INVESTMENTS 投资学 （博迪BODIE, KANE, MARCUS）Chap001 The Investment Environment.ppt

Chapter 1 The Investment Environment Systemic Risk and the Real Economy Add liquidity to reduce insolvency risk and break a vicious circle of valuation risk/counterparty risk/liquidity risk Increase transparency of structured products like CDS contracts Change incentives to discourage excessive risk-taking and to reduce agency problems at rating agencies * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * INVESTMENTS | BODIE, KANE, MARCUS INVESTMENTS | BODIE, KANE, MARCUS Copyright ? 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Real Assets Versus Financial Assets Real Assets Determine the productive capacity and net income of the economy Examples: Land, buildings, machines, knowledge used to produce goods and services Financial Assets Claims on real assets Financial Assets Three types: Fixed income or debt Common stock or equity Derivative securities Fixed Income Payments fixed or determined by a formula Money market debt: short term, highly marketable, usually low credit risk Capital market debt: long term bonds, can be safe or risky Common Stock and Derivatives Common Stock is equity or ownership in a corporation. Payments to stockholders are not fixed, but depend on the success of the firm Derivatives Value derives from prices of other securities, such as stocks and bonds Used to transfer risk Financial Markets and the Economy Information Role: Capital flows to companies with best prospects Consumption Timing: Use securities to store wealth and transfer consumption to the future Financial Markets and the Economy (Ctd.) Allocation of Risk: Investors can select securities consistent with their tastes for risk Separation of Ownership and Management: With stability comes agency problems Financial Markets and the Economy (Ctd.) Corporate Governance and Corporate Ethics Accounting Scandals Examples – Enron, Rite Aid, HealthSouth Auditors – watchdogs of the firms Analyst Scandals Arthur Andersen Sarbanes-Oxley Act