Risk Management: Foundations for a Changing Financial World -- CONTENTS -- FOREWORD -- ACKNOWLEDGMENTS -- INTRODUCTION -- PART I: OVERVIEW-TWO DECADES OF RISK MANAGEMENT -- CHAPTER 1: A FRAMEWORK FOR UNDERSTANDING MARKET CRISIS -- SOURCES OF CRISIS -- CASE STUDIES -- LESSONS LEARNED -- POLICY ISSUES -- QUESTION AND ANSWER SESSION -- CHAPTER 2: PRACTICAL ISSUES IN CHOOSING AND APPLYING RISK MANAGEMENT TOOLS -- EFFECTIVE RISK MANAGEMENT -- DEFINING RISK -- RISK MEASURES -- BUY OR BUILD? -- CONCLUSION -- QUESTION AND ANSWER SESSION -- NOTES -- CHAPTER 3: THE THREE P'S OF TOTAL RISK MANAGEMENT -- THE THREE P'S -- PRICES -- PROBABILITIES -- PREFERENCES -- PUTTING THE THREE P'S TOGETHER -- THE FUTURE OF RISK MANAGEMENT -- ACKNOWLEDGMENTS -- NOTES -- REFERENCES -- CHAPTER 4: REPORTING AND MONITORING RISK EXPOSURE -- THE RISK-MANAGEMENT SYSTEM -- INCORPORATING RISK INTO THE INVESTMENT PROCESS -- CONCLUSION -- ACKNOWLEDGMENTS -- QUESTION AND ANSWER SESSION -- CHAPTER 5: RISK MANAGEMENT: A REVIEW -- FINANCIAL RISK OR FINANCIAL RISKS? -- LESSONS FROM FINANCIAL DISASTERS -- POPULAR RISK MEASURES FOR PRACTITIONERS -- CREDIT RISK METHODOLOGIES -- OPERATIONAL RISK -- LIQUIDITY RISK -- A NEW CLASSIFICATION OF RISK MEASURES -- THE QUEST FOR AN INTEGRATED RISK MEASUREMENT -- CONCLUSION -- NOTES -- REFERENCES -- CHAPTER 6: DEFINING RISK -- FRANK KNIGHT -- CRITIQUE OF KNIGHT'S DEFINITION -- HARRY MARKOWITZ -- UNCERTAINTY -- EXPOSURE -- RISK -- OPERATIONAL DEFINITIONS -- AN OPERATIONAL PERSPECTIVE ON RISK -- CONCLUSION -- NOTES -- REFERENCES -- CHAPTER 7: VALUE AND RISK: BEYOND BETAS -- RISK MANAGEMENT VS. RISK REDUCTION -- RISK AND VALUE: CONVENTIONAL VIEW -- EXPANDING THE ANALYSIS OF RISK -- FINAL ASSESSMENT OF RISK MANAGEMENT -- CONCLUSION -- NOTE -- CHAPTER 8: A SIMPLE THEORY OF THE FINANCIAL CRISIS -- OR, WHY FISCHER BLACK STILL MATTERS.

