Risk Analysis in Finance and Insurance, 2nd Edition

Introduction

Financial and insurance markets always operate under various types of un-

certainties that can affect the financial position of companies and individuals.

In financial and insurance theories, these uncertainties are usually referred to

as risks. Given certain states of the market, and the economy in general, one

can talk about risk exposure. It is expected that individuals, companies, and

public establishments that aim to accumulate wealth should examine their

risk exposure. The process of risk management consists of a sequence of corre-

sponding actions over a period of time that are designed to mitigate the level

of risk exposure. Some