Контрольная работа по "Английскому языку"

ФГБОУ ВПО

Саратовский государственный  технический университет им. Гагарина Ю.А.

 

 

 

Кафедра «Иностранные языки и межкультурная коммуникация»

 

 

 

 

КОНТРОЛЬНАЯ РАБОТА

по английскому  языку

 

 

 

 

 

Выполнила:                студентка ФЭМ ЭУСз-51

Ланге Р.А.

                                                          Проверила:                              Олейникова Н.П.

 

 

 

 

 

 

 

Саратов  2012

INVESTORS AND THE INVESTMENT PROCESS

Translating the aspirations and circumstances of diverse households into appropriate investment decisions is a daunting task. The task is equally difficult for institutions, most of which have many stakeholders and often are regulated by various authorities. The investment process is not easily reduced to a simple or mechanical algorithm.

While many principles of investments are quite general and apply to virtually all investors, some issues are peculiar to the specific investor. For example, tax bracket, age, risk tolerance, wealth, job prospects, and uncertainties make each investor’s circumstances somewhat unique. In this chapter we focus on the process by which investors systematically review their particular objectives, constraints, and circumstances. Along the way, we survey some of the major classes of institutional investors and examine the special issues they must confront.

There is of course no unique “correct” investment process. However, some approaches are better than others, and it can be helpful to take one high-quality approach as a useful case study. For this reason, we will examine the systematic  approach suggested by the Association for Investment Management and Research(AIMR). Among other things, the AIMR administers examinations to certify investment professionals as Chartered Financial Analysts. Therefore, the approach we outline is also one that a highly respected professional group endorses through the curriculum that it requires investment practitioners to master. The nearby box describes how to become a Chartered Financial Analyst.

The basic framework involves dividing the investment process into four stages:

specifying objectives, specifying constraints, formulating policy, and monitoring and updating the portfolio as needed. We will treat each of these activities in turn. We start with a description of the major types of investors, both individual and institutional, as well as their special objectives. We turn next to the constraints or circumstances peculiar to each investor class, and we consider some of the investment policies that each can choose.

Investors and the Investment Process

Most investors would agree with the notion that they want to earn as much money on their investments as possible. But while the concept “earn money” is simple enough after the fact, since you simply count the profits on your investments, it is vague when applied to an investment before the fact, since you rarely will know for sure what your earnings will be. Almost all investments entail uncertainty. Thus, while investors all wish to earn the highest rate of return possible, they also seek to avoid risk. It is not surprising that ultimately, then, investments that offer higher expected returns will impose greater risk. This is the risk-return trade-off.

Investors will differ in their choice of investments because they differ in their willingness to trade off expected return against risk. We describe the willingness to accept higher risk to attain higher expected returns the investor’s risk tolerance; equivalently, we can describe attitudes toward risk using the concept of the investor’s risk aversion, or reluctance to accept risk.

These terms describe behavior: If we could observe an investor making many choices among assets whose return and risk were well understood, we could measure an investor’s risk  aversion (or risk tolerance) by observing his or her willingness to invest in various portfolios with differing risk and return attributes. With no access to such data, and without perfect insight into the risk-return characteristics of investments, we can only surmise an investor’s risk aversion. Note that, explicitly or implicitly, many professional investors do exactly that (although, obviously they do more than just that); by choosing investments on behalf of their clients, they make the risk-return choice for their clients.

Individual Investors

The basic factors affecting an individual investor usually arise from that investor’s stage in the life cycle. The first significant investment decision for most individuals concerns education, which is an investment in “human capital.” The major asset most people have during their early working years is the earning power derived from their skills. For these people, the financial risk due to illness or injury is far greater than that associated with the rate of return on their portfolios of financial assets. At this point in the life cycle, the most important financial decisions concern insurance against the possibility of disability or death.

The first major economic asset many people acquire is their own house. One can view the purchase of a house as a hedge against two types of risk. The first is the risk of increases in rental rates. If you “pay rent to yourself,” you do not need to be concerned with increases in the cost of housing. The second kind of risk is that the particular house or apartment where you live may not always be available to you. By buying, you guarantee its availability.

