... rate
Depends on economic conditions
Less than 1 percent in the late 1990s
Exceeded 3 percent in 20 02
23
Corporate Bonds (cont’d)
Corporate bond yields and risk (cont’d)
Investor assessment of ... bonds
2
Chapter Outline
Background on bonds
Treasury and federal agency bonds
Municipal bonds
Corporate bonds
Institutional use of bond markets
Globalization of bond mar...
... is
this bond’s bond price elasticity?
53.0
%7
%7%9
24 .27 3,1$
24 .27 3,1$61.080,1$
in change percent
in change percent
−=
−
−
=
=
k
P
p
e
26
Sensitivity of Bond Prices to
Interest Rate Movements ... duration of this bond?
years 92. 1
)10.1(
090,1$
)10.1(
90$
)10.1(
)2( 090,1$
)10.1(
90$
)1(
)1(
)(
DUR
21
21
1
1
=
+
+
=
+
+
=
∑
∑
=
=
n
t
t
t
n
t
t
t
k
C
k
tC
28
Sensitivity of...
... chức năng thứ 2 của tài sản tài chính.
III. THỊ TRƯỜNG TÀI CHÍNH:
1. Khái niệm về thị trường
Thị trường tài chính thể hiện rất nhạy cảm mọi hoạt động của các thị trường
hàng hoá và dịch vụ. ... tồn tài một thị
trường vốn thuần tuý mà phải tồn tại một thị trường tài chính bao gồm cả thị trường
vốn và thị trường tiền tệ hỗn hợp.
4 .2. Mối...
... quotations
23
Computing A Dividend Yield
XYZ Corporation annual dividend is $1. 02 per
share. XYZ’s prevailing stock price is $20 .
What is the annual dividend yield of XYZ
stock?
%10.5
20 $
02. 1$
price ... institutional investors
About 2 percent of IPO shares are offered as allotments to
brokerage firms
12
Initial Public Offerings (cont’d)
Abuses in the IPO market
In 20...
... ECNs
26
Computing the Spread
Your broker quotes a bid price of $28 .50 and
an ask price of $29 .05 for Palmetto stock.
What is the bid-ask spread?
%89.1
05 .29 $
50 .28 $05 .29 $
Spread
=
−
=
27
How ... year period. What would
the return on the margin transaction have been in this case?
%18
25 $
50$ .27 $25 $47$
−=
+−−
=
+−−
=
INV
DLOANINVSP
R
11
Stock Market Transactions (cont’d)...
...
of the stock according to the adjusted
dividend discount model?
29 .54$
)13.1(
82. 78$
)13.1(
2$
)13.1(
2$
)13.1(
2$
)13.1(
2$
44 321
=
++++=PV
16
Stock Valuation Methods (cont’d)
Adjusting the ... years?
82. 78$ 726 .11$
industry) of ratio (PE years)4 in Earnings( years4 in price Stock
=×=
×=
15
Using the Adjusted Dividend
Discount Model (cont’d)
Parker is expected to pay...
... option
premiums
12
Background on Options (cont’d)
Stock option quotations (cont’d)
Strike Exp. Vol. Call Vol. Put
McDonald’s 45 Jun 180 4 1 /2 60 2 3/4
45 Oct 70 5 3/4 120 3 3/4
50 Jun 360 ... exercise price of $53 and a premium of $2. If the
stock price of XYZ stock is $47 when the option expires,
what is Mary’s net gain?
share per 4 $2$ 47$53$ =−−
2
Chapter Outline
Backgro...
...
Discount
Open High Low Settle Change Settle Change Open
Sept 20 05 93.80 94.05 93.80 94.05 + .28 5.95 – .28 2, 519
12
Characteristic of
Futures Contract
Treasury Bond Futures Treasury ... point
Minimum price
fluctuation
One thirty-second (1/ 32) of a point,
or $31 .25 per contract
One thirty-second (1/ 32) of a
point, or $31 .25 per contract
Daily trading limits Three points (...
... estate investments
The value of stock portfolios managed by insurance companies
declined in 20 01 20 02
35
Exposure to Risk (cont’d)
Liquidity risk
A high frequency of claims at a single point ... companies have a much higher concentration on
government bonds than life insurance companies
22
Property and Casualty Insurance
Operations (cont’d)
Property and casualty reinsurance:...