Fundamentals of Investment Management

part one INTRODUCTION TO INVESTMENTS The Investment Setting 4(20) Forms of Investment 5(1) The Setting of Investment Objectives 6(5) Risk and Safety of Principal 6(1) Current Income versus Capital Appreciation 7(1) Liquidity Considerations 8(1) Short-Term versus Long-Term Orientation 8(1) Tax Factors 9(1) Ease of Management 9(2) Retirement and Estate Planning Considerations 11(1) Measures of Risk and Return 11(2) Risk 12(1) Actual Consideration of Required Returns 13(4) Real Rate of Return 13(1) Anticipated Inflation Factor 14(1) Risk Premium 15(2) What You Will Learn 17(7) Appendix 1A: Career Opportunities in Investments 21(3) Security Markets: Present and Future 24(22) The Market Environment 25(1) Market Functions 26(1) Market Efficiency and Liquidity 26(1) Competition and Allocation of Capital 26(1) Secondary Markets 26(1) Primary Markets 27(1) Organization of the Primary Markets: The Investment Banker 27(5) Underwriting Function 27(1) Distribution 28(1) Investment Banking Competition 29(3) Organization of the Secondary Markets 32(2) Organized Exchanges 32(1) Consolidated Tape 32(1) Listing Requirements for Firms 32(2) Listing Fees 34(1) The Organization of the NYSE 34(1) Trading on the NYSE 34(1) The Nasdaq Stock Market 35(1) Electronic Communication Networks (ECNs) 36(1) Other Organized Exchanges 37(1) The American Stock Exchange 37(1) The Chicago Board Options Exchange 37(1) Futures Markets 37(1) Over-the-Counter Markets 38(1) Debt Securities Traded Over-the-Counter 38(1) Institutional Trading 39(1) Regulation of the Security Markets 39(7) Securities Act of 1933 39(1) Securities Exchange Act of 1934 40(1) The Securities Acts Amendments of 1975 40(1) Other Legislation 41(1) Insider Trading 41(1) Program Trading and Market Price Limits 42(4) Participating in the Market 46(25) Buying and Selling in the Market 46(3) Cash or Margin Account 47(1) Long or Short?-That Is the Question 48(1) Types of Orders 49(1) Cost of Trading 50(2) Taxes and the 2003 Tax Act 52(2) Capital Gains and Dividends 53(1) Measures of Price Performance: Market Indexes 54(1) Indexes and Averages 54(17) Dow Jones Average 54(2) Standard & Poor's Indexes 56(2) Value Line Average 58(1) Other Market Indexes 58(13) Sources of Investment Information 71(27) Aggregate Economic Data 72(6) Federal Reserve Bulletin 72(1) Federal Reserve Banks 72(2) Survey of Current Business 74(3) Web sites and Economic Data 77(1) Other Sources of Economic Data 78(1) Investment Advisory Resources 78(6) Mergent 78(1) Standard & Poor's 79(3) Value Line 82(1) Morningstar 82(2) Other Investment Resources 84(1) SEC Filings, Periodicals, and Journals