Artificial Intelligence Risk & Governance
After completing this reading, you should be able to: Identify and discuss the categories of potential risks associated with the use of AI by financial firms and describe the risks that are considered under each category. Describe the four core…
Cognitive Errors Vs. Emotional Biases
Distinguishing between cognitive and emotional bias is not always a binary process. Some biases manifest elements of both cognitive and emotional aspects. Categorizing biases as cognitive or emotional is useful to analysts and advisors in answering the question of…
The Future Monetary System
After completing this reading, you should be able to: Identify and describe the benefits and limitations of crypto and decentralized finance (DeFi) innovations. Describe the role of stablecoins in DeFi ecosystems and differentiate among the types of stablecoins. Discuss possible…
Machine Learning and Prediction
After completing this reading, you should be able to: Explain the role of linear regression and logistic regression in prediction. Evaluate the predictive performance of logistic regression models. Describe and apply methods used to encode categorical variables. Discuss why regularization…
Machine Learning Methods
After completing this reading, you should be able to: Discuss the philosophical and practical differences between machine learning techniques and classical econometrics. Compare and apply the two methods utilized for rescaling variables in data preparation. Explain the differences among the…
Considerations When Evaluating the Effects of Regulation
The laws and regulations in a market can take different structures. Further, the laws can affect industries and individual companies differently. Therefore, regulation analysts need to understand and predict the impact of proposed new regulations. Similarly, they should analyze varying…
Benefits and Costs of Regulation
It is usual for regulators to evaluate the cost-benefit of the regulatory suggestions. Such evaluation aims to determine the trade-offs related to regulatory action and suggest alternative solutions. Regulators rely on economic principles when developing methods to measure a regulation’s…
The Regulatory Tools
The regulatory and government policies should be predictable, contemplative, and effective in reaching their goals. This is because it is challenging for any business entity to operate in an environment governed by an uncertain regulatory system. In other words, regulators…
The Regulatory Interdependencies
Regulated bodies in a market react differently to new proposed regulations. They often fight new rules but not outrightly since such wars easily attract public attention. However, according to the regulatory capture theory, laws work in the best interest of…
Growth Accounting Relations
Growth accounting relations is a quantitative model Robert Solow developed in 1957. It is used to measure the effect of different factors of economic growth. In addition, it indirectly estimates the technological progress in an economy. In other words, it…
