Palisade

Oct/Nov Web and Live Training Sessions from Palisade Experts

For those of you looking to hone your risk analysis and modeling skills, don’t miss out on our training services, both in-person and web-based!

Palisade Regional Seminars

Apply @RISK and the DecisionTools Suite to real-life problems, maximizing your software investment. All courses include free materials with dozens of example models. Participants bring their own laptops.

Events take place around the globe—look for events near you:

Asia-Pacific
Singapore: 18-20 November

Europe, Middle East, and Africa 
Amsterdam: 6-7 October
Johannesburg: 15-17 October
London: 28-30 October
London: 25-27 November

Brazil (in Portuguese)
São Paulo: 16-17 de outubro
Belo Horizonte: 22-24 de outubro
São Paulo: 29-31 de outubro
Brasilia: 19-21 de novembro
Rio de Janeiro:  26-28 de novembro

North America 
Montreal : 21-23 October
Denver: 29-31 October

Latin America (in Spanish)
Santiago, Chile: 3 al 5 de noviembre


Live Web Trainings

Delivered by an expert instructor via an interactive web session. Course notes and examples files are emailed to you. With online training you can avoid travel time and costs while still interacting with the instructor and group.

Check out these valuable training sessions, from the comfort of your own computer:

Decision-Making & Quantitative Risk Analysis using @RISK, Part II
8-9 October 2014, 1pm-5pm ET (6pm-10pm GMT)

Decision-Making and Quantitative Risk Analysis using the DecisionTools Suite, Part I
20-21 October 2014, 9am-1pm ET (2pm-6pm GMT)

Decision-Making & Quantitative Risk Analysis using the DecisionTools Suite, Part II
3-4 November, 9am-1pm ET (2pm-6pm GMT)

@RISK Improves Upon Black-Scholes Options Pricing Method

CaseStudy_BUAP

The financial world holds a great deal of risk. To help balance some of the unknowns, Dr. José Raúl Castro Esparza, professor at Benemérita Universidad Autónoma de  Puebla, in Puebla, Mexico has used @RISK to create a more exact and accurate pricing strategy for a key financial tool, the derivative. He has used this model as a teaching tool for both graduate and undergraduate students in the Actuarial Sciences and Masters of Finance programs at his university.

Derivatives are, in essence, a security whose price depends on the performance of one or more underlying assets. Companies often buy derivatives to help manage risk, as these tools can be viewed as a form of insurance policy. But how does the seller of the derivative determine its price?

The typical technique used is known as the Black-Scholes method, which takes into account the current price of the asset, the average price of the asset during the past, and how many days, months, or years into the future the asset will be bought (i.e. time until expiration of the option). Additionally, the formula incorporates a “white noise” element—which stands in as the inherent uncertainty that cannot be measured.

However, the Black-Scholes method doesn’t fully capture reality. “Real life doesn’t statistically behave in those normal distributions,” says Dr. Castro.  As an alternative, he applied a Monte Carlo method, based on the “Random Walk Model” (a mathematical formalization of random movement) that uses the appropriate statistical distribution to model random errors, and designed an interactive model in Excel VBA so that users could easily access this tool for pricing options.

@RISK’s customizability and ease-of-use made his option pricing program possible, says Dr. Castro. “I was able to develop this capability with Palisade’s software, creating a much more accurate and simple method of determining the price of these derivatives.”

» Read “@RISK Improves Upon Black-Scholes Options Pricing Method”

Non-Profits None too Confident When it Comes to Risk Management

A few days ago, we discussed how major for-profit corporations admitted they aren’t doing all they can to manage their business risks. Turns out, non-profits aren’t confident they’re doing much better.

According to a June 2014 survey of 150 U.S. nonprofit foundations and endowments conducted by SEI’s Institutional Group, 44% of them are not confident that they are spending enough time assessing the impact of potential market shocks, and 49% don’t believe that their investment committee has identified all key portfolio risks. Nearly a quarter (24%) said they lack confidence that the committee is provided with enough information to conduct substantial risk analysis.

However, these nonprofits are recognizing the importance of risk management; 46% of those surveyed said “they place greater value on positive risk-adjusted returns than on overall portfolio returns when evaluating investment success,” and that “Managing the risk/reward balance is a huge priority.”

Non-profits can use software tools such as @RISK to quantify the magnitude and probability of risks in funding streams, and enhance risk management in portfolios. Risk analysis helps non-profits develop effective strategic contingency plans, and communicate challenges to board members and other stakeholders.