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Comprehend how market conditions, such as changes in the risk-free rate and market risk premium, influence stock and portfolio returns.
Recognize the principle of diversification and its effects on portfolio risk.
Identify the factors that cause shifts in the Security Market Line (SML) and understand the implications of such shifts.
Calculate portfolio betas and understand the impact of portfolio composition changes on its beta.

Definitions:

Discipline

A field of study or branch of knowledge, or the practice of training individuals to follow a specific code of behavior, often through correction and instruction.

Abuse

Harmful, injurious, or offensive treatment of a person or entity, which can be physical, emotional, sexual, or psychological.

Harm Reduction

A set of practical strategies aimed at minimizing negative health, social, and legal impacts associated with various human behaviors, notably drug use.

Alcohol Abuse

The harmful or hazardous use of alcohol that leads to health problems, social issues, or both.

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