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Discrete-time risk measures with time consistency

  • Jian Sun*
  • , Yan Wang
  • , Ze Bin Zhao
  • *Corresponding author for this work
  • School of Management, Harbin Institute of Technology

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

According to the properties of general probability space, we propose the conception of acceptance set and capital requirement in the discrete-time risk measures framework. Related propositions are put forward and proved in the second part. Then we mainly focus on the time consistency properties shown during the course of discrete-time risk measures. Time consistency has been certified as one of the most important properties for discrete-time risk measures. In particular, the poor, middle and strong consistency based on the original recursiveness and consistency are proposed in the third section. These time consistency properties provide the mathematical description of dynamic risk measures on the general probability space. Finally, the validation of time consistency of existing methods including VaR, CVaR and ES is provided.

Original languageEnglish
Title of host publicationProceedings of 2006 International Conference on Management Science and Engineering, ICMSE'06 (13th)
PublisherInstitute of Electrical and Electronics Engineers Inc.
Pages375-380
Number of pages6
ISBN (Print)7560323553, 9787560323558
DOIs
StatePublished - 2006
Externally publishedYes
Event2006 International Conference on Management Science and Engineering, ICMSE'06 - Lille, France
Duration: 5 Oct 20067 Oct 2006

Publication series

NameProceedings of 2006 International Conference on Management Science and Engineering, ICMSE'06 (13th)

Conference

Conference2006 International Conference on Management Science and Engineering, ICMSE'06
Country/TerritoryFrance
CityLille
Period5/10/067/10/06

Keywords

  • Discrete-time risk measures
  • Risk measures
  • Time consistency

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