ch01THE INVESTMENT SETTING(投资学,赖利).ppt

Copyright ? 2003 by Harcourt Brace & Company All rights reserved Chapter 1 THE INVESTMENT SETTING Chapter 1 Questions What is an investment ? What are the components of the required rate of return on an investment? What key issues should investors always consider? What types of investments can one make? Chapter 1 Questions Where do U.S. investors place funds for investment and savings purposes? What are some basic investment philosophies that individual and institutional investors follow? Why are ethics and regulations a concern to all investment professionals? What are some career paths available for persons interested in investments? What is an investment ? An investment is the current commitment of resources for a period of time in the expectation of receiving future resources greater than the current outlay. What is an investment ? Is hiding money in a mattress or keeping it in a piggy bank an investment ? No! The “safe-keeping” of money does not involve any expected compensation. What is an investment ? How about baseball cards or Beanie Babies? Are they an investment? Possibly, but compensation is highly uncertain, and some of the value of ownership may be “sentimental” rather than financial in nature. Components Of The Required Rate of Return In order to part with their money, investors require compensation for: the time resources are committed the expected rate of inflation the uncertainty of the future payments Compensation for time: The real risk-free rate of interest is the exchange rate between future consumption and present consumption. This rate of interest can be thought of as the “pure” rental rate on money in the absence of inflation and risk. Why is the real risk-free rate positive? Borrowers are willing to pay to be able to spend more than their current resources allow. Savers need compensation in order to give up the right to consume today. Compensation for expected inflation: If the future payment will be diminished in value because