LESSON 1 : Risk and Risk Aversion

   All this world about finance is about one thing: earning as mucho money as possible.
But you cannot just enter in the financial market and start investing with no criteria, becuase if your just loocking for luck, you better go to a casino rather than aquiring stocks. You therefore need to follow an Investment process which should be something like this:

 (1) SECURITY AND MARKET ANALYSIS: What you should first do is to asses/analyse the risk and expected-return attributes of the entire set of investment assets.
 (2) Portfolio Theory: After analysing the market( which we will learn how in future lessons) you should configure your investment portfolio by determining the best risk-return opportunities available in the financial market.

  According to the personality of the person, we can find three kind of Investors:

                                       1st-  Risk averse investors:

nA risk averse investor penalizes the expected rate of return of a risky portfolio to account for the risk involved. They take a lot into account the volatility. In this way, they never have very high profits but they also have very few possibilities of loosing money.

 

Welcome

 Welcome to all of you to my blog. In it, I will try to post about all the things that I´m doing or have done in the University related to the Finance.
  As a differential factor with other websites, I will try to explain the material in a "clean" and "easy" way, so for those of you who haven´t got any basis on this and therefore don´t control the vocabulary.
  I hope you find this site usefull and that it helps you learning new things which yo didn´t understand before or simply have never heard.
  
                             eddie