Reviews (5)

PhD in Finance students- Go get it!
This book is the best book that I have come across in the field of finance. Although as most students will agree the new edition is a little outdated in terms of research enumeration..it is still a great book. It is like a comprehensive mini dictionary actually which you can pick up and find out what you are looking for instantly. The authors have also done a decent job in terms of writing the text-- very easy to read and follow even for non majors..
if any PhD in finance students do not own this book they are missing out BIG TIME!

beautiful!
Since I have a MA in Econ, I was looking for a book that builds the bridge from economics to finance. copeland and weston have done an excellent job,and I am lucky to have struck gold after months of frustrations with "popular" texts like brealey myers. Copeland and Weston is meant for advanced undergrad and grad students. It presents the material in a serious, mathematical fashion,unlike Stephen Leroy's Financial Economics (another excellent text, but aimed for Phd students),so that there is a feeling of actually learning something at the end of the chapter. Most importantly it doesent trivialize issues like B/M do. I would definitely recommend the book to those interested in learning finance seriously.especially to those with a masters background.

Reviews (45)

A good first step into the world of Quantitative Finance
The author has written a nice, lively elementary text on mathematical finance. This book can serve as a excellent launching point into the topic. For the next step in the reader's development, I recommend the very good intermediate level treatment by Bjork in "Arbitrage Theory in Continuous Time" 2nd edition. As a capstone for advanced study, I recommend the advanced treatment of Musiela and Rutkowski's "Martingale Methods in Financial Modeling.

Hull starts out his 5th edition with several chapters on the basics of the derivative contracts in his study. The contracts introduced are forward and futures contracts, interest rate swaps, and equity options. The basic definitions of each contingency contract is given, as well as characteristics of the markets where these contracts trade. Some basic trading strategies are also studied.

The study of the option pricing model problem begins in earnest in Chapter 10. The section on one-step binomial tree model leads to a very intuitive description of risk-neutral valuation.

Chapter 11 introduces continuous time stochastic processes in a very intuitive setting. To avoid the hard-core Ito calculus, the author motivates the stochastic differential by considering difference equations. This is a nice technique and makes the material accessible to the beginner. The next highlight is a statement of Ito's lemma. This is not given in full generality, but only stated precisely as needed for Black-Scholes calculations. The appendix gives an intuitive motivation for Ito's lemma based on the multi-dimensional Taylor's formula.
This is a nice illustration as Taylor's formula is indeed a component of the formal semi-martingale based proof of Ito's rule. See for example Oksendal, "Stochastic Differential Equations" Chapter 4, or Karatzas & Shreve "Brownian Motion and Stochastic Calculus, Chapter 3.

Chapter 12 is devoted to the Black-Scholes-Merton theory of option pricing. The famous Black-Scholes PDE is derived via Ito's rule and application of a delta hedge. The author doesn't directly solve this PDE (via the standard application of the Feyman-Kac formula). Instead a nice proof of the option pricing formula is established in the appendix based on a simple log-normal distribution argument.

Chapter 13 discusses option pricing in for other contingency contracts. In Chapter 14, we return to equity options by studying the Greek letters. The reader discovers the Greek letters can be thought of as coefficients of the Black-Scholes PDE and learns some elementary hedging techniques.

Chapter 15 discusses implied volatility and volatility smiles. It is here that the astute reader gets his first indication that the Black-Scholes theory for option pricing may not be as robust or "true to market" as the reader may have been lead to believe. (The folks at Long-Term Capital Management learned this hard lesson rather publicly.)

A survey of topics of interest follows in the next handful of chapters. The material on value at risk, the GARCH volatility model and exotic options is somewhat superficial. The careless reader will come away feeling he knows quite a bit more than he really does.

Martingale theory is touched on in 21 and the Girsanov Theorem is alluded to, but these topics are really too complex and require too many prerequisites for proper treatment in the context. A general multi-variate version of Ito's Rule is stated in the appendix of this chapter.

The next section of the book deals with term-structure models and their applications. One-factor models are discussed along with the various limitations of each of these models. This gives a nice historical treatment. The Heath-Jarrow-Morton and Libor Market Model k-factor term-structure frameworks are introduced. Without the supporting martingale theory, the analysis of these models presented here is very limited.

