Slide 1Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
CHAPTER 1
Essential nature of investment
Financial Assets
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Fixed income or debt
Information Role
Agency Issues
Accounting Scandals
Analyst Scandals
Arthur Andersen
Sarbanes-Oxley Act
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Security selection
Security analysis
Holding a highly diversified portfolio
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Financial Intermediaries
Investment Companies
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Commercial Banks, 2007
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Instruments and vehicles continue to develop (WEBs)
Exchange Traded Funds (ETFs)
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Offers opportunities for investors and originators
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Use of mathematical models and computer-based trading technology to synthesize new financial products
Bundling and unbundling of cash flows
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Figure 1.4 Unbundling of Mortgages into Principal- and Interest-Only Securities
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Information is made cheaply and widely available to the public
Automated trade crossing