As part of the CFA Institute Investment Series, the Second Edition of Quantitative Investment Analysis has been designed for a wide range of individuals, from graduate-level students focused on finance to practicing investment professionals. This globally relevant guide will help you understand quantitative methods and apply them to today's investment process.

In this latest edition, the distinguished team of Richard DeFusco, Dennis McLeavey, Jerald Pinto, and David Runkle update information associated with this discipline; improve the presentation and coverage of several major areas, including regression, time series, and multifactor models; and introduce an even greater variety of investment-oriented examples—which reflect the changes currently taking place in the investment community. Throughout the text, special attention is paid to ensuring the even treatment of subject matter, consistency of mathematical notation, and continuity of topic coverage that is so critical to the learning process.

Valuable for self-study and general reference, this book provides clear, example-driven coverage of a wide range of quantitative methods. Topics discussed include:

• The time value of money
• Discounted cash flow applications
• Common probability distributions
• Sampling and estimation
• Hypothesis testing
• Correlation and regression
• Multiple regression and issues in regression analysis
• Time-series analysis
• Portfolio concepts

And to further enhance your understanding of the tools and techniques presented here, don't forget to pick up the Quantitative Investment Analysis Workbook, Second Edition—an essential guide containing learning outcomes and summary overview sections along with challenging problems and solutions.

With each author bringing his own unique experiences and perspectives to the table, the Second Edition of Quantitative Investment Analysis distills the knowledge, skills, and abilities you need to succeed in today's fast-paced financial environment. Filled with in-depth insights and practical advice, Quantitative Investment Analysis, Second Edition offers a comprehensive treatment of quantitative methods that combines best practices with solid theory.

Quantitative Investment Analysis, Second Edition responds to the need for a globally relevant guide to applying quantitative analysis to the investment process. Examples and problems are investment-oriented and reflect the changes currently taking place in the global investment community.

Richard A. DeFusco, CFA (Lincoln, NE) is an Associate Professor of Finance at the University of Nebraska-Lincoln (UNL). Dennis W. McLeavey, CFA (Charlottesville, VA) is Head, Professional Development Products at CFA Institute. Jerald E. Pinto, CFA (Charlottesville, VA) is Director in the CFA Program Division at CFA Institute. David E. Runkle, CFA (Minneapolis, MN) is Vice President and Research Manager at U.S. Bancorp Piper Jaffray.

Praise for Quantitative Investment Analysis, Second Edition

"Quantitative Investment Analysis is an essential book for any serious investor in today's financial markets. Cogently written, the authors cover a robust array of quantitative methods in a straightforward and digestible style. This book should be on everyone's short list of necessary reading and reference."

—Gary P. Brinson, CFA, President, GP Brinson Investments

"This second Edition of Quantitative Investment Analysis provides a strong foundation for investment practitioners seeking benefit from the rigor and discipline of quantitative tools and analysis. An abundance of examples enhances the value of this essential text for non-classroom pedagogy."

—Brian Singer, CFA, UBS Global Asset Management

"Quantitative Investment Analysis gets to the heart of the matter. Crisp, well-written, and technically thorough, this book provides an excellent foundation for understanding the statistics and economics of portfolio management and asset pricing. It also provides a thorough review of the major asset pricing models widely used today."

—David Blackwell, Head and RepublicBank/James W. Aston Professor of Finance, Mays Business School, Texas A&M University

RICHARD A. DEFUSCO, CFA, is an Associate Professor of Finance at the University of Nebraska-Lincoln (UNL). He earned his CFA charter in 1999. DeFusco is a member of the Omaha-Lincoln Society of Financial Analysts, and completed his bachelor's degree in management science at the University of Rhode Island and doctoral degree in finance at the University of Tennessee-Knoxville.

DENNIS W. MCLEAVEY, CFA, is Head of Professional Development Products at CFA Institute. During his twenty-five year academic career, he has taught at The University of Western Ontario, the University of Connecticut, the University of Rhode Island (where he founded a student-managed fund), and Babson College. McLeavey completed a doctorate in production management and industrial engineering at Indiana University in 1972, and earned his CFA charter in 1990.

JERALD E. PINTO, CFA, is Director in the CFA and CIPM Programs Division at CFA Institute. Before coming to CFA Institute in 2002, he consulted to corporations, foundations, and partnerships in investment planning, portfolio analysis, and quantitative analysis. He has also worked in the investment and banking industries in New York City and taught finance at New York University's Stern School of Business. He holds an MBA from Baruch College, a PhD in finance from the Stern School, and earned his CFA charter in 1992.

DAVID E. RUNKLE, CFA, is Vice President and Research Manager at U.S. Bancorp Piper Jaffray. He has been an adjunct professor of finance in the Carlson School of Management at the University of Minnesota since 1989. Runkle received a BA in economics from Carleton College and a PhD in economics from MIT.

Preface.

Acknowledgements.

Introduction.

Chapter 1. The Time Value of Money.

Chapter 2. Discounted Cash Flow Applications.

Chapter 3. Statistical Concepts and Market Returns.

Chapter 4. Probability Concepts.

Chapter 5. Common Probability Distributions.

Chapter 6. Sampling and Estimation.

Chapter 7. Hypothesis Testing.

Chapter 8. Correlation and Regression.

Chapter 9. Multiple Regression and Issues in Regression Analysis.

Chapter 10. Time-Series Analysis.

Chapter 11. Portfolio Concepts.

Appendices.

References.

Glossary.

About the CFA Program.

About the Authors.

Index.