Measures a specific stock's volatility relative to the broader market. 4. Valuation Models
Determining what a future sum of money is worth in today’s terms, often used to decide if a current stock price is "fair." 2. Compound Interest: The "Eighth Wonder" Investment Mathematics
Unlike simple interest, which is calculated only on the principal, compound interest is calculated on the principal plus the accumulated interest of previous periods. Measures a specific stock's volatility relative to the
In math, "risk" is often expressed as . Investors use statistical tools to predict the likelihood of an investment's return: Investment Mathematics