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Short sales, 73, 86“88 functions, 45“46 reaction to takeover attempts, SuperDot System, 59, 76
Short-term CDs, 28 price forecasts, 441 262“263 Suppliers™ bargaining power, 405
SIC Codes, 397 Standard & Poor™s Transportation response to economic signals, 389 Supply and demand analysis
Siegel, Jeremy J., 81 Index, 46 successful times of, 271 demand/supply shocks, 387“388
Simple interest technique, 32 Standard & Poor™s Utility Index, 46 tech bubble, 172 of interest rates, 386“387
Singer, Brian, 706n Standard deviation, 136“137, 142, Stock market fads, 272 Supply curve, and interest rate,
Single-country mutual funds, 734 144, 146, 178, 180, Stock market indexes, 25, 42“47 386“387
Single-factor asset market, 192“199 543“544, 690 comparison of national Supply shock, 387“388
in APT, 245 Standard Industry Classification, 397 returns, 727 Supply-side policies, 388, 390
diversification in, 199 Start-up stage, 402 equally weighted, 46 Support level, 661“662
Single-index model Statement of cash flows, 454“456 market value-weighted, 45“46 Swap dealer, 367
security characteristic line, Statman, Meir, 281“282, 655 price-weighted averages, 42“45 Swaps, 491; see also Bond swaps;
231“232 Status quo bias, 653“654 Stock market listings, 40“41 Interest rate swaps
specification of, 193“194 Staunton, Michael, 157, 158 Stock market price, 395“396 Symmetric return, 137
statistical graphical Stein, Charles, 433 Stock options, 8, 50, 472“473 Synthetic protective put, 553“554
representation, 194“197 Stern Stewart and Company, 139, 467 Stock prices, 420“423 Synthetic stock positions, 586
Sinking funds, 319“322 Stickell, Scott, 676“677 and accounting fraud, 475 Syre, Steven, 433
Slow growers, 403 Stiglitz, Joseph E., 264n, 699n and book value, 414 Systematic market risk, 170“171
Small company stocks, 143 Stock, alpha, 227 continuity, 75 Systematic risk, 192“193, 194, 199,
Small-firm effect, 274“275 Stock Exchange Automated decimal system, 72 224, 238
Small Order Execution System, 76“77 Quotations System, 78 in Dow theory, 661 negative, 196
Smith, Ruth, 84 Stock Exchange Electronic Trading and earnings, 384 Systematic variance, 196
Social investing, 606 Service, 78 economic indicator, 395“396
T
Social Security, 639“643, 639 Stock exchanges, 15, 65“67; see also excessive volatility, 658“659
Average Indexed Monthly Financial markets; forecasts of economic
T. Rowe Price, 121, 602“603
Income, 640, 641 Stock market activity, 441
Takeover attempts, 262“263
benefits allocation, 640 dollar volume in 2000, 78 history of, 664
Takeover threat, 8, 39
calculating benefits, 640 foreign, 46 industry performance, 398
Tavel. Mark, 676“677
indexing factor series, 640 fourth market, 68“69 and liquidation value, 414
Tax code, 632“634
Primary Insurance Amount, 640, market capitalization, 721 and option valuation, 532“534
Tax deferral, 639
641“643 national comparisons, 77“79 price-weighted average, 42“43
Taxes
privatization proposal, 642“643 over-the-counter market, 76“77 random walk, 262
endowment funds, 621
threat to solvency of, 642 participants, 71“72 resistance level, 661“662
exchange-traded funds, 112
Societal risk, 608 price continuity, 75 search for patterns, 665“667
flat tax, 630
Soft dollars, 110“111 regulation of, 89“92 and straddles, 508
and futures market, 576“577
Solnik, Bruno, 743 circuit breakers, 89“91 and Super Bowl, 665
and investment decisions, 607
Soros, George, 285 insider trading, 91 support level, 661“662
and investment policy, 268
Specialists, 71, 74“75 self-regulation, 89“91 time series analysis, 262
and January effect, 275
Specialized sector funds, 105“106 specialists in, 74“75 Stock risk, 432“433
on mutual fund income, 111“112
Speculation, 6, 50, 138, 491, 577“579 third market, 68 Stocks; see also Equity valuation
preferred stock dividends,
Speculative grade bonds, 316“317 trading costs, 80“82 average annual return, 9
300“301
Speidell, Lawrence S., 476 types of orders equilibrium prices and demand
and REITs, 103
