Investment Pricing Methods: A Guide for Accounting and Financial Professionals - Hardcover

Casabona, Patrick; Traficanti, Robert M.

Hardcover

ISBN 10: 0471177407 ISBN 13: 9780471177401

Publisher: Wiley, 2001

Synopsis

Practical, expert coverage of investment pricing methods for financial professionals

This book on investment pricing methods offers accounting and financial practitioners and academics a solid understanding of the techniques and methods investment analysts use to price common financial investment instruments, such as commercial mortgages, private placement-bonds, mortgage-backed securities, private and public equities, derivatives, and joint ventures. Clarification of important terminology and an overview of fundamental concepts are provided for less experienced professionals, while in-depth and up-to-date discussion of technical matters offers experienced professionals expert dissection of more complex material. This authoritative and reliable guide features:

• PowerPoint(TM) presentation for teaching purposes available online at www.wiley.com/go/investmentpricing
• In-depth and up-to-date pricing models
• Verbal and formula explanations for all mathematical equations
• Tips on reviewing investment prices for accuracy or flaws
• Investment type characteristics such as contractual provisions, cash flows, and risks for applying Statement 133 hedge effectiveness guidelines
• Basic building blocks of investment pricing methodologies including present value methodologies used for pricing and evaluating common investment types
• Coverage of complex issues including term structure of interest rates, determinants of bond yields and stock risk premiums, estimation of free cash flows for valuing a business entity, and more

About this title

About the Author

PATRICK CASABONA, PhD, is Associate Professor in the Department of Accounting and Taxation at the Peter J. Tobin College of Business at St. John's University and a consultant to various business organizations.
ROBERT M. TRAFICANTI is Director of Accounting Policy at a major investment bank. He coauthored this book while he was a project manager at the Financial Accounting Standards Board.

From the Back Cover

Practical, expert coverage of investment pricing methods for financial professionals

This book on investment pricing methods offers accounting and financial practitioners and academics a solid understanding of the techniques and methods investment analysts use to price common financial investment instruments, such as commercial mortgages, private placement-bonds, mortgage-backed securities, private and public equities, derivatives, and joint ventures. Clarification of important terminology and an overview of fundamental concepts are provided for less experienced professionals, while in-depth and up-to-date discussion of technical matters offers experienced professionals expert dissection of more complex material. This authoritative and reliable guide features:
* PowerPoint(TM) presentation for teaching purposes available online at www.wiley.com/go/investmentpricing
* In-depth and up-to-date pricing models
* Verbal and formula explanations for all mathematical equations
* Tips on reviewing investment prices for accuracy or flaws
* Investment type characteristics such as contractual provisions, cash flows, and risks for applying Statement 133 hedge effectiveness guidelines
* Basic building blocks of investment pricing methodologies including present value methodologies used for pricing and evaluating common investment types
* Coverage of complex issues including term structure of interest rates, determinants of bond yields and stock risk premiums, estimation of free cash flows for valuing a business entity, and more

From the Inside Flap

This book on investment pricing methods provides accounting and financial professionals and academics with a practical understanding of how investment analysts price common investments, such as commercial mortgages, private placement-bonds, mortgage-backed securities, private and public equities, derivatives, and joint ventures.

Authors Casabona and Traficanti provide explanations and easy-to-follow illustrations of investment pricings in order to reinforce valuation concepts and help accountants apply those concepts to more complicated investments that are found in the marketplace. They show how investors are compensated for assuming risks and how this impacts pricing. Such in-depth discussions will allow accountants to understand the inputs used in appropriate investment pricing models (including the basic valuation formula), how changing market conditions impact fair values, and why certain internal control processes are important in arriving at accurate and consistent pricing estimates for investments. The book also illustrates common derivative hedging transactions to help the reader understand how derivatives are used to reduce risk and achieve other objectives.

Detailed coverage of the five elements that professionals use to price private investments is provided:
* Estimation of future cash flows
* Expectation about variations in the amount or timing of future cash flows
* Time value of money as represented by the risk-free rate of interest
* Price for bearing the uncertainty in the asset or liability
* Other factors such as illiquidity and market imperfections

Investment Pricing Methods offers readers a sound understanding of the fundamentals of investment pricing procedures and helps them apply these techniques to investment pricing calculations observed in practice. Suitable for professionals and academics of various experience levels, the book offers both fundamental concepts in pricing methods and advanced coverage of particular techniques.

Edition details

• Publisher: Wiley
• Publication date: 2001
• Language: English
• ISBN 10: 0471177407
• ISBN 13: 9780471177401
• Binding: Hardcover
• Edition number: 1
• Number of pages: 384