Modeling Risk: Applying Monte Carlo Simulation, Real Options Analysis, Forecasting, and Optimization Techniques (Wiley Finance)

"Johnathan Mun's book is a sparkling jewel in my finance library. Mun demonstrates a deep understanding of the underlying mathematical theory in his ability to reduce complex concepts to lucid explanations and applications. For this reason, he's my favorite writer in this field."
—Janet Tavakoli, President, Tavakoli Structured Finance, Inc. and author of Collateralized Debt Obligations and Structured Finance

"A must-read for product portfolio managers . . . it captures the risk exposure of strategic investments, and provides management with estimates of potential outcomes and options for risk mitigation."
—Rafael E. Gutierrez, Executive Director of Strategic Marketing and Planning, Seagate Technology, Inc.

"Once again, Dr. Mun has created a 'must-have, must-read' book for anyone interested in the practical application of risk analysis. Other books speak in academic generalities, or focus on one area of risk application. [This book] gets to the heart of the matter with applications for every area of risk analysis. You have a real option to buy almost any book?you should exercise your option and get this one!"
—Glenn Kautt, MBA, CFP, EA, President and Chairman, The Monitor Group, Inc.

Note: CD-ROM/DVD and other supplementary materials are not included as part of eBook file.

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All Customer Reviews
Average Customer Review:
2 of 2 people found the following review helpful:

Modeling Risk, 2008-05-22
Modeling Risk is an excellent book to introduce someone to quantitative risk analysis. I have been an experienced user of several quantitative risk tools. No other book has put the topic forward as clearly and succinctly as Dr. Mun. Risk Simulator is used as the primary tool for many of the case studies, but it too is one of the best tools I have used. A trial version of the software is included with the book. As an instructor who teaches Risk Analysis at the Masters degree level, I found Dr. Mun's book and his collection of case studies enlightening for both myself and my students.


0 of 2 people found the following review helpful:

Far beyond expectations...., 2008-05-21
This is another "must have" book on your list. Modeling risk is a practical "hands-on" book to understand and use practical and advanced analytical risk models. Dr. Mun writes another best seller on this interesting topic. I highly recommend to buy the book and use the software in it.


1 of 1 people found the following review helpful:

Painful but Priceless....., 2008-05-21
Yes, it is a thick book, Yes, it is a complex topic. But if you make decisions in this complex world; If you have to make choices between multiple paths and options; If you have to make decisions quickly or understand the levers that drives the decisions; Then take the time to learn. This is the guide book and the software tools significantly reduces the complexity. Dr. Mun provides the analytical methodologies and tools to improve your company's competitive advantage.

As a user of these analytical tools, I have found significant value in being able to quickly and better analyze the financial risk elements of any project. It has significantly increase the velocity of our evaluation process and improve our ability to assess our business options. Priceless!!


11 of 11 people found the following review helpful:

A 600-Page Advertisement, 2007-04-26
I found the discussion on nonparametric simulation, though brief, to be very helpful. The book also inspired me to use Excel's Solver in ways I had not considered before.

Beyond that, I was disappointed. The book is poorly edited and lacks a coherent structure. Once in a while, entire strings of paragraphs are repeated in two different parts of the book. More serious, however, is the fact that the book is largely an advertisement for the author's proprietary software.

If you are looking for a few techniques that you can apply in an Excel environment, you will find a few nuggets here and there. However, you will mostly be skimming through the 600 pages of rambling discussion.


12 of 12 people found the following review helpful:

Applying Monte Carlo Simulation, 2007-03-30
In the first few chapters the author is certainly successful in making the argument why one should use simulation rather than point estimates. However, the case studies are somewhat vague because the author presents the problem and discusses results of the simulation (using the Risk Simulator S/W) but leaves you wondering how he setup up the model to run this simulation and come up with the results(not even available in the excel examples on the CD). Clear examples of this case include the example on pages 75, 76 & the "Financial Planning" example on page 219.

As an IT Project manager, I didn't find it very helpul in addressing my problems and I wouldn't recommend it for people who want to learn about simulation without going too technical

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