Samenvatting

Concise summary of all lectures of Investment Analysis - MSc Finance - Tilburg University

14 keer verkocht

Instelling
Tilburg University (UVT)

This is a concise summary of all lectures of Investment Analysis at Tilburg University - MSc Finance. This summary will save you time in learning for the exam, because it mitigates the unnecessary parts of the lectures and give you a to the point view of what you need to know for the test. Good luc...

[Meer zien]

Voorbeeld 4 van de 43 pagina's

Bekijk voorbeeld

Geupload op 16 oktober 2023
Aantal pagina's 43
Geschreven in 2023/2024
Type Samenvatting

finance
investment
analysis
markowitz
bonds
securities
portfolio
investing
investments
duration
convexity

Lecture 1: Contents
Investments & Financial Assets
 Essential nature of investment:
o Reduced current consumption
o Planned later consumption

 Real Assets
o Assets used to produce goods and services (Land, Buildings, Machines)

 Financial Assets
o Claims on real assets (Stocks, Bonds)
Financial Markets and the Economy
 Informational role of financial markets
o Financial markets play a central rol in the allocation of capital resources
 Consumption Timing
 Allocation of Risks
 Separation of Ownership and Management
o Agency issues (Corporate Governance and Corporate Ethics)
- Huge accounting scandals in the past (Enron, Royal Ahold, Bernard L.
Madoff Investment Securities LLC, Libor rate scandal)
- Auditing Scandals
- Analyst scandals: Favorable stock analysis in exchange fore for the
promise of future investment banking business
- Sarbanes-Oxley Act/Code Tabaksblat (Netherlands) – Tighten the rules
of corporate governance
Consumption Timing – Example
 There are two periods and in each period I have an
income of $10,000, saving and borrowing is
possible at an interest rate of 5%

1. Consume $10,000 in both periods, consume
$10,000 in both periods

2. Save all money of the first period and
consume everything in the second period,
consume $0 in the first period and $10,000 x
1.05 + $10,000 = $20,500 in the second period

3. Consume everything now, consume $10,000 +
$10,000 /1.05 = $19,524 in the first period and
consume $0 in the second period

,Indifference Curves
 The investor is indifferenct whether he obtains point A,
B or C along curve I1

 All choices along I1 will be preferred to choices on I2

 If you have not much to consume in period 1, extra
period 1 consumption requires larger efforts of period 2
consumption.

 The steepness of the indifference curve for a given
person depends on the personal preferences – such as
risk-aversion
The Investment Process
 Portfolio: Collection of Invesment Assets
o Asset allocation (choice among broad range of asset classes)
o Security selection (choice of securities within each asset class)

 Security Analysis: valuation
o Top-down – asset allocation – pick securities
o Bottom-up – attractively priced securities, without much concern for asset
allocation
Markets are Competitive
 Risk-Return Trade-Off
o Assets are priced in line with risks

 Active Management
o Finding mispriced securities
o Timing the market

 Passive Management
o No attempt to find undervalued securities
o No attempt to time the market
o Holding a highly diversified portfolio
o Trading costs/management fees are much lower

,The players
 Firms – net borrowers
 Households – net savers
 Governments – can be both borrowers and savers
 Financial intermediaries
o Investment companies
o Pension funds
o Banks
o Insurance companies
 Invesment Banks
o Perform specialized services for businesses, for example IPO
o SEO/SPO
o Handles the marketing of securities in the primary market
 Venture Capital – active role in the management of start-ups
 Private Equity – investment in not publicly traded firms
Financial Markets
 Money Markets – short term, liquid, low-risk
o T-Bills
o Certificates of Deposits
o Commercial paper
o Bankers’ acceptance
o Eurodollars
o Repurchase agreements
o Federal Funds
o Brokers’ Calls
o LIBOR and its replacements
o Bond Market – Longer term borrowing or debt instruments
 Treasury notes and bonds
 Municipal bonds
 Corporate bonds
 Mortgage securities
 Federal agency debt
 Capital Markets – longer term, more risky
o Common stock
 Ownership share
 1 share 1 vote
 Board of directors, elected by shareholders (owners)
 Residual claim – last in line on assets and income
 Limited liability – max potential loss is original investment
 Dividend yield
 Capital gains

, o Preferred stock – features of equity and debt
 Fixed amount of income
 No voting power
 Obligation to pay interest, but not dividend
 Payments are treated as dividends, not tax-deductible for firm
o Derivative Assets – a claim whose value is contingent on the value of some
underlying asset
 Options (call/put)
 Right to buy or sell
 Exercised only when profitable
 Must be purchased
 Futures
 Obligation to make or take delivery
 Obligation to buy/sell at futures price
 Contracts are entered without costs

Lecture 2:
Chapter 3 How securities are traded
How firms issue securities
 Firms can issue securities by borrowing money or selling shares
o Primary market – new issue of securities
o Secondary market – trading existing securities on exchanges or OTC markets
 Both publicly listed firms and private corporations have shares, but the
first are traded publicly in markets, while the latter are held by a small
number of managers and investors
Publicly traded companies
 IPO
o Road shows
o Bookbuilding
o Underwriters bears price risk
 SEO
o Public offerings of stocks/bonds are marketed by underwriters

Dit zijn jouw voordelen als je samenvattingen koopt bij Stuvia:

Bewezen kwaliteit door reviews

Studenten hebben al meer dan 850.000 samenvattingen beoordeeld. Zo weet jij zeker dat je de beste keuze maakt!

In een paar klikken geregeld

Geen gedoe — betaal gewoon eenmalig met iDeal, creditcard of je Stuvia-tegoed en je bent klaar. Geen abonnement nodig.

Direct to-the-point

Studenten maken samenvattingen voor studenten. Dat betekent: actuele inhoud waar jij écht wat aan hebt. Geen overbodige details!

Veelgestelde vragen

Wat krijg ik als ik dit document koop?

Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.

Tevredenheidsgarantie: hoe werkt dat?

Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.

Van wie koop ik deze samenvatting?

Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper mathijssnijders. Stuvia faciliteert de betaling aan de verkoper.

Zit ik meteen vast aan een abonnement?

Nee, je koopt alleen deze samenvatting voor €5,92. Je zit daarna nergens aan vast.

Is Stuvia te vertrouwen?

4,6 sterren op Google & Trustpilot (+1000 reviews)

Afgelopen 30 dagen zijn er 68175 samenvattingen verkocht

Opgericht in 2010, al 15 jaar dé plek om samenvattingen te kopen

Begin nu gratis