MICHAEL G. MCMILLAN, CFA, is Director of Ethics and Professional Standards in the Education Division of CFA Institute. Dr. McMillan joined CFA Institute in 2008 after more than a decade as a professor of accounting and finance at Johns Hopkins University's Carey School of Business and The George Washington University's School of Business. He has a doctorate in accounting and finance from The George Washington University, an MBA from Stanford University, and a BA from the University of Pennsylvania. Dr. McMillan is a member of the CFA Society of Washington, D.C., and the East African Society of Investment Professionals. JERALD E. PINTO, CFA, is Director of Curriculum Projects in the Education Division of 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. WENDY L. PIRIE, CFA, is Director of Curriculum Projects in the Education Division of CFA Institute. Prior to joining CFA Institute in 2008, she taught finance, accounting, statistics, taxation, business law, and marketing for over twenty years at both large and small, public and private universities, religious colleges, and military academies. Her work has been published in the Journal of Financial Research and Journal of Economics and Finance. She holds a PhD from Queen's University at Kingston and MBAs from the Universities of Toronto and Calgary. GERHARD VAN DE VENTER, CFA, is Deputy Head of the School of Finance and Economics at University of Technology, Sydney. He was previously Director of Curriculum Projects in the Education Division of CFA Institute. He began his career in South Africa as a financial analyst and later as a dealer on the Bond Exchange, where he traded fixed income securities. He holds a PhD in finance from the University of Technology, Sydney. He is a member of CFA Institute and the New York Society of Security Analysts.

• PART I: Learning Outcomes, Summary Overview, and ProblemsCHAPTER 1: Market Organization and Structure 3Learning Outcomes 3Summary Overview 3Problems 5CHAPTER 2: Security Market Indices 13Learning Outcomes 13Summary Overview 13Problems 14CHAPTER 3: Market Efficiency 21Learning Outcomes 21Summary Overview 21Problems 22CHAPTER 4: Portfolio Management: An Overview 27Learning Outcomes 27Summary Overview 27Problems 28CHAPTER 5: Portfolio Risk and Return: Part I 31Learning Outcomes 31Summary Overview 31Problems 32CHAPTER 6: Portfolio Risk and Return: Part II 39Learning Outcomes 39Summary Overview 39Problems 40CHAPTER 7: Basics of Portfolio Planning and Construction 47Learning Outcomes 47Summary Overview 47Problems 48CHAPTER 8: Overview of Equity Securities 53Learning Outcomes 53Summary Overview 53Problems 54CHAPTER 9: Introduction to Industry and Company Analysis 59Learning Outcomes 59Summary Overview 59Problems 62CHAPTER 10: Equity Valuation: Concepts and Basic Tools 67Learning Outcomes 67Summary Overview 67Problems 68CHAPTER 11: Equity Market Valuation 75Learning Outcomes 75Summary Overview 75Problems 77CHAPTER 12: Technical Analysis 85Learning Outcomes 85Summary Overview 85Problems 87PART II: SolutionsCHAPTER 1: Market Organization and Structure 95Solutions 95CHAPTER 2: Security Market Indices 99Solutions 99CHAPTER 3: Market Efficiency 103Solutions 103CHAPTER 4: Portfolio Management: An Overview 105Solutions 105CHAPTER 5: Portfolio Risk and Return: Part I 107Solutions 107CHAPTER 6: Portfolio Risk and Return: Part II 111Solutions 111CHAPTER 7: Basics of Portfolio Planning and Construction 115Solutions 115CHAPTER 8: Overview of Equity Securities 119Solutions 119CHAPTER 9: Introduction to Industry and Company Analysis 121Solutions 121CHAPTER 10: Equity Valuation: Concepts and Basic Tools 123Solutions 123CHAPTER 11: Equity Market Valuation 127Solutions 127CHAPTER 12: Technical Analysis 131Solutions 131About the CFA Program 134