The last several chapters of the text are very survey-like and breezily touch on topics such as credit risk, credit derivatives and energy derivatives. There isn't a lot of theory in these chapters at all, but at least the reader is made aware of the existence of these kinds of contingencies.

The book wraps up with a cautionary chapter in the form of lessons learned. The unwary reader might see all of the derivative-related train wrecks and say to himself "well, that won't be me". The problem is that it really might be you if you truly (and foolishly) still believe the equity prices always follow geometric Brownian motion. See Lo & MacKinlay "A Non-Random Walk Down Wall Street" for an excellent exposition into the limitations of the basic assumptions underpinning the Black-Scholes-Merton theory.

If nothing else, Hull's last chapter should convince you that maybe this isn't the only book you'll ever want to read in your study of mathematical finance.

The bible of derivatives
As the title of this review indicates, this is _the_ book out of many for financial derivatives. It is by no means the only thing you'll need, but it is a great book for a solid foundation in the subject. In short, this book should adorn every finance dork's library.

N.

Reviews (13)

A finance textbook full of errors and holes
I am a postgraduate student in finance and this book is on my reading list for corporate finance. I must say that I am not very pleased with this book. First, it seems to skip around from chapter to chapter with no real logical organizational structure. Second, it is full of typos and mistakes -- some that are quite dangerous for a proper understanding of the material. Third, it does not develop fully the statistically techniques in Chapter 4 that it builds on in later chapters. This is a major problem in my opinion. What saves this book from the lowest rating is that it does discuss empirical studies and journal articles, and it does not do an entirely awful job about the more qualitative subjects like adverse selection and capitalization policy.

For what it's worth, I received my undergraduate degree at Wharton and am now at the London School of Economics. Instead of this book, I recommend Brealey and Myer's Principles of Corporate Finance. This is what I used as an undergraduate and is what seems to be the de facto textbook in the top undergraduate and MBA programs.

N.

A Wonderful Approach to Corporate Finance
After reading the reviews for this book, I feel obligated to write a review, although I will admit a bias since one of the co-authors was a favorite professor of mine in college.

I will admit this book does not take the standard approach to learning corporate finance.The authors discuss a wide variety of common topics, ranging from market models, option valuation, capital structure concepts and decisions, to more specialized topics such as corporate governance and financial risk management.

What is unique about this book, though, is that the authors encourage students to think about problems more broadly than one often sees in introductory texts and courses.For example, the authors encourage the use of decision trees (i.e. binomial models) to value a wide range of assets, not just stocks.If one can value a stock option using a binomial tree, why not use the same framework to value a plot of undeveloped real estate, an untapped mine, or any other "real option" owned by a company?

Another reason this text is excellent is because the authors include a vast survey of recent financial and economic literature relevant for the financial decision-maker.Highly developed markets depend on the signaling of information between investors and management, creditors and debtors, customers and suppliers, and so forth; understanding the implications of these interactions and their subsequent effects is of primary importance to decision-makers.

For example, the "pecking order" theory of capital structure is one of the most well-known concepts in finance, but nonetheless often misunderstood (if you want proof of this, why did investorsrespond so enthusiastically to every IPO in the late 1990's?).Instead of glossing over an explanation of the theory, the book thorougly explains it and provides problems where the reader can actually work through a simplified model that really reinforces the concept.

While this book served as a good introduction to a wide scope of problems in finance, it was most useful because it helped me to apply economic tools not just to solve but to understand financial problems.The use of decision trees in the simplified, binomial model setting helped me to understand option/project valuation and risk-netural valuation, the linchpin of no-arbitrage pricing.It also has perhaps the most thorough, lucid explanation of Arbitrage Pricing Theory (APT) I've seen anywhere- for a practitioner trying to understand factor models, this chapter alone makes the book worth it.

I understand that this is a very difficult book and that the problems are beyond what one may expect in a MBA-level course.Nonetheless, finance is an increasingly competitive field whose employers are starting to demand more analytical skills and intiution from recent graduates.In response to the reviewer who said this text is not suitable for CFA preparation, I do agree with that sentiment.First, the CFA program is designed for self-study that any motivated and capable professional can handle, while Grinblatt/Titman is clearly appropriate for a rigorous MBA-level sequence in corporate finance.Second, the CFA exam emphasizes asset valuation and portfolio management, while this book stresses financial decision-making from a manager's standpoint.

