The Universal Principle of Risk Management - Pooling and Hedging Risks

Explore the fundamental principles of risk management in finance through this comprehensive lecture from Yale University's Financial Markets course. Delve into the origins of probability theory and its applications in finance. Learn about key statistical concepts such as measures of central tendency, dispersion, and their relevance to financial analysis. Discover the importance of present value calculations and their historical significance in understanding the time value of money. Examine the Expected Utility Theory and its implications for decision-making in finance. Gain insights into how mathematics and statistics form the backbone of financial theories and risk management strategies. This 69-minute lecture provides a solid foundation for understanding the quantitative aspects of finance and their practical applications in risk management.

- Chapter 1. The Etymology of Probability
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- Chapter 2. The Beginning of Probability Theory
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- Chapter 3. Measures of Central Tendency: Independence and Geometric Average
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- Chapter 4. Measures of Dispersion and Statistical Applications
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- Chapter 5. Present Value
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- Chapter 6. The Expected Utility Theory and Conclusion
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