By the end of this chapter, you should be able to:
• Explain what risk is in a financial management context.
• Relate risk and return in financial decision making.
• Describe how risk affects return and therefore the risk tolerance of managers.
• Apply risk-return decision making in your daily activities.
• Evaluate financial options applying the time value of money principles.
The discussion of these related topics provides a basis and a setting for much of the material in the next several chapters. Managerial decisions, whether they are ...