Lecture1 - 9/3/2010 MGMT 4370 / MGMT 7760 Risk Management...

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9/3/2010 1 MGMT 4370 / MGMT 7760 Risk Management Aparna Gupta Lally School of Management and Technology Office: PITTS 2104 Email: guptaa@rpi.edu Phone: x2757 What is Risk? And why should we bother? •R i s k – Variability that can be quantified in terms of probabilities. (reserving ‘variability that cannot be quantified at all’ for ‘uncertainty’) • Risk is everywhere – future cannot be predicted • The intuitive commonsense of Risk-Reward coupling – No risk; no reward – Taking on more risk is sensible only if it results in greater
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9/3/2010 2 Types of Risk – The LIST! • Risk: volatility of returns leading to ‘unexpected losses’ with higher volatility indicating higher risk. • Volatility of returns is directly or indirectly affected by Volatility of returns is directly or indirectly affected by numerous variables – called risk factors
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This note was uploaded on 01/27/2011 for the course MGMT 4370 taught by Professor Gupta during the Fall '10 term at Rensselaer Polytechnic Institute.

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Lecture1 - 9/3/2010 MGMT 4370 / MGMT 7760 Risk Management...

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