The theory included concepts that went on to become important elements in investment dialogue: risk aversion, volatility as the definition of risk, risk-adjusted returns, systematic and nonsystematic risk, alpha, beta, the random walk hypothesis and the efficient market hypothesis. (All of these are addressed in the pages that follow.) In the years since it was first proposed, that last concept has proved to be particularly influential in the field of investing, so significant that it deserves its own chapter.
