Risk and Return Relationships

Overview

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Master the core financial principle of the time value of money to make smarter investment decisions. This course covers everything from compounding and present value calculations to annuities, teaching you how to measure an investment's expected rate of return and riskiness. You will also learn how diversification can reduce risk by exploring historical risk-return relationships. By the end of this course, you will be able to apply these fundamental concepts to evaluate the financial viability of any investment opportunity.

Syllabus

Risk and Return Relationships

In this course, we delve into the time value of money, understanding the mechanics of compounding and present value calculations. You'll learn about compound interest, future and present value, and annuities. Additionally, we'll define and measure the expected rate of return and riskiness of individual investments, compare historical risk-return relationships, and explore how diversification impacts investment risk and return.