Escolar Documentos
Profissional Documentos
Cultura Documentos
by
Robert A. Strong
University of Maine
PowerPoint Presentation
by
Yee-Tien Fu
National Cheng-Chi University Taipei, Taiwan
South-Western / Thomson Learning 2004
CHAPTER ONE
Outline
Investing Defined
Investment Alternatives
Assets Securities Security Groupings
1-3
Outline
The Academic Study of Investments
Theoretical Research Empirical Research Professors vs. Practitioners
1-4
Investing Defined
To consume, to save, or to invest a dollar that is earned ? Both saving and investing amount to consumption shifting through time. However, saving involves little, if any, risk, while investing is a risky endeavor.
1-5
Investment Alternatives
Assets are things that people own.
Financial assets have a corresponding liability, while real assets do not. Assets
Financial Assets e.g. bond, stock Real Assets e.g. land
1-6
Investment Alternatives
A security is a legal document that shows an ownership interest. Although securities are historically associated with financial assets, they are also applicable to real assets. Securitization is the process of converting an asset or collection of assets into a more marketable form.
1-7
Investment Alternatives
There are three broad categories of securities. Securities Equity Securities e.g. common stock Fixed Income Securities e.g. bonds, preferred stock Derivative Assets e.g. futures, options
1-8
E.g. arbitrage relationships, impact of stock splits and cash dividends on investors
Theoretical models are frequently tested by conducting empirical research.
1 - 10
An anomaly is an observed result that defies explanation within the known theoretical framework.
1 - 11
vs.
Professors
Practitioners
The investment community can learn much from both rigorous academic research and from the life experiences of people on the front lines of the marketplace.
1 - 12
Review
Investing Defined
Investment Alternatives
Assets Securities Security Groupings
1 - 13
Review
The Academic Study of Investments
Theoretical Research Empirical Research Professors vs. Practitioners
1 - 14