Finance studies how people allocate resources and manage risk over time. The time value of money means receiving money now is better than later, and present value calculations allow comparison of sums over different times. Risk-averse individuals can reduce risk through insurance, diversification among many unrelated risks to reduce idiosyncratic risk, and accepting lower returns. According to the efficient markets hypothesis, asset prices instantly reflect all available information so markets are efficient and random walks, but some question if irrational factors also affect prices.