This section gets a bit academic. Here are the basic principles which students of finance learn. The principles described here are quite useful when it comes to understanding finance and financial markets. Study these well, and investigate further whenever necessary.

Among the finance principles that are covered here are the time value of money, risk versus return trade-off, efficient market hypothesis, use of cash flows in valuations, and the agency dilemma. Some readers who are new to investing and have limited knowledge of finance may find some of these topics a bit foreign and even challenging.

Nevertheless, it is worthwhile to ponder over these principles and even re-study them at a later time. After all, the time spent will represent investment into knowledge. All without paying college tuition.

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Introduction to Basic Principles of Finance

In this section, we start digging into some of the most important principles of finance. If you've taken a university finance class, you should be familiar with most of them. As an investor and/or trader, you need to have a full grasp of these important concepts.

Time to study some finance theory