TAILIEUCHUNG - Lecture Investments (Special Indian Edition): Chapter 5 - Bodie, Kane, Marcus

Casual observation and formal research both suggest that investment risk is as important to investors as expected return. while we have theories about the relationship between risk and expected return that would prevail in rational capital markets, there is no theory about the levels of risk we should find in the marketplace. we can at best estimate the level of risk likely to confront investors by analyzing historical experience. | Chapter 5 History of Interest Rates and Risk Premiums Factors Influencing Rates Supply Households Demand Businesses Government’s Net Supply and/or Demand Federal Reserve Actions Q0 Q1 r0 r1 Funds Interest Rates Supply Demand Interest Rates Supply Q0 Q1 r0 r1 Funds Demand Level of Interest Rates Fisher effect: Approximation nominal rate = real rate + inflation premium R = r + i or r = R - i Example r = 3%, i = 6% R = 9% = 3% + 6% or 3% = 9% - 6% Fisher effect: Exact r = (R - i) / (1 + i) = (9%-6%) / () Empirical Relationship: Inflation and interest rates move closely together Real vs. Nominal Rates HPR = Holding Period Return P0 = Beginning price P1 = Ending price D1 = Dividend during period one Rates of Return: Single Period Ending Price = 48 Beginning Price = 40 Dividend = 2 HPR = (48 - 40 + 2 )/ (40) = 25% Rates of Return: Single Period Example 1) Mean: most likely value 2) Variance or standard deviation 3) Skewness * If a distribution is approximately normal, the distribution is described by characteristics 1 and 2. Characteristics of Probability Distributions Symmetric distribution mean . . Normal Distribution Subjective returns p(s) = probability of a state r(s) = return if a state occurs 1 to s states Mean Scenario or Subjective Returns State Prob. of State r in State 1 2 .2 .05 3 .4 .15 4 .2 .25 5 .1 .35 E(r) = (.1)() + (.2)(.05).+ (.1)(.35) E(r) = .15 Scenario or Subjective Returns: Example Standard deviation = [variance]1/2 Subjective or Scenario Var =[(.1)()2+(.2)(.05- .15)2.+ .1(.)2] Var= .01199 [ .01199] 1/2 = .1095 Using Our Example: Variance or Dispersion of Returns Geom. Arith. Stan. Series Mean% Mean% Dev.% Sm Stk Lg Stk LT Gov T-Bills Inflation Annual Holding Period Returns (Arithmetic) Risk Real Series Premiums% Returns% Sm Stk Lg Stk LT Gov T-Bills --- Inflation --- --- Risk Premiums Real Returns

• Quỹ đầu tư
• Lecture Investments
• Portfolio theory
• Equilibrium in capital markets
• Investment environment
• Financial instruments
• Factors influencing rates
• Accounting principles
• Lecture Accounting principles
• Financial reporting
• Classifying investments
• Accounting for trading investments
• Strategic investments
• International operations
• Noninfluential investments
• Motivation for investments
• Fundamental accounting principles
• Lecture Fundamental accounting principles
• Financial accounting
• Lecture Financial accounting
• Accounting system
• Interpreting investments
• Passive investments
• Equity securities
• Investments in stock
• Survey of accounting
• Lecture Survey of accounting
• Capital investments
• Planning for capital investments
• Reinvestment assumption
• Internal rate of return
• Intermediate accounting
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• Investments in debt securities
• Investments in equity securities
• Available for sale securities
• Debt investments
• Stock investments
• Financial statements
• Nguyên lý kế toán
• Managerial Accounting
• Lecture Managerial Accounting
• Kế toán quản trị
• Capital budgeting evaluation
• Accounting for cash
• Accounting cycle
• Business decision
• Kế toán tài chính
• Analyzing investments
• Financial information
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• Intercorporate equity investments
• Minority passive investments
• Acquisition method
• Investment analysis
• Principles of portfolio
• Equity analysis
• Portfolio management
• Market organization
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• Investment management products
• Portfolio risk
• Portfolio planning
• Company analysis
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