8. Pricing Stocks and Bonds

  1. Edwin H. Neave

Published Online: 13 DEC 2011

DOI: 10.1002/9781118267714.ch8

Modern Financial Systems: Theory and Applications

Modern Financial Systems: Theory and Applications

How to Cite

Neave, E. H. (2009) Pricing Stocks and Bonds, in Modern Financial Systems: Theory and Applications, John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9781118267714.ch8

Publication History

  1. Published Online: 13 DEC 2011
  2. Published Print: 23 NOV 2009

ISBN Information

Print ISBN: 9780470419731

Online ISBN: 9781118267714

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Keywords:

  • stocks and bonds;
  • corporate securities;
  • arbitrage opportunities;
  • risk-neutral probabilities;
  • asset pricing theory

Summary

This chapter contains sections titled:

  • Profit-Seeking Eliminates Arbitrage Opportunities

  • Pricing Securities Relative to Each Other

  • Calculating Risk-Neutral Probability Measures

  • Using Risk-Neutral Probabilities for Securities Valuation

  • Debt versus Equity

  • Application: Bond Valuation and Market Risk

  • Terms