Risk management is vital in institutional investment management from "summary" of Institutional Investment Management by Frank J. Fabozzi
Risk management plays a crucial role in institutional investment management. Institutional investors must carefully assess and manage risks to protect the assets under their management and achieve their investment objectives. Failure to effectively manage risks can lead to significant financial losses and damage to the reputation of the institution. Institutional investors face a wide range of risks, including market risk, credit risk, liquidity risk, and operational risk. Market risk arises from fluctuations in the prices of financial instruments, while credit risk is the risk of counterparty default. Liquidity risk refers to the difficulty of buying or selling assets without significantly impacting their prices. Operational risk encompasses a variety of risks related to internal processes, systems, and personnel. To manage th...
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