 | Learning Objectives
(See related pages)
In this chapter you will learn:
- The idea of present value and why it is critical in making financial decisions.
- About the most popular investments: stocks, bonds, and mutual funds.
- How investment returns compensate for being patient and for bearing risk.
- About portfolio diversification and why it implies that investors can focus on nondiversifiable risk when evaluating an investment opportunity.
- Why higher levels of nondiversifiable risk are associated with higher rates of return.
- Why even professionals have a hard time trying to "beat the market."
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