## Risk. What is Risk?

What is risk? Risk is uncertainty. Risk is opportunity. Risk is often misunderstood. Traders like risk and uncertainty because uncertainty breeds opportunity and trades.

When it comes to financial risk management, we measure price movements (**financial risk**) and volatility (i.e. standard deviation). We use a simple measure to answer a simple question – “By how much can prices move over a given time period?”

Here is a simple rule for risk assessment. Don’t think in terms of absolutes and averages. Think in terms of levels, trends and scales. The risk is not that you will get the average or the averaging period wrong. The risk is that you will misread the level/threshold of risk you are facing; that you will misread the change and miss the transition to the next higher level.

- Asset Liability Management – Earnings at Risk
- Asset Liability Management – Fall in Market Value of Equity
- Value at Risk, Histograms and risk management in Excel
- Comparing VaR models, metrics and methods
- Calculating Conditional Value at Risk (CVaR) or Expected Shortfall – VaR and beyond
- Calculating Value at Risk for Options and Futures
- Value at Risk for Swaps – Interest Rate & Cross Currency Swaps VaR
- Crude Oil Mispricing Model – Commodity Prices and a study in Trailing Correlations
- Relative Gold Price Model – Forecasting the price of gold
- Convexity & Duration calculator for US Treasuries

- Value at Risk (VaR) Margin Lending Prime Brokerage Case Study
- Calculating Value at Risk (VaR): Step by Step Guide & Case study
- Liquidity Risk Management Case Studies
- Master Class: Risk for the Oil and Petrochemical Industry
- Jet Fuel Aviation Hedge Case Study
- Stress testing guidelines for bank: A simple comparison of US, European and Asian guidelines
- Risk Assessment Analysis: Exposure and Target Accounts for Risk Hedging

- What is Risk? What is Risk Management?
- Risk Assessment. What is Risk?
- Calculating Value at Risk (VaR)
- Calculating Value at Risk for Swaps (Rates & Currency) using Historical Simulation
- The ALM Crash course and survival guide
- Collateral Valuation in Credit Risk Management Course
- Correlation
- Market Risk Metrics
- Risk management: Risk systems for Central Banks
- Setting Counterparty Limits, Market Risk Limits & Liquidity and Interest Rate Risk Limits
- Stop Loss Limits – Review triggers
- Setting Risk Limits: Worst Case Loss versus Most likely loss
- Understanding Stress Testing: A short guide to stress testing for board of directors and board risk committee members
- Liquidity Stress Testing
- Advance Risk Management Models Training Workshop – Resource page
- Financial Risk Management Training Workshop – Resource page
- Frontier and Emerging Markets Enterprise Risk Management: A practical perspective
- Portfolio VaR – Simple Moving Average Variance Covariance Approach using the Short Cut technique – PROOF!!
- Value at Risk course guide to dummies

# Recent Posts

- Risk Assessment Analysis: Exposure and Target Accounts for Risk Hedging
- Calculating Value at Risk. FRM MBA Workshop Transcript. Day One
- FRM Training: Risk Exposure Estimation. Transcript
- Asset Liability Management (ALM) Study Guide for Board Members - coming soon to an iPad near you.
- Risk Management Training - The quest for 25 answers to 25 questions. A risk student speaks.
- The LIBOR Crisis Barclays Bank.
- Financial Risk Management MBA Workshop - Fuel Hedging Case - The Case for and against Jet Fuel Hedging
- More Forward Rates Lessons: How to calculate Forward Rates - Calculations walk through
- Selling Treasury Derivative products: Estimating client exposure to crude oil price volatility
- Market Risk Metrics – Volatility Trend Analysis

# Premium Courses:

**PDF & EXCEL**

**Videos**

- Calculating Value at Risk (VaR) – Package
- Calculating VaR – Includes case study
- Calculating VaR – EXCEL Example
- Calculating VaR for Futures and Options – EXCEL Example
- Collateral Valuation in Credit Risk Management
- Comparing Value at Risk – Model, Methods and Metrics – EXCEL
- Portfolio Risk Metrics – EXCEL Example
- Portfolio VaR – EXCEL Example
- Risk Frameworks & Applications – 2nd Edition
- Setting Counterparty Limits
- Setting Limits – EXCEL Example
- Setting Counterparty Limits – Package
- Sample Counterparty Limit Proposal
- Value at Risk Example for Fixed For Floating Interest Rate Swaps – EXCEL
- Value at Risk with Liquidity Premium
- Value at Risk using the Monte Carlo simulation with Historical Returns approach

## One thought on “Risk. What is Risk?”