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Random walk
________- the path of a variable whose changes are impossible to predict.
Firm
________- specific risk- the risk that affects only a single company.
Fundamental analysis
________- The study of a companys accounting statements and future prospects to determine its value.
Finance
________- the field that studies how people make decisions regarding the allocation of resources over time and the handling of risk.
Risk aversion
________- A dislike of uncertainty.
Present value
________- the amount of money today that would be needed, using prevailing interest rates, to produce a given future amount of money.
Informational
________ efficiency- the description of asset prices that rationally reflect all available information.
Efficient markets hypothesis
________- The theory that asset prices reflect all publicly available information about the value of an asset.
Diversification
________- The reduction of risk achieved by replacing a single risk with a large number of smaller, unrelated risks.
