6. Uses and Limitations of Quantitative Techniques

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Investment Risk and Performance Feature Articles
March 2012 | Vol. 2012 | No. 1
Source: CFA Institute
Thomas S. Coleman

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Abstract

Managing risk is at the core of managing any financial organization. Risk measurement and quantitative tools are critical aids for supporting risk management, but quantitative tools alone are no substitute for judgment, wisdom, and knowledge. Managers within a financial organization must be, before anything else, risk managers in the true sense of managing the risks that the firm faces.

This article is an extract from a CFA Institute Research Foundation monograph, A Practical Guide to Risk Management by Thomas S. Coleman. The full monograph can be downloaded free at www.cfapubs.org/loi/rf.

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Topics
Quantitative Methods
    :
  • Basic Statistical and Probability Concepts
  • ·
  • Probability Distributions
|
Risk Management
    :
  • Firmwide Risk Management
  • ·
  • Portfolio Risk Management
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