金融专业英语重要概念和理论

❶Economy:Aneconomyoreconomicsystemconsistsoftheproduction,distributionortrade,andconsumptionoflimitedgoodsandservices.❷Finance:Financeisafieldthatdealswiththeallocationofassetsandliabilitiesovertimeunderconditionsofcertaintyanduncertainty.(---Akeypointinfinanceisthetimevalueofmoney,whichstatesthatpurchasingpowerofoneunitofcurrencycanvaryovertime.Financeaimstopriceassetsbasedontheirrisklevelandtheirexpectedrateofreturn.)Bodies'finance:financeisthestudyofhowpeopleallocatescarceresourcesovertime.Financialsystemisthesetofmarketsandotherinstitutionsusedforfinancialcontractingandtheexchangeofassetsandrisks.wiki:Afinancialmarketisamarketinwhichpeopleandentitiescantradefinancialsecurities.Mishkin:financialmarketisamarketinwhichfundsaretransferredfrompeoplewhohaveanexcessofavailablefundstopeoplewhohaveashortage.❸Corporatefinance:Corporatefinanceisabouthowtoincreasethevalueofthefirmbydealingwiththesourcesoffundingandthecapitalstructureofthefirm.——(Theprimarygoalofcorporatefinanceistomaximizeorincreaseshareholdervalue.)——orsaycorporatefinanceisabranchoffinancedealingwithfinancialdecisionsoffirms.❹Option:anoptionisacontractwhichgivesthebuyer(theowner)theright,butnottheobligation,tobuyorsellanunderlyingassetataspecifiedstrikepriceonorbeforeaspecifieddate.moreaboutoptionThesellerhasthecorrespondingobligationtofulfillthetransaction–thatistosellorbuy–ifthebuyer(owner)exercisestheoption.Thebuyerpaysapremiumtothesellerforthisright.Anoptionthatconveystotheownertherighttobuysomethingataspecificpriceisreferredtoasacall;anoptionthatconveystherightoftheownertosellsomethingataspecificpriceisreferredtoasaput.Inbasicterms,thevalueofanoptioniscommonlydecomposedintotwoparts:Thefirstpartistheintrinsicvalue,whichisdefinedasthedifferencebetweenthemarketvalueoftheunderlyingassetandthestrikepriceofthegivenoption.Thesecondpartisthetimevalue.❺Future:afuturescontractisacontractbetweentwopartiestobuyorsellanassetforapriceagreedupontoday(thefuturesprice)withdeliveryandpaymentoccurringatafuturepoint,thedeliverydate.Thebuyerofthecontractissaidtobelong,andthepartysellingthecontractissaidtobeshort.[1]❻APT:arbitragepricingtheory(APT)isageneraltheoryofassetpricingthatholdsthattheexpectedreturnofafinancialassetcanbemodeledasalinearfunctionofvariousmacro-economicfactorsortheoreticalmarketindices,wheresensitivitytochangesineachfactorisrepresentedbyafactor-specificbetacoefficient.Themodel-derivedrateofreturnwillthenbeusedtopricetheassetcorrectly-theassetpriceshouldequalthepresentvalueofthefuturecashinflowataninterestrateordiscountratecalculatedbyAPT.❼MMtheorem:Thebasictheoremstatesthatthevalueofafirmisnotaffectedbyit'scapitalstructureundercertainassumptions.Insteadit'sdecidedbythevalueofit'srealassets.Assumption:suchasfrictionlessmarket,noasymmetricinformation.(africtionlessmarketisafinancialmarketwithouttransactioncosts.)ConsequentlytheModigliani–Millertheoremisalsooftencalledthecapitalstructureirrelevanceprinciple.❽CAPM:thecapitalassetpricingmodel(CAPM)isusedtodetermineatheoreticallyappropriaterequiredrateofreturnofanassetifeveryinvestorholdtheeffectiveportfolioaccordingtoMarkowitzmodel.ThemainideaofCAPMisthatifallinvestorsonlyholdrisk-freeassetandmarketportfolio,therewillbealinearrelationbetweentheexpectedrateofreturnandtherisksoftheasset.Themodeltakesintoaccounttheasset'ssensitivitytonon-diversifiablerisk(alsoknownassystematicriskormarketrisk),oftenrepresentedbythequantitybeta(β)inthefinancialindustry,aswellastheexpectedreturnofthemarketandtheexpectedreturnofatheoreticalrisk-freeasset.CAPM―suggeststhataninvestor’scostofequitycapitalisdeterminedbybeta.‖❾EMH:theefficient-markethypothesis(EMH)assertsthatfinancialmarketsareinformationallyefficient.Inconsequenceofthis,onecannotconsistentlyachievereturnsinexcessofaveragemarketreturns.Therearethreemajorversionsofthehypothesis:weak,semi-strong,andstrong.TheweakformoftheEMHclaimsthatpricesontradedassetsalreadyreflectallpastpubliclyavailableinformation.Thesemi-strongformoftheEMHclaimsboththatpricesreflectallpubliclyavailableinformationandthatpricesinstantlychangetoreflectnewpublicinformation.ThestrongformoftheEMHadditionallyclaimsthatpricesinstantlyreflectevenhiddenorinsiderinformation.【10】DuPontanalysis:DuPontAnalysisisanexpressionwhichbreaksROE(ReturnOnEquity)intothreepartsinordertoanalyzeacompany'sfinancialcondition,operatingefficiency&profitability.【Basicformula】ROE=(Profitmargin)*(Assetturnover)*(Equitymultiplier)=(Netprofit/Sales)*(Sales/Assets)*(Assets/Equity)=(NetProfit/Equity)Profitability(measuredbyprofitmargin)Operatingefficiency(measuredbyassetturnover)Financialleverage(measuredbyequitymultiplier)【11】asymmetricinformation:Asymmetricinformationdealswiththestudyofdecisionsintransactionswhereonepartyhasmoreorbetterinformationthantheother.Thiscreatesanimbalanceofpowerintransactions,whichcansometimescausethetransactionstogoawry,akindofmarketfailureintheworstcase.Examplesofthisproblemareadverseselection,[1]moralhazard,andinformationmonopoly.[2]Informationasymmetryisincontrasttoperfectinformation,