Title: Investment Pricing Methods: A Guide for Accounting and Financial Professionals / Edition 1
Author: Patrick Casabona, Robert M. Traficanti, Bob Traficanti (Other)
ISBN-10: 0471177407
ISBN-13: 9780471177401
This book on investment pricing methods provides accounting andfinancial professionals and academics with a practicalunderstanding of how investment analysts price common investments,such as commercial mortgages, private placement-bonds,mortgage-backed securities, private and public equities,derivatives, and joint ventures. Authors Casabona and Traficanti provide explanations andeasy-to-follow illustrations of investment pricings in order toreinforce valuation concepts and help accountants apply thoseconcepts to more complicated investments that are found in themarketplace. They show how investors are compensated for assumingrisks and how this impacts pricing. Such in-depth discussions willallow accountants to understand the inputs used in appropriateinvestment pricing models (including the basic valuation formula),how changing market conditions impact fair values, and why certaininternal control processes are important in arriving at accurateand consistent pricing estimates for investments. The book alsoillustrates common derivative hedging transactions to help thereader understand how derivatives are used to reduce risk andachieve other objectives. Detailed coverage of the five elements that professionals use toprice private investments is provided: * Estimation of future cash flows * Expectation about variations in the amount or timing of futurecash flows * Time value of money as represented by the risk-free rate ofinterest * Price for bearing the uncertainty in the asset or liability * Other factors such as illiquidity and market imperfections Investment Pricing Methods offers readers a sound understanding ofthe fundamentals of investment pricing procedures and helps themapply these techniques to investment pricing calculations observedin practice. Suitable for professionals and academics of variousexperience levels, the book offers both fundamental concepts inpricing methods and advanced coverage of particular techniques.
