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Table of Contents

    • 1The Financial System
      • 1.1Evil and Brilliant Financiers?
      • 1.2Financial Systems
      • 1.3Asymmetric Information: The Real Evil
      • 1.4Financial Markets
      • 1.5Financial Intermediaries
      • 1.6Competition Between Markets and Intermediaries
      • 1.7Regulation
      • 1.8Suggested Reading
    • 2Money

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      • 2.1Of Love, Money, and Transactional Efficiency

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      • 2.2Better to Have Had Money and Lost It Than to Have Never Had Money at All

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      • 2.3A Short History of Moolah

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      • 2.4Commodity and Credit Monies

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      • 2.5Measuring Money

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      • 2.6Suggested Reading

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    • 3Basic Ideas of Finance

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      • 3.1Introduction

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      • 3.2Income and Expenses

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      • 3.3Assets

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      • 3.4Debt and Equity

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      • 3.5Income and Risk

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    • 4Financial Statements

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      • 4.1Introduction

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      • 4.2Accounting and Financial Statements

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      • 4.3Comparing and Analyzing Financial Statements

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      • 4.4Accounting Software: An Overview

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    • 5Evaluating Choices: Time, Risk, and Value

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      • 5.1Introduction

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      • 5.2The Time Value of Money

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      • 5.3Calculating the Relationship of Time and Value

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      • 5.4Valuing a Series of Cash Flows

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      • 5.5Using Financial Statements to Evaluate Financial Choices

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      • 5.6Evaluating Risk

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    • 6Financial Plans: Budgets

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      • 6.1Introduction

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      • 6.2The Budget Process

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      • 6.3Creating the Comprehensive Budget

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      • 6.4The Cash Budget and Other Specialized Budgets

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      • 6.5Budget Variances

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      • 6.6Budgets, Financial Statements, and Financial Decisions

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    • 7Financial Management

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      • 7.1Introduction

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      • 7.2Your Own Money: Cash

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      • 7.3Your Own Money: Savings

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      • 7.4Other People’s Money: Credit

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      • 7.5Other People’s Money: An Introduction to Debt

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    • 8Interest Rates

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      • 8.1The Interest of Interest

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      • 8.2Present and Future Value

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      • 8.3Compounding Periods

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      • 8.4Pricing Debt Instruments

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      • 8.5What’s the Yield on That?

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      • 8.6Calculating Returns

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      • 8.7Inflation and Interest Rates

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      • 8.8Suggested Reading

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    • 9The Economics of Interest-Rate Fluctuations

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      • 9.1Interest Rate Fluctuations

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      • 9.2Shifts in Supply and Demand for Bonds

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      • 9.3Liquidity Preference

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      • 9.4Predictions and Effects

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      • 9.5Suggested Reading

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    • 10The Economics of Interest-Rate Spreads and Yield Curves

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      • 10.1A Short History of Interest Rates

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      • 10.2Interest-Rate Determinants I: The Risk Structure

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      • 10.3The Determinants of Interest Rates II: The Term Structure

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      • 10.4Suggested Reading

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    • 11Investing

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      • 11.1Introduction

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      • 11.2Investments and Markets: A Brief Overview

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      • 11.3Investment Planning

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      • 11.4Measuring Return and Risk

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      • 11.5Diversification: Return with Less Risk

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    • 12Owning Stocks

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      • 12.1Introduction

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      • 12.2Stocks and Stock Markets

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      • 12.3Stock Value

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      • 12.4Common Measures of Value

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      • 12.5Equity Strategies

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    • 13Owning Bonds

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      • 13.1Introduction

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      • 13.2Bonds and Bond Markets

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      • 13.3Bond Value

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      • 13.4Bond Strategies

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    • 14What Should Decision-makers Know so That Good Decisions Can Be Made about an Organization?

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      • 14.1Creating a Portrait of an Organization That Can Be Used by Decision Makers

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      • 14.2Dealing with Uncertainty

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      • 14.3The Need for Generally Accepted Accounting Principles

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      • 14.4Four Basic Terms Found in Financial Accounting

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      • 14.5End-of-Chapter Exercises

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    • 15In What Form Is Financial Information Actually Delivered to Decision Makers Such as Investors and Creditors?

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      • 15.1The Construction of an Income Statement

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      • 15.2Reported Profitability and the Principle of Conservatism

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      • 15.3Increasing the Net Assets of a Company

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      • 15.4Reporting a Balance Sheet and a Statement of Cash Flows

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      • 15.5End-of-Chapter Exercises

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    • 16Why Should Decision Makers Trust Financial Statements?

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      • 16.1The Need for the Securities and Exchange Commission

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      • 16.2The Role of the Independent Auditor in Financial Reporting

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      • 16.3Performing an Audit

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      • 16.4The Need for Internal Control

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      • 16.5The Purpose and Content of an Independent Auditor’s Report

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      • 16.6End-of-Chapter Exercises

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    • 17In a Set of Financial Statements, What Information Is Conveyed about Shareholders’ Equity?

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      • 17.1Selecting a Legal Form for a Business

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      • 17.2The Issuance of Common Stock

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      • 17.3Issuing and Accounting for Preferred Stock and Treasury Stock

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      • 17.4The Issuance of Cash and Stock Dividends

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      • 17.5The Computation of Earnings per Share

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      • 17.6End-of-Chapter Exercises

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    • 18In a Set of Financial Statements, What Information Is Conveyed by the Statement of Cash Flows?

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      • 18.1The Structure of a Statement of Cash Flows

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      • 18.2Cash Flows from Operating Activities: The Direct Method

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      • 18.3Cash Flows from Operating Activities: The Indirect Method

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      • 18.4Cash Flows from Investing and Financing Activities

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      • 18.5Appendix

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      • 18.6End-of-Chapter Exercises

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