Introduction to Finance

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Introduction to Finance
Markets, Investments, and Financial Management
16th Edition
R O N A L D W. M E L I C H E R
Professor of Finance
University of Colorado at Boulder
E D GA R A . N O RTO N
Professor of Finance
Illinois State University

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Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
To my parents, William and Lorraine, and
to my wife, Sharon, and our children, 
Michelle, Sean, and Thor
Ronald W. Melicher
To my best friend and wife, Becky; 
our son Matthew and his wife, Angie; 
our daughter Amy and her husband, Jake
Edgar A. Norton

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Preface
The sixteenth edition of 
Introduction to Finance: Markets, 
Investments, and Financial Management 
builds upon the suc-
cesses of its earlier editions while maintaining fresh and up-
to-date coverage of the fi eld of fi nance. This edition introduces 
several new electronic features to assist with student access to 
the textbook and with learning.
Our text is designed to present a more-balanced fi rst 
course in fi nance, one that off ers students perspectives on fi nan-
cial markets, investing, and fi nancial management. We use a 
successful pedagogy that reviews, fi rst, markets and institu-
tions; then, the world of investments; and fi nally, the concepts 
and applications of business fi nancial management.
Unlike other textbooks with a singular “corporate fi nance” 
focus, our text off ers a balanced fi rst course in fi nance. Eighteen 
chapters cover the three major fi nancial areas involving the 
fi nancial system, investments, and business fi nance. For the stu-
dent who does not plan to take additional courses in fi nance, 
this book provides a valuable overview of the discipline’s 
major concepts. For the student who wants to take additional 
courses in fi nance, the overview presented provides a solid 
foundation upon which future courses can build.
Introduction to Finance 
is meant to be used in a course 
whose purpose is to survey the foundations of the fi nance dis-
cipline. As such, it is designed to meet the needs of students in 
various programs. Specifi cally, 
Introduction to Finance 
can be 
used in any of the following four ways:
1.
As the fi rst course in fi nance at a college or university where 
the department wants to expose students to a broad founda-
tional survey of the discipline.