投资学英文版课件Ch1 An Introduction to Investments.pptVIP

Definition Diversifiable risk The risk associated with the specific asset and is reduced through the construction of a diversified portfolio. Nondiversifiable Risk The risk associated with (1)fluctuating security prices in general (2)fluctuating interest rates (3)reinvestment rates (4)the loss of purchasing power through inflation (5)loss from changes in the value of exchange rates. They are not affected by the construction of a diversified portfolio. A. Nondiversifiable Risk 1 2 3 4 5 Fluctuating security prices in general Fluctuating interest rates Reinvestments rates The loss of purchasing power The loss from changes in the value of exchange rates 1-Fluctuating security prices in general Asset returns tend to move together. General security prices A specific security General security prices A specific security 2- Fluctuating interest rates A systematic negative relationship exists between the prices of fixed-income securities and changes in interest rates. Interest rates Prices of fixed-income securities The same relationship exists between common stock and interest rates. reasons Future cash flows from common stocks are being discounted at higher rates, so their present values are lower. The movement from stock to higher-paying debt instruments tends to depress stock prices. Substitute effect DDM的总公式及评价 公式特点：只包含股利这一个因素。 DMM最重要的性质：任意一期的预期收益率都等于市场资本报酬率k。 3- Reinvestments rates When reinvestment rates change, the amount received on these reinvested funds also changes. early 1980s-relatively high interest rates-high reinvested yields 2000s-lowest interest rates—earned loss on reinvested funds 2 examples 4- The loss of purchasing power Investors must also endure the loss of purchasing power through inflation. Rising prices of goods services Reducing purchasing power Declining income and asset values Investors should earn a return that exceeds the rate of inflation. 5- The loss from changes in the value of exchange rates If inves