macro econ

the amount of money today that would be needed using prevailing interest rates to produce a future given amount of money

a dislike of uncertainty

shows how utility a subjective measure of satisfaction depends on wealth, as wealth rises utility function becomes flatter, reflecting property of diminishing marginal utility

risk that affects single/specific company

risk that affects all companies in the stock market

volitility of a variable; how much variable is likely to fluctuate

the theory that asset prices reflect all publicly available information about value of an asset

the study of a company's accounting statements and future prospects to determine it's value

the path of a variable whose changes are impossible to predict

in 10 years ending July 2005 80% of mutual stock funds failed to beat the S&P 500 index fund

• (1xr)xN
• (1xr)*xN

70/percentage points in growth equals years for income to double