Hersh Shefrin : Behaviorial Risk Management Review
Behavioral Risk Management by Hersh Shefrin, Mario L. Belotti Professor of Finance, was the subject of a book review by the CFA Institute. The review synthesizes the key points of the book and ultimately expresses the significance of his exploration of behavioral psychology and operational risk.
Key features of the book such as biases including groupthink and Bayesian avoidance that Shefrin includes are also discussed. Furthermore, the article highlights how Shefrin includes tips for improving risk management in order to counter these biases.
An excerpt from the article:
In summary, Behavioral Risk Management is a thought-provoking book that advances the behavioral finance literature by moving beyond the historical focus on asset pricing to examine operational risk within a number of institutions. The book effectively demonstrates that investment managers need to understand not only the quantitative tools, such as conditional value at risk, but also the psychology of risk management.
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