Open Yale CoursesECON 252: Financial MarketsLecture 2 - The Universal Principle of Risk Management:Pooling and the Hedging of Risks<< previous session | next session >>Overview:Statistics and mathematics underlie the theories of finance. Probability Theory and various distribution typesare important to understanding finance. Risk management, for instance, depends on tools such as variance,standard deviation, correlation, and regression analysis. Financial analysis methods such as present valuesand valuing streams of payments are fundamental to understanding the time value of money and have been inpractice for centuries.Reading assignment:
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