The article discusses how investors balance risk and return when building a portfolio. It explains the concept of diversification to reduce risk, and introduces the Capital Asset Pricing Model (CAPM) to price securities based on their risk level. The researchers show that securities are priced according to their beta risk compared to the market, with the Security Market Line indicating the expected return for each stock. This model helps investors make informed decisions about their investments based on the tradeoff between risk and return.