Financial riskFinancial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default. Often it is understood to include only downside risk, meaning the potential for financial loss and uncertainty about its extent. A science has evolved around managing market and financial risk under the general title of modern portfolio theory initiated by Harry Markowitz in 1952 with his article, "Portfolio Selection".
Dorsolateral prefrontal cortexThe dorsolateral prefrontal cortex (DLPFC or DL-PFC) is an area in the prefrontal cortex of the primate brain. It is one of the most recently derived parts of the human brain. It undergoes a prolonged period of maturation which lasts into adulthood. The DLPFC is not an anatomical structure, but rather a functional one. It lies in the middle frontal gyrus of humans (i.e., lateral part of Brodmann's area (BA) 9 and 46). In macaque monkeys, it is around the principal sulcus (i.e., in Brodmann's area 46).
GyrusIn neuroanatomy, a gyrus (: gyri) is a ridge on the cerebral cortex. It is generally surrounded by one or more sulci (depressions or furrows; : sulcus). Gyri and sulci create the folded appearance of the brain in humans and other mammals. The gyri are part of a system of folds and ridges that create a larger surface area for the human brain and other mammalian brains. Because the brain is confined to the skull, brain size is limited.
Quantitative analysis (finance)Quantitative analysis is the use of mathematical and statistical methods in finance and investment management. Those working in the field are quantitative analysts (quants). Quants tend to specialize in specific areas which may include derivative structuring or pricing, risk management, investment management and other related finance occupations. The occupation is similar to those in industrial mathematics in other industries.
Broca's areaBroca's area, or the Broca area (ˈbroʊkə, also UKˈbrɒkə, USˈbroʊkɑː), is a region in the frontal lobe of the dominant hemisphere, usually the left, of the brain with functions linked to speech production. Language processing has been linked to Broca's area since Pierre Paul Broca reported impairments in two patients. They had lost the ability to speak after injury to the posterior inferior frontal gyrus (pars triangularis) (BA45) of the brain.
Cortical stimulation mappingCortical stimulation mapping (CSM) is a type of electrocorticography that involves a physically invasive procedure and aims to localize the function of specific brain regions through direct electrical stimulation of the cerebral cortex. It remains one of the earliest methods of analyzing the brain and has allowed researchers to study the relationship between cortical structure and systemic function.
BrainA brain is an organ that serves as the center of the nervous system in all vertebrate and most invertebrate animals. It is located in the head, usually close to the sensory organs for senses such as vision. It is the most complex organ in a vertebrate's body. In a human, the cerebral cortex contains approximately 14–16 billion neurons, and the estimated number of neurons in the cerebellum is 55–70 billion. Each neuron is connected by synapses to several thousand other neurons.
Empirical risk minimizationEmpirical risk minimization (ERM) is a principle in statistical learning theory which defines a family of learning algorithms and is used to give theoretical bounds on their performance. The core idea is that we cannot know exactly how well an algorithm will work in practice (the true "risk") because we don't know the true distribution of data that the algorithm will work on, but we can instead measure its performance on a known set of training data (the "empirical" risk).
Ambiguity aversionIn decision theory and economics, ambiguity aversion (also known as uncertainty aversion) is a preference for known risks over unknown risks. An ambiguity-averse individual would rather choose an alternative where the probability distribution of the outcomes is known over one where the probabilities are unknown. This behavior was first introduced through the Ellsberg paradox (people prefer to bet on the outcome of an urn with 50 red and 50 black balls rather than to bet on one with 100 total balls but for which the number of black or red balls is unknown).
ClaustrumThe claustrum (Latin, meaning "to close" or "to shut") is a thin sheet of neurons and supporting glial cells, that connects to the cerebral cortex and subcortical regions including the amygdala, hippocampus and thalamus of the brain. It is located between the insula laterally and the putamen medially, separated by the extreme and external capsules respectively. Blood to the claustrum is supplied by the middle cerebral artery.