While I normally don't like reviews that justify their opinions by offering credentials, I also work on Wall Street and I find the concepts taught in this book to be quite relevant in handling real-world problems.

Reviews (6)

Good Introduction to the Subject, in Some Parts too Brief
The book "Multinational Financial Management" is a good introduction to this rather complex subject. It is written well and contains a lot of examples and historical references. Some of the chapters in the second part are kept a tad too short though.

The book covers the main topics of international financial management, the environment of international financial management, foreign exchange and derivatives market and risk management, financing of multinational corporations, foreign investment analysis and multinational working capital management in 5 main sections.

I found most parts of the text to be very well readable and easy to understand. All concepts are backed up by examples and separate illustrations discussing a real event in more or less detail. This works especially well in the first chapters of the text covering the simpler concepts. Subjects like international monetary systems or country risk analysis (to just mention a few) are covered in great detail, and the required math, e.g. the formulas used for the parity conditions and the Fisher Effect, are illustrated with enough examples even for someone with little or no mathematical background.

The parts of the book covering derivatives is too short and the theory provided does not go deep enough in order to comprehend the more complex examples easily. Trying to figure out the mechanics of Kodak's Zero Coupon Australian Dollar Interest Rate/Currency Swap involving 11 parties, multiple swaps and currencies was no easy task after a mere 2 1/2 page theoretical introduction to currency swaps. There are better books for understanding currency swaps.

Other parts not covered deep enough were the chapters on international project and firm evaluation (covering subject like WACC and CAPM). With just this book, it is impossible to get an idea of the real meaning of these models and techniques. Too many details are omitted that should have been covered. Granted, these are more complex subjects, but maybe the author should have either keep the book focused on the main topics or split the content over two books.

Overall, the first part of the book is very useful, but the more complex subjects are not covered with the depth they require.

verbosity should be verboten
I am really impressed with the good ratings this book has gotten so far. I hate it.

The authors incapability to explain the multinational context in simple terms, his approach to pack every little, tiny detail that somehow might correlate to the overall subject into each chapter, and his inability to use formulas and graphs in an understandable way, makes me wonder if the author actually knows what he is talking about. I find this financial book the worst I had to deal with so far. As an honor student with a finance major I feel like Shapiro is trying to hard to create a book that covers all. His examples and illustrations are somewhat interesting since they provide some information on how things work in the real world, but they lack something really important that I personally find essential for demonstration purposes: clarity and comprehensiveness.
Additionally, I find his approach to verbally describe his calculations in huge paragraphs disturbing. As disturbing is his way to create his own symbols and acronyms and not using those other financial books use. When studying you therefore need so much time in figuring out, what his symbols actually mean, that you would rather read another book.
I personally doubt that Shapiro has actually understood the subject himself. He is using the trick I always use when I do not want my professors to notice my lack of understanding: verbosity. Quantity is not always good.

I would definitely simplify the book and use clearer formulas, a more mathematical approach, better graphs, more information on how these formulas could be derived, less words, fewer sub-chapters,more interesting case studies at the end of the chapters, more problems for self-evaluation at the end of the chapters, clearer examples and illustrations....

There is so much room to improve that it might be better to rewrite the whole book using a better author.

Reviews (27)

not good for learning, OK as a reference book
i am currently subjecting myself to finance curriculum at a quant-heavy, top-5 bschool.this text was recommended for my Intro Cap Markets class (although the prof didnt exactly use it in the class).

i often used it to gain understanding of what was taught in class.unfortunately, i found this book to be EXTREMELY painful.it was verbose, overly complicated, hard to read, poorly organized & full of jargon.while it is thorough in its coverage of Capital Markets & instruments, i found it to be nearly impossible to read.

esoteric theories & mathematical proofs were introduced with little background, and often without insufficient detail to understand grasp.but the jargon & vocabulary are what made the book so unreadable ... trying to read a chapter in this book would literally consume 4-5 hours of my time.

AND forget about trying to use this book to do problemsets OR assignments. i could go on, but trust me, this book is bad ... UNLESS you already have a good intro & just want to use this as a reference.

