2015财务管理专业英语unit6.pptVIP

Risk and return Wisdom Wisdom He is the part of wise man to keep himself today for tomorrow, and not venture all his eggs in one basket. ——Cervantes, Don Quixote 他是智者中的一员，为明天而在今天保存自己，不会冒险把鸡蛋放在同一个篮子里。 The reason why corporations do not enter gambles with volatile payoffs and small positive expected returns is that managers know that generally volatility matters. ——Rene M.Stulz 一些企业之所以没有涉足到一些带有极大不确定性回报和预期收益很小的类似赌博似的业务中，是因为经理人知道极大的不确定性是存在的。 Mini case For many people it is quite acceptable to risk $20 every week in the lottery, in view of potential returns of hundreds of thousands (or even millions) of dollars. When you buy a lottery ticket, the risk of losing your $20 is very high (how often have you won anything at lotto). How much you will be willing to risk, given a set probability of winning or losing, depends on your character——you may be a risk-lover or you may be risk-averse. Words study 3.Expected return 期望收益 Expected return refers to the expected change in the value of an asset over a given (future) time period. Since we cannot know the future, we have to make a guess as to what to “expect”, based on what has happened to returns in the past. 4.Radom variable 随机变量 5.Probability 概率 The uncertainty of future outcomes is usually expressed in terms of probability and plotted in a probability distribution which can be expressed as an equation called the probability distribution function. Words study Words study Words study 10. investor rationality 投资者的理性 Investor rationality implies that investors behave as if they were rational and possessed a full knowledge of all available market information to a high degree of accuracy. Rational behavior means that individuals maximize some objective function——their utility function——under the constraints that they face. 11.Institu