Does risk management involve a lot of maths?
@SOActuaries @GARP_Risk @CQFInstitute @PRMIA @CFAinstitute @irmglobal
@SOActuaries @GARP_Risk @CQFInstitute @PRMIA @CFAinstitute @irmglobal
Yes and No!
It's a well-rounded discipline.
It's a well-rounded discipline.
For #Actuarial, #Insurance, Financial Engineering, #Quantitative #Finance and Investment Management, #Mathematical #Trading, and #Financial Risk Assignments, you might require a lot of Maths and Statistics.
Is like asking whether we need milk and sugar for making ice cream ;)
Is like asking whether we need milk and sugar for making ice cream ;)
For #Auditing and Internal Controls, you need to have some basic understanding of statistics, probability models and applied mathematics.
For #ERM - Enterprise Risk Management Systems Design, Project Implementation and installation, you need to know many subjects such as risk computing(programming in R or #Python or MATLAB/C++/VBA, etc), Cost, Financial and Management Accounting, Internal Auditing,
Internal Controls, and Mathematics, and preferably some Econometrics, to measure up the predictable risk consequences (selecting and computing the severity and understanding the frequency distributions etc.).
Operational & Financial Risks are treated as different concepts in risk management, and similarly, risk and uncertainty are not the same, and hence measurement methods vary across risks and the processes mapped therein, using a selected RM Standard and the laid-down taxonomy!
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