Chapter 1Introduction e The relationship between investment and speculation o Function of securities Resources collocation- capital control right competition o Make property right distinct o Push forward national industry policy e Factors of investment o Revenue, income or yield o Risk or uncertainty o Liquidity
Chapter 1 Introduction The relationship between investment and speculation Function of securities ⚫ Resources collocation– capital control right competition ⚫ Make property right distinct ⚫ Push forward national industry policy Factors of investment ⚫ Revenue,income or yield ⚫ Risk or uncertainty ⚫ Liquidity
Chapter 1 Introduction o Law of investment Prospective income lead law Yield and risk symbiosis law o Security and money syntony law e Investments establishment o Harry Markowitz publish his famous article"Portfolio Selection"in Journal of Finance(December 1952) o William Sharpe "single-index model, see"A simplified Model of Portfolio Analysis", in Management Science(January 1963)
Chapter 1 Introduction Law of investment ⚫ Prospective income lead law ⚫ Yield and risk symbiosis law ⚫ Security and money syntony law Investments establishment ⚫ Harry Markowitz publish his famous article “Portfolio Selection” in Journal of Finance(December 1952) ⚫ William Sharpe “single-index model”,see “A simplified Model of Portfolio Analysis”, in Management Science (January 1963)
Chapter 1Introduction O Sharpe (1964), Lintner (1965), Mossin(1966)developed the famous Capital Asset Pricing Model. Sharpe, WF"Capital Asset Prices: A Theory of Market Equilibrium Under Conditions of Risk, "Journal of Finance (Sept1964) Lintner.J. The Valuation of Risk Asset and the Selection of Risky Investments in Stock Portfolios and Capital Budgets Review of Economics and Statistics(Feb. 1965) Mossin, J,"Equilibrium in a capital Market,, Econometrica (oct.1966) a Steve Ross(1976)& Richard Roll(1977, 1978), Arbitrage Pricing Theory, Ross, S.A. "The Arbitrage Theory of Capital Asset of Pricing, "Journal of Economic Theory(Dec 1976)
Chapter 1 Introduction Sharpe(1964), Lintner(1965), Mossin(1966) developed the famous Capital Asset Pricing Model. Sharpe,W.F. “Capital Asset Prices: A Theory of Market Equilibrium Under Conditions of Risk,” Journal of Finance (Sept.1964). Lintner,J. ,“ The Valuation of Risk Asset and the Selection of Risky Investments in Stock Portfolios and Capital Budgets,” Review of Economics and Statistics (Feb.1965). Mossin,J., “Equilibrium in a Capital Market” , Econometrica (Oct. 1966). Steve Ross(1976) & Richard Roll(1977,1978), Arbitrage Pricing Theory, Ross,S.A., “The Arbitrage Theory of Capital Asset of Pricing,” Journal of Economic Theory (Dec.1976)
Chapter 2 Security Market A security market can be defined as a mechanism for bringing together buyers and sellers of financial assets in order to facilitate trading. As opposed to primary market, security market are secondary market, because the financial assets traded on on them were issued at some previous point in time. One of their main function is price discovery, that is, to cause prices to reflect currently available information The quicker this is done, the more efficiently financial market will see that capital is allocated to its most productive opportunities
Chapter 2 Security Market A security market can be defined as a mechanism for bringing together buyers and sellers of financial assets in order to facilitate trading. As opposed to primary market, security market are secondary market, because the financial assets traded on on them were issued at some previous point in time. One of their main function is price discovery, that is , to cause prices to reflect currently available information. The quicker this is done, the more efficiently financial market will see that capital is allocated to its most productive opportunities
Chapter 2 Security Market o Structure of security market The primary market The primary market can be subdivided into seasoned and unseasoned new issues. A seasoned new issues refers to the offering of an additional amount of an already existing security, whereas an unseasoned new issue involves the initial offering of a security to the public. So the unseasoned new issues are often referred to as initial public offerings, or IPOs o The secondary market
Chapter 2 Security Market Structure of security market ⚫ The primary market The primary market can be subdivided into seasoned and unseasoned new issues. A seasoned new issues refers to the offering of an additional amount of an already existing security, whereas an unseasoned new issue involves the initial offering of a security to the public. So the unseasoned new issues are often referred to as initial public offerings, or IPO’s. ⚫ The secondary market