MICHAEL G. MCMILLAN, CFA, is Director of Ethics and Professional Standards in the Education Division of CFA Institute. Dr. McMillan joined CFA Institute in 2008 after more than a decade as a professor of accounting and finance at Johns Hopkins University's Carey School of Business and The George Washington University's School of Business. He has a doctorate in accounting and finance from The George Washington University, an MBA from Stanford University, and a BA from the University of Pennsylvania. Dr. McMillan is a member of the CFA Society of Washington, D.C., and the East African Society of Investment Professionals. JERALD E. PINTO, CFA, is Director of Curriculum Projects in the Education Division of 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. WENDY L. PIRIE, CFA, is Director of Curriculum Projects in the Education Division of CFA Institute. Prior to joining CFA Institute in 2008, she taught finance, accounting, statistics, taxation, business law, and marketing for over twenty years at both large and small, public and private universities, religious colleges, and military academies. Her work has been published in the Journal of Financial Research and Journal of Economics and Finance. She holds a PhD from Queen's University at Kingston and MBAs from the Universities of Toronto and Calgary. GERHARD VAN DE VENTER, CFA, is Deputy Head of the School of Finance and Economics at University of Technology, Sydney. He was previously Director of Curriculum Projects in the Education Division of CFA Institute. He began his career in South Africa as a financial analyst and later as a dealer on the Bond Exchange, where he traded fixed income securities. He holds a PhD in finance from the University of Technology, Sydney. He is a member of CFA Institute and the New York Society of Security Analysts.

• PART I: Learning Outcomes, Summary Overview, and ProblemsCHAPTER 1: Market Organization and Structure 3Learning Outcomes 3Summary Overview 3Problems 5CHAPTER 2: Security Market Indices 13Learning Outcomes 13Summary Overview 13Problems 14CHAPTER 3: Market Efficiency 21Learning Outcomes 21Summary Overview 21Problems 22CHAPTER 4: Portfolio Management: An Overview 27Learning Outcomes 27Summary Overview 27Problems 28CHAPTER 5: Portfolio Risk and Return: Part I 31Learning Outcomes 31Summary Overview 31Problems 32CHAPTER 6: Portfolio Risk and Return: Part II 39Learning Outcomes 39Summary Overview 39Problems 40CHAPTER 7: Basics of Portfolio Planning and Construction 47Learning Outcomes 47Summary Overview 47Problems 48CHAPTER 8: Overview of Equity Securities 53Learning Outcomes 53Summary Overview 53Problems 54CHAPTER 9: Introduction to Industry and Company Analysis 59Learning Outcomes 59Summary Overview 59Problems 62CHAPTER 10: Equity Valuation: Concepts and Basic Tools 67Learning Outcomes 67Summary Overview 67Problems 68CHAPTER 11: Equity Market Valuation 75Learning Outcomes 75Summary Overview 75Problems 77CHAPTER 12: Technical Analysis 85Learning Outcomes 85Summary Overview 85Problems 87PART II: SolutionsCHAPTER 1: Market Organization and Structure 95Solutions 95CHAPTER 2: Security Market Indices 99Solutions 99CHAPTER 3: Market Efficiency 103Solutions 103CHAPTER 4: Portfolio Management: An Overview 105Solutions 105CHAPTER 5: Portfolio Risk and Return: Part I 107Solutions 107CHAPTER 6: Portfolio Risk and Return: Part II 111Solutions 111CHAPTER 7: Basics of Portfolio Planning and Construction 115Solutions 115CHAPTER 8: Overview of Equity Securities 119Solutions 119CHAPTER 9: Introduction to Industry and Company Analysis 121Solutions 121CHAPTER 10: Equity Valuation: Concepts and Basic Tools 123Solutions 123CHAPTER 11: Equity Market Valuation 127Solutions 127CHAPTER 12: Technical Analysis 131Solutions 131About the CFA Program 134

