Discover and read the best of Twitter Threads about #BSOP

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I have even met some foolhardy alternative investment aka asset managers that use the BSOP Black Scholes Option Pricing Model Calculator to price oil exploration, drilling and other natural resource mining risks.
BS Option Pricing Model like its cousin the CAP-M is widely misused
Neither BSOP nor CAP-M were invented to price the risks of tangible engineering projects and other physical activities of commercial nature such as mining, drilling, real estate ventures, REITs, Securitized Toxic Assets, Embedded Bonds, etc.
Model Abuse leads to Modelling Risk!
Although the #BSOP Model has paved the way forward in the domains of Quantitative Finance, Investment Portfolio Management, and Mathematical Trading, like no other academic invention,, it's abuse and misuse, was never controlled.
#LTCM is a case study and an e.g. of that failure!
Read 5 tweets
I have been asked to do a detailed write-up on what does and does not constitute risk management.
There is a lot of confusion within the scholarly cum practitioner domain, as many topics are unjustly added or deleted from academic curriculums and workshop topical course outlines
Risk Management has a wide scope both within the financial services and non-financial services industry.
Especially, Risk as a subject has greatly benefited from the transfer of applicable and vocational knowledge outside the Insurance Field, over the years.
Risk as a profession, which was and continues to be dominated by Applied Statisticians, and Mathematicians, generally fitted well into the #Actuarial Domain, but, only until recently, when scholars from other non-related professions jumped into the market, offering afresh ideas.
Read 19 tweets

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