The ideas that currently govern the way money is invested
1. The concept of balancing risk and return through tracking the mean and variance of market of market prices
2. The Capital asset pricing model that divides the return of a securityt into "beta" of sensitivity to the market and "alpha" an uncorrelated return
3. The efficient market that holds that the market always attempts to incorporate all available information
4. Black Scholes: which makes it possible to piut a notional value on options
Behavioural Finance suibstuitue insights from experimental psychology for the assumption of traditional economists athat people always act rationally.
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