Ross, S$.$ A$.,$ Westerfield, R$.$ W$.,$ Jaffe, J$.$ F$.,$ & Jordan, B$.$ D$.(2021).$ Corporate finance: Core principles and applications $(6$th ed$.).$ McGraw$-$Hill.

These chapters advance the concept of risk by relating it to return. The concepts of risk and return are directly correlated. They affect investment and capital project selection and are incorporated in corporation and investment value.

Chapter $10,$ "Risk and Return: Lessons from Market History," pages $287315.$

Chapter $11,$ "Return and Risk: The Capital Asset Pricing Model $($CAPM$),"$ pages $316356.$

Risk management is used by all investors and corporations. This discussion will help you understand how world$-$class investors manage risk. These risk management concepts will be employed in the Unit $10$ assignment, Financial Engineering to Enhance Shareholder Value. To gain a full understanding of the impact of risk on the success or failure of capital projects, you should strive to see the different views of risk and that all should be considered.

Warren Buffett is the most successful investor in our lifetime, and he employs capital budgeting tools and risk assessments before he decides to invest. After reading the two articles on Buffett, how would you assume Warren Buffett employs capital budgeting and risk management in selecting which companies to buy? How do his ideas on risk differ from academic metrics and concepts of risk? Which are more reasonable? Why is the academic definition of risk different from the definition of risk by "superinvestors" like Buffett, Munger, and Graham?