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Hardcover | $130.00 X | £108.95 | 1088 pp. | 8 x 9 in | 63 figures | October 2015 | ISBN: 9780262029483
eBook | $130.00 X | February 2016 | ISBN: 9780262331579
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Capital Markets, Fifth Edition

Institutions, Instruments, and Risk Management


Over the last fifty years, an extensive array of instruments for financing, investing, and controlling risk has become available in financial markets, with demand for these innovations driven by the needs of investors and borrowers. The recent financial crisis offered painful lessons on the consequences of ignoring the risks associated with new financial products and strategies. This substantially revised fifth edition of a widely used text covers financial product innovation with a new emphasis on risk management and regulatory reform. Chapters from the previous edition have been updated, and new chapters cover material that reflects recent developments in financial markets.

The book begins with an introduction to financial markets, offering a new chapter that provides an overview of risk—including the key elements of financial risk management and the identification and quantification of risk. The book then covers market participants, including a new chapter on collective investment products managed by asset management firms; the basics of cash and derivatives markets, with new coverage of financial derivatives and securitization; theories of risk and return, with a new chapter on return distributions and risk measures; the structure of interest rates and the pricing of debt obligations; equity markets; debt markets, including chapters on money market instruments, municipal securities, and credit sensitive securitized products; and advanced coverage of derivative markets. Each chapter ends with a review of key points and questions based on the material covered.

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About the Author

Frank J. Fabozzi is Professor of Finance at EDHEC Business School in France and has held positions at Yale School of Management, Princeton University, and MIT Sloan School of Management. He is the author of Capital Markets: Institutions, Instruments, and Risk Management (fifth edition, MIT Press) and other books.


“The fifth edition of Capital Markets maintains the strength of the previous editions with its unique coverage of structured finance and applications of derivatives. In addition to an updating of global regulations resulting from the recent financial crisis, the new edition takes a much greater focus on risk management than the previous editions.”
Turan G. Bali, Robert Parker Chair Professor of Finance, McDonough School of Business, Georgetown University
“The book provides very comprehensive coverage of all aspects of capital markets. It is a must-have book for investors, traders, risk managers, and regulators. It is also an excellent book for students of finance.”
Yu Zhu, retired Professor of Finance, China Europe International Business School