Description
The book was released on May 2010 and covers four software applications: Risk Simulator, Real Options Super Lattice Solver, Modeling Toolkit, and Employee Stock Options Valuation Toolkit. It shows how these different methodologies are used in concert with one another in a comprehensive and integrated risk analysis and risk management paradigm. This book is a completely updated version of the first edition of the Modeling Risk text. The updates include several detailed new business cases and dozens of applied cases (U.S. Military strategy, Boeing’s global systems of systems, biotech deal licensing, oil and gas exploration, manufacturing real estate, personal financial planning, employee stock options valuation under FAS123, and many more)!
We live in an environment fraught with risk and operate our businesses in a risky world, as higher rewards only come with risks. It is unimaginable if the element of risk is not considered when corporate strategy is framed and when tactical projects are implemented. Modeling Risk provides a novel view of evaluating business decisions, projects, and strategies by taking into consideration a unified strategic portfolio analytical process. The book provides a qualitative and quantitative description of risk, as well as introductions to the methods used in identifying, quantifying, applying, predicting, valuing, hedging, diversifying, and managing risk, through rigorous examples of the methods’ applicability in the decision-making process.
Pragmatic applications are emphasized to demystify the many elements inherent in risk analysis. A black box will remain a black box if no one can understand the concepts despite its power and applicability. It is only when the black box becomes transparent to allow analysts to understand, apply, and convince others of its results, value-add, and applicability, that the approach will receive wide-spread influence. This is done through step-by-step applications of risk analysis as well as presenting multiple business cases, and discussing real-life applications. This book is targeted at both the uninitiated professional as well as those well versed in risk analysis––there is always something for everyone. It is also applicable for use as a second-year M.B.A. level or introductory Ph.D. textbook. A DVD is included in the book, including a trial version of the Risk Simulator and Real Options SLS software, Excel models, and associated training videos.
The second edition includes additional practical case-studies, and multiple hands-on detailed exercises, as well as the latest forecasting techniques, and is almost double the size of the first edition, both in terms of number of pages and analytical techniques.
