The Economics of Financial Markets

By: Hendrik S. Houthakker, Peter J. Williamson

Write A Review

Hardcover | 12 September 1996

At a Glance

Hardcover
376 Pages

Dimensions(cm)
22.86 x 15.24 x 2.54

Hardcover

$146.25

or 4 interest-free payments of $36.56 with

Aims to ship in 7 to 10 business days

The Economics of Financial Markets puts economics to work on the daily problems faced by investors, traders, speculators and brokers as they wrestle with increasingly diverse and complex financial markets. Drawing on data direct from the financial behavior of households, corporations, and governments, the authors show how accessible but rigorous economics can help in making sense of the financial markets (including those in equities, bonds, mutual funds, options and futures) and of the ways in which these markets are organized.
The Economics of Financial Markets is for those who wish to look behind the daily financial headlines and understand what is driving the prices of bonds, stocks, options, futures and other instruments; how financial markets work; how to identify consistent patterns of market behavior; and how the complex jigsaw of institutions, financial intermediaries, trading places, speculators, hedgers, savers and investors fits together. It operates at that rare intersection of theory and practice where the study of intriguing patterns and phenomena can actually uncover profitable opportunities. The authors don't pretend that they have a secret formula or a sure-fire way to pick future winners in the financial race. The world is littered with the gravestones of "get rich quick" strategies. And there are enough books, both good and bad, on investments and investing. Instead, the authors' task is to make the reader better informed about both the patterns and paradoxes that underlie the twists and turns of financial markets and help turn the jargon of these unique markets from a barrier into a tool.

Industry Reviews

"This well-written book, while important to library collections, will probably best be used as supplemental readings for most courses in finance or financial economics....As the subject penetrates further into the liberal arts colleges, the Houthakker/Williamson approach may be more widely used. An excellent supplemental work for upper-division undergraduates and graduates."--Choice "The Economics of Financial Markets is an outstanding book about financial markets....[IT] deserves to be a standard reference. It is an excellent choice for economists who would like to become acquainted with the economics of financial markets or for practitioners who want an overview of financial markets. Based on Houthakker's lectures in an elective, undergraduate course at Harvard for economics majors, it also would be useful in a Master's level course and in a course with birght, diligent undergraduates."--Journal of Economic Literature "This well-written book, while important to library collections, will probably best be used as supplemental readings for most courses in finance or financial economics....As the subject penetrates further into the liberal arts colleges, the Houthakker/Williamson approach may be more widely used. An excellent supplemental work for upper-division undergraduates and graduates."--Choice "The Economics of Financial Markets is an outstanding book about financial markets....[IT] deserves to be a standard reference. It is an excellent choice for economists who would like to become acquainted with the economics of financial markets or for practitioners who want an overview of financial markets. Based on Houthakker's lectures in an elective, undergraduate course at Harvard for economics majors, it also would be useful in a Master's level course and in a course with birght, diligent undergraduates."--Journal of Economic Literature

Shipping

	Standard Shipping	Express Shipping
Metro postcodes:	$9.99	$14.95
Regional postcodes:	$9.99	$14.95
Rural postcodes:	$9.99	$14.95

How to return your order

At Booktopia, we offer hassle-free returns in accordance with our returns policy. If you wish to return an item, please get in touch with Booktopia Customer Care.

Additional postage charges may be applicable.

Defective items

If there is a problem with any of the items received for your order then the Booktopia Customer Care team is ready to assist you.

For more info please visit our Help Centre.

