Friday, September 17, 2010


Ellen Says:---risk budgeting is a dynamic portfolio management process whereby scarce resources are put to work to achieve the optimal result. As such, risk budgeting enables an investor to evaluate the portfolio contribution to various exposures to risk. It begins with the determination of current risk exposures to the managers and strategies. Then, it uses the risk measure as the denominator of the risk-adjusted return equation. It ends with
risk being used as the basis of "strategic risk management."

Risk budgeting and should serve equally well for both risk management and investment professionals. If you are looking for state-of-the-art discussion of risk budgeting, this collection of articles is a must-read. If it is a more practical framework than you are interested in, several examples from real-life situations are provided. As for advanced insights into risk budgeting as well as risk management, this collection has plenty to offer.

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