# 金融代写|投资组合代写Investment Portfolio代考|NBA5120

## 金融代写|投资组合代写Investment Portfolio代考|Anchoring Asset Returns to Trend Growth

Both theory and empirical evidence indicate that the average level of real (nominal) defaultfree bond yields is linked to the trend rate of real (nominal) growth. ${ }^{9}$ To put it another way, bond yields will be pulled toward this level over time. Thus, the trend rate of growth provides an important anchor for estimating bond returns over horizons long enough for this reversion to prevail over cyclical and short-term forces. Intertemporal consistency demands that this anchor be factored into forecasts even for shorter horizons.

The trend growth rate also provides an anchor for long-run equity appreciation. ${ }^{10} \mathrm{We}$ can express the aggregate market value of equity, $V^{e}$, as the product of three factors: the level of nominal GDP, the share of profits in the economy, $S^{k}$ (earnings/GDP), and the P/E ratio (PE).
$$V_{t}^{e}=\mathrm{GDP}{t} \times S{t}^{k} \times P E_{t}$$
It is clear that over long periods, capital’s share of income cannot continually increase or decrease. The same is true for the P/E multiple applied to earnings. As a result, in the long run, the growth rate of the total value of equity in an economy is linked to the growth rate of GDP. Over finite horizons, the way in which the share of capital and the P/E multiple are expected to change will also affect the forecast of the total value of equity, as well as its corresponding growth rate over that period.

This argument applies to the capital appreciation component of equity returns. It does not supply a way to estimate the other component: the dividend yield. An estimate for the dividend yield (annual dividends/market value) can be obtained by noting that the dividend yield equals the dividend payout ratio (dividends/profit) divided by the profit multiple (market value/profit). The analyst may set any two of these three ratios and infer the third.

## 金融代写|投资组合代写Investment Portfolio代考|Approaches to Economic Forecasting

Whereas the trend growth rate is a long-term average and reflects only the supply side of the economy, most macroeconomic forecasting focuses on short- to intermediate-term fluctuations around the trend-that is, the business cycle. These fluctuations are usually ascribed primarily to shifts in aggregate demand, although shifts in the short-term aggregate supply curve also play a role.

Before discussing the business cycle, we outline the main approaches available for tracking and projecting these movements. There are at least three distinct approaches:

• Econometric models: the most formal and mathematical.
• Indicators: variables that lead, lag, or coincide with turns in the economy.
• Checklists: subjective integration of the answers to relevant questions.
These approaches are not mutually exclusive. Indeed, thorough analysis is likely to incorporate elements of all three.

Econometrics is the application of statistical methods to model relationships among economic variables. Structural models specify functional relationships among variables based on economic theory. The functional form and parameters of these models are derived from the underlying theory. Reduced-form models have a looser connection to theory. As the name suggests, some such models are simply more compact representations of underlying structural models. At the other end of the spectrum are models that are essentially data driven, with only a heuristic rationale for selection of variables and/or functional forms.

Econometric models vary from small models with a handful of equations to large, complex models with hundreds of equations. They are all used in essentially the same way, however. The estimated system of equations is used to forecast the future values of economic variables, with the forecaster supplying values for the exogenous variables. For example, such a model may require the forecaster to enter exchange rates, interest rates, commodity prices, and/or policy variables. The model then uses the estimated past relationships to forecast the future. It is important to consider that the forecaster’s future values for the exogenous variables are themselves subject to estimation error. This fact will increase the variability of potential forecast errors of the endogenous variables beyond what results from errors in the estimated parameter values. The analyst should examine a realistic range of values for the exogenous variables to assess the forecast’s sensitivity to these inputs.

## 金融代写|投资组合代写Investment Portfolio代考|Anchoring Asset Returns to Trend Growth

$$V_{t}^{e}=\mathrm{GDP} t \times S t^{k} \times P E_{t}$$

## 金融代写|投资组合代写Investment Portfolio代考|Approaches to Economic Forecasting

• 计量经济模型：最正式和数学的。
• 指标：领先、滞后或与经济转折相吻合的变量。
• 清单：对相关问题的答案进行主观整合。
这些方法并不相互排斥。事实上，彻底的分析很可能包含所有三者的元素。

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