Risk Analysis
"Knowledge is the only instrument of production that is not subject to diminishing returns." [John Clarke]
This exercise was given by a Math genius and a very likable person, Nidal Sh., to former colleagues of mine. I enjoyed it very much. I think it is a very useful exercise to sharpen your understanding for data and for risk in general.
You are a fund manager (FX, Real Estate, Equities or Fixed Income). You need to perform two presentations:
a) Show your CEO that your fund is very risky compared to the other ones. You need more capital, budget and other resources to deal with that properly. b) Show a potential client that your fund generates safe income and that it is less risky than the other high-speculative funds.
Your Quant department has provided all possible monthly returns for each fund - 2,500 possible outcomes for each one.
Generate as many risk definitions as possible and prepare your two presentations. Keep in mind that you need to reverse your arguments completely between your presentations. And try to visualize your data (introduce meaningful graphics).
You can download the 182 KB Excel data file below:
Fund Returns for Risk Analysis Exercise
Please note that this file is for information purposes only. It comes without any warranty - please read my disclaimer.
You can start on this exercise now. If you like to share your findings with me, send me an email, please. You will find it on my Contact page.
Last modified 1yr ago
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