Description: This is the second part of a 2 part series on Real options analysis (ROA). This article looks into the limitations of using financial option theory when doing real options analysis with projects that are long-dated and uncertain, such as: 1. First-degree homogeneity, 2. Uncertainty must derive from Brownian motion, and 3. Risk neutrality.

Description: Explains the method used to calculate Liquidity Cost Score and Price Impact Score. Describes the rationale for and applications of these methods.

Description: Feature article provides a glimpse into recent changes to various standards of care owed to customers that will undoubtedly have a significant impact on the products and services offered by many financial institutions.

Description: This article presents recent developments and trends with respect to Economic Capital based on the work of the EC subgroup of the SOA's Risk Management Task Force.

Description: The article focuses on the need to develop a strategy for investing surplus resulting from the buildup of significant excess capital. The author discusses three principles on which a company can base its surplus investment strategy, including the risk/return preference of the client, attribution of surplus to the products and an investment strategy based on all company risks.

Description: There are two main techniques for evaluating the financial impact of interest rate movements on insurance companies: duration measures and computer simulations. In many ways these approaches provide complementary viewpoints.

Description: GDP growth has slowed as numerous headwinds have emerged. This article summarizes a research paper by Mark Alberts and Max Rudolph that addresses reasons why this is so and how risk managers can address using scenarios.

Description: Feature article summarizing a talk given by Andrew Lo at the SOA 2009 Annual Meeting on the credit crisis and why risk management failed to stop the excessive risk taking.

Description: Describes the construction of the CBOE's VIX index. Shows mathematically how the variance of investment returns is reflected in the price of the index. Provides a rational explanation of technical factors that lead the index to perform inconsistently with market sentiment. Highly relevant for any hedger seeking to use the VIX index.

Description: This article discusses market declines and the impact that white collar crime or gross dishonesty in financial reporting can have on market declines.