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Conservation of risk as a concept

Sunday, December 07, 2008
Adoption of a conservation of risk framework greatly increases investor/manager awareness of the trade-offs in risk and uncertainty that are at the heart of investing.

A SQUARE :: 07Dec08 Conservation of risk as a concept
Category Risk
Author Sona Blessing
Actually, the efficient market hypothesis suggests a kind of risk conservation law; except that it assumes (mistakenly) that the "market" is a closed system. In fact, information and risk flow into and out of the market all the time.
These are what we now call "alternative risk premia".
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