Risk Management Exams Required for Chinese Financial Managers

As a result of the world financial crisis, China is taking risk management seriously. The Chinese financial regulatory system has instituted testing for all workers in the financial sector, including risk managers, certified financial analysts and information security engineers. The workers are required to pass exams within one year, or lose their jobs. “There are […]

Monte Carlo Simulation Provides Advantages in Six Sigma

First of all, what is Monte Carlo simulation?Monte Carlo simulation is a computerized mathematical technique that allows people to account for variability in their process to enhance quantitative analysis and decision making. The technique is used by professionals in such widely disparate fields as finance, project management, energy, manufacturing, engineering, research and development, insurance, oil&gas, […]

The Lost Decade and How to Avoid Another One

A broad-reaching reevaluation has been forced on both financial planners and retirees by the drastic down-trend in the financial markets.  In my last commentary on retirement planning, I cited the work of Wharton professor Jeremy Siegel, who has used risk analysis and other forms of statistical analysis to estimate that it takes about twenty years […]

Uses of the Uniform Continuous Distribution

The continuous uniform distribution represents a situation where all outcomes in a range between a minimum and maximum value are equally likely. From a theoretical perspective, this distribution is a key one in risk analysis; many Monte Carlo software algorithms use a sample from this distribution (between zero and one) to generate random samples from […]

The Stochastic Nature of Risk Aversion

An aspect often missing from risk analysis discussion is the stochastic nature of risk aversion. In calibrating a financial model, the resulting implied values are the ones that would prevail, in that they are risk-adjusted. The expected cash flows are discounted at a rate that takes risk aversion into account. Should the risk aversion vary […]

Sign of the Times?

This morning I received a couple of interesting emails. The first being from Vijay Bajaj, WCBF’s Founder&CEO. The second being from Michael Cyger, Founder of iSixSigma.  For those of you who may not be familiar with either organization, iSixSigma is one of the premier commercial organization that provides information and networking to the Six Sigma […]