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 …

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 …

It’s an important distinction to be made in the world of finance. Earnings at risk are when a company’s future earnings are threatened due to factors such as unfavorable economic conditions or changes in consumer tastes. Cash flow at risk, on the other hand, is when a company’s current cash …

Backtesting can become a key factor in the success of a system. Not even all experienced traders understand how to correctly implement a backtest, which often results in erroneous outcomes. If it is done correctly, we can expect some excellent results. In this article, we are going to talk about …

Both backtesting and forward testing can and should be used to test a trading strategy. A trading strategy is a set of rules for when to buy and sell an investment, usually in the form of computer code or a trading algorithm. A trading algorithm can be viewed as a …

In recent years, ESG (environmental, social, and governance) risks have received increased attention from investors due to the growing awareness of the impact these issues can have on their investments. Regulators are also increasingly requiring companies to disclose them in annual reports. Investors who want to assess ESG risks should …

In the past, there was a global trend for investors to seek out low-risk investment opportunities. However, this has changed in recent years with many investors looking at higher-risk investments as a way of generating more returns on their capital. This is especially true when considering political risk in investment. …

Tax risk is the chance that your tax liability will be higher than expected. It’s worth considering because it can be a significant expense. There are many ways to reduce or eliminate this risk, but knowing about these opportunities ahead of time can help you plan and save for them …

What is a Promissory Note? A promissory note is a document or statement containing a promise from one party to another. This note states that the note’s issuer will pay a predefined sum of money to the noteholder. Usually, it also includes the maturity date or the date on which …

When it comes to financial institutions such as banks, insurance companies, and securities firms, the model risk management framework is a way of assessing risks associated with the model that an organization uses. The main job of any financial institution is to provide services or products to their customers. This …