THE FINANCIAL CRISIS: ONE POSSIBLE SCENARIO -- HOW WERE ALL THESE SYSTEMATIC ERRORS POSSIBLE? -- WHERE DID WE END UP? -- REFERENCES -- CHAPTER 9: MANAGING FIRM RISK -- ENHANCING RISK INTUITION THROUGH REAL-TIME PORTFOLIO MONITORING -- BANK VERSUS FUND RISK MANAGEMENT: NOT THE SAME GAME -- RISK REPORTING -- RISK JUDGMENTS -- CONCLUSION -- QUESTION AND ANSWER SESSION -- CHAPTER 10: RISK MEASUREMENT VERSUS RISK MANAGEMENT -- FROM DATA TO USEFUL INFORMATION -- THE NEW INSTITUTIONAL INVESTOR -- TRANSPARENCY AND RISK MEASUREMENT: THE NEW CONSTITUENCY -- PROVIDING THE TOOLS -- CONCLUSION -- NOTE -- PART II: MEASURING RISK -- CHAPTER 11: WHAT VOLATILITY TELLS US ABOUT DIVERSIFICATION AND RISK MANAGEMENT -- DID DIVERSIFICATION FAIL? -- DID RISK MODELS FAIL? -- SHOULD THE MAGNITUDE OF RISK HAVE BEEN A SURPRISE? -- WERE INVESTORS TOO EXPOSED TO TAIL RISK? -- CONCLUSION -- QUESTION AND ANSWER SESSION -- CHAPTER 12: RISK 2: MEASURING THE RISK IN VALUE AT RISK -- MEASURING VAR -- EVALUATING VAR -- CONCLUSIONS -- NOTES -- REFERENCES -- CHAPTER 13: HOW RISK MANAGEMENT CAN BENEFIT PORTFOLIO MANAGERS -- DEFINING RISK -- DEFINING RISK MANAGEMENT -- VAR BACKGROUND -- ADOPTING VAR -- CONCLUSION -- QUESTION AND ANSWER SESSION -- CHAPTER 14: MERGING THE RISK MANAGEMENT OBJECTIVES OF THE CLIENT AND INVESTMENT MANAGER -- MANDATES AND GUIDELINES -- PARAMETRIC RISK ANALYSIS -- PROBABILITY-BASED RISK MEASURES -- MARKET RISK STRUCTURE -- STRESS TESTING -- CONCLUSION -- QUESTION AND ANWER SESSION -- CHAPTER 15: THE MISMEASUREMENT OF RISK -- WHY INVESTORS CARE ABOUT INTERIM RISK -- WITHIN-HORIZON EXPOSURE TO LOSS -- APPLICATIONS -- CONCLUSIONS -- APPENDIX A. WITHIN-HORIZON RISK -- NOTES -- REFERENCES -- CHAPTER 16: RISKINESS IN RISK MEASUREMENT -- ON TOOLS -- STATIC RISK -- DYNAMIC RISK -- REBALANCING REGIMES AND DISTRIBUTIONS -- CONCLUSION -- QUESTION AND ANSWER SESSION -- NOTES.

CHAPTER 17: THE SECOND MOMENT -- NOTE -- REFERENCES -- CHAPTER 18: THE SENSE AND NONSENSE OF RISK BUDGETING -- RISK ALLOCATION MODELS -- RISK ALLOCATION VS. ASSET ALLOCATION -- OPTIMAL RISK ALLOCATION -- SENSITIVITY OF THE OPTIMAL RISK ALLOCATION -- RISK ALLOCATIONS AND IMPLIED IRs -- OPTIMAL ALLOCATION TO STRATEGIC AND ACTIVE RISK -- SETTING TARGET IRs -- CONCLUSION -- ACKNOWLEDGMENTS -- APPENDIX A. OPTIMAL RISK ALLOCATION -- NOTES -- REFERENCES -- CHAPTER 19: UNDERSTANDING AND MONITORING THE LIQUIDITY CRISIS CYCLE -- THE CYCLE -- MEASURING THE CYCLE -- CONCLUSION -- NOTE -- CHAPTER 20: WHY COMPANY-SPECIFIC RISK CHANGES OVER TIME -- COMPANY-SPECIFIC RISK OVER TIME -- WHY DOES COMPANY-SPECIFIC RISK CHANGE OVER TIME? -- CONTROLLING FOR THE THREE FACTORS -- CONCLUSION -- ACKNOWLEDGMENTS -- NOTES -- REFERENCES -- CHAPTER 21: BLACK MONDAY AND BLACK SWANS -- THE LIGHT SHINED BY KNIGHT -- MANDELBROT ON RISK, RUIN, AND