Credit Value at Risk (cVAR) is a measure of the potential economic loss on credit exposures due to credit events. Credit Value at Risk may be calculated for individual assets, portfolios, or even institutions. It can be expressed in absolute terms, such as Euros or Dollars, or as a percentage …

A professional accountant is responsible for satisfying the needs of their clients or employers. However, their responsibility also extends toward the public. The accountancy profession requires accountants to act in the public interest. The same concept applies to auditors. In the auditing process, the professional ethics of an auditor is …

A floating-rate loan is a type of mortgage or loan that provides the borrower with an interest rate that can change at any time. The interest rates will typically be set for one month, three months, six months, or one year and then adjust to reflect current market conditions. Floating-rate …

Both econometrics and machine learning provide a way for analysts to have a glimpse of the future, and on that basis, make predictions. As research methodologies, both strive towards the same goal: inducing new knowledge. And, for this purpose, they adopt statistical tools, making for precision in scientific research. However, …

If you want to invest in something, you should not only think about the rate of return. It is better to also think about the risk. The risk can be high or low. It refers to how different an asset’s or security’s financial performance will be than what is expected. …

In the hedge fund industry, return over maximum drawdown is the best measure of how well the fund manager has managed risks. It measures the average return of a portfolio over its worst loss, or “maximum drawdown.” This is a relatively new indicator for managers to track and compare since …

What is Econometrics? Econometrics is a field in economics that applies statistical and mathematical methods to economic theories. It has become more relevant over the years as it helps economists quantify their economic theories and hypotheses. Econometrics helps economists test those theories by using statistical tools with mathematical equations. Therefore, …

The Tail Value at Risk (TVaR) is a financial measure of a potential loss in a portfolio. Tail Value at risk uses the same statistical principles as the traditional value at risk with the only difference being that it measures an expectation of the remaining potential loss given a probability …

Most companies use the historical value method of deriving their asset’s value. This process includes taking the asset’s cost and deducting any impairment and depreciation to reach the book value. The same method applies to deriving the value of liabilities. However, some accounting standards also require or allow companies to …

For a time, it was widely believed that the only way to determine how good an investment is, was by looking at its return. But in recent years, investors have come to realize that a high return doesn’t always equal a good investment. For example: if one company has a …