Theory of Financial Decision Making [Hardcover]

Jonathan E. Ingersoll (Author)

Book Description

ISBN-10: 0847673596 | ISBN-13: 978-0847673599 | Publication Date: June 28, 1987 | Edition: First

Based on courses developed by the author over several years, this book provides access to a broad area of research that is not available in separate articles or books of readings. Topics covered include the meaning and measurement of risk, general single-period portfolio problems, mean-variance analysis and the Capital Asset Pricing Model, the Arbitrage Pricing Theory, complete markets, multiperiod portfolio problems and the Intertemporal Capital Asset Pricing Model, the Black-Scholes option pricing model and contingent claims analysis, 'risk-neutral' pricing with Martingales, Modigliani-Miller and the capital structure of the firm, interest rates and the term structure, and others.

Product Details

• Hardcover: 496 pages
• Publisher: Rowman & Littlefield Publishers; First edition (June 28, 1987)
• Language: English
• ISBN-10: 0847673596
• ISBN-13: 978-0847673599
• Product Dimensions: 9.3 x 6.2 x 1.6 inches
• Shipping Weight: 1.9 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (7 customer reviews)
• Amazon Best Sellers Rank: #135,103 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

12 of 12 people found the following review helpful:

4.0 out of 5 stars A Revision, Please!, February 4, 2002

By 

Rodrigo D. S. Bueno (Sao Paulo - Brazil) - See all my reviews
(REAL NAME)   

This review is from: Theory of Financial Decision Making (Hardcover)

The books presents traditional finance economics. It is a very good and a classical book. But it is not easy to read because of its terrible, old-fashioned notation and writing.

It is plenty of examples and gives a very good intuition. So I'd say it is good because it teaches traditional finance since the beginning in a way one can understand finance and the underlying math.

Clearly, the book needs a revision to put it into the modern language of financial economics as well as to add the results (and models) that have been published in papers in the last 20 years.

As I said, without a revision, reading the book is not enough to allow one to understand modern papers published in the field. As a result, after reading it you will not be able to say you know finance. But without knowing what the book is about, you will not be also able to say you know finance. Of course you can consult other sources, but even with the terrible notation, it is a pleasure to read, for instance, chapter 2 (Arbitrage), chapter 4 (mean-variance portfolio analysis) or chapter 11 (discrete-time intertemporal portfolio selection).

15 of 18 people found the following review helpful:

5.0 out of 5 stars This book is excellent. Every page is important!, September 18, 1999

By A Customer

This review is from: Theory of Financial Decision Making (Hardcover)

This book is very good. It contains broad contents. Of course, it's not sufficient for a financial economist -impossible for a single book. It contains asset pricing theories from discrete-time models to continuous-time models,and from two-period models to intertemporal models. For a beginner, starting with Huang and Litzenberger is a better idea. Need introduction to continuous-time finance? Neftci is good, Merton is good, and Dothan is for advanced.

1 of 1 people found the following review helpful:

5.0 out of 5 stars Detailed and thorough, October 18, 2007

By 

Neal Groothuis (New York, NY USA) - See all my reviews

Amazon Verified Purchase

This review is from: Theory of Financial Decision Making (Hardcover)

The book lives up to the title. It assumes that you're comfortable with multivariate calculus and linear algebra, including things like using Lagrange's method to find extrema of functions. If you're looking for a less precise treatment, _Investments_ by Brodie et al. might be a better choice, but if you need the math, it's all here.