Risk is not just a four-letter word

In the managed futures course I teach at DePaul University in Chicago, the first question I ask the students is “what is risk?” The usual response is that it relates to losing money in the markets. Yes, this is true. However, I like to say risk is like ice cream because it’s available in many flavors. This may include legal risk, headline risk/ reputational risk, political risk, commodity risk, key-person risk, weather risk, cybersecurity risk, investment risk, liquidity risk, regulatory risk, disaster recovery, asset liability management and the list goes on.

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