Economics for Investment Decision Makers

CHRISTOPHER D. PIROS, PhD, CFA, is the Managing Director of Investment Strategy and Chairman of the Investment Policy Committee at Hawthorn, a member of the PNC Financial Services Group, Inc., which is dedicated to serving the needs of individuals and families with investable assets in excess of $20 million. Prior to joining PNC, Mr. Piros served on the team responsible for the curriculum underlying the Chartered Financial Analyst® designation. He also has served as Director of Investment Strategy & Portfolio Management at Prudential Investments LLC, the wealth management services arm of Prudential Financial. He was a global fixed-income portfolio manager and head of fixed-income quantitative analysis at MFS Investment Management.JERALD E. PINTO, PhD, CFA, is Director, Curriculum Projects, in the education division of the CFA Institute. Prior to joining CFA Institute, he consulted with corporations, foundations, and partnerships in investment planning, portfolio analysis, valuation, and quantitative analysis. Pinto also worked in the investment and banking industries in New York, and taught finance at NYU Stern School of Business. He holds an MBA from Baruch College, a PhD in finance from the Stern School, and is a member of CFA Virginia.CFA INSTITUTE is a global, not-for-profit organization comprising the world's largest association of investment professionals. With over 100,000 members, and regional societies around the world, CFA Institute is dedicated to developing and promoting the highest educational, ethical, and professional standards in the investment industry. CFA Institute offers a range of educational and career resources, including the Chartered Financial Analyst (CFA) and the Certificate in Investment Performance Measurement (CIPM) designations, and is a leading voice on global issues of fairness, market efficiency, and investor protection.

• PART I Learning Outcomes, Summary Overview, and Practice Problems CHAPTER 1 Demand and Supply Analysis: Introduction 3Learning Outcomes 3Summary Overview 3Practice Problems 5CHAPTER 2 Demand and Supply Analysis: Consumer Demand 11Learning Outcomes 11Summary Overview 11Practice Problems 12CHAPTER 3 Demand and Supply Analysis: The Firm 15Learning Outcomes 15Summary Overview 15Practice Problems 16CHAPTER 4 The Firm and Market Structures 23Learning Outcomes 23Summary Overview 23Practice Problems 24CHAPTER 5 Aggregate Output, Prices, and Economic Growth 29Learning Outcomes 29Summary Overview 29Practice Problems 32CHAPTER 6 Understanding Business Cycles 39Learning Outcomes 39Summary Overview 39Practice Problems 41CHAPTER 7 Monetary and Fiscal Policy 45Learning Outcomes 45Summary Overview 45Practice Problems 47CHAPTER 8 International Trade and Capital Flows 53Learning Outcomes 53Summary Overview 53Practice Problems 55CHAPTER 9 Currency Exchange Rates 61Learning Outcomes 61Summary Overview 61Practice Problems 63CHAPTER 10 Currency Exchange Rates: Determination and Forecasting 67Learning Outcomes 67Summary Overview 68Practice Problems 71CHAPTER 11 Economic Growth and the Investment Decision 77Learning Outcomes 77Summary Overview 77Practice Problems 79CHAPTER 12 Economics of Regulation 87Learning Outcomes 87Summary Overview 87Practice Problems 88PART II SolutionsCHAPTER 1 Demand and Supply Analysis: Introduction 93Solutions 93CHAPTER 2 Demand and Supply Analysis: Consumer Demand 97Solutions 97CHAPTER 3 Demand and Supply Analysis: The Firm 99Solutions 99CHAPTER 4 The Firm and Market Structures 101Solutions 101CHAPTER 5 Aggregate Output, Prices, and Economic Growth 103Solutions 103CHAPTER 6 Understanding Business Cycles 107Solutions 107CHAPTER 7 Monetary and Fiscal Policy 109Solutions 109CHAPTER 8 International Trade and Capital Flows 111Solutions 111CHAPTER 9 Currency Exchange Rates 115Solutions 115CHAPTER 10 Currency Exchange Rates: Determination and Forecasting 119Solutions 119CHAPTER 11 Economic Growth and the Investment Decision 123Solutions 123CHAPTER 12 Economics of Regulation 127Solutions 127About the CFA Program 129