As one ages and accumulates savings to provide for consumption during retirement, the composition of wealth shifts from human capital toward financial capital. At this point, portfolio choices become progressively more important. In middle age, most investors will be willing to take on a meaningful amount of portfolio risk in order to increase their expected rates of return. As retirement draws near, however, risk tolerance seems to diminish. The evidence in Table 17.1 supports the life-cycle view of investment behavior. Questionnaire results suggest that attitudes shift away from risk tolerance and toward risk aversion as investors near retirement age. With age, individuals lose the potential to recover from a disastrous investment performance. When they are young, investors can respond to a loss by working harder and saving more of their income. But as retirement approaches, investors realize

there will be less time to recover, hence, the shift to safe assets.

Professional Investors

Professional investors provide investment management services for a fee. Some are employed directly by wealthy individual investors. Most professional investors, however, either pool many individual investor funds and manage them or serve institutional investors.

INVESTOR CONSTRAINTS

Even with identical attitudes toward risk, different households and institutions might choose different investment portfolios because of their differing circumstances. These circumstances include tax status, requirements for liquidity or a flow of income from the portfolio, or various regulatory restrictions. These circumstances impose constraints on investor choice. Together, objectives and constraints determine appropriate investment policy.

As noted, constraints usually have to do with investor circumstances. For example, if a family has children about to enter college, there will be a high demand for liquidity since cash will be needed to pay tuition bills. Other times, however, constraints are imposed externally.

For example, banks and trusts are subject to legal limitations on the types of assets they may hold in their portfolios. Finally, some constraints are self-imposed. For example, “social investing”  means that investors will not hold shares of firms involved in ethically objectionable activities. Some criteria that have been used to judge firms as ineligible for a portfolio are:

involvement in nuclear power generation; production of tobacco or alcohol; participation in polluting activities.

Five common types of constraints are described below.

Liquidity

Liquidity is the speed and ease with which an asset can be sold and still fetch a fair price. It is a relationship between the time dimension (how long it will take to sell) and the price dimension (the discount from fair market price) of an investment asset.

When an actual concrete measure of liquidity is necessary, one thinks of the discount when an immediate sale is unavoidable.

Cash and money market instruments such as Treasury bills and commercial paper, where the bid–ask spread is a fraction of 1%, are the most liquid assets, and real estate is among the least liquid. Office buildings and manufacturing structures in extreme cases can suffer a 50% liquidity discount.

Both individual and institutional investors must consider how likely they are to require cash at short notice. From this likelihood, they establish the minimum level of liquid assets they need in the investment portfolio.

Investment Horizon

This is the  planned liquidation date of the investment. Examples of an individual’s investment horizon could be the time to fund a college education or the retirement date for a wage earner. For a university or hospital endowment, an investment horizon could relate to the time to fund a major construction project. Horizon dates must be considered when investors choose between assets of various maturities. For example, the maturity date of a bond might make it a more attractive investment if it coincides with a date on which cash is needed.

Regulations

Only professional and institutional investors are constrained by regulations. First and foremost is the prudent investor rule. That is, professional investors who manage other people’s money have a fiduciary responsibility to restrict investment to assets that would have been approved by a prudent investor. The law is purposefully nonspecific. Every professional investor must stand ready to defend an investment policy in a court of law, and interpretation may differ according to the standards of the times.

The worst market crisis in 60 years

The current financial crisis was precipitated by a bubble in the US housing market. In some ways it resembles other crises that have occurred since the end of the Second World War at intervals ranging from four to 10 years.

However, there is a profound difference: the current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. The periodic crises were part of a larger boom-bust process. The current crisis is the culmination of a super-boom that has lasted for more than 60 years.

Boom-bust processes usually revolve around credit and always involve a bias or misconception. This is usually a failure to recognize a reflexive, circular connection between the willingness to lend and the value of the collateral. Ease of credit generates demand that pushes up the value of property, which in turn increases the amount of credit available. A bubble starts when people buy houses in the expectation that they can refinance their mortgages at a profit. The recent US housing boom is a case in point. The 60-year super-boom is a more complicated case.

