Modern Portfolio Theory and Investment Analysis, 9th Edition

New to the 9th Edition

There has been a renewed interest in the science of investment management in the years since the global financial crisis. The volatility of world markets and the shock to its financial institutions has caused a profound reexamination of risk, research into the methods of effective diversification, and exploration of the fundamental expected returns from financial assets. Rather than causing a rejection of modern portfolio theory, however, the financial crisis highlighted the validity of its fundamental tenants: higher expected returns require a willingness to accept higher risks; the methodology of diversification is extremely important; a longer-term perspective and an understanding of the broader scope of financial history is vital.

National and world events together with important new theoretical and empirical research have motivated a major revision of this book.

Almost all of the chapters have been revised, while more than half have been substantially rewritten. Modern developments in the theoretical and empirical literature have been incorporated into the text. All examples in the text have been brought up to date. A new chapter had been added to describe changing conditions in the mutual fund industry.

Some of the key changes in the text include the following:

• Recognizing the structural changes that have occurred in the markets in which securities are traded
• Recognizing the causes of the financial crisis of 2008 and the financial instruments that ...