Posts tagged with price
"Pricing" risk means, in part, assessing the probability of some sh*tty outcome.
Like, “Well, Baggins, what are the chances that…
- interest rates move against us?”
- the company defaults on its debts?”
- a chain reaction based in the short-debts of South Asian markets triggers a worldwide fear of Russian default, thus causing a prolonged period of high volatility that nearly wipes out the American financial sector because of a single highly-leveraged hedge fund run by Nobel laureates?”
- you make me a mustard sandwich?”
It means more, though, because of risk aversion, loss aversion, and the interaction of one investment with others in one’s portfolio.