The urgency of estimating the impact of climate risks on the financial system is increasingly recognized among scholars and practitioners. By adopting a network approach to financial dependencies, we look at how climate policy risk might propagate through the financial system. We develop a...

Derivative financial instruments play a very important role in financial markets, but they are seen as rather contradictory and their impact on financial markets and the stability of these markets has not been comprehensively examined. Therefore, the aim of this article is to systematise the...

The high cost of capital for firms conducting medical research and development (R&D) has been partly attributed to the government risk facing investors in medical innovation. This risk slows down medical innovation because investors must be compensated for it. We propose new and simple financial...

Background: To stay competitive in a highly unpredictable market of today, companies must be able to manage project risks effectively. The basis for an effective risk management is a thorough risk analysis. Despite the availability of many different risk analysis approaches, companies can be...

The standard approach to measuring portfolio risk - regressing portfolio returns on market returns - seriously understates the risk of venture capital, buyouts (private equity), real estate, and other alternative assets not traded in active markets. Institutional investors, having a sense of the...

We use a dataset of sell-side analysts' scenario-based valuation estimates to examine whether analysts reliably assess the risk surrounding a firm's fundamental value. We find that the spread in analysts' state-contingent valuations captures the riskiness of operations and predicts the absolute...

We provide a model of investment into new ventures that demonstrates why some places, times and industries should be associated with a greater degree of experimentation by investors. Investors respond to financing risk ― a forecast of limited future funding ― by modifying their focus to...