Author: Philip J. Romero

About the Book: 

Capital is a deliberately brief, high-altitude view of the basic concepts in finance. It is organized around seven fundamental ideas, groupedin three major book sections:

Using capital: Deciding whether an investment earns a satisfactory return

• Fundamental Idea A: Time Value of Money—Chapter III
• Fundamental Idea B: Risk and Return/Diversification –Chapter V
• Fundamental Idea C: Net Present Value (NPV)—Chapter VII

Acquiring capital: tapping investors to provide the financing your business needs to grow

• Fundamental Idea D: Bond and stock prices—Chapters XIV and XV
• Fundamental Idea E: Capital structure (Debt/equity mix)—Chapter XV

Investing capital: Deploying your surplus in asset markets (Wall Street)

• Fundamental Idea F: Efficient market hypothesis (EMH)—Chapter XVIII
• Fundamental Idea G:Portfolio construction (Modern Portfolio Theory, MPT)—Chapter XIX

A fourth section applies these ideas for individual readers, showing examples of how financial literacy will make them better consumers and investors, and offer them a competitive advantage in their careers.

This second edition reflects comments by hundreds of readers.

The author is a professor of finance at the University of Oregon, a former strategist for a Fortune 50 industrial conglomerate, and twice chief economist to the governor of California.