Spider (SPDR), 112 limit orders, 72“73 for, 216“220
and savings plan, 630“631
Spillane, Rick, 688 market orders, 72 financial, 389
on Social Security benefits,
Spivaj, Avia, 646 stop-buy orders, 73 historical record, 139“146
641“642
Spot-futures parity theorem, stop-loss orders, 73 indexing, 156
Tax-exempt bonds, 33“35
580“582 Stock funds, 105, 688“689 versus options, 500“504
Tax-inefficient portfolio, 111“112
Spread, 508“510 Stock Guide (S&P), 478 price-share performance, 157
Tax policy, 388“389, 390
Spread position, 579, 583 Stockholders™ equity, 452“454 Stock selection, 747
Tax Reform Act of 1986, 34
Spring Street Brewing Company, Stock index futures, 586 Stock splits, 43
Tax shelters, 632
63“64 listing of, 584“585 Stop-buy orders, 73
benchmark, 632
Squared deviation, 136 Stock listings Stop-loss orders, 73
capital gains, 637“638
Stalwarts, 403 NASDAQ, 68 Straddle, 508
economics of, 632“634
Stambaugh, Robert F., 273, 275 New York Stock Exchange, 65 Straight bond, 512“514
enhancing retirement annuity, 639
Standard & Poor™s Corporation, 28, and SEC, 477 Straps, 508
401K plans, 637
316“317, 318, 397 Stock market; see also Efficient Street.com Internet Index, 513
403B plans, 637
market value-weighted market hypothesis Street name, 76
IRAs, 634“635
portfolio, 139 best and worst years, 9 Streibel, Paul J., 275
risky investments, 637“638
Standard & Poor™s Depository broad movements, 273 Strike price, 48“49, 492
and tax code, 632
Receipt, 112 crash of 1987, 76, 89, 501, 555, Strips, 315, 508
versus unsheltered savings,
Standard & Poor™s Financial Index, 46 743, 744 Strong-form EMH, 265
638“639
Standard & Poor™s Index, 267 decline since 2000, 172 Style analysis, 706“708
Tax swap, 363
Standard & Poor™s 500 Index, 46, driven by global factors, 742 Style choice, 283
Tax timing option, 638
105, 139, 144, 155, 156, 193, forecasting ability, 441 Subordinated debentures, 36
TD Waterhouse Group, 84
205, 228“229, 266, 282“283, foreign, 382 Subordination clause, 320
Tech bubble, 172
286, 496, 576, 584“585, 587, globalization, 79 Subordination of further debt, 320
Technical analysis, 265“266,
613, 638, 684, 688, 694, 698, historical record, 139“146 Substitute products, 404
273, 651
704, 707, 721 market anomalies, 273“278 Substitution swap, 362
charting, 660“667
earnings yield vs. T-bond yield, new/old economy, 433 Summers, Lawrence H., 271n, 646
in efficient markets, 675
440“441 reaction to earnings Sunbeam Corporation, 473
nature and purpose, 659“660
versus earnings per share, 384 announcements, 276“278 Sun Microsystems, 67, 435“436
self-destructing patterns, 660, 675
Bodie’Kane’Marcus: Back Matter Index © The McGraw’Hill
Essentials of Investments, Companies, 2003
Fifth Edition




I-14 Index

Technical analysis”Cont. Treasury bills, 6, 27 Wellington Management, 101
V
technical indicators, 667“674 historical record, 139“146 Westerfield, Randolph W., 317
VA Linux, 63
Value Line system, 674“675 prices, 314 Whaley, Robert E., 556
Valuation; see also Equity valuation;
Technical analysts, 266, 413 rate of return, 138 Whole-life insurance policy, 605
Financial statement analysis;
Technical indicators risk-free asset, 150 Wiesenberger Investment Companies
Fundamental analysis; Option
flow of funds, 669“670 yields on, 30 Services, 105, 108, 118
valuation
market structure indicators, Treasury bond futures contract, Wilhelm, William, 63n
conversion of bonds, 54
670“673 577“578, 589“590 Wilshire 5000 Index, 46, 106,
of inventories, 470“471
Sentiment indicators, 668“669 Treasury bonds, 31“32 115“116, 120, 267, 281
of options at expiration, 498“504
types of, 667 characteristics, 296“298 Windsor Fund, 106
Value investing, 477“478
Templeton, John, 284 earnings yield, 440“441 Winner™s curse, 653
Value Line, Inc., 435, 438, 676“677
Templeton Funds, 285 maturities, 315 Winterthur, 302
Value Line Centurion Fund, 677
Term insurance, 605 Treasury Inflation Protected Wit Capital, 64, 65
Value Line Investment Survey, 263,
Term repo, 29 Securities, 302“303 Wolfson, Mark A., 264
397, 478, 674, 676, 424“427
