10/4/16
Use Excel or Google Sheets
All formulas start with =
Addi9on, subtrac9on: =B5 + C5 D5
Func9ons and help
FormaFng cells
Freeze panes
Absolute vs. rela9ve references
Excel
Excel
3
5
Pair and share: Find a+b, a*b and (a+b)*c
C
D
C
10/13/16
Risk and return
1
Risk and return
17
Nominal interest rate (rn)
Growth rate of your money
Real interest rate (rr)
Growth rate of your purchasing power
Rate of inaAon (i)
Growth rate of general price level
1+ rr =
1+ rn
1+ i
rr rn
1/13/15
Agenda for this week
News
Con.nued: Investment companies
Quiz
Excel
Mini-lecture: Risk and return
Rates of return
Risk and risk premiums
Normal distribu.on
Historic returns on risky porHolios
Exe
9/29/16
Elements of
investments
Financial assets
2
13
Types of assets
U.S. markets by instrument
Capital
Wealth
Total
Instruments
Ac>vely Traded Trade
Instruments
Frequency
Nominal
trading
Volume
Common stocks
20%
15,000
1,000
High
Low
Equit
10/6/16
Time value of money
11
Time value of money
De/initions
13
FV = PV (1 + r)N
FV = future value
PV = present value
r = period interest rate, or discount rate
N = number of periods
Future value interest factor = (1 + r)N
PV = FV / (
11/10/16
Bonds
17
INVESTMENTS | BODIE, KANE, M ARCUS
5-18
18
Bond characteristics
Bond quotes
Fixed
Face or par value: $1,000
Coupon rate (APR)
Maturity date
Indenture
Variable
Price (quoted in percent of par)
Yield to maturity (APR or BEY)
22
Bon