REWARD -- THE WISDOM OF KEYNES -- QUANTIFYING KEYNES' DISTINCTION -- MINSKY ADDS A CRUCIAL INGREDIENT -- RISK AND RUIN-A REPRISE -- HIGH RISKS, LOW RISK PREMIUMS? -- OTHER RISKS -- AFTERWORD -- NOTES -- REFERENCES -- CHAPTER 22: THE UNCORRELATED RETURN MYTH -- THEORY -- EVIDENCE -- NOTES -- PART III: MANAGING RISK -- CHAPTER 23: RISK MANAGEMENT FOR HEDGE FUNDS: INTRODUCTION AND OVERVIEW -- WHY RISK MANAGEMENT? -- WHY NOT VAR? -- SURVIVORSHIP BIAS -- DYNAMIC RISK ANALYTICS -- NONLINEARITIES -- LIQUIDITY AND CREDIT -- OTHER CONSIDERATIONS -- CONCLUSION -- ACKNOWLEDGMENTS -- NOTES -- REFERENCES -- CHAPTER 24: RISK MANAGEMENT FOR ALTERNATIVE INVESTMENT STRATEGIES -- RISK MANAGEMENT FRAMEWORK -- MANAGING RISK AND RETURN -- DUE DILIGENCE -- TYPES OF RISKS -- HOLISTIC APPROACH -- CONCLUSION -- QUESTION AND ANSWER SESSION -- NOTES -- CHAPTER 25: SOURCES OF CHANGE AND RISK FOR HEDGE FUNDS -- BENCHMARKING -- TRANSPARENCY.

ARTICULATION OF INVESTMENT STRATEGY -- FEE RATIONALIZATION -- RISK CONTROL -- QUESTION AND ANSWER SESSION -- NOTE -- CHAPTER 26: RISK MANAGEMENT IN A FUND OF FUNDS -- DEFINING RISK -- MANAGING TAIL RISK -- FUTURE RISKS -- QUESTION AND ANSWER SESSION -- NOTE -- CHAPTER 27: HEDGE FUNDS: RISK AND RETURN -- THE TASS DATABASE -- NONNORMALITY OF RETURNS -- BIASES IN REPORTED HEDGE FUND RETURNS -- PERSISTENCE IN HEDGE FUND RETURNS -- PROBIT ANALYSIS OF PROBABILITY OF FUND DEMISE -- CONCLUSION -- ACKNOWLEDGMENTS -- NOTES -- REFERENCES -- CHAPTER 28: CREDIT RISK -- WHAT ARE CREDIT DERIVATIVES? -- PREDICTING DEFAULT -- STRUCTURAL PRICING MODELS -- REDUCED-FORM PRICING MODELS -- CDS -- TIME-VARYING DEFAULT INTENSITIES -- SIMULATING DEFAULT TIMES -- EXAMPLE OF SIMULATING DEFAULT TIMES -- CDOs -- THE IMPACT OF CORRELATION ON CDO PRICES -- CREDIT INDICES -- BASKET DEFAULT SWAPS -- MODELS OF CORRELATED DEFAULT -- PRICING A CDO BY MONTE CARLO ANALYSIS -- SUMMARY -- ACKNOWLEDGMENTS -- NOTES -- REFERENCES -- CHAPTER 29: TUMBLING TOWER OF BABEL: SUBPRIME SECURITIZATION AND THE CREDIT CRISIS -- RISK-SHIFTING BUILDING BLOCKS -- WHAT GOES UP . . . -- . . . MUST COME DOWN -- CONCLUSION: BUILDING FROM THE RUINS -- ACKNOWLEDGMENTS -- NOTES -- REFERENCES -- CHAPTER 30: APPLYING MODERN RISK MANAGEMENT TO EQUITY AND CREDIT ANALYSIS -- PAST DISTORTIONS IN VALUATION AND RISK ANALYSIS -- PRESENT FAILURES IN RECOGNIZING VALUE AND RISK -- FUTURE DISTORTIONS: DERIVATIVES IN STRATEGIC RISK MANAGEMENT -- CONCLUSION -- QUESTION AND ANSWER SESSION -- NOTE -- REFERENCES -- CHAPTER 31: THE USES AND RISKS OF DERIVATIVES -- DERIVATIVES -- HISTORY OF DERIVATIVE PRODUCTS -- USING DERIVATIVES IN GLOBAL PORTFOLIOS -- RISK MANAGEMENT AND DERIVATIVES -- CONCLUSION -- NOTES -- CHAPTER 32: EFFECTIVE RISK MANAGEMENT IN THE INVESTMENT FIRM -- WHY RISK MANAGEMENT NOW? -- THE GROUP OF THIRTY REPORT.

