4 concepts
Present Value and the Time Value of Money
The time value of money is the principle that a certain amount of money today has a different buying power (value) than in the future.
Measuring and Managing Risk
Risk is pervasive in the economy and is an essential component in the derivation of an asset's investment return.
The Value of Diversification
The compensation adjustment for holding an asset of a given risk profile can be further enhanced through asset diversification.
The Relationship Between Risk and Return and the Security Market Line
The security market line is useful to determine if an asset being considered for a portfolio offers a reasonable expected return for risk.