Time Value of Money and Risk

This course covers time value of money (TVM) principles and risk and return. You will review the basic TVM techniques used in evaluating all financial decisions and their cash flow implications. For Risk and Return, you will learn how risk influences investment decisions, and how to calculate risk and rates of return. Further, you will explore the benefits of diversification and the use of the portfolio concept in investing.

After completing this course, you'll be able to:

• Distinguish between points in time and periods of time as shown by a time line
• Define compounding and discounting
• Compute future value or present value for single payment amounts
• Distinguish between single payments and streams of payments and between uneven streams and annuities
• Solve for the interest rate or time period for simple present value and future value problems
• Define risk
• Describe how risk influences investment decisions
• Calculate risk and rates of return
• Describe how diversification can limit risk
• Explain how diversifiable risk can be lowered using a portfolio approach

Target Audience: This course is designed for adult learners and/or non-financial managers.

Level/Prerequisites: Introductory/No Prerequisites

Estimated time to complete: 3-5 hours

Ask the Expert: This course has an "Ask the Expert" feature, which submits your questions directly to an expert in the field you are studying. Questions are answered as quickly as possible and usually within 24 hours.

Required Material: This course does not require any additional purchases of supplementary materials.

Successful Completion Requirement for IACET CEU: Learners must achieve an average test score of at least 70% to meet the minimum successful completion requirement and qualify to receive IACET CEU credit. Learners will have three attempts at all graded assessments.