The Absence of Change in the Best-Selling Introductory Finance Textbook

Abstract

This short paper examines the absence of change in the current best-selling introductory finance textbook, Ross, Westerfeld and Jordan’s Fundamentals of Corporate Finance. The first edition was published in 1991 and the current edition, the tenth, was published in 2012. We do not attempt an extensive review but instead investigate several topics that have seen a shift in belief due to recent events and research over the last 20 years. These topics include market efficiency, the distribution of stock returns and the capital asset pricing model. We find that in spite of all the recent events that have changed the way we view finance in the last 20 years, very little has changed in the textbook on these topics.

Keywords: Finance Textbook, Behavioral Finance, Fat Tails

JEL Classification: A2