The Rules of Risk: A Guide for Investors

A Dynamic Framework for Forward–Looking Risk Management

Praise

"A powerhouse in the understanding of risk. With their ingenious blend of psychology and rigorous quantitative analysis, the authors have created an authoritative and innovative handbook of risk management that is essential for both practitioners and theoreticians."––Peter L. Bernstein, Author, Against the Gods, Capital Ideas, and The Power of Gold

"This excellent and readable book provides an innovative approach to choosing actions when the outcomes are uncertain. Anyone with an interest in improving their decision–making skills would benefit from reading this. Anyone with a professional interest in risk management must read it."––Stephen A. Ross, Fisher Black Visiting Professor of Finance, Massachusetts Institute of Technology; Sloan School of Management, Sterling Professor of Economics and Finance, Yale University

"Ron Dembo and Andrew Freeman have done an excellent job of describing how to think about and measure risk. This will become required reading for businesses and personal investment executives."––Ned C. Lautenbach, Senior Vice President and Group Executive, IBM

Introduction: It Really Happened.

How to Think About Risk.

The Elements of Risk Management.

Of Decisions and Risk.

Sweet Regret.

Keeping Up With the Joneses.

Paying for Playing.

The Rap Trap and Evaluations.

Of Life, Lotteries, and Stock Options.

Making Good Things Better.

Know Your Risk.

Afterword: How Regret Can Change Your Life.

Index.

DR. RON S. DEMBO is President and CEO of Algorithmics, Inc., a leading provider of innovative financial risk management software. Prior to founding Algorithmics in 1989, he managed a risk analysis group at Goldman, Sachs, and served on the academic faculties of several universities, including Yale University.
ANDREW FREEMAN manages and edits the financial services division of the Economist Intelligence Unit. From 1994–1997 he was the American Finance Editor for the Economist in New York.