You Can Find This Book In

Non-Fiction Accounting & Finance Finance Investment & Securities Shares & Stocks

Introduction	p. 3
What This Book Is About	p. 3
Financial Markets and Financial Instruments Defined	p. 7
Basic Concepts of Accounting	p. 9
The Balance Sheet	p. 10
The Cash Flow Statement	p. 12
The Income Statement	p. 14
Sources of Information	p. 15
The Place of Financial Markets in the Economy	p. 16
Real Assets and Financial Claims	p. 16
Balance Sheets for the U.S. Economy	p. 19
The International Investment Position of the United States	p. 21
The Distribution of Financial Assets	p. 22
A Framework for Macroeconomic Analysis of Flows	p. 23
The National Accounts	p. 24
The Flow of Funds Accounts	p. 28
The Relation between Stocks and Flows	p. 30
International Transactions	p. 31
Exchange Rates	p. 32
The Rate of Interest	p. 35
The Rate of Interest in a Barter Economy	p. 35
Government Borrowing	p. 36
Introducing Money: Nominal and Real Interest Rates	p. 37
Monetary and Fiscal Policy	p. 40
The Supply of Money	p. 40
The Demand for Money	p. 43
The Objectives of Monetary Policy	p. 45
Fiscal Policy and the Government Budget	p. 46
The Supply of Securities	p. 48
General Characteristics of Securities	p. 49
The Supply of Government Securities	p. 49
Federal Government Obligations	p. 50
Municipal Bonds	p. 52
Bonds of Foreign Governments and International Organizations	p. 53
Index-Linked Bonds	p. 53
Corporate Financial Policy	p. 54
Empirical Evidence	p. 59
The Supply of Corporate Securities	p. 61
Corporate Equities	p. 62
Corporate Takeovers	p. 67
Corporate Bonds	p. 67
Junk Bonds	p. 68
Convertible Securities	p. 69
Partnership Units and Business Taxation	p. 70
Mutual Fund Shares	p. 71
Money Market Funds	p. 74
Mortgages and Mortgage-Backed Securities	p. 74
Claims on Financial Institutions	p. 75
The Demand for Securities	p. 78
The Time Dimension	p. 79
A Case in Microeconomics: Saving for Retirement	p. 79
Present Value and Duration	p. 81
The Calculation of Yields on Zero-Coupon Bonds	p. 87
The Term Structure of Interest Rates	p. 88
The Risk Dimension	p. 90
The Measurement of Risk	p. 90
Bivariate Distributions	p. 93
Expected Utility	p. 95
Estimating the Mean and Variance of Returns	p. 103
Conditional Probabilities and Expected Values	p. 104
The Portfolio Complication	p. 105
Securities Markets and Their Efficiency	p. 110
Central Trading Places	p. 111
Stock Exchanges	p. 111
Types of Orders and Their Execution	p. 116
Specialists and Market Clearing	p. 118
Financial Markets without Central Trading Places	p. 122
The Over-the-Counter Stock Market	p. 123
Stock Exchanges in Other Countries	p. 125
The International Stock Exchange in London	p. 126
The Tokyo Stock Exchange	p. 129
Operational Efficiency and the Efficient Market Hypothesis	p. 130
The Weak Form of the EMH, and Technical Analysis	p. 132
Do Equity Prices Follow a Random Walk?	p. 135
The Semistrong Form of the EMH, and Security Analysis	p. 137
How Rapidly Do Prices Adjust to News?	p. 138
The Strong Form of the EMH	p. 139
Conclusions on Informational Efficiency	p. 140
The Determination of Equity Prices	p. 141
Shares as Claims to Future Dividends	p. 142
Steady Growth in the Dividend	p. 142
Aggregate Dividends, Earnings, and Inflation	p. 145
Shares as Claims to Corporate Net Worth	p. 146
The Capital Asset Pricing Model	p. 150
The Simplest Form of CAPM	p. 151
Extending the CAPM	p. 156
Estimating Betas	p. 158
Implications for Portfolio Management	p. 159
The Validity of CAPM	p. 162
Arbitrage Pricing Theory: An Alternative Approach	p. 162
Appendix: Stock Indexes	p. 164
The Three Main Indexes	p. 164
Some Other Stock Indexes	p. 167
Security Analysis	p. 168
Security Analysis and Market Efficiency	p. 168
A Modern View of Security Analysis	p. 169
Macroeconomic Developments and Changes in Regime	p. 170
Industry Growth	p. 171
International and Regional Growth	p. 175
Industry Structure	p. 177
Firm-Specific Factors	p. 180
The Role of Financial Statement Analysis	p. 182
The Adjustment Process of Financial Ratios	p. 186
Pro-Forma Income and Cash Flow	p. 188
Caterpillar Inc.: A Security Analysis and Valuation Example	p. 191
Shortcuts in Security Valuation	p. 195
Uses and Pitfalls of Price/Earnings Ratios	p. 196
Tobin's q as an Alternative Approach to Securities Valuation	p. 198
Options and Options Pricing	p. 201
The Basics of Stock Options	p. 202
Institutional Aspects: Exchange-Traded Stock Options	p. 202
The Payoff from Buying and Selling Options	p. 205
Combinations of Options	p. 207
Combining Options with Stocks	p. 209
The Put-Call Parity Theorem	p. 211
The Valuation of Stock Options	p. 213
The Expected Payoff of a European Call	p. 215
Application of the Capital Assets Pricing Model to Options	p. 216
The Black-Scholes Formula for a European Call	p. 217
Alternative Derivations of the Black-Scholes Formula	p. 220
Other Option Models	p. 222
Some Extensions of the European Call Formula	p. 223
The Empirical Relevance of the Black-Scholes Formula	p. 226
Options and Portfolio Management	p. 226
Convertible Bonds and Stocks as Options	p. 227
Other Types of Options	p. 229
Futures Contracts and Futures Markets	p. 230
Forward Contracts	p. 231
The Origins of Futures Trading	p. 232
Basic Elements of Futures Contracts	p. 234
Delivery and Cash Settlement	p. 235
Futures and Options	p. 238
The Organization of Futures Markets	p. 240
Categories of Traders	p. 242
Types of Commodities and Financial Instruments Traded	p. 244
Volume and Open Interest	p. 246
Appendix: The Euromarkets and the Swap Market	p. 251
Innovations in Euromarket Instruments	p. 252
The Swap Market	p. 253
Futures Prices	p. 255
Profits and Losses on Various Transactions	p. 256
Implied Limits on Simultaneous Price Differences	p. 257
Relations among Spot and Futures Prices	p. 258
Financial Futures	p. 258
Nonseasonal Commodities	p. 263
Seasonal Commodities	p. 265
Hedgers, Speculators, and Market Equilibrium	p. 268
A Portfolio Analysis of Hedging	p. 269
Hedging Effectiveness	p. 271
Market Equilibrium	p. 272
The Role of Expectations	p. 273
Futures Prices as Predictors of Spot Prices	p. 274
Expectations versus Spot-Market Constraints	p. 274
Samuelson's Conjecture on Increasing Volatility	p. 276
Futures and Portfolio Management	p. 278
Program Trading	p. 278
Portfolio Insurance: A Post-mortem	p. 279
Futures Contracts as an Investment	p. 280
Regulation of Financial Markets	p. 283
The Ethics of Finance and the Economic Function of Financial Markets	p. 283
The Purposes of Regulation	p. 285
Maintaining Competition	p. 285
Preventing Fraud and Providing Information	p. 286
Levels of Regulation	p. 287
Federal Regulation of Trading in Corporate Securities	p. 288
Reporting of Financial Results and Other Developments	p. 288
New Issues	p. 289
Insider Trading	p. 290
Federal Regulation of Futures Markets	p. 290
A Case Study: The Silver Manipulation of 1979-1980	p. 292
The Silver Market	p. 292
The Manipulation	p. 293
The End of the Manipulation	p. 295
The Other Side of the Story	p. 296
The Aftermath	p. 297
Regulatory Aspects	p. 297
Regulation in the United Kingdom	p. 299
Notes	p. 303
Bibliography	p. 335
Author Index	p. 349
Subject Index	p. 351
Table of Contents provided by Syndetics. All Rights Reserved.

