金融技术分析.pptVIP

Investments Introduction to Investments Available Investment Options Put your money under your mattress. Put your money in the bank or buy bonds from the government. You will be guaranteed an interest rate and your money back with no risk or little risk. Buy bonds sold by corporations. You will earn a higher interest rate than what the bank or the government guaranteed, but you can loose little or all of your money. Other investment options that can earn you more: buy a business, buy real estate or invest in the market. Risk and Return Risk Adjusted Return Risk and Return Risk and Return Properties Diversification Effect Standard Deviation Investments How to Value Investments Valuing your Investment Valuing your Investment Valuing your Investment How much would you pay for each of these businesses? Valuing your Investment Let’s take a look at a simple case: How much would you pay for Jason’s gum business? Valuing your Investment How much would you pay for Jason’s gum business Jason buys 4 to 5 packs of gum at $0.25 on his way to school (There are 5 sticks in each pack of gum) Jason then sells each stick of gum for $0.25 during the school day. Jason earns a profit of $1 for each pack of gum or a total profit per day of $4 to $5 Jason has 6 more years of school Valuing Jason’s Gum Business If you are Jason’s classmate, then you also have 6 years of school left to run his gum business. There are 36 weeks of school each year. As such your earnings potential is (36wk*5days*$5=$900) or (36wk*5days*$4=$720) How much would you pay for a business that can earn you $720 to $900 per year? Is it $4,320 (720*6) or $5,400 (900*6)? Is it much less? Would you pay $1, if yes, then the value of the Jason’s gum business is between $1 and $5,400 Valuing your Investment Which building is a better deal? Valuing your Investment Which building is a better deal? Valuing your Investment Additional research show