Finance [Hardcover]

Zvi Bodie (Author), Robert C Merton (Author)

Book Description

ISBN-10: 0130151025 | ISBN-13: 978-0130151025 | Publication Date: August 26, 1999

This significant new guide to finance has a broader scope and greater emphasis on general principles than most other books of its kind, which typically focus exclusively on corporate finance. Acclaimed authors Bodie and Merton offer an approach balanced among the three "pillars" of finance—optimization over time, asset valuation, and risk management. Encompasses all subfields of finance within a single unifying conceptual framework. Offers the "big picture" of resource allocation over time under conditions of uncertainty. Focuses on personal finance topics, such as saving and investing, as well as asset valuation. Provides spreadsheet modeling exercises in the accompanying Prentice Hall Finance Center CD. MARKET: Ideal for executives or for anyone seeking a solid understanding and overview of the field of finance.

Editorial Reviews

From the Back Cover

This significant new guide to finance has a broader scope and greater emphasis on general principles than most other books of its kind, which typically focus exclusively on corporate finance. Acclaimed authors Bodie and Merton offer an approach balanced among the three "pillars" of finance—optimization over time, asset valuation, and risk management. Encompasses all subfields of finance within a single unifying conceptual framework. Offers the "big picture" of resource allocation over time under conditions of uncertainty. Focuses on personal finance topics, such as saving and investing, as well as asset valuation. Provides spreadsheet modeling exercises in the accompanying Prentice Hall Finance Center CD. MARKET: Ideal for executives or for anyone seeking a solid understanding and overview of the field of finance.

Product Details

• Hardcover: 479 pages
• Publisher: Prentice Hall (August 26, 1999)
• Language: English
• ISBN-10: 0130151025
• ISBN-13: 978-0130151025
• Product Dimensions: 10.2 x 8.2 x 1 inches
• Shipping Weight: 2.1 pounds
• Average Customer Review: 3.4 out of 5 stars  See all reviews (12 customer reviews)
• Amazon Best Sellers Rank: #265,569 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

29 of 34 people found the following review helpful:

3.0 out of 5 stars Readable intro. to standard finance theory, October 18, 2000

By 

Professor Joseph L. McCauley "Joseph L. McCauley" (Austria+Texas) - See all my reviews

Amazon Verified Purchase

This review is from: Finance (Hardcover)

First: this book is certainly not worth [the price] ...I read the 1998 softcover 'preliminary edition' by Bodie and Merton, which I ordered and received from amazon.com in fall, 1999. Samuelson's name was not on the cover and at any rate should not cause the price of the book to increase... The current price makes the book unattractive. Now for my review of the softcover version:

This is a relatively well-written undergraduate-level text that can be read/understood without the need for classroom instruction. It is especially useful for self-study by ordinary people who know nothing at all about finance theory but are motivated to learn. The reader will find all of the main topics covered: cash flows, efficient market hypothesis, capital asset pricing model (CAPM), risk management, hedging, and options pricing at Black-Scholes (B-S) level of discussion. In the spirit of the simple level of the text, the B-S equation is applied but not derived (best derivation is still the second one, and the Black's original method starting from the CAPM, in the famous 1973 Black-Scholes paper). `Fat tails' (known and largely ignored since Mandelbrot, 1962) and non-risk-neutral hedges, the frontiers of modern finance theory, are not discussed. Throwing the traditional `financial-engineering' bone in the direction of fat tails, implied volatility is discussed because in practice fat tails can't any longer be ignored. All in all, the book is recommendable to physics grad. students who want to learn finance terminology along with the main (wrong) ideas believed by the finance theory community. As an example of the book's weaknesses, the authors assume that the vague, undefined notion of `fundamental value' makes sense, and that liquid markets are in some vague, undefined sense `efficient' although the notion of a relaxation time is never mentioned. Typical finance theorists' shortcomings aside, this book can profitably be read before (or at least parallel with) Hull and other harder texts on derivatives. Liars' Poker and Fiasco can also be read profitably in parallel with this book. No knowledge of neo-classical ('marginal utility') econ (as is excesively taught in Samuelson's standard text) is required, and is at any rate is useless for finance theory/practice.

20 of 23 people found the following review helpful:

1.0 out of 5 stars This book should not be used for graduate level study, September 14, 2002

By A Customer

This review is from: Finance (Hardcover)

I was required to purchase this book for an MBA class in Business Finance. To put it simply, this book is terrible. There are errors in calculations from front cover to back. The describers used to name calculations are changed from page to page, without any consistency whatsoever, requiring a flow chart to understand what it is Bodie and Merton are discussing. Nobel prize or not, Mr. Bodie and Mr. Merton should be embarrassed to publish such trash.

Also, the way the questions are worded in the end of chapter reviews leave little relevance to what was taught in the preceding pages. Often questions that are asked are open-ended and very ambiguous.

I would not recommend this book to anyone and have asked my University to stop using this book because it is so flawed.

13 of 14 people found the following review helpful:

1.0 out of 5 stars Riddled with errors, July 9, 2002

By A Customer

This review is from: Finance (Hardcover)

I am an MBA student-this was one of the worst textbooks I think I have ever had the misfortune to use. It was riddled with errors, which took me an hour to transcribe from the publisher's website. My entire class was confused by the end of chapter questions, which in some chapters seemed to have no connection to what was taught in the chapter. I and everyone else in my class wondered all along the way if we could trust what we were reading as being accurate. Stay away from this if you value your time and your sanity.