Rate-Of-Return Analytics

ISBN-13: 9781530465613 / Angielski / Miękka / 2016 / 158 str.

Raoul Kennedy

Opis

An understanding of rates of return and pricing may help savers, investors and businesses better manage their finances and avoid losses. Policymakers may also benefit from rate-of-return-based analytical tools to prevent policy actions from leading to financial crises, worsening poverty and inequality. Drawing from five centuries of economic and financial thought, this book explores a framework in hopes of applying the concept of rates of return to current issues. Asset mispricing can result in unsustainable bubble-crash cycles, financial losses and economic dislocation. In Part II, rates of return on cost (RRC) and returns-to-valuation gaps are computed for publicly-traded non-financial firms in five sectors worldwide with total market capitalization of an estimated U.S. $700 billion as of 2015. The analysis may also apply to individuals: Declining purchasing power may result when consumer prices rise faster than the rate of return on the cost of living. A more general theory of returns-to-pricing may suggest that growth in rates of returns of financial entities should roughly align with pricing growth--in both asset and goods markets. The appendices include additional observations, historical extensions and commentary on analytical approaches for economic management in the 21st century.