Risk Modification: Transferring, Shifting, and How to Choose
Risk transfer is the process of passing on a risk to another party, often, but not always, in the form of an insurance policy. Risk Shifting
Risk Modification: Prevention, Avoidance, and Acceptance
Risk Prevention and Avoidance Risk Acceptance: Self-Insurance and Diversification
Identification of Risk – Financial Vs. Non-Financial Risk
Financial Risks Non-Financial Risks
Risk Budgeting
Risk budgeting picks up where risk tolerance leaves off. Whereas risk tolerance focuses on the appetite for risk and what is and is not acceptable, risk budgeting has a more specific focus on how that risk is taken. Risk budgeting quantifies and allocates the tolerable risk by specific metrics; it extends and guides implementation of the…
Risk Governance – An Enterprise View
An Enterprise View of Risk Governance
Risk Management Framework
A risk management framework flows logically from the definition of risk management that was previously given: It is the infrastructure, process, and analytics needed to support effective risk management in an organisation. Despite customisation, every risk management system or framework should address the following key factors:
Risk Management Process
Risk, broadly speaking, is exposure to uncertainty. Risk is also the concept used to describe all of the uncertain environmental variables that lead to variation in and unpredictability of outcomes. More colloquially, risk is about the chance of a loss or adverse outcome as a result of an action, inaction, or external event. Risk exposure is…
Behavioral Finance and Market Behavior
Defining Market Anomalies Anomalies are apparent deviations from the efficient market hypothesis, identified by persistent abnormal returns that differ from zero and are predictable in direction. Not every deviation is anomalous. Misclassifications tend to stem from three sources: choice of asset pricing model, statistical issues, and temporary disequilibria. Momentum Bubbles and Crashes