finance_a fine art Contents Foreword by Sheldon Gordon vii 1 The marketplace 1 The state and the financial markets 3 The capital cities of trade and commerce 7 How stock exchanges began 13 The farmers and financial markets 21 2 The mechanics of financial markets 29 Hard bargaining or software mediation 31 How prices are established on organized markets 35 Bulbs, bubbles and bull markets 37 3 Globalization 46 Common currency 48 Foreign exchanges 55 Finance capital of the world? 62 4 The future is the field of play 66 As time goes by 68 A roll of the dice shall never abolish randomness 79 How normal is it for stock prices to fluctuate? 85 When managing risk, diversify 96 When managing risk, wait and see 104 5 The price of stocks 111 The value of art and the art of value 112 The market will fluctuate 120 A major yet largely misunderstood principle 125 Speculative value 129 6 The derivatives markets　134 Futures and forward contracts　136 Options　154 The risks of derivatives　166 7 My word is my bond　179 Interest and rent 179 The value of bonds 184 The term structure of interest rates 191 My word is not my bond 194 8 The issuers of financial instruments 201 Capitalism or capitalisms? 201 Managing for value 211 Enterprise value 219 The values of corporate finance 221 9 The investors 233 High net worth individuals　236 Equity funds 243 Hedge funds 255 Pension funds 259 Notes 270 Index 28