投资学全英文ppt4

Chapter4ReturnandRiskCopyright©2014PearsonEducation,Inc.Allrightsreserved.4-2ReturnandRisksLearningGoals1.Reviewtheconceptofreturn,itscomponents,theforcesthataffecttheinvestor’slevelofreturn,andhistoricalreturns.2.Discusstheroleoftimevalueofmoneyinmeasuringreturnanddefiningasatisfactoryinvestment.3.Describereal,risk-free,andrequiredreturnsandthecalculationandapplicationofholdingperiodreturn.Copyright©2014PearsonEducation,Inc.Allrightsreserved.4-3ReturnandRisksLearningGoals(cont’d)4.Explaintheconceptandcalculationofyieldandhowtofindgrowthrates.5.Discussthekeysourcesofriskthatmightaffectpotentialinvestments.6.Understandtheriskofasingleasset,riskassessment,andthestepsthatcombinereturnandrisk.Copyright©2014PearsonEducation,Inc.Allrightsreserved.4-4TheConceptofReturn•Return–Thelevelofprofitfromaninvestment,or–Therewardforinvesting•ComponentsofReturn–Income:cashornear-cashthatisreceivedasaresultofowninganinvestment–Capitalgains(orlosses):thedifferencebetweentheproceedsfromthesaleofaninvestmentanditsoriginalpurchaseprice•TotalReturn:thesumoftheincomeandthecapitalgain(orloss)earnedonaninvestmentoveraspecifiedperiodoftimeCopyright©2014PearsonEducation,Inc.Allrightsreserved.4-5WhyReturnisImportant•Therateofreturnindicateshowrapidlyaninvestorcanbuildwealth.•Allowsusto“keepscore”onhowourinvestmentsaredoingcomparedtoourexpectations•HistoricalPerformance–Providesabasisforfutureexpectations–Doesnotguaranteefutureperformance•ExpectedReturn–Returnaninvestorthinksaninvestmentwillearninthefuture–DetermineswhataninvestoriswillingtopayforaninvestmentoriftheyarewillingtomakeaninvestmentCopyright©2014PearsonEducation,Inc.Allrightsreserved.4-6KeyFactorsinReturn•InternalCharacteristics–Typeorriskofinvestment–Issuer’smanagement–Issuer’sfinancing•ExternalForces–Politicalenvironment–Businessenvironment–Economicenvironment–Inflation–DeflationCopyright©2014PearsonEducation,Inc.Allrightsreserved.4-7Table4.4HistoricalReturnsforSelectAssetClasses(1900-2011)Copyright©2014PearsonEducation,Inc.Allrightsreserved.4-8TheTimeValueofMoneyandReturns•Thesooneryoureceiveareturnonagiveninvestment,thebetter•Adollarreceivedtodayisworthmorethanadollarreceivedinthefuture•Thesooneryourmoneycanbeginearninginterest,thefasteritwillgrowCopyright©2014PearsonEducation,Inc.Allrightsreserved.4-9DeterminingaSatisfactoryInvestment•SatisfactoryInvestment:oneforwhichthepresentvalueofbenefitsequalsorexceedsthepresentvalueofitscostsCopyright©2014PearsonEducation,Inc.Allrightsreserved.4-10MeasuringReturn•RequiredReturn–TherateofreturnaninvestormustearnonaninvestmenttobefullycompensatedforitsriskRequiredreturnoninvestmentj=Realrateofreturn+Expectedinflationpremium+RiskpremiumforinvestmentjRequiredreturnoninvestmentj=Risk-freerate+RiskpremiumforinvestmentjCopyright©2014PearsonEducation,Inc.Allrightsreserved.4-11MeasuringReturn(cont’d)•RealRateofReturn–Equalsthenominalrateofreturnminustheinflationrate–Measuresthechangeinpurchasingpowerprovidedbyaninvestment•ExpectedInflationPremium–TheaveragerateofinflationexpectedinthefutureCopyright©2014PearsonEducation,Inc.Allrightsreserved.4-12MeasuringReturn(cont’d)•Risk-freeRate–Therateofreturnthatcanbeearnedonarisk-freeinvestment–Themostcommon“risk-free”investmentisconsideredtobethe3-monthU.S.TreasuryBillRisk-freerate=Realrateofreturn+Expectedinflationpremium*FrrIPCopyright©2014PearsonEducation,Inc.Allrightsreserved.4-13MeasuringReturn(cont’d)•RiskPremium–Additionalreturnaninvestorrequiresonariskyinvestmenttocompensateforrisksbaseduponissueandissuercharacteristics–Issuecharacteristicsarethetype,maturityandfeatures–IssuercharacteristicsareindustryandcompanyfactorsCopyright©2014PearsonEducation,Inc.Allrightsreserved.4-14HoldingPeriodReturn(HPR)•HoldingPeriod:theperiodoftimeoverwhichaninvestorwishestomeasurethereturnonaninvestmentvehicle•RealizedReturn:currentreturnactuallyreceivedbyaninvestorduringthegivenreturnperiod•PaperReturn:returnthathasbeenachievedbutnotyetrealized(nosalehastakenplace)Copyright©2014PearsonEducation,Inc.Allrightsreserved.4-15HoldingPeriodReturn(HPR)•HoldingPeriodReturn–Thetotalreturnearnedfromholdinganinvestmentforaspecifiedholdingperiod(usually1yearorless)IncomeCapitalgain(orloss)duringperiodduringperiodHoldingperiodreturnBeginninginvestmentvalueCapitalgain(orloss)duringperiod=Endinginvestmentvalue-BeginninginvestmentvalueCopyright©2014PearsonEducation,Inc.Allrightsreserved.4-16Table4.6KeyFinancialVariablesforFourInvestmentsCopyright©2014PearsonEducation,Inc.Allrightsreserved.4-17UsingHPRinInvestmentDecisions•AdvantagesofHoldingPeriodReturn–Easytocalculate–Easytounderstand–Considersincomeandgrowth•DisadvantagesofHoldingPeriodReturn–Doesnotconsidertimevalueofmoney–RatemaybeinaccurateiftimeperiodislongerthanoneyearCopyright©2014PearsonEducation,Inc.Allrightsreserved.4-18Yield:InternalRateofReturn(IRR)•InternalRateofReturn:determinesthecompoundannualrateofreturnearnedonaninvestmentheldforlongerthanoneyear•Yield(IRR)Example:Whatistheyield(IRR)onaninvestmentcosting$1,000todaythatyouexpectwillbeworth$1,400attheend