This book on investment pricing methods provides accounting and financial professionals and academics with a practical understanding 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 and easy-to-follow illustrations of investment pricings in order to reinforce valuation concepts and help accountants apply those concepts to more complicated investments that are found in the marketplace. They show how investors are compensated for assuming risks and how this impacts pricing. Such in-depth discussions will allow accountants to understand the inputs used in appropriate investment pricing models (including the basic valuation formula), how changing market conditions impact fair values, and why certain internal control processes are important in arriving at accurate and consistent pricing estimates for investments. The book also illustrates common derivative hedging transactions to help the reader understand how derivatives are used to reduce risk and achieve other objectives. Detailed coverage of the five elements that professionals use to price private investments is provided:* Estimation of future cash flows* Expectation about variations in the amount or timing of future cash flows* Time value of money as represented by the risk-free rate of interest* 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 of the fundamentals of investment pricing procedures and helps them apply these techniques to investment pricing calculations observed in practice. Suitable for professionals and academics of various experience levels, the book offers both fundamental concepts in pricing methods and advanced coverage of
Investment Pricing Methods: A Guide for Accounting and Financial Professionals
This book on investment pricing methods provides accounting and financial professionals and academics with a practical understanding 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 and easy-to-follow illustrations of investment pricings in order to reinforce valuation concepts and help accountants apply those concepts to more complicated investments that are found in the marketplace. They show how investors are compensated for assuming risks and how this impacts pricing. Such in-depth discussions will allow accountants to understand the inputs used in appropriate investment pricing models (including the basic valuation formula), how changing market conditions impact fair values, and why certain internal control processes are important in arriving at accurate and consistent pricing estimates for investments. The book also illustrates common derivative hedging transactions to help the reader understand how derivatives are used to reduce risk and achieve other objectives. Detailed coverage of the five elements that professionals use to price private investments is provided:* Estimation of future cash flows* Expectation about variations in the amount or timing of future cash flows* Time value of money as represented by the risk-free rate of interest* 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 of the fundamentals of investment pricing procedures and helps them apply these techniques to investment pricing calculations observed in practice. Suitable for professionals and academics of various experience levels, the book offers both fundamental concepts in pricing methods and advanced coverage of
