It assumes some knowledge of statistics and a familiarity with the concepts of net present value. Please feel free to link to this text, but do not download or reproduce the material without my permission, since it is copyrighted. I wish to thank the students in my 1996 Financial Management class for working with the notes to this book in the development phase, Ken Gray for his invaluable programming assistance and Zika Abzuk for system adminstration. I wish to thank my colleagues N. Prabhala, Geert Rouwenhorst and Campbell Harvey for their useful suggestions. I wish to thank Ibbotson Associates for the use of their Encorr software in the preparation of figures for this text.
All errors are the sole responsibility of the author.