of debt instruments. 3.2 Accrued interest on bonds in the secondary market. 3.3 More trade terminology. 3.4 How prices are formed in the secondary market. 4 Cash. 4.1 Cash as a means of exchange. 4.2 Cash as an investment class. 4.3 More trade terminology. 5 Derivatives. 5.1 Exchange traded derivative contracts. 5.2 More trade terminology. 5.3 OTC derivatives. 6 Common Attributes of Financial Instruments. 6.1 Summary of all trade terminology used in chapters 1 to 5. 6.2 Summary of basic trade arithmetic for transactions in securities, futures and options. 7 Market Participants. 7.1 Introduction. 7.2 Investors. 7.3 Institutional fund managers. 7.4 Private client stockbrokers and investment managers. 7.5 Investment banks that accept and execute orders from investors. 7.6 Investment exchanges. 7.7 Settlement agents. 7.8 Other market participants. 8 How Investment Firms are Regulated. 8.1 Introduction. 8.2 Objectives of regulation. 8.3 The global perspective. 8.4 The European perspective. 8.5 The UK perspective â?? the role of the financial services authority. 8.6 Specific offences in the United Kingdom. 8.7 Regulation and its impact on the it function. 9 Straight-Through-Processing. 9.1 Introduction. 9.2 To what extent is STP actually achieved in practice? 10 The Role of Accurate Static Data in the STP Process. 10.1 Static data overview. 10.2 Duplication of static data across systems. 10.3 Instrument group static data. 10.4 Instrument static data. 10.5 Trading party and settlement agent static data. 10.6 Standard settlement instructions (SSIs). 10.7 Static data that is internal to the firm concerned. 10.8 Normal working days and public holidays. 10.9 Country information. 11 Communications Between Industry Participants. 11.1 SWIFT. 11.2 The financial information exchange (Fix Protocol). 11.3 Other message standards. 12 The Trade Agreement and Settlement Processes. 12.1 The trade agreement process. 12.2 Communications between the trade party and its settlement agent. 13 Failed Trades â?? Causes, Consequences and Resolution. 13.1 Failed trades â?? causes. 13.2 Consequences of failed trades. 13.3 The prevention and resolution of failed trades and the impact on It applications. 14 An Overview of Investment Accounting. 14.1 Role of the financial control department. 14.2 Departmental systems. 14.3 The general ledger. 15 The Stock Record â??Using the double-entry Convention to Control Positions and Security Quantities. 16 Example STP Flows of Equity Agency Trades â?? When Execution Venue is the London Stock Exchange. 16.1 Introduction. 16.2 Equity agency trades with institutional investor customers. 16.3 Equity agency trades with private investor customers. 16.4 Direct market access. 17 The STP Flow of Debt Instrument Trades. 17.1 Introduction. 17.2 Order placement. 17.3 Order execution. 17.4 Trade amounts. 17.5 Trade agreement. 17.6 Regulatory trade reporting. 17.7 Settlement. 17.8 General ledger postings for the trade and the settlement. 17.9 Stock record postings for the trade and the settlement. 