Mathematics and Statistics for Financial Risk Management

Preface

The recent financial crisis and its impact on the broader economy underscore the importance of financial risk management in today's world. At the same time, financial products and investment strategies are becoming increasingly complex. It is more important than ever that risk managers possess a sound understanding of mathematics and statistics.

Mathematics and Statistics for Financial Risk Management is a guide to modern financial risk management for both practitioners and academics. Risk management has made great strides in recent years. Many of the mathematical and statistical tools used in risk management today were originally adapted from other fields. As the field has matured, risk managers have refined these tools and developed their own vocabulary for characterizing risk. As the field continues to mature, these tools and vocabulary are becoming increasingly standardized. By focusing on the application of mathematics and statistics to actual risk management problems, this book helps bridge the gap between mathematics and statistics in theory and risk management in practice.

Each chapter in this book introduces a different topic in mathematics or statistics. As different techniques are introduced, sample problems and application sections demonstrate how these techniques can be applied to actual risk management problems. Exercises at the end of each chapter, and the accompanying solutions at the end of the book, allow readers to practice the techniques they are learning ...