金融学英文课件：Chapter05 Household Saving and Investment Decisions

1、Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall1ObjectiveFinancial decisions in an uncertain world; Human capital, permanent income decisions over life cycle Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall2Copyright 2009 Pearson Education, Inc. Publishing as Pre

2、ntice Hall3Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall4Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall5Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall6Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall7Copyright 2009 Pearso

3、n Education, Inc. Publishing as Prentice Hall8Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall9Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall10Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall11Labor Income and Consumption-5000050001000015000200

4、0025000300003500035404550556065707580AgeReal $lab_incconsumpCopyright 2009 Pearson Education, Inc. Publishing as Prentice Hall12Human Capital and Wealth-10000001000002000003000004000005000006000007000003545556575AgeReal $fundHumanCapCapitalCopyright 2009 Pearson Education, Inc. Publishing as Prentic

5、e Hall13RtttTTtttiYWiBiC101111Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall14Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall15Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall16Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

6、17Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall18Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall19Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall20Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall21Copyright 2009 Pearson Edu

7、cation, Inc. Publishing as Prentice Hall22Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall23 Youve decided to obtain practical experience for 10 years, and then get a Ph.D. In three years You want the same standard of income over the next 13 years Assume that all cash flows occur a

8、t year-end Your starting salary is $50,000. Because you are smart, this will increase by 15% / year. You have agreed to be paid this at the end of the first year, and yearly thereafter Ph.D. Fees are currently $15,000 per year, and increase by 3%/year with general inflation. Fees are paid at the end

9、 of each year, so the fees for the period from 10 to 11 are paid at year 11Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall24 Taxes are 30%, and are assumed to be constant. Assume that lending and borrowing rates have been adjusted for tax A fund with acceptable risk yields 10% / y

10、ear You may also borrow at 10% Lending rate = borrowing rate! The real reason for this is to simplify the math, but the fund could be moderately aggressive, and the debt be consumer loansCopyright 2009 Pearson Education, Inc. Publishing as Prentice Hall25 Let the expenditure required for your standa

11、rd of living be X at the end of year 0 (beginning of year 1), X*1.03 in year 2, X*1.032 in year 3, et cetera The fees start at $15,000*1.0310 (year 11), and continue to grow at a rate of 3% Your net salary starts at $35,000 in year 1, and grows at 15% for 10 years Everything is discounted at 10%Copy

12、right 2009 Pearson Education, Inc. Publishing as Prentice Hall26 The after-tax nominal cash flow in the first year is $35,000, grows at a nominal 15% for 10 years We treat the 15% as the combined effect of inflation and real growth Inflation is the interest rate The real rate is (0.10-0.15)/1.15= -

13、4.35%Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall27 Now, remember, we have assumed that the cash flows occur at the end of each year The first net income occurs at time 1, and so must be discounted to year 0 The real salary is not $35,000 but $35,000/1.15 = $30,434.78Copyright

14、2009 Pearson Education, Inc. Publishing as Prentice Hall28 Using your financial calculators 10 - n; 4.3478261 “+/-” - I; PV = ?; $30,434.78261 - PMT; 0 - FV Result PV = $391,816.3459 (in)Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall29 The fees are already expressed in real terms

15、, but the first cash flow occurs in year 11, not 10 (the evaluation point) The year 11 real cash flow must be adjusted to year 10 15000/1.03 = $14563.1068Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall30 The real interest rate is (0.10-0.03)/1.03 = 6.7961165% or about 6.80%Copyrig

16、ht 2009 Pearson Education, Inc. Publishing as Prentice Hall31 The present value of the fees at year 10 may be obtained using your financial calculator: 3 - n; 6.7961165 - I; PV = ?; $14563.1068 - PMT; 0 - FV Result PV10 = -$38,361.00678 10 - n; 6.7961165 - I; PV = ?; PMT - 0; FV10 = 38,361.00678 (=

17、PV10) Result PV0 = $19,876.2931 (out)Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall32 Cash flows are assumed to occur at the end of each year Let us compute the real amount today. Denote this nominal amount in terms of the unknown amount X in year 1 X/1.03 = 0.970873786 xCopyrigh

18、t 2009 Pearson Education, Inc. Publishing as Prentice Hall33 This case is easy. The real rate has been computed to be 6.7961165% in the fee sectionCopyright 2009 Pearson Education, Inc. Publishing as Prentice Hall34 We do not know both the PV nor the PNT. Set the payment to $1 for now, and multiply

19、by X later Using your financial calculators 13 - n; 6.7961165 - I; PV = ?; $0.970873786 - PMT; 0 - FV Result PV = $8.208829899 * X (out) Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall3575.309,45$208829897. 829308.198763459.39181629308.19876*208829897. 83459.391816XXPVCopyright 20

20、09 Pearson Education, Inc. Publishing as Prentice Hall36 This amount is the actual amount that will be expended for the first year, paid at the end of that year This is a simple, but not a trivial, example, but it is loaded with traps of even the most experienced. It requires multistage logic The us

21、e of two distinct interest rates will bother some of you Some thinkers believe that it is better to avoid quantities that can not be observed directly While we certainly feel the influence of real cash flows and real rates, observation is through the inflation rate We live in the world of the nomina

22、l, and another approach is to recognize this in our system of financial analysisCopyright 2009 Pearson Education, Inc. Publishing as Prentice Hall37Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall38111111abaargrgrXPVCopyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

23、39Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall40jajbjgjXajPVj1 110 10% 35,000?2 113 3%X1?3 11 13 3%15,000*1.0310?Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall4175.4530929308.19876208829897. 83459.39181601 . 103. 111 . 103. 01 . 003. 1150001 . 103. 111 . 103

24、. 01 . 01 . 115. 111 . 115. 01 . 0350000111131111013111011xxxPVCopyright 2009 Pearson Education, Inc. Publishing as Prentice Hall42 The plan projects your going into debt in the early years. You are probably collaterallizing your existing human capital, or future earnings potentialCopyright 2009 Pearson Education, Inc. Publishing as Prentice Hall43YearNetSalary FeesExpendSumAccount0135000-45310-10310-10310240250-46669-641948069-1782-21317453231-495113719