In this module, we will discuss risk and return. As an investor, the first thing you care about is the return. Investors always wanting to achieve a higher return given a certain level of risk. Higher return is easy to understand and there's almost no dispute about it. But when we think about risk, different people have different attitudes towards risk. I want you to think about some examples in real life. Some people like extreme sports, such as snowboarding, rock climbing, skydiving, surfing and cave diving. They're fans who enjoying these sports so much and cannot live without them. Well, other people may think it's too dangerous to try. Another example is food. Some people are very brave to try different kinds of food and new flavors while others prefer to stick to their old routine. Owning to these different tastes, there are a wide variety of restaurants for you to choose from. Just like the example of sports and food, people have different risk preferences. According to empirical research some investors are risk loving. Well, most investors are risk averse. This is especially true when the stake is big. This is also why we need to buy car insurance, health insurance and home insurance. We cannot bear the downside risk all by ourselves. We need insurance companies to help us mitigate the risks. In the context of investment, risk is the possibility that investors may lose money. Almost all investments carry a certain level of risk because investment return is not fixed ahead of time. Generally speaking, if you want to accept more risk, you can also achieve a higher return. But what is the precise relationship between risk and return? We need a systematic framework to analyze it. First, let's get introduced to several ways of measuring return and the relationship between these measures. Next, we will cover common matters to evaluate risk. Then we can further categorize the risk into systematic risk and unsystematic risk. For the investors, not all risks matter. The next topic is how to measure systematic risk. After that, we can put all these pieces together to establish the capital asset pricing model, which is a widely used model to estimate the expected return of a security. In this module, we provide a guideline for you because no matter what your risk preference is, you need to have a general understanding of what risk and return are. In practice, there are a wide array of investment opportunities for you to choose from. After this module, you will be in a better position to decide the best investment opportunities based on general knowledge you learn and your own risk preference.