Introduction to Risk Management
Free CFA Level I lesson in Portfolio Management. 18 min read, ~2,761 words.
Risk management = identify, measure, and modify exposures so the portfolio earns intended risks and sheds unintended ones. It is NOT risk avoidance. Risk tolerance is set at the top (board/IPS) BEFORE the budget is built. Tolerance is the willingness and ability to bear loss; budget is the dollar/sigma allocation...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- introduction to risk management
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