Introduction

T. E. Cooke, J. Matatko and D. C. Stafford
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T. E. Cooke: University of Exeter
J. Matatko: University of Exeter
D. C. Stafford: University of Exeter

A chapter in Risk, Portfolio Management and Capital Markets, 1992, pp 1-4 from Palgrave Macmillan

Abstract: Abstract Since the worldwide stock market crash of 1987, the word ‘risk’ has assumed a vital significance in practical investment terminology. While it is true that for almost 25 years academic work on capital markets has been two-dimensional, return and risk, many investment practitioners considered the rigorous, quantitative view of the second dimension as arcane and unnecessary. All that was necessary in this view was the selection of ‘good’ or ‘under-valued’ securities. With the sudden and dramatic fall in stock markets in October 1987 came the realisation that the ‘risk’ to which a portfolio was exposed needed to be analysed and, if possible, quantified. If such analysis could be successfully applied, then although the risk dimension could not be eliminated it could be controlled or even set at a pre-selected level. The client of the investment manager could be offered a product where, although the possibility of loss could not be eliminated, at least it was clearly labelled. This volume reports the papers presented to a meeting of financial ‘practitioners’, sprinkled with academics, each study dealing with an aspect of the process of understanding and managing ‘risky’ assets. The volume is in three parts: The Revolution in Equity Management; ‘Special Problems’; ‘Developments in Accounting and Finance’.

Keywords: Stock Market; Future Contract; Historical Cost; Interest Rate Swap; Capital Protection (search for similar items in EconPapers)
Date: 1992
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-11666-9_1

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DOI: 10.1007/978-1-349-11666-9_1

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