Term structure of interest rates, Treasury notes, 31“32, 296“298 World Bank, 722“723
Value Line system, 674“675
322“323 Treasury strips, 315 WorldCom, 467
Value stocks, 122
expectations theory, 323“325 Treasury yield curve, 323 World Equity Benchmark Shares,
VanderHoff, Frank, 501
liquidity preference rates, Trend analysis 15“16, 112, 737
Vanguard 500 Index Fund, 105,
325“326 filter rule, 271 World-event risk, 608
149“150
Tertiary trends, 661 predictability in stock returns, Wright, David J., 49
Vanguard GNMA Fund, 106
Texas hedge, 645 270“273 Writing calls, 492
Vanguard Group, 46, 101, 104, 106,
Texas Power and Light Company, 373 Treynor, Jack L., 221, 685, 705, 709
113, 115, 148, 267, 602, 611,
Y
Thaler, Richard H., 272, 280, 281, Treynor-Black model, 709“712, 710
612, 734
282, 652 Treynor measure, 686, 689“690
Yahoo!, 396, 465
Variable costs, 400
Thayer, Peter, 501 Trin statistic, 668
Yankee bonds, 33, 301
Variable life policy, 605
Theglobe.com, 63 Triple witching hour, 587
Yield
Variance, 136“137, 176, 177, 194
Third market, 68 Trough, 391
versus bond price, 306
historical, 142“144
Thomas, Jeffrey H., 278 Trustee, 602
money market instruments, 30
Vertical spread, 508
Threat of entry, 404 T+3 settlement, 76
on preferred stock, 41
Vishney, Robert W., 279
Three-factor model, 279 Turnarounds, 404
S&P 500 vs. T-bonds, 440“441
Volatility, 239, 293
Three-stage growth models, 427“428 Turnover, 111“112
Yield curve, 322“327
of dividends, 659
Tick test, 90 Turnover ratios, 461“462
expectations theory, 323“325
of stock prices, 658“659
Time deposits, 27“28 Tversky, Amos, 280
inverted, 322
Volatility value, 532
Time diversification, 211“212 12b-1 fees, 108“109
liquidity preference theory,
Vontobel Ltd., 586
Time horizon, endowment funds, 621 Two-factor model, 248
325“326
Times interest earned ratio, Two-risky-asset portfolio
synthesis of theories, 327
318, 463 asset allocation, 171“184
W Yield premium, 300
Time spread, 508 risk-return trade-off, 177“178
Yield ratio, 35
Time to maturity, 347, 348 three rules of, 177 W. R. Grace and Company, 472
Yield to call, 309“310
Time values, 532 Two-stage dividend discount W. R. Hambrecht and Company, 65
Yield to maturity, 31“32, 297,
Time-weighted average, 133 models, 424“427 Wage insurance, 646
306“307
TIPS; see Treasury Inflation Two-state option pricing, 534“537 Wallace, A., 241n
and bond price changes, 340“341
Protected Securities Wall Street Journal, 1, 26, 31, 32, 36,
and bond prices, 306“309
Titman, Sheridan, 271, 272“273, 40“41, 46, 49, 51, 101“102,
U calculation of, 307“308
672, 673 105, 268, 269, 270, 296, 298,
compared to current yield,
Unbundling, 18“19
Tobin, James, 192, 414 322, 396, 433, 489, 494, 496,
308“309
Underpricing, 63
Tobin™s q, 414 567“570, 583, 587, 589, 661,
and default risk, 320“325
Underwriters, 60“61
Tokyo Stock Exchange, 46, 79 668, 671, 692
versus holding-period return,
best-efforts agreement, 60
Tombstone advertisements, 60“61 Wal-Mart, 460
313“314
of bond issue, 306
Top-down investment policies, Walt Disney Company, 302
interpretation of, 314
firm commitment, 60, 589
612“614 Wang, Zhenyu, 241
versus realized compound yield,
initial public offerings, 61“65
Top-down portfolio construction, 9 Warner-Lambert, 373
310“312
Underwriting syndicate, 60
Total assets, 453 Warrants, 516“517
Unemployment rate, 384
Total return, 41 Weak-form EMH, 265
Z
Uniform Securities Act of 1956, 89
Total variance, 196 Wealth, national, 4“5
Union Carbide, 43
Toyota Motors, 4 WEBS; see World Equity Benchmark Zero correlation coefficient, 178n
Unique risk, 171, 199
Tracking error, 552 Shares Zero-coupon bonds, 296, 342,
United States industrial long-term
Trading costs, 80“82 Weighted average of betas, 196n 347“348
debt, 319
Trading halts, 89“90 Weighted average time until prices of, 314“315
United States Supreme Court, 91
Trading Places, 573 payments, 342“344, 347 Zero-investment portfolio, 242
Unit investment trust, 101, 101
Trading through, 77 Weighting schemes, 745“746 Zero-plus tick, 90

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