CFA三级基础班讲义SS7 Economic Concepts for Asset Valuation in Portfolio Management–pdf下载

Dreaming with BRICs: The Path to 2050
Reading 25
Reading 25:
a. contrast the economic potential of Brazil, Russia, India, and China
(BRICs) to that of the current G6 (U.S., Japan, U.K., Germany, France,
and Italy) in terms of economic size and growth, demographics and per
capita income, growth in global spending, and trends in real exchange
rates;
b. explain why certain developing economies may have high returns
on capital, rising productivity, and appreciating currencies;
c. evaluate the importance of technologic progress, employment
growth, and growth in capital stock in estimating the economic
potential of an emerging market;
d. discuss the conditions necessary for sustained economic growth,
including the core factors of macro-economic stability, institutional
efficiency, open trade, and worker education;
e. evaluate the investment rational for allocating part of a well
diversified portfolio to emerging markets in countries with above
average economic potential.

Microvaluation
DDM approach
Measures of equity risk premium
Historical returns
Dividend yield
Credit risk premium
Expected growth rate
g = (retention rate) (ROE)
FCFE approach (two-stage FCFE)
FCFE is the cash available to stockholders after funding capital
requirements, working capital needs, and debt financing requirements

Economic Potential of the BRICs
Potential economic size and growth
by 2050 the BRIC economies could be larger in size
Demographics and per capita income
will experience a decline in working age population but later than that in
the G6
per capita income is expected to be lower than G6, with the exception of
Russia
Growth in global spending
much higher increases in annual spending
Trends in real exchange rates
could strengthen by 300% by 2050