17.10 Position-related events. 18 The STP Flow of Foreign Exchange and Money Market Trades. 18.1 Foreign exchange. 18.2 Money market. 19 The STP Flow of Futures and Options Transactions. 19.1 Introduction. 19.2 Futures and options â?? common process steps. 19.3 Futures-specific process steps. 19.4 Options-specific process steps. 20 The STP Flow of SWAP and other OTC Derivative Trades. 20.1 Introduction. 20.2 Order placement. 20.3 Order execution. 20.4 Trade components and amounts. 20.5 Trade agreement. 20.6 Regulatory trade reporting. 20.7 Settlement. 20.8 General ledger postings. 20.9 Stock record postings. 20.10 Marking to market. 20.11 Daily accrual of interest. 21 Stock Lending, Repos and Funding. 21.1 Introduction. 21.2 Stock Lending and borrowing transactions. 21.3 Repo transactions. 21.4 Summary of the differences between the various transaction types. 21.5 The Role of specialist lending intermediaries (SLIs). 21.6 Business Applications to support stock lending and repos. 22 The Impact of Islamic Finance. 22.1 Introduction. 22.2 Delivering Islamic financial services. 22.3 Sharia compliant instruments. 22.4 The valuation and risk management of Islamic financing instruments. 22.5 The It implications of providing islamic instruments. 23 The Management of Positions. 23.1 Introduction. 23.2 Trade dated, value dated, settled and depot positions. 23.3 Interest payments and interest rate fixings. 23.4 Collection of maturity proceeds. 23.5 Dividend payments. 23.6 Corporate actions. 23.7 Listed derivatives â?? contract expiry and delivery dates. 23.8 Marking positions to market. 23.9 Accrual of interest. 23.10 Other accruals. 23.11 Reconciliation. 24 The Management of Risk. 24.1 Forms of market risk. 24.2 Forms of credit risk. 24.3 Other forms of risk. 24.4 The role of the board of directors in managing risk. 24.5 The role of the risk management department. 24.6 An introduction to value-at-risk (VAR). PART TWO: GOOD IT PRACTICE IN THE INVESTMENT INDUSTRY.. 25 The Role of the IT Department in Daily Operations. 25.1 Introduction. 25.2 User support and helpdesk management. 25.3 Data security, data retention, data protection and intellectual property. 25.4 Change management. 25.5 Business continuity planning. 25.6 Use of the It infrastructure library in managing It operations. 26 The Role of the IT Department in Managing Business Change. 26.1 Introduction. 26.2 The software development lifecycle. 26.3 Project management standards. 26.4 Software development models. 26.5 Requirements gathering. 26.6 Quality assurance testing. 27 Package and Vendor Selection, Outsourcing and Offshoring. 27.1 Making the buy or build decision. 27.2 Vendor and package selection. 27.3 Outsourcing and offshoring. Appendix 1 Bond Market Price Calculations. Straight bond calculations. Simple yield to maturity. Gross redemption yield. FRN calculations. Simple margin. Discounted margin. Valuation methodologies for other types of debt instrument. Appendix 2 Summary of Contractual Documents. Further Reading. Glossary of Terms. Index.

