In this course, we take you on a journey of imagining and visualising the relationship between risk and return, the quarrelsome and often misunderstood siblings of the investment world. You'll see them in an entirely different light by the time you reach the end.

You'll discover the many-sided nature of this relationship through visualisation, imagination, simulation, and analysis. You'll learn that risk and return are euphemisms for fear and greed, and that far from being a scary monster, risk is actually the driver of return. As our resident professor puts it, without risk there is little or no return, and risk is best viewed through a prism of statistics and event probability, a range of probable return outcomes around an average value.

To add to your learning experience, this package also gives you access to our Learning Lounge, designed for those who want to delve deeper into a subject and get to know its nuts and bolts.

Is the glass half full or half empty? That is the question.

Understanding Risk Profiling examines the diversity of human perception, particularly the paradox that while the same investment may appeal to one investor it may be equally unattractive to another. Personal preferences play a key role in assessing investment prospects and must be superimposed on the already complex relationship between risk and return.

This course probes this seemingly contradictory aspect of human nature through principles originally developed by the 18th-century Swiss mathematician and physicist Daniel Bernoulli, using an imaginary game of chance he called the Saint Petersburg Paradox. You can play a similar game to find out your risk score and discover whether your profile is what you thought it would be.

To add to your learning experience, this package also gives you access to the Learning Lounge, designed for those who wish to delve deeper into a subject and understand its nuts and bolts.

Understanding Diversification explores the simple but wise age-old parable of not putting all your eggs in one basket. But are all eggs and all baskets created equal, and how many eggs should we put in a basket anyway?

To answer these questions, we trace the steps of a mysterious medieval figure whose fortunes have finally taken a favourable turn and who now has a windfall to invest in the property market. We begin with the mathematics of a simple diversification strategy, then examine event probability using a game of dice, elaborating on the deeper nuances of diversification and what they mean for modern portfolio construction and management.

To add to your learning experience, this package also gives you access to our Learning Lounge, designed for those who want to delve deeper into a subject and get to know its nuts and bolts.

Understanding Asset Classes continues the theme of diversification by focusing on the building blocks of investing: the many types of asset and their classification and characteristics. These include cash, stocks, bonds, property, and commodities, as well as more exotic and less tangible ones such as options and futures.

We focus on stocks and bonds and examine their behavioural traits, including historical risk and return profiles, the factors that make them tick, their sensitivity to market and economic events, and the unique inverse relationship between them that makes these instruments such useful partners in portfolio construction. We discover that, far from being homogeneous groups, stocks and bonds come in many varieties and their spectrum of risk and return is wider than could be imagined. We also put property under the microscope, applying tried and tested criteria to selecting an investment property to buy.

To add to your learning experience, this package also gives you access to the Learning Lounge, designed for those who wish to delve deeper into a subject and understand its nuts and bolts.

Understanding Portfolio Construction is where all the concepts introduced in Modules 1 to 4 come together. In a portfolio, risk and return take on new characteristics and asset classes begin to behave differently than when they were in isolation: normally volatile stocks can exert a moderating influence, while steady bonds can emerge as a catalyst for change.

Asset classes behave differently in a portfolio setting. Your preferences as to which you hold, in what combination, and for how long add yet another dimension to the complexity.

Modern Portfolio Theory (MPT) describes these transformations, interactions, and permutations in the context of an investment portfolio. One peculiarity is that adding a risky asset to a portfolio can actually reduce overall risk, which for many seems counter-intuitive. Another key insight is that a portfolio containing two or more risky assets can be engineered to maximise return for a given level of risk, or minimise risk for a given level of return. There is only a finite set of portfolios that can be constructed this way, and collectively these trace out a curve referred to as the Efficient Frontier.

To add to your learning experience, this package also gives you access to the Learning Lounge, designed for those who wish to delve deeper into a subject and understand its nuts and bolts.

Understanding the Magic Black Box is a revealing glimpse into an essential tool of this study program: the silent engine that works tirelessly behind the scenes, generating the dynamic numbers that let us create graphs, tables, and diagrams to illustrate key investment concepts and ideas.

We call it the "Magic" Black Box because of its diverse abilities, from generating random numbers that support our visualizations to running simulations and producing probabilistic scenarios and forecasts. It's a versatile computational tool that helps us demystify a subject many find mysterious.

To add to your learning experience, this package also gives you access to our Learning Lounge, designed for those who want to delve deeper into a subject and get to know its nuts and bolts.