Jane McCarthy, manager of portfolio risk management BHP Billiton
What do you regard as the most significant recent developments in risk management?
Proper options evaluation, going beyond simple Black-Scholes to incorporate non-normal underlying distributions and multiple underlying risk factors. Say you have a mine producing copper, silver and gold, for example - traditional Black-Scholes would not allow you to model all three risk factors. You would need to use Monte Carlo software to evaluate such options accurately.
The integration of this with decision
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