Note: this article is a work in progress

A Primer on Risk

Structure:

1. Introduce yield as a sum of the risk free rate and risk premium
   1. Introduce risk-free rate
   2. Introduce risk premium
2. Break down risk premium into various components
3. Qualitative premiums—Introduce behavioural economics
   1. Factor perceived risk into premiums
   2. Discuss examples where premiums become negative
   3. Discuss examples where premiums are very very positive
4. Discuss the role of information and risk
   1. Speed of information
   2. Distribution of information
   3. Informed decision making
   4. Information as a force-multiplier
5. Present Core thesis—attractive high yields are actually unattractive, which is why they are high
6. Present the case that asset issuers must work towards lower premiums
7. Propose strategies towards lower risk premiums
   1. risk reviews
   2. quantitative risk dashboards
   3. information curation and distribution
   4. minimising exposure to risky platforms—e.g. an asset can be deeply integrated and distributed across platforms with high risk as long as perceived dependency on these platforms is low
   5. Continuous monitoring of costs
   6. Building integrations upon integrations