Investment is about risk and expected return. No one likes risk and the higher an investment’s expected return, the better. Textbook descriptions of the investment process use these observations to divide investment strategies into two types. Inefficient strategies incur risk that is not rewarded sufficiently with higher expected return. Efficient strategies provide the highest possible expected return for a given level of risk....

.Making saving and spending decisions .Understanding the representative investor .Predictable inefficiencies .Using estimates of beta....