## VocabularyEdit

__Finance__

**Definition:**The field that studies how people make decisions regarding the allocation of resources over time and the handling of risk.

**What It Means:**

__Present Value__

**Definition:**The amount of money today that would be needed, using prevailing interest rates, to produce a given future amount of money.

**What It Means:**

__Future Value__

**Definition:**The amount of money in the future that an amount of money today will yield, given prevailing interest rates**.**

**What It Means:**

__Compounding__

**Definition:**The accumulation of a sum of money in, say, a bank account, where the interest earned remains in the account to earn additional interest in the future.

**What It Means:**

__Risk Aversion__

**Definition:**A dislike of uncertainty.

**What It Means:**

__Diversification__

**Definition:**The reduction of risk achieved by replacing a single risk with a large number of smaller, unrelated risks.

**What It Means:**

__Firm-Specific Risk__

**Definition:**Risk that affects only a single company.

**What It Means:**

__Market Risk__

**Definition:**Risk that affects all companies in the stock together.

**What It Means:**

__Fundamental Analysis__

**Definition:**The study of a company's accounting statements and future prospects to determine its value.

**What It Means:**

__Efficient Markets Hypothesis__

**Definition:**The theory that asset prices reflect all publicly available information about the value of an asset.

**What It Means:**

__Informational Efficiency__

**Definition:**The description of asset prices that rationally reflect all available information.

**What It Means:**

__Random Walk__

**Definition:**The path of a variable whose changes are impossible to predict.

**What It Means:**

## VideosEdit

thumb|500px|right|Simple and Compound Interest, as seen in class.thumb|500px|right|Invest sooner rather than later.thumb|500px|right|The Rule of 70, as seen in class.thumb|500px|right|Rule of 70 Part 2: Doubling Time. As seen in class.