Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.

PART 9 The Real Economy in the Long Run
Chapter 27 of 36 Basic Tools of Finance
Section 16 of 16
…
Chapter 27 Conclusion.
Here we have considered some of the basic tools people use when making financial decisions.
The concepts of present and future value tells us a dollar in the future is less valuable than a dollar today.
The theory of risk management tells us since the future is uncertain risk-averse people can take actions to protect against uncertainty such as buying insurance.
The concept of asset valuation tells us any company’s stock price reflects both its present profitability and future profitability expectations.
The efficient markets hypothesis tells us prices of all stocks in the stock market reflect all available value information, so even a skilled trader cannot beat the market unless lucky.
Stock market fluctuations move in conjunction with fluctuations in the broad economy.
Sudden large stock market value changes happen because of unexpected events.
(end of chapter 27)
… ...
unexpected events
yokisenu dekigoto
予期せぬ出来事
Congratulations! 27/36 = 75% of way to becoming competent economist.

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