The financier speaks to Christie Freeland, the FT’s  US managing editor

Every time the credit expansion ran into trouble the financial authorities intervened, injecting liquidity and finding other ways to stimulate the economy. That created a system of asymmetric incentives also known as moral hazard, which encouraged ever greater credit expansion. The system was so successful that people came to believe in what former US president Ronald Reagan called the magic of the marketplace and I call market fundamentalism. Fundamentalists believe that markets tend towards equilibrium and the common interest is best served by allowing participants to pursue their self-interest. It is an obvious misconception, because it was the intervention of the authorities that prevented financial markets from breaking down, not the markets themselves. Nevertheless, market fundamentalism emerged as the dominant ideology in the 1980s, when financial markets started to become globalised and the US started to run a current account deficit.

Globalization allowed the US to suck up the savings of the rest of the world and consume more than it produced. The US current account deficit reached 6.2 per cent of gross national product in 2006. The financial markets encouraged consumers to borrow by introducing ever more sophisticated instruments and more generous terms. The authorities aided and abetted the process by intervening whenever the global financial system was at risk. Since 1980, regulations have been progressively relaxed until they have practically disappeared.

The super-boom got out of hand when the new products became so complicated that the authorities could no longer calculate the risks and started relying on the risk management methods of the banks themselves. Similarly, the rating agencies relied on the information provided by the originators of synthetic products. It was a shocking abdication of responsibility.

Everything that could go wrong did. What started with subprime mortgages spread to all collateralized debt obligations, endangered municipal and mortgage insurance and reinsurance companies and threatened to unravel the multi-trillion-dollar credit default swap market. Investment banks’ commitments to leveraged buyouts became liabilities. Market-neutral hedge funds turned out not to be market-neutral and had to be unwound. The asset-backed commercial paper market came to a standstill and the special investment vehicles set up by banks to get mortgages off their balance sheets could no longer get outside financing. The final blow came when interbank lending, which is at the heart of the financial system, was disrupted because banks had to husband their resources and could not trust their counterparties. The central banks had to inject an unprecedented amount of money and extend credit on an unprecedented range of securities to a broader range of institutions than ever before. That made the crisis more severe than any since the Second World War.

Credit expansion must now be followed by a period of contraction, because some of the new credit instruments and practices are unsound and unsustainable. The ability of the financial authorities to stimulate the economy is constrained by the unwillingness of the rest of the world to accumulate additional dollar reserves. Until recently, investors were hoping that the US Federal Reserve would do whatever it takes to avoid a recession, because that is what it did on previous occasions. Now they will have to realise that the Fed may no longer be in a position to do so. With oil, food and other commodities firm, and the renminbi appreciating somewhat faster, the Fed also has to worry about inflation. If federal funds were lowered beyond a certain point, the dollar would come under renewed pressure and long-term bonds would actually go up in yield. Where that point is, is impossible to determine. When it is reached, the ability of the Fed to stimulate the economy comes to an end.

Although a recession in the developed world is now more or less inevitable, China, India and some of the oil-producing countries are in a very strong countertrend. So, the current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the US and the rise of China and other countries in the developing world.

The danger is that the resulting political tensions, including US protectionism, may disrupt the global economy and plunge the world into recession or worse.

McKinsey warns US may lose financial leadership

The US looks poised to lose its mantle as the world’s dominant financial market because of a rapid rise in the depth and maturity of markets in Europe, a study suggests.

The change may have occurred already, not least because US markets are beset by credit woes, according to research by McKinsey Global Institute, a think-tank affiliated to the consultancy.

“We think the differential growth rates are so significant that it is quite likely Europe has overtaken the US,” said Diana Farrell, author of the report.

“They are now neck and neck, which means exchange rates are very important. It is a real change.”

McKinsey calculated the size of the more fragmented European market by adding several markets together.

A power shift is also under way in Asia as the Chinese market continues to boom while markets such as Japan stagnates.

McKinsey suggests China’s booming trade surplus has put it into the position of being the world’s largest net exporter of capital, topping Japan, Germany and the oil exporters for the first time.

