对外经济贸易大学投资学.ppt

Lecture3RiskandReturn

KeyConceptsandSkillsKnowhowtocalculatethereturnonaninvestmentUnderstandthehistoricalreturnsonvarioustypesofinvestmentsUnderstandthehistoricalrisksonvarioustypesofinvestments321

Risk,ReturnandFinancialMarketsWecanexaminereturnsinthefinancialmarketstohelpusdeterminetheappropriatereturnsonnon-financialassetsLessonsfromcapitalmarkethistoryThereisarewardforbearingriskThegreaterthepotentialreward,thegreatertheriskThisiscalledtherisk-returntrade-off

DollarReturnsTotaldollarreturn=incomefrominvestment+capitalgain(loss)duetochangeinpriceExample:Youboughtabondfor$950oneyearago.Youhavereceivedtwocouponsof$30each.Youcansellthebondfor$975today.Whatisyourtotaldollarreturn?Income=30+30=60Capitalgain=975–950=25Totaldollarreturn=60+25=$85

PercentageReturns1Itisgenerallymoreintuitivetothinkintermsofpercentagesthanindollarreturns2Dividendyield=income/beginningprice3Capitalgainsyield=(endingprice–beginningprice)/beginningprice4Totalpercentagereturn=dividendyield+capitalgainsyield

Example–CalculatingReturnsYouboughtastockfor$35andyoureceiveddividendsof$1.25.Thestockisnowsellingfor$40.Whatisyourdollarreturn?Dollarreturn=1.25+(40–35)=$6.25Whatisyourpercentagereturn?Dividendyield=1.25/35=3.57%Capitalgainsyield=(40–35)/35=14.29%Totalpercentagereturn=3.57+14.29=17.86%

CompoundreturnConventionsforquotingratesofreturn:UsuallyweuseAPR,annualpercentagerateAPR=per-periodrate*periodsperyearSometimesweuseEAR(effectiveannualrate)Incontinuoustime,EAR=eAPR-1St=S0ert,sorateofreturnequalLn(St/S0)

RateofReturn-exampleSupposeyoubuyT-billmaturinginonemonthfor$9,900.HPR=(10000-9900)/9900=1.01%APR=1.01%*12=12.12%EAR=(1+1.01%)12-1=12.82%3214

Figure12.4

Year-to-YearTotalReturnsLarge-Compa