E-Books →The Known, the Unknown, and the Unknowable in Financial Risk Management Measurement and Theory Advancing Practice

Free Download The Known, the Unknown, and the Unknowable in Financial Risk Management: Measurement and Theory Advancing Practice By Francis X. Diebold (editor), Neil A. Doherty (editor), Richard J. Herring (editor)
2010 | 392 Pages | ISBN: 0691128839 | PDF | 5 MB
A clear understanding of what we know, don't know, and can't know should guide any reasonable approach to managing financial risk, yet the most widely used measure in finance today-Value at Risk, or VaR-reduces these risks to a single number, creating a false sense of security among risk managers, executives, and regulators. This book introduces a more realistic and holistic framework called KuU-the Known, the unknown, and the Unknowable-that enables one to conceptualize the different kinds of financial risks and design effective strategies for managing them. Bringing together contributions by leaders in finance and economics, this book pushes toward robustifying policies, portfolios, contracts, and organizations to a wide variety of KuU risks. Along the way, the strengths and limitations of "quantitative" risk management are revealed.