The findings are likely to attract attention from bankers and policymakers since they come amid an intensifying debate about the changing pattern of financial power – an issue likely to be centre stage at the meeting of the World Economic Forum in Davos next week.

In previous decades, most US policymakers and bankers assumed their domestic markets were the largest and most sophisticated in the world, and sought to export their model of financial capitalism to other parts of the globe.

But the credit crisis has dented confidence in the health of America’s financial institutions and its model of finance.

Meanwhile, since the launch of the single currency in 1999, European markets have been steadily growing in liquidity and size.

And other parts of the world, such as Asia and the Gulf, are enjoying rapidly growing financial clout due to their large surpluses – a shift exemplified by the recent decision of Asian and Gulf Sovereign Wealth Funds to take large stakes in big US banks such as Citigroup.

The study by McKinsey, which provides one of the most comprehensive independent snapshots of financial flows, covers the trends in 2006.

But analysts say their initial research following the subprime shock suggests the credit turmoil has intensified these trends in 2007 in terms of the global pecking order.

In 2006, McKinsey calculates that America’s markets had some $56,100bn of assets. Europe, including the UK, had $53,200bn of assets, a sharp increase on recent years.

On recent trajectories, this implies that Europe overtook the US in 2007.

“The main message that emerged about financial deepening and what is happening outside the US in 2006 continued in 2007,” Ms Farrell said.

The UK accounted for some $10,000bn of assets, according to McKinsey, while the eurozone accounted for $37,600bn.

Switzerland, Sweden, Iceland, Denmark and Norway accounted for a combined $5,600bn.

Перевод

Инвестиционный  процесс

Устремления и различные  обстоятельства  домохозяйств,  принимающие инвестиционные решения является сложной задачей. Задача же трудна  для учреждений, большинство из которых зачастую регулируются различными органами власти. Инвестиционный процесс нелегко сводится к простому  или механическому алгоритму.

Хотя многие принципы инвестиции носят довольно общий характер,  но все-таки инвестиции  специфичны для конкретного инвестора. Например, налоговые кронштейн, возраст, склонность к риску, богатство, перспективы трудоустройства, а также неопределенности сделают обстоятельства каждого инвестора несколько уникальным. В этой главе мы сосредоточимся на процессе, посредством которого инвесторы систематически пересматривают свои конкретные задачи.

 Конечно, нет единого  "правильного" инвестиционного  процесса. Тем не менее, некоторые  подходы лучше, чем другие, и  полезней взять один подходящий  подход для изучения конкретного  случая. По этой причине мы  рассмотрим систематический подход, предложенный Ассоциацией управления  инвестициями и исследованиям  (AIMR).

Среди прочего, AIMR выпускает  высококвалифицированных специалистов. Имеющих сертификаты в области  инвестиций.  Таким образом, подготавливаем группы уважаемых профессиональных людей, имеющих практику в области  инвестиций.

Основные рамки предполагают деление инвестиционного процесса на четыре этапа:

указание целей, с указанием ограничений, разработку политики, а также мониторинг и обновление портфеля по мере необходимости. Мы будем уделять внимание каждому из видов деятельности.

Начнем с описания основных типов инвесторов, как индивидуальных, так и институциональных, а также  их особые цели. Перейдем к ограничениям или обстоятельствам, свойственных каждому классу инвесторов, и мы рассмотрим  инвестиционную политику,  выбранную инвесторами.

Инвесторы и инвестиционный процесс.

Большинство инвесторов согласятся с идеей, что они хотят заработать как можно больше денег от своих  инвестиций, насколько  это возможно. Но в то время как понятие "заработать" достаточно просто,  по факту это  банально подсчитать прибыль от ваших  инвестиций. Почти все инвестиции влекут за собой определенные риски. Таким образом, в то время как  инвесторы хотят,  заработать высокие  нормы прибыли, они  пытаются избежать рисков.  Неудивительно, что в конечном итоге те  инвестиции, которые предлагают более высокую ожидаемую доходность, будут сопутствовать высокому риску.  Это выбор между риском и доходностью.