About the lab
Financial markets function as an intermediary for the distribution of risk and returen. The different financial mechanisms and securities at hand, bond human beings with different motivations through contracts, in order to pursue together the growth and sustainability of their enterprise.
The research in the lab aims to investigate the efficiency of these markets and mechanisms and engineer new financial instruments that will fulfil their original goal for prosperity.
In order to achieve this mission it is a crucial to first conduct an empirical research of the market risk and probability of success. Then, measure the risk fund with adequate risk measures for the best practice of risk management. Once the financial risk structure is clarified, we compare it to human perceived risk. Finally, in order to compensate investors for the deviations from rationality, we need to suggest new financial products and instruments. Such products, will incorporate the understanding of empirical market risk and human behavior under perceived risk in order to best reflect the motivation and needs of the parties involved.
The research in the Financial Engineering Lab at the Technion tries to follow the path to engineer new financial products that will help investors achieve a better risk adjusted susteinable performance under various market conditions.