公司理财英文课件Chap010.ppt

Risk and Return Lessons from Market History Key Concepts and Skills Know how to calculate the return on an investment Know how to calculate the standard deviation of an investment’s returns Understand the historical returns and risks on various types of investments Understand the importance of the normal distribution Understand the difference between arithmetic and geometric average returns Chapter Outline 10.1 Returns 10.2 Holding-Period Returns 10.3 Return Statistics 10.4 Average Stock Returns and Risk-Free Returns 10.5 Risk Statistics 10.6 More on Average Returns 10.1 Returns Dollar Returns the sum of the cash received and the change in value of the asset, in dollars. Returns Dollar Return = Dividend + Change in Market Value Returns: Example Suppose you bought 100 shares of Wal-Mart (WMT) one year ago today at $25. Over the last year, you received $20 in dividends (20 cents per share × 100 shares). At the end of the year, the stock sells for $30. How did you do? Quite well. You invested $25 × 100 = $2,500. At the end of the year, you have stock worth $3,000 and cash dividends of $20. Your dollar gain was $520 = $20 + ($3,000 – $2,500). Your percentage gain for the year is: Returns: Example Dollar Return: $520 gain 10.2 Holding-Period Returns The holding period return is the return that an investor would get when holding an investment over a period of n years, when the return during year i is given as ri: Holding-Period Return: Example Suppose your investment provides the following returns over a four-year period: Holding-Period Returns A famous set of studies dealing with rates of returns on common stocks, bonds, and Treasury bills was conducted by Roger Ibbotson and Rex Sinquefield. They present year-by-year historical rates of return starting in 1926 for the following five important types of financial instruments in the United States: Large-company Common Stocks Small-company Common Stocks Long-term Corporate Bonds Long-term U.S. Government Bonds U.S. Treas