Stress Testing
The effectiveness of a stress-testing program depends on the availability of quality data and modeling tools.
- File size:
275.14 KB - Published on:
2007-09-21 04:27 PM
Stress testing is a useful tool for risk management as it provides valuable information to portfolio managers about vulnerabilities of the portfolio to extreme, yet probable, events. Stress testing used in conjunction with EC and other VAR measures help portfolio manager’s focus on the impact of events for which the firm is not capitalized. This information helps in defining hedging and rebalancing activities, which in turn minimizes the volatility of earnings.
Please sign-in to download the document.
No account? Register with us!
