le01TheInvestmentSetting(资产定价-上海交大,蔡明超).pptxVIP

Lec 1The Investment Setting;;Why Do Individuals Invest ?;LOS a: concept of required rate of return and components of an investors required rate of return.;How Do We Measure The Rate Of Return On An Investment ?; People’s willingness to pay the difference for borrowing today and their desire to receive a surplus on their savings give rise to an interest rate referred to as the pure time value of money.; If the future payment will be diminished in value because of inflation, then the investor will demand an interest rate higher than the pure time value of money to also cover the expected inflat