1.Expanded coverage of capital budgeting takes place in Chapter 7 with the introduction of several new techniques that correspond with this topic. Discussion of short sales has also been expanded and repositioned into Chapter 7.
2.New topics added: Leasing as an alternative to traditional loan financing, with particular emphasis on automobile leasing has been added to Chapter 8.
3.Two new chapters: Chapters 10 and 11 are two new chapters that are included in the third edition. Chapter 10 covers the term structure of interest rates with expanded consideration of spot rates, forward rates, relationship with bond yields, and a section with detailed discussion of arbitrage. Chapter 11 covers important techniques in the management of assets and liabilities, such as duration, convexity, and immunization.
4.Computational approaches in the third edition have been modernized to reflect the widespread availability of calculators with exponential logarithmic capability, including those with built-in financial functions. The importance of the mastery of basic concepts techniques are stressed throughout the text which enable students to gain knowledge about the importance of calculators.
5.End of chapter exercises have expanded to 545. Each exercise is intended to illustrate a somewhat different point to keep the number of repetitious exercises to a minimum.
6.New chapter appendices contain such items as the more complex derivations, extended results of interest but not fundamental and additional formulas and techniques.
7.The basic mathematical theory of interest is covered in the first seven chapters as traditionally developed.
8.The pedagogical approach from the previous edition has been retained as the textbook narrative still emphasizes both the importance of conceptual understanding and the ability to apply the techniques to practical problems.
9.A working knowledge of calculus is required, since the continuous nature of interest is recognized throughout the book.
10.Economic and financial theory of interest is still covered in the third edition on Chapters 9 through 13.