theinvestmentenvironment(编辑修改稿)

theinvestmentenvironment(编辑修改稿)内容摘要：

ext.p. 5In addition to these financial assets, individuals might invest directly in some real assets. For example, real estate or modities such as precious metals or agricultural products are real assets that might form part of an investment portfolio.2A call option is the right to buy a share of stock at a given exercise price on or before the option39。 s expiration date. If the market price of Intel remains below $20 a share, the right to buy for $20 will turn out to be valueless. If the share price rises above $20 before the option expires, however, the option can be exercised to obtain the share for only $20. Financial Markets and the EconomyWe stated earlier that real assets determine the wealth of an economy, while financial assets merely represent claims on real assets. Nevertheless, financial assets and the markets in which they trade play several crucial roles in developed economies. Financial assets allow us to make the most of the economy39。 s real assets.The Informational Role of Financial MarketsIn a capitalist system, financial markets play a central role in the allocation of capital resources. Investors in the stock market ultimately decide which panies will live and which will die. If a corporation seems to have good prospects for future profitability, investors will bid up its stock price. The pany39。 s management will find it easy to issue new shares or borrow funds to finance research and development, build new production facilities, and expand its operations. If, on the other hand, a pany39。 s prospects seem poor, investors will bid down its stock price. The pany will have to downsize and may eventually disappear.The process by which capital is allocated through the stock market sometimes seems wasteful. Some panies can be “hot” for a short period of time, attract a large flow of investor capital, and then fail after only a few years. But that is an unavoidable implication of uncertainty. No one knows with certainty which ventures will succeed and which will fail. But the stock market encourages allocation of capital to those firms that appearat the timeto have the best prospects. Many smart, welltrained, and wellpaid professionals analyze the prospects of firms whose shares trade on the stock market. Stock prices reflect their collective judgment.Consumption TimingSome individuals in an economy are earning more than they currently wish to spend. Others, for example, retirees, spend more than they currently earn. How can you shift your purchasing power from highearnings periods to lowearnings periods of life? One way is to “store” your wealth in financial assets. In highearnings periods, you can invest your savings in financial assets such as stocks and bonds. In lowearnings periods, you can sell these assets to provide funds for your consumption needs. By so doing, you can “shift” your consumption over the course of your lifetime, thereby allocating your consumption to periods that provide the greatest satisfaction. Thus, financial markets allow individuals to separate decisions concerning current consumption from constraints that otherwise would be imposed by current earnings.Allocation of RiskVirtually all real assets involve some risk. When Ford builds its auto plants, for example, it cannot know for sure what cash flows those plants will generate. Financial markets and the diverse financial instruments traded in those markets allow investors with the greatest taste for risk to bear that risk, while other, less risktolerant individuals can, to a greater extent, stay on the sidelines. For example, if Ford raises the funds to build its auto plant by selling both stocks and bonds to the public, the more optimistic or risktolerant investors can buy shares of its stock, while the more conservative ones can buy its bonds. Because the bonds promise to provide a fixed payment, the stockholders bear most of the business risk but reap potentially higher rewards. Thus, capital markets allow the risk that is inherent to all investments to be borne by the investors most willing to bear that risk.p. 6This allocation of risk also benefits the firms that need to raise capital to finance their investments. When investors are able to select security types with the riskreturn characteristics that best suit their preferences, each security can be sold for the best possible price. This facilitates the process of building the economy39。 s stock of real assets.Separation of Ownership and ManagementMany businesses are owned and managed by the same individual. This simple organization is well suited to small businesses and, in fact, was the most mon form of business organization before the Industrial Revolution. Today, however, with global markets and largescale production, the size and capital requirements of firms have skyrocketed. For example, in 2009 General Electric listed on its balance sheet about $73 billion of property, plant, and equipment, and total assets of nearly $780 billion. Corporations of such size simply cannot exist as owneroperated firms. GE actually has more than 600,000 stockholders with an ownership stake in the firm proportional to their holdings of shares.Such a large group of individuals obviously cannot actively participate in the daytoday management of the firm. Instead, they elect a board of directors that in turn hires and supervises the management of the firm. This structure means that the owners and managers of the firm are different parties. This gives the firm a stability that the ownermanaged firm cannot achieve. For example, if some stockholders decide they no longer wish to hold shares in the firm, they can sell their shares to other investors, with no impact on the management of the firm. Thus, financial assets and the ability to buy and sell those assets in the financial markets allow for easy separation of ownership and management.How can all of the disparate owners of the firm, ranging from large pension funds holding hundreds of thousand。