Financial Market Theory (Equilibrium, Efficiency, and Information)

Author: (Italian) Emilio B. (Emilio B.) Author, Li Xiaojiang Translator
Publisher:
Publish Date: 2006-05-01
Features: Financial Market Theory elaborates on classical asset pricing theory, which includes iconic concepts such as portfolio selection, risk aversion, the fundamental asset pricing theorem, portfolio frontier, CAPM, CCAPM, APT, Modigliani-Miller theorem, no-arbitrage/risk-neutral valuation, and financial market information. Starting from an empirical analysis of the theoretical testing of these concepts, the author explores recent literature, highlighting major developments within classical asset pricing theory and new approaches to unresolved issues (e.g., behavioral finance). This is the only textbook that not only explains the fundamentals of financial market economics in rigorous mathematical language but also provides a comprehensive and independent critique based on empirical findings. Financial Market Theory is an advanced textbook suitable for first-year graduate courses in financial markets, economics, or financial mathematics. It is self-contained and complete, with a framework for explaining topics that is easily understandable for economists and professionals with a basic mathematical background. For those lacking foundational microeconomic theory, the book begins by providing the necessary tools to understand the theoretical analysis. This analytical approach makes the book an important reference for professionals in the insurance industry, banking, investment funds, and financial consulting, while also serving as an excellent graduate-level textbook. Financial Market Theory elaborates on classical asset pricing theory, which includes iconic concepts such as portfolio selection, risk aversion, the fundamental asset pricing theorem, portfolio frontier, CAPM, C...