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Book SynopsisComplete profiles of today's most successful annuities. Expert tips on how to maximize your returns. Variable annuities now outpace mutual funds as the number one choice among street-smart investors--and it's easy to see why.Table of ContentsALL ABOUT ANNUITIES. What Is a Variable Annuity?. How an Annuity Works. How to Invest in a Variable Annuity. Reading a Variable Annuity Prospectus. THE 100 BEST SUBACCOUNTS. How the 100 Best Subaccounts Were Determined. About the 100 Best Subaccounts. Aggressive Growth Subaccounts. Balanced Subaccounts. Corporate Bond Subaccounts. Global Stock Subaccounts. Government Bond Subaccounts. Growth Subaccounts. Growth and Income Subaccounts. High-Yield Bond Subaccounts. Metals Subaccounts. Specialty Subaccounts. Utility Stock Subaccounts. World Bond Subaccounts. Glossary of Annuity Terms. About the Author.

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Book SynopsisBy assembling the highly focused works of more than two dozen businessmen, lawyers, accountants, investment bankers, consultants, and experts in such fields as risk management and human resources, BenDaniel and Rosenbloom seamlessly illuminate a complex subject.-Paul E. Graf, President and CEO, Axel Johnson Inc. This fully revised Second Edition shows readers how to find, analyze, structure, and negotiate international deals.Table of ContentsList of Exhibits. PART ONE: CRITICAL ISSUES IN PLANNING AND IMPLEMENTATION. Strategic Choices (L. Newman). PART TWO: LEGAL ASPECTS. Legal Aspects of Acquiring U.S. Enterprises (P. McCarthy). Legal Aspects of Acquiring Non-U.S. Enterprises (P. McCarthy). PART THREE: ACCOUNTING AND TAX ASPECTS. Accounting Aspects of International Mergers and Acquisitions (R. Hoffman). Tax Aspects of Inbound Merger and Acquisition and Joint Venture Transactions (D. Tillinghast). Tax Considerations in Acquiring Non-U.S. Enterprises (R. Bossart & J. Meisel). PART FOUR: FINANCIAL ASPECTS. International Financing for Cross-Border M&A Transactions (R. Smith & Y. Mao). Government Assistance in Financing Cross-Border Transactions (K. Brody & R. Waxman-Lenz). Overview of International Project Finance (S. Hoffman). PART FIVE: JOINT VENTURES. Nature of International Joint Ventures and Their Role in Global Business (V. Kvint). Legal Aspects of International Joint Ventures and Strategic Alliances (R. Ebin). PART SIX: VALUING COMPANIES AND NEGOTIATING TRANSACTIONS. Pricing and Negotiations (A. Rosenbloom). PART SEVEN: SPECIAL TOPICS. Risk Management in Cross-Border Transactions (A. Fisher & R. Inserra). Human Resources Concerns (D. McClurg). Postmerger Integration (C. Wood & R. Porter). References. Index.

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Book SynopsisA guide to the latest, most promising technical indicators andtheir applications Momentum, direction, and divergence are the three basic componentsof nearly all technical indicators used in the analysis of stockand commodities trading. And for those who understand them andtheir applications, they are also the pillars of a high-performancetrading strategy. In this groundbreaking book, technical wizardWilliam Blau schools financial professionals in all three.Combining the latest financial information with dozens ofeye-opening graphics, Blau clearly, concisely, and with a minimumof complex mathematics: * Introduces the principle of double smoothing and develops potentnew indicators based on double smoothing techniques * Describes the uses and limitations of a variety of notabletechnical indicators * Explains momentum, direction, and divergence and new ways toapply them * Presents the True Strength Index and shows how it candramatically improve most directional indTable of ContentsTrue Strength Index. Stochastic Momentum. Tick Volume Indicator. A Detrending Indicator. Candlestick Momentum. Directional Trending. True Strength Directional Trending. Stochastic Trade Filtering. TVI Trade Filtering. ADX-Type Filtering, Slope Divergence. Appendices. References. Index.

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Book SynopsisShopping centers and other forms of retail properties continue tobe among the soundest real estate investments in North America. Butretail property is a highly specialized field of real estatedevelopment with a unique and complex set of legal, financial,development, management, and marketing variables about whichinvestors and developers must possess a sound working knowledge.Now this book arms with you with that knowledge, and muchmore. The most comprehensive, authoritative, up-to-date resource of itskind, Shopping Centers and Other Retail Properties covers everyvital aspect of negotiating, buying, selling, developing, managing,and marketing shopping centers and other retail properties. EditorsJohn R. White and Kevin D. Gray, of the leading real estateconsulting firm Landauer Associates, and an all-star team ofexperts in the field of shopping center and retail propertydevelopment, share everything they know about: * All important legal issues * Investment and feasibiliTable of ContentsPartial table of contents: Retailing in the Twenty-First Century (R. Blackwell). The Investment Structure and Investors in Retail Real Estate (H.Mautner). Analyzing Market Demand for Shopping Centers (R. Kateley). Analyzing the Specifics of Retail Markets (C. Ray). The Formats Employed in New Retail Strategies (H. Gelbtuch). Planning, Designing, and Renovating Retail Properties (L. Josal& J. Scalabrin). Developing and Investing in Regional and Super-Regional Malls(M. Bucksbaum & M. Bucksbaum). Space Marketing and Lease Terms in Shopping Centers (M.Munaretto). Operating and Managing Retail Centers (H. Carlson). Various Means of Debt Financing for Shopping Centers (R.Jennings). Sales Agency Marketing of Shopping Centers (G. Whitmore). Appraising Retail Properties (P. Korpacz). Accounting Aspects of Retail Properties (R. Lowe). Epilogue. Index.

