Risk management is more important than ever in times of crisis. In addition, companies are obliged to identify, quantify and aggregate risks as part of a risk management system. IDW PS 340 has set the framework for this. This book uses a case study to show you "step by step" how to analyze and quantify risks with the help of Excel.
The book begins with the graphical representation of risks and the calculation of risk parameters such as the Value at Risk. It then aggregates different risks into an overall risk using Monte Carlo simulation. Hedging risks is also explained and how non-hedgeable risks are built into a business plan. The topic of valuing extreme risks is addressed, as well as how to model volatilities. Best of all, you need virtually no prior mathematical knowledge. You learn everything step by step.