Risk

Against the Gods: The Remarkable Story of Risk – Peter L. Bernstein
A highly entertaining historical account of risk in our society. From the probability theory of Bernoulli and Bayes to the statistics of Gauss; from the portfolio theory of Harry Markowitz to the prospect theory of Kahneman and Tversky, they are all in here. A must-read for every financial market professional.
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A Demon of Our Own Design – Richard Bookstaber
In this fascinating book on risk management, there’s only one hero: the cockroach. Its coarse rule of simply running away from the slightest puff of air is often the best survival strategy in a fundamentally unpredictable environment such as financial markets. Using illustrations of nuclear power plants and airline accidents, Bookstaber shows how complex risk management systems currently in fashion may end up contributing to instability rather than mitigating it. Having been at the nexus of many financial market crises in the past 25 years, Richard Bookstaber knows what he’s talking about.
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