Over the last two decades, default rates and market risk have increased substantially. A consequence of the growing global interlacing is a strong dependence between both individual stock returns and credit events. Risk management (especially risk diversification) is much more challenging,...

This paper examines the recent innovation of “prediction markets,” a new genre of financial markets, and how such markets can be utilized to assess, manage, and plan for risks of all types, including economic and financial risks. A comprehensive study of these markets concluded that...