金融市场与净现值分析报告(英文版)

$30,000
Student #1
$30,000
Student #2
Dentist
$30,000×(1+r)
$30,000
Student #3
$30,000×(1+r)
$30,000
Student #4
The Financial Market Economy:
Example
❖ Rather than performing the credit analysis 4 times, he could loan the whole $120,000 to a financial intermediary in return for a promise to repay the $120,000 in one year with interest.
❖ He could loan $30,000 to each of 4 college seniors. They each promise to pay him back with interest after they graduate in one year.
$30,000×(1+r)
$30,000×(1+r)
❖ Because of this, a market has arisen for money. The price of money is the interest rate.
The Financial Market Economy:
Example
❖ Consider a dentist who earns $200,000 per year and chooses to consume $80,000 per year. He has $120,000 in surplus money to invest.
金融市场与净现值分析报告（英文版）
wk.baidu.com
3.1 The Financial Market Economy
❖ Individuals and institutions have different income streams and different intertemporal consumption preferences.
❖ This graph will show intertemporal consumption opportunities.
Intertemporal Consumption Opportunity Set
Consumption at t+1
$120,000 $100,000 $80,000 $60,000
❖In the example above, the bank took a large loan from the dentist and made small loans to the students.
Term intermediation
❖Commercial banks finance long-term mortgages with short-term deposits.
3.2 Making Consumption Choices over Time
❖ An individual can alter his consumption across time periods through borrowing and lending.
❖ We can illustrate this by graphing consumption today versus consumption in the future.
A person with $95,000 who faces a 10% interest rate has the following opportunity set.
One choice available is to consume $40,000 now; invest the remaining $55,000; consume
$60,000 next year.
$6,0 00 $ 0 5,0 50 (1 0 .1)1 0
$40,000
$20,000
$0 $0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
Consumption today
Intertemporal Consumption Opportunity Set
Risk intermediation
❖Financial intermediaries can tailor the risk characteristics of securities for borrowers and
Market Clearing
❖ The job of balancing the supply of and demand for loanable funds is taken by the money market.
$120,000×(1+r)
$30,000×(1+r) $30,000
$30,000×(1+r)
Student #4
The Financial Market Economy: ❖ Financial inteErmxeadmiatpiolnecan take three
forms:
Size intermediation
❖
The intermediary 4 college seniors.
in
tu$r3n0,l0o0a0n×s($1+3r0) ,000
to
each
of
the
$120,000
Dentist
Bank
$30,000 $30,000×(1+r)
$30,000
Student #1 Student #2
$30,000 Student #3
❖ When the quantity supplied equals the quantity demanded, the market is in equilibrium at the equilibrium price.
❖ The price of money is the interest rate.