Risk management is a practice most frequently applied by individuals, without often realizing its importance. Managing risk can be considered more important that the application of science in our daily lives. Businesses often apply risk management without incorporating probability theory that can lead to decisions adversely affecting individuals as well as large population by extreme events. This course is meant to introduce how to think about making decisions in our everyday lives, considering the effect of rare events that are likely to have a severe impact. The program will bring examples from financial markets and apply them in other industries including healthcare, economics, aviation, nuclear energy, etc.
- Making decisions under uncertainty.
- Understanding how to determine the impact of extreme events.
- Learning how to take risks while investing money.
- Apply the understanding of extreme events to other industries, including healthcare, nuclear power, aviation, etc.
Day-1:
1-2 hour: Introduction, probability distributions
1-2 hour: terminology, financial options, portfolio theory
Day-2:
1-2 hour: Jensen's inequality, Extreme values and outliers
1-2 hour: Power law distribution, alpha, application, taking risks in the capital markets
Overview of probability distributions
- Extremistan and Mediocrastan
- Convexity and concavity
- Flaws in traditional finance, Modern Portfolio Theory
- Financial options, antifragility: gaining from disorder
- Jensen's inequality
- Extreme values and outliers
- Power law distribution, alpha
- Application in other phenomenon, including pandemics, wars, inflation, nuclear energy
- How to take risks in the capital markets
Dr. Mohsin
Dr. Mohsin, Assistant Professor at the Institute of Business administration Karachi, holdsa PhD in Finance from La
Trobe University, Australia. He completed his MBA degree from North eastern University, USA and BS in Computer
Science from King Fahd University(KFUPM), Saudi Arabia. He has also completed the Real World Risk Institute
(RWRI) training regarding the application of risk management through the application of probability theory
- Risk managers
- Corporate executives
- Analysts
- Finance professionals
