ABSTRACT
INTRODUCTION The two basic elements of investing are risk and (expected) return. The objective of the investor is to maximize his expected return subject to constraints including risk. Therefore return is a crucial metric and the investor must know how to calculate and interpret it. There are several ways to measure return and all of them will be presented in the next section. Apart from return, the risk of the individual securities the investor holds in his portfolio as well as his overall (or portfolio) risk is important for the investor; he must also know how to compute and interpret it. This will be covered in the third section.
