MODELING RISK - 2ND EDITION
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.
"Unavoidable for any professional...logical, concrete and conclusive approach."
"A “must-have, must-read” book with practical applications of risk analysis."
"Clear step-by-step...latest technology in decision making for real-world business."
"Must-read for portfolio managers...captures risk exposure of strategic investments."
"Clearly organized tool-supported exploration of real-life risks, options, strategy."
"Valuable tools for corporations to deliver value to shareholders and society."
"Powerful toolset for program managers to make rational choices."
"My favorite writer...a sparkling jewel, complex concepts with lucid explanations."
"Pragmatic powerful risk techniques, valuable theoretical insights and analytics."
"Clear roadmap, breadth of topics to create dynamic risk-adjusted strategies."
"The best risk modeling book is now better...required reading by all executives."
"Step-by-step complex concepts with unmatched ease and clarity...a “must read”."
"Most important risk tools in one volume, a definitive source on risk management with vivid examples."
"Innovative approach bridging the gap between theory and practice."
"A “must have” for experience with cutting-edge, high-productivity analytical tools."
"Advanced theories of mathematical statistics with practical techniques."
" Brilliantly clear exposition of nontrivial subjects, theory and real-world practice."
"Absolutely the best book in risk,mere mortals can do it...useful in all industries."
"Conceptualizes and measures risk...great value to professionals, VCs, investors."
"Combines practical application with intellectual and academic rigor."
"The most comprehensive, understandable, practical book indispensable in valuation...a tour-de-force."
"Helps managers make informed, disciplined, replicable, defensible choices."
"Complex topics exceptionally explained...can understand and practice."
"Bridge of theory and practice, intuitive, understandable interpretations."