MICHAEL G. MCMILLAN, CFA, is Director of Ethics and Professional Standards in the Education Division of CFA Institute. Dr. McMillan joined CFA Institute in 2008 after more than a decade as a professor of accounting and finance at Johns Hopkins University's Carey School of Business and The George Washington University's School of Business. He has a doctorate in accounting and finance from The George Washington University, an MBA from Stanford University, and a BA from the University of Pennsylvania. Dr. McMillan is a member of the CFA Society of Washington, D.C., and the East African Society of Investment Professionals. JERALD E. PINTO, CFA, is Director of Curriculum Projects in the Education Division of 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. WENDY L. PIRIE, CFA, is Director of Curriculum Projects in the Education Division of CFA Institute. Prior to joining CFA Institute in 2008, she taught finance, accounting, statistics, taxation, business law, and marketing for over twenty years at both large and small, public and private universities, religious colleges, and military academies. Her work has been published in the Journal of Financial Research and Journal of Economics and Finance. She holds a PhD from Queen's University at Kingston and MBAs from the Universities of Toronto and Calgary. GERHARD VAN DE VENTER, CFA, is Deputy Head of the School of Finance and Economics at University of Technology, Sydney. He was previously Director of Curriculum Projects in the Education Division of CFA Institute. He began his career in South Africa as a financial analyst and later as a dealer on the Bond Exchange, where he traded fixed income securities. He holds a PhD in finance from the University of Technology, Sydney. He is a member of CFA Institute and the New York Society of Security Analysts.

• PART I: Learning Outcomes, Summary Overview, and ProblemsCHAPTER 1: Market Organization and Structure 3Learning Outcomes 3Summary Overview 3Problems 5CHAPTER 2: Security Market Indices 13Learning Outcomes 13Summary Overview 13Problems 14CHAPTER 3: Market Efficiency 21Learning Outcomes 21Summary Overview 21Problems 22CHAPTER 4: Portfolio Management: An Overview 27Learning Outcomes 27Summary Overview 27Problems 28CHAPTER 5: Portfolio Risk and Return: Part I 31Learning Outcomes 31Summary Overview 31Problems 32CHAPTER 6: Portfolio Risk and Return: Part II 39Learning Outcomes 39Summary Overview 39Problems 40CHAPTER 7: Basics of Portfolio Planning and Construction 47Learning Outcomes 47Summary Overview 47Problems 48CHAPTER 8: Overview of Equity Securities 53Learning Outcomes 53Summary Overview 53Problems 54CHAPTER 9: Introduction to Industry and Company Analysis 59Learning Outcomes 59Summary Overview 59Problems 62CHAPTER 10: Equity Valuation: Concepts and Basic Tools 67Learning Outcomes 67Summary Overview 67Problems 68CHAPTER 11: Equity Market Valuation 75Learning Outcomes 75Summary Overview 75Problems 77CHAPTER 12: Technical Analysis 85Learning Outcomes 85Summary Overview 85Problems 87PART II: SolutionsCHAPTER 1: Market Organization and Structure 95Solutions 95CHAPTER 2: Security Market Indices 99Solutions 99CHAPTER 3: Market Efficiency 103Solutions 103CHAPTER 4: Portfolio Management: An Overview 105Solutions 105CHAPTER 5: Portfolio Risk and Return: Part I 107Solutions 107CHAPTER 6: Portfolio Risk and Return: Part II 111Solutions 111CHAPTER 7: Basics of Portfolio Planning and Construction 115Solutions 115CHAPTER 8: Overview of Equity Securities 119Solutions 119CHAPTER 9: Introduction to Industry and Company Analysis 121Solutions 121CHAPTER 10: Equity Valuation: Concepts and Basic Tools 123Solutions 123CHAPTER 11: Equity Market Valuation 127Solutions 127CHAPTER 12: Technical Analysis 131Solutions 131About the CFA Program 134