THE 1994 FOLLOW-UP STUDY -- MARKET RISK -- CONCLUSION -- QUESTION AND ANSWER SESSION -- CHAPTER 33: RISK-MANAGEMENT PROGRAMS -- RISK -MANAGEMENT PREMISES -- TODAY'S RISKS -- A RISK-MANAGEMENT PROGRAM -- CONCLUSION -- QUESTION AND ANSWER SESSION -- NOTE -- CHAPTER 34: DOES RISK MANAGEMENT ADD VALUE? -- COMPANY USES OF RISK MANAGEMENT -- MARKET REACTION -- CONCLUSION -- QUESTION AND ANSWER SESSION -- NOTES -- CHAPTER 35: RISK MANAGEMENT AND FIDUCIARY DUTIES -- FIDUCIARY RELATIONSHIPS -- FIDUCIARY LAW -- FIDUCIARY LAW VERSUS CONTRACT LAW -- TRUST LAW VERSUS CORPORATE LAW -- FIDUCIARY DUTIES -- LESSONS FROM CASE LAW -- CONCLUSION -- QUESTION AND ANSWER SESSION -- NOTES -- CHAPTER 36: FINANCIAL RISK MANAGEMENT IN GLOBAL PORTFOLIOS -- THE FUNDAMENTALS -- DEALING WITH RISK -- DEALING WITH MISCONCEPTIONS -- CONCLUSION -- NOTES -- CHAPTER 37: UNIVERSAL HEDGING: OPTIMIZING CURRENCY RISK AND REWARD IN INTERNATIONAL EQUITY PORTFOLIOS -- WHY HEDGE AT ALL? -- THE UNIVERSAL HEDGING FORMULA -- APPLYING THE FORMULA TO OTHER TYPES OF PORTFOLIOS -- CONCLUSION -- NOTES -- CHAPTER 38: STRATEGIES FOR HEDGING -- MOTIVATION FOR CURRENCY-RISK MANAGEMENT -- CURRENCY EXPOSURE AND DIVERSIFICATION -- LINEAR CURRENCY-HEDGING STRATEGIES -- NONLINEAR CURRENCY-HEDGING STRATEGIES -- CASH FLOW MANAGEMENT FOR CURRENCY-HEDGING STRATEGIES -- CONCLUSION -- QUESTION AND ANSWER SESSION -- CHAPTER 39: CURRENCY RISK MANAGEMENT IN EMERGING MARKETS -- MANAGING CURRENCY RISK -- CONCLUSION -- CHAPTER 40: MANAGING GEOPOLITICAL RISKS -- PROCESSES DRIVING RISK -- UNITED STATES -- CHINA -- RUSSIA -- EMERGING MARKETS -- GEOPOLITICAL RISK AND THE ENERGY PROBLEM -- CONCLUSION -- QUESTION AND ANSWER SESSION -- NOTES -- CHAPTER 41: COUNTRY RISK IN GLOBAL FINANCIAL MANAGEMENT -- FOREWORD -- PREFACE -- EXECUTIVE SUMMARY -- INTRODUCTION -- COUNTRY RISK -- DETERMINING COUNTRY RISK IN PRACTICE.

APPLICATIONS OF COUNTRY RISK ANALYSIS.