Emne Probability

Modelling volatility

Arkivert som Modelling av i 2013 0 kommentarer
Modelling volatility

An estimate of variability is the most important input into a risk model. Risk arises because the actual variable values differ from the expected value.  This is why the first question you need to ask yourself in order to estimate risk is: How much can the variables be expected to differ from the expected value? […]

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Risk modelling

Arkivert som Risk av i 2013 0 kommentarer
Risk modelling

The strategic decisions of a business are based on plans and assumptions about how the future will develop. These assumptions are more or less uncertain, in fact, the only thing that is certain that the outcome will not be exactly as expected.  A plan and the financial estimates it contains is a modelled representation of […]

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Simulation of balance sheet risk

Arkivert som Hedging av i 2013 0 kommentarer
Simulation of balance sheet risk

As I wrote in my article about balance sheet risk, a company with covenants in its loan agreements may have to hedge balance sheet risk even though it is not optimal from a market risk perspective. But how can the company know which covenant to hedge? Often a company will have more than one covenant, […]

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The risk of planes crashing due to volcanic ash

Arkivert som Modelling av i 2013 0 kommentarer
The risk of planes crashing due to volcanic ash

When the Icelandic volcano Eyafjallajøkul had a large eruption in 2010 it lead to closed airspace all over Europe, with corresponding big losses for airlines. In addition it led to significant problems for passengers who were stuck at various airports without getting home. In Norway we got a new word: “Ash stuck”1 became a part […]

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