Future events are far from certain in the business world. This is especially true for smaller businesses, which tend to have more volatility than larger organizations, or newer businesses without a ...

What Are Risk-Neutral Probabilities? Risk-neutral probabilities are probabilities of potential future outcomes adjusted for risk, which are then used to compute expected asset values. In other words, ...

Ruin probabilities in risk models quantify the likelihood that an insurer’s reserves will be exhausted in the face of unpredictable and potentially large claims. These models lie at the heart of ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...