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Preface.<br /> <br /> Acknowledgments.<br /> <br /> 1 Pricing Concepts and the Term Structure of Interest Rates.<br /> <br /> Introduction.<br /> <br /> Present Value Formula.<br /> <br /> Duration and Other Fixed-Income Pricing Concepts.<br /> <br /> Concluding Remarks.<br /> <br /> Notes.<br /> <br /> Appendix A: Calculation of U.S. Treasury Bond Yield Curve.<br /> <br /> Appendix B: Eurodollar Futures Yields.<br /> <br /> 2 Fixed-Income Pricing Matrix and Decomposing Yields.<br /> <br /> Introduction.<br /> <br /> Determining the Discount Rate.<br /> <br /> Credit Rating Categories and Determination.<br /> <br /> Processes for Decomposing Bond Yields.<br /> <br /> Normalized-Yield Pricing Matrix.<br /> <br /> Concluding Remarks.<br /> <br /> Notes.<br /> <br /> 3 Public Corporate Bonds, Private-Placement Bonds, and Whole Commercial Mortgages.<br /> <br /> Introduction.<br /> <br /> Key Terminology.<br /> <br /> Publicly Issued Corporate Bonds.<br /> <br /> Public Corporate Bond Pricing.<br /> <br /> Private-Placement Bonds.<br /> <br /> Valuing a Private-Placement Bond.<br /> <br /> Pricing Bonds that Have Sinking-Fund Payment Requirements.<br /> <br /> Pricing Defaulted Bonds.<br /> <br /> Whole Commercial Mortgage Loans.<br /> <br /> Valuing a Whole Commercial Mortgage Loan.<br /> <br /> Monetary Default Scenarios.<br /> <br /> Notes.<br /> <br /> Appendix C: Bloomberg-Yield to Call Data.<br /> <br /> Appendix D: Selected Portions of BondCalc (r) Brochures.<br /> <br /> 4 Mortgage-Backed and Asset-Backed Securities.<br /> <br /> Introduction.<br /> <br /> Evolution of the Mortgage-Backed Securities Market.<br /> <br /> Mortgage-Backed Securities.<br /> <br /> Collateralized Mortgage Obligations.<br /> <br /> Bloomberg Median Prepayments.<br /> <br /> Stripped Securities.<br /> <br /> Private-Placement Asset-Backed Securities.<br /> <br /> Concluding Remarks.<br /> <br /> Notes.<br /> <br /> 5 Privately Held Equity.<br /> <br /> Introduction.<br /> <br /> Equity Volatility.<br /> <br /> Pricing Equity Issues.<br /> <br /> Common Equity Pricing Models Used by Investment Analysts.<br /> <br /> Price-Multiple Equity Pricing Models.<br /> <br /> Discounted Cash Flow Approach Equity Pricing Model.<br /> <br /> Basic Framework of Private-Equity Investing.<br /> <br /> Accountant's Review of Private-Equity Valuations.<br /> <br /> Concluding Remarks.<br /> <br /> Notes.<br /> <br /> 6 Public Equity Pricing.<br /> <br /> Introduction.<br /> <br /> "Fox Rocks" Valuation Illustration.<br /> <br /> Discounted Cash Flow Model.<br /> <br /> Concluding Remarks.<br /> <br /> Notes.<br /> <br /> Appendix E: "Fox Rocks" Valuation Illustration.<br /> <br /> 7 Derivatives.<br /> <br /> Introduction.<br /> <br /> Forward Contracts.<br /> <br /> Futures Contracts.<br /> <br /> Option Contracts.<br /> <br /> Swaps.<br /> <br /> Credit Derivatives.<br /> <br /> Forward Rate Agreements.<br /> <br /> Notes.<br /> <br /> Appendix F: Using Pricing Concepts of Fixed-Income Investments and Derivatives to Illustrate How to Hedge the Base Rate of Interest.<br /> <br /> Appendix G: Fixed Income Option Strategies.<br /> <br /> 8 Partnerships.<br /> <br /> Introduction.<br /> <br /> Surfside Condominium Partnership.<br /> <br /> Concluding Remarks.<br /> <br /> Glossary.<br /> <br /> References.<br /> <br /> Index.

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.<br /> 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.

Practical, expert coverage of investment pricing methods for financial professionals<br /> <br /> 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:<br /> * PowerPoint(TM) presentation for teaching purposes available online at www.wiley.com/go/investmentpricing<br /> * In-depth and up-to-date pricing models<br /> * Verbal and formula explanations for all mathematical equations<br /> * Tips on reviewing investment prices for accuracy or flaws<br /> * Investment type characteristics such as contractual provisions, cash flows, and risks for applying Statement 133 hedge effectiveness guidelines<br /> * Basic building blocks of investment pricing methodologies including present value methodologies used for pricing and evaluating common investment types<br /> * 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

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