Investments 8th canadian edition by Bodie

Investments 8th canadian edition by Bodie

Print ISBN: 9780071338875, 007133887X

eText ISBN: 9781259259630, 1259259633

By: BODIE

Publisher: McGraw-Hill Ryerson Ltd. Canada

Print ISBN: 9780071338875, 007133887X

eText ISBN: 9781259259630, 1259259633

Edition: 8th

PREFACE

The first Canadian edition of this text was written more than two decades ago. The intervening

years have been a period of rapid and profound change in the investments industry, and included

as well a financial crisis of historic magnitude that hit the U.S. financial markets. The vast expansion

in financial markets during the intervening period was due in part to an abundance of newly

designed securities, in part to the creation of new trading strategies that would have been impossible

without concurrent advances in computer technology, and in part to rapid advances in the

theory of investments that have come out of the academic community.

Yet the financial crisis was also rooted in these developments. Many of the innovations in securities

design facilitated high leverage and increased reliance on risk transfer strategies of dubious

efficiency. These, coupled with relaxation of regulatory controls and reduced transparency,

masked the increased exposure to risk of key financial institutions. Although these regulatory

failures were not present in Canada, and for this reason the financial crisis was not felt as acutely

in the Canadian markets, the new edition of our text reflects these world events.

This Eighth Canadian Edition of Investments is intended primarily as a textbook for courses

in investment analysis. Our guiding principle has been to present the material in a framework that

is organized by a central core of consistent fundamental principles. We make every attempt to

strip away unnecessary mathematical and technical detail, and we have concentrated on providing

the intuition that may guide students and practitioners as they confront new ideas and challenges

in their professional lives.

This text will introduce you to major issues currently of concern to all investors. It can give you

the skills to conduct a sophisticated assessment of current issues and debates covered by both the

popular media and more specialized finance journals. Whether you plan to become an investment

professional or simply a sophisticated individual investor, you will find these skills essential.

Our primary goal is to present material of practical value, but all five of us are active researchers

in the science of financial economics and find virtually all of the material in this book to be

of great intellectual interest. Fortunately, we think, there is no contradiction in the field of investments

between the pursuit of truth and the pursuit of money. Quite the opposite. The capital asset

pricing model, the arbitrage pricing model, the efficient market hypothesis, the option-pricing

model, and the other centrepieces of modern financial research are as much intellectually satisfying

as subjects of scientific inquiry as they are of immense practical importance for the sophisticated

investor.

In our effort to