Chapter One - The Highlights

  • show empirically (using combinations of stocks listed on the New York stock exchange), how specific risk is reduced when stocks are added to a portfolio;
  • explain the difference between actual and expected rates of return (which is often widely misunderstood);
  • break the real rate of interest down into its constituent components;
  • provide practical real world examples of specific risks and systematic risks; and
  • consider the impact of behavioural psychology on financial analysis and thinking.
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