copyright © 2004 south-western 27 the basic tools of finance grundvallar verkfæri sem notuð eru...
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Copyright © 2004 South-Western
2727The Basic Tools of Finance
Grundvallar verkfæri sem notuð eru í
fjármálum
Copyright © 2004 South-Western
• Finance is the field that studies how people make decisions regarding the allocation of resources over time and the handling of risk. Fjármál fjalla um hvernig fólk tekur ákvarðanir um tilfærslu/ráðstöfun auðlinda yfir tíma og meðhöndlun áhættu.
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PRESENT VALUE: MEASURING THE TIME VALUE OF MONEY
• Present value refers to the amount of money today that would be needed to produce, using prevailing interest rates, a given future amount of money.
Núvirði vísar til þess peningamagns sem þyrfti í dag, byggt almennum vöxtum, til að skila tiltekinni upphæð í framtíðinni.
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PRESENT VALUE: MEASURING THE TIME VALUE OF MONEY
• Future Value Future Value FramtíðarvirðiFramtíðarvirði• The amount of money in the future that an amount
of money today will yield, given prevailing interest rates (að gefnum almennu vaxtastigi), is called the future value.
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MANAGING RISK
• A person is said to be risk averse (áhættufælin persóna) if she exhibits a dislike of uncertainty (ef er á móti áhættu).
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MANAGING RISK
• Individuals can reduce risk choosing any of the following:• Buy insurance• Diversify• Accept a lower return on their investments
Figure 1 Risk Aversion
Wealth0
Utility
Currentwealth $1,000
gain$1,000loss
Utility lossfrom losing$1,000
Utility gainfrom winning$1,000
Copyright©2004 South-Western
Copyright © 2004 South-Western
The Markets for Insurance
• One way to deal with risk is to buy insuranceinsurance (ein leið til að glíma við áhættu er að kaupa (ein leið til að glíma við áhættu er að kaupa tryggingu).tryggingu).
• The general feature of insurance contracts is that a person facing a risk pays a fee to an insurance company, which in return agrees to accept all or part of the risk. (Almennir eiginleikar tryggingasamninga eru þeir að aðilar greiði þóknun til tryggingafyrirtækis, sem í staðinn skuldbindur sig til að standa undir hluta eða allri ábyrgð sem áhættunni fylgir.)
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Diversification of Idiosyncratic Risk
• Diversification (Systematic risk) refers to the reduction of risk achieved by replacing a single risk with a large number of smaller unrelated risks.
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Diversification of Idiosyncratic Risk
• Idiosyncratic risk (Unsystematic risk) is the risk that affects only a single person. The uncertainty associated with specific companies.
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Diversification of Idiosyncratic Risk
• Aggregate risk (Heildaráhætta) is the risk that affects all economic actors at once, the uncertainty associated with the entire economy.
• Diversification cannot remove aggregate risk. (Fjölþætting getur ekki eytt heimldaráhættu)
Figure 2 Diversification
Number ofStocks inPortfolio
49
(More risk)
(Less risk)
20
0 1 4 6 8 10 20 40
Risk (standarddeviation of
portfolio return)
Aggregaterisk
Idiosyncraticrisk
30
Copyright©2004 South-Western
Copyright © 2004 South-Western
Diversification of Idiosyncratic Risk
• People can reduce risk by accepting a lower rate of return. Fólk getur dregið úr áhættu, með því að sætta sig við lægri ávöxtun.
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Efficient Markets Hypothesis
• The efficient markets hypothesis is the theory that asset prices reflect all publicly available information about the value of an asset. Tilgátan um skilvirkan markað felur í sér kenningu um að eignaverð endurspegli upplýsingar aðgengar almenningi um virði eigna.
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CASE STUDY: Random Walks and Index Funds
• Random walk refers to the path of a variable whose changes are impossible to predict. (Ráf / slembiganga, tengist markaðsskilvirkni og felur í sér leitni í breytu sem ómögulegt er að spá fyrir um.)
• If markets are efficient, all stocks are fairly valued and no stock is more likely to appreciate than another. Thus stock prices follow a random walk. (Sé markaður skilvirkur, þá eru öll hlutabréf verðlögð á sanngjarnan máta og engin þeirra líklegri til að verðfalla frekar en önnur).