Beruflich Dokumente
Kultur Dokumente
1-1
Real Assets
Assets used to produce goods and services
Financial Assets
Claims on real assets
1-3
Derivative securities
1-4
Consumption Timing
Shift the purchasing power from high-earning periods to low-earning periods
Allocation of Risk
Allow investors with the greater taste for risk bear that risk.
1-5
1-7
Forming a portfolio
A portfolio is the collection of investment assets Asset allocation Choice among broad asset classes such as stocks, bonds, real estate, commodities... Security selection Choice of which securities to hold within asset class Security Analysis 1-8
Risk-Return Trade-Off
Higher expected return means higher investment risk There is a trade-off between risk and return in the securities market
1-9
Active Management
Finding mispriced securities Timing the market
1-10
The Players
Households-Net Lender (Government) Firms-Net Borrower (Government)
Direct markets
Financial Intermediaries
1-11
1-12
1-13
Recent Trends
1) Globalization
Investors do not have to limit themselves to the domestic assets Foreign securities offered in dollars, Mutual funds that invest internationally, Derivative securities with payoffs that depend on prices in foreign security markets...
1-14
Internet
Information is made cheaply and widely available to the public 1-16