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Book SynopsisChronicles the experiences of an American stock-market trader from his first job as a quotation boy in a Boston brokerage firm to his influential position on Wall Street in the 1920s. The author provides his observations about the markets and the minds and motivations of a typical trader.Table of ContentsChapter I - 3 Chapter II – 14 Chapter III – 27 Chapter IV – 35 Chapter V – 49 Chapter VI – 60 Chapter VII – 71 Chapter VIII – 77 Chapter IX – 89 Chapter X – 104 Chapter XI – 116 Chapter XII – 127 Chapter XIII – 141 Chapter XIV – 153 Chapter XV – 168 Chapter XVI – 176 Chapter XVII – 190 Chapter XVIII – 203 Chapter XIX – 210 Chapter XX – 216 Chapter XXI – 227 Chapter XXII – 241 Chapter XXIII – 259 Chapter XXIV – 269

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Book SynopsisEntrepreneurial Finance: A Casebook provides students with a thorough understanding of entrepreneurial finance through the use of cases based on realistic situations. This case approach allows students to gain insight into the real world of entrepreneurial finance while sharpening their analytical skills. The cases are organized according to four major topics critical to a thorough understanding of entrepreneurial finance: Investment Analysis, Financing the Entrepreneurial Firm, Harvesting, and Renewal in the Entreprenurial Firm.Table of ContentsSECTION I. INVESTMENT ANALYSIS Module I.A. SOURCES OF VALUE. 1. Introduction to Entrepreneurial Finance. 2. The Knot. 3. Beta Group. 4. Cachet Technologies. 5. Some Thoughts on Business Plans. 6. NSK Software Technologies Ltd.. MODULE I.B. UNDERSTANDING FINANCIAL STATEMENTS AND PRO FORMA MODELS. 7. Tutor Time (A). 8. Fenchel Lampshade Company. MODULE I.C. PURCHASING FIRMS, BUYOUTS, AND VALUATION. 9. A Note on Valuation in Entrepreneurial Ventures. 10. Digital Everywhere, Inc. 11. The Carlton Polish Company. 12. Record Masters MODULE I.D. REAL OPTIONS. 13. Capital Projects as Real Options: An Introduction 14 Penelope's Personal Pocket Phones. 15. E-ink: Financing Growth 16. Genset: 1989. SECTION II. FINANCING THE ENTREPRENEURIAL FIRM: MODULE II A. VENTURE CAPITAL. 17. A Note on Private Equity Securities. 18. edocs, Inc. (A) MODULE II.B. ANGEL FINANCING. 19. A Note on Angel Financing. 20. Honest Tea MODULE III.C. VENTURE LEASING. 21. Note on the Venture Leasing Industry. 22. Efficient market services: August 1993 (A). MODULE II.D. FRANCHISING. 23. A Note on Franchising. 24. Tutor Time (B). MODULE II.E. BANKS. 25. Xedia and Silicon Valley Bank (A). MODULE III.F. LICENSING/STRATEGIC ALLIANCE. 26. A Note on Strategic Alliances. 27. Parenting magazine. MOCULE II.G. GOVERNMENTS FINANCING 28. A Note on Government Sources of Financing for Small Businesses. 29. Torrent Systems. SECTION III. HARVESTING : MODULE III.A. INITIAL PUBLIC OFFERINGS. 30. A Note on the Initial Public Offering Process. 31. Amazon.com--Going Public. 32. Arthrocare. MODULE III.B. ACQUISITIONS. 33. Nantucket Nectars. 34. HIMs Corp, Inc. SECTION IV. RENEWAL IN THE ENTREPRENEURIAL FIRM. 35. Dell Ventures. Glossary. Index

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