The Economics of Financial Markets

At a Glance

Hardcover

Industry Reviews

Shipping

How to return your order

Defective items

You Can Find This Book In

More in Investment & Securities

The Trading Game

A Confession

Get Started Investing

It's easier than you think to invest in shares

The Intelligent Investor Third Edition

The Algebra of Wealth

A Simple Formula for Success

Don't Stress, Just Invest

It's time to set up your investments and get on with your life

Investing with She's on the Money

Build your future wealth: from the creator of the #1 finance podcast

The Little Book of Common Sense Investing

The Only Way to Guarantee Your Fair Share of Stock Market Returns

The World for Sale

Money, Power and the Traders Who Barter the Earth's Resources

Rethink Property Investing, Fully Updated and Revised Edition

Become Financially Free with Commercial Property Investing

Private Markets

Building Better Portfolios with Private Equity, Private Credit, and Private Real Estate

Getting Started in Shares For Dummies

4th Edition

A Field Guide to Responsible Investing

Asset Management in the Age of Polycrises

Economics in Plain English

Definitions. Examples. Uses.

Positively Geared

How to Build a Multi-Million-Dollar Property Portfolio from a $50K Deposit

The Toyota Way 2nd Edition

14 Management Principles from the World's Greatest Manufacturer

Online Investing on Australian Sharemarket

How to Research, Trade and Invest in Shares and Securities Online 5th Edition

How To Not Work Forever

Start Investing and Build a Life You Love

How to Make Money in Stocks

A Winning System in Good Times and Bad, Fourth Edition

Market Wizards

Interviews with Top Traders

Trading in the Zone

Master the Market with Confidence, Discipline, and a Winning Attitude

Replace Your Salary by Investing

Save More, Invest Smart and Maximise Your Money

The Little Book of Bitcoin

What You Need to Know that Wall Street Has Already Figured Out

Common Stocks and Uncommon Profits and Other Writings

Wiley Investment Classics

The Warren Buffett Way

30th Anniversary Edition

This product is categorised by