Key Sources of Financial Information参考.ppt

Key Sources of Financial Information ? Learning Objectives ? To identify important sources of information about the global financial system. To understand why the efficient distribution of information within the financial system is important. To learn how market participants keep track of the prices of financial assets. To learn about the content and concepts behind the main social accounting systems. Introduction Sound financial decisions require adequate and accurate financial information. We may divide the sources of information relied on by financial decision makers into: debt security prices and yields, stock prices and dividend yields, information on security issuers, general economic and financial conditions, and social accounting data. Efficient Markets Asymmetric Information The efficient markets hypothesis (EMH) contends that information relevant to the pricing (valuation) of loans, securities, and other financial assets is readily available to all borrowers and lenders at negligible cost. Efficient Markets Asymmetric Information On the other hand, the concept of asymmetric information argues that the financial marketplace contains pockets of inefficiency in the availability and use of information, such that insiders can earn excess returns by selectively trading assets based on the special information they have been able to acquire. Efficient Markets Asymmetric Information In an efficient marketplace, each individual investor will rationally use all the relevant information that is available to value stocks and bonds. Hence, each financial asset will generate an ordinary or normal rate of return commensurate with its level of risk. Efficient Markets Asymmetric Information According to the capital asset pricing model (CAPM), the expected return on financial asset (or portfolio of assets) i, E(Ri), is: Efficient Markets Asymmetric Information The line or curve described by the CAPM equation is usually called the security market line (SML). Efficient Ma