Modern Investment Theory

Modern Investment Theory is the only book published in Hebrew on this central topic for students and practitioners of business and economy. The book opens with a review of the investment environment and the structure and institutions of the Israeli capital market, as well as a description of the assets traded in the equity, debt, and derivative markets. Since Israel is a small economy, its interactions with global financial markets is highlighted. 

The core concepts are presented by order of their evolution and contribution to the field: from rational and behavioral decision-making in states of risk, to Portfolio Theory, the CAPM, and advanced theoretical and empirical models, including five-factor models. Three chapters are devoted to fixed income pricing and risk, and two chapters address derivative assets and their pricing. Some of the chapters introduce for the first time in Hebrew financial crises and their impact on the real economy and on society, private capital, behavioral finance, and international finance. 

Many of the concepts of modern investment theory were developed by prominent researchers; some won Nobel or other prestigious prizes. To sixteen of these outstanding researchers, seven of whom are Israeli, I devote special boxes entitled "Figures from the Hall of Fame," highlighting their contribution to the field. 

Pedagogically, the book follows the American model where each chapter is accompanied by a Powerpoint presentation file, the chapter is briefly summarized, has a list of key terms, and between twenty to forty questions. Teachers can access all chapter solutions.