Aaron Brown

Aaron Brown is managing director and risk manager at AQR Capital Management and the 2011 GARP Risk Manager of the Year. He wrote Red-Blooded Risk and The Poker Face of Wall Street. He was named Financial Educator of the Year by the readers of Wilmott Magazine and his website won a Forbes Best of the Web award for Theory and Practice of Investing.

Articles From Aaron Brown

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Financial Risk Management For Dummies Cheat Sheet

Cheat Sheet / Updated 06-30-2024

Financial risk management can be very complicated, which can make it hard to know where to begin thinking about it. This Cheat Sheet distinguishes some of the key concepts such as risk versus danger and opportunity, probability, volatility, normality and uncertainty. It discusses how to manage the seven major types of financial risk in financial institutions including asset managers, banks, insurance companies and dealers. These aren’t exclusive; in fact, a common mistake is to fixate only on one type of risk. Most risks cross boundaries and present issues of several, or even all seven, types. The seven types are market risk, credit risk, operational risk, liquidity risk, funding risk, reputational risk and political risk.

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