Aside from the humor . . .
If one is willing to look aside from the dry substandard humor of the author, they will find one of the best written textbooks around in any subject.Taken as a given that some of this material is mathematically and analytically intensive, I cannot say that this entire book is easy reading.However, you will find that the authors due an excellent job explaining and demonstrating difficult concepts.They also provide a variety of real life examples to supplement their explanations, that help to provide context for some of the seemingly abstract concepts.Moreover, they extensively make use of Microsoft Excel is demonstrating how to perform some complicated aspects of security analysis in a way that is easily reproducible to the reader.

Reviews (7)

Very understandable introduction to econometrics
First of all I will admit, this is the only book I have read for econometrics.It was the book chosen by my professor for my eonometrics class while doing my undergraduate in economics.Having said that I recommend the book.I feel that it is a very good intro to a subject that can get weighted down in technical difficulties for the beginning student.Some people have complained about its lack of rigor or lack of proofs but I feel that is unjustified because all it really does is utilize statistical principles for economics.At my university, and I would assume most, stats was a prereq for this course and in stats you should cover the real nuts and bolts of statistical theory.This would give you your proofs and underlying understanding of the hands on approach this book gives for econometrics.I think that this book is good in that it does give, as it says, a practical guide to econometrics enabling the student to move on to the more analytically rigorous studies of the field.It doesn't overwhelm but leaves you with a foundational sense of understanding.

Fulfil expectations
That book goes straight to the point. First, the title of the book is 100% appropriate.It is about how to use econometrical tools in practice. Second, exercises are E-views oriented, which is also a good point given the user-friendly E-views interface. This book is a very good introductory book for applied econometrics.I've read some reviews criticizing the book for its novice approach and lack of theoretical ground.Well, I would have done so too IF AN ONLY IF the book title had been "Advanced Theory in Econometrics". But it is not!

Good Starting Point for Econometrics
In 2000, I wrote a review of this text.I still stand by my assertion that this is an excellent introduction to econometrics.One thing that I failed to mention in my 2000 review is that this book is good for people who have never seen econometrics in their life.Furthermore, don't expect to see proofs, theorems, etc.This book does not emphasize mathematics.

Reviews (28)

not agood textbook :(
this book wastes alot of pages just for margin. not an easy to read book. the whole semester, we only covered 5 chaps, alot of material is not useful for undergraduates.

Great intro finance class textbook
I used this book for my undergrad introductory corporate finance class and the structure of the book is just great. The early chapters does a superb job getting across the basics of finance (NPV, IRR), while the later ones give a general look at more complex issues such as dividend policy and corp fin for M&A.

Excellent Introduction to Finance, and a Good Reference
First off, I never had any particular interest in the area of Finance.I simply purchased this book as a required text for the core finance course in my MBA program.All in all, I was very pleasantly surprised.The course was very informative, with a top-notch professor leading us through the material.But even more than the lectures, this book was my primary resource for guiding me through the principles of Corporate Finance.Ross does a great job of clearly explaining each topic, then supporting his explanation with effective examples.

Even though the book is well written, I can't deny that it was still challenging for a finance novice, such as myself.But Ross's clean, to-the-point style was a refreshing way for me to approach a previously unknown topic.

Reviews (25)

Verbose
I used this book for the Cornell Econ 301 course, a calculus based intro to microeconomics. The professor taught everything in lecture so that the book was used only as a supplement. I read part of the book and found that it is too verbose and repetitive. The author could have explained everything in less than half of the book. The exercises are not helpful. Moreover, this little book is sold for more than a 100 dollars. Not worth the money at all.

Okay
I think this book is okay but as many reviewers have said the math is a little lacking.While math is important to economics, it isn't necessarily for the math's sake that that is so.Incorporating both the math and specific examples utilizing math really clarifies the theory.I found myself confused about what microeconomic theory meant when there wasn't a lot of numerical examples to back it up.There are far better text books to get a really thorough grasp of microeconomic theory, but if you already have that fundamental grasp I think this one might refresh your memory.But I would recommend others if you are looking to learn the theory for the first time.

Reviews (2)

Not good for selfstudy
This book is hard to understand and not good for self study. On the back side of the book it is written that
"...companian web site provides the following resources for both lecturer and student:
* Lecture Plans
* PowerPoint slide shows
* Solutions to end of chapter exercises
* Revision Questions
* Weblinks
* Case studies."
I tried to access the website but i noticed that those resources are not for students although they mentioned so.
I donot recommend that book instead buy one of N. Gregory Mankiw's economics book.

Regards,

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