1;Preface;5 2;Contents;7 3;Part I Preliminary;10 3.1;Introduction;11 3.1.1;Part I: Preliminary;11 3.1.2;Part II: ERM Perspectives;12 3.1.3;Part III: ERM Technologies;12 3.1.4;Part IV: Applications of ERM in China;13 3.1.5;Thanks to Authors;14 3.1.6;End Notes;14 3.2;The Human Reaction to Risk and Opportunity;15 3.2.1;Introduction;15 3.2.2;Risk and Risk Events;16 3.2.3;Ductile Systems;16 3.2.4;The Value of the System;18 3.2.5;Social Amplification of Risk;19 3.2.6;The Perception of Risk, Dread and Knowledge;20 3.2.7;The Processing of Risk: Emotion Versus Reason;22 3.2.8;Quantification as a Coping Mechanism;23 3.2.9;Incentives and Operational Risk;24 3.2.10;Conclusion;27 3.2.11;End Notes;28 4;Part II ERM Perspectives;31 4.1;Enterprise Risk Management: Financial and Accounting Perspectives;33 4.1.1;ERM and Finance Operations: Key Financial Risks;33 4.1.2;The Accounting Perspective: The COSO ERM Cube;40 4.1.3;Conclusions;44 4.1.4;End Notes;45 4.2;An Empirical Study on Enterprise Risk Management in Insurance;47 4.2.1;Enterprise Risk Management in Insurance;47 4.2.2;Multidisciplinary Views of Risk;48 4.2.3;Insurance Industry Practice;50 4.2.4;Discussion;55 4.2.5;Conclusion;60 4.2.6;End Notes;61 4.3;Supply Chain Risk Management;65 4.3.1;Supply Chain Risk Management Process;65 4.3.2;Supply Management;67 4.3.3;Demand Management;68 4.3.4;Product Management;69 4.3.5;Supply Chain Disruption;69 4.3.6;Supply Chain Risks;69 4.3.7;Multiple Criteria Selection Model;71 4.3.8;Conclusions;73 4.3.9;End Notes;74 4.4;Two Polar Concept of Project Risk Management;77 4.4.1;Risk Management Processes;77 4.4.2;Equilibriant RMPs and Related Gaps;78 4.4.3;A Two Polar RMP Framework for Projects;83 4.4.4;Conclusion;96 4.4.5;End Notes;97 5;Part III ERM Technologies;101 5.1;The Mathematics of Risk Transfer;103 5.1.1;Hedge Funds of the Twenty-First Century;103 5.1.2;Pricing Risk;105 5.1.3;Collateralized Fund Obligations;111 5.1.4;Non-Gaussian Returns;113 5.1.5;Challenges in the New Century;118 5.1.6;End Notes;120 5.2;Stable Models in Risk Management;121 5.2.1;Introduction;121 5.2.2;Stable Laws: Simulation and Calibration;122 5.2.3;GARCH Calibration and Some Numerical Problems;129 5.2.4;End Notes;132 5.3;Hybrid Calibration Procedures for Term Structure Models;133 5.3.1;Introduction;133 5.3.2;Preliminaries;134 5.3.3;Explicit Pricing Formulas;136 5.3.4;Hybrid Calibration Procedures;141 5.3.5;Risk Measures;148 5.3.6;Conclusion;151 5.3.7;End Notes;151 5.4;The Sarbanes-Oxley Act and the Production Efficiency of Public Accounting Firms;153 5.4.1;Introduction;153 5.4.2;Background and Hypothesis Development;154 5.4.3;Research Design;156 5.4.4;Empirical Estimation and Results;160 5.4.5;Conclusion;166 5.4.6;End Notes;168 5.5;Credit Risk Evaluation Using Neural Networks;171 5.5.1;Introduction;171 5.5.2;Review of Quantitative Credit Risk Prediction Techniques;172 5.5.3;Neural Network Basics;178 5.5.4;Discussion of Models and Results;180 5.5.5;Conclusions and Discussion;185 5.5.6;End Notes;186 5.6;Applying the Real Option Approach to Vendor Selection in IT Outsourcing;189 5.6.1;Information Technology Outsourcing;189 5.6.2;Review of Literature;190 5.6.3;Data and Methodology;193 5.6.4;Results;195 5.6.5;Conclusions and Future Study;198 5.6.6;End Notes;199 6;Part IV Applications of ERM in China;201 6.1;Assessment of Banking Operational Risk;203 6.1.1;Oprisk and Measurement Research;203 6.1.2;Assessment of Oprisk on DS Evidential Theory;206 6.1.3;Indicators of Oprisk's Assessment;209 6.1.4;Model Structure and Demonstration;211 6.1.5;Conclusion;213 6.1.6;The Function of DS Evidential Theory in Oprisk Assessment;214 6.1.7;End Notes;215 6.2;Case Study of Risks in Cailing Chemical Corporation;217 6.2.1;Risk Composition of Cailing Chemical Corporation;217 6.2.2;Risk Assessment;222 6.2.3;Risk Analysis;223 6.2.4;Risk Distribution of Cailing Chemical Corporation;225 6.2.5;Conclusions;227 6.2.6;End Notes;229 6.3;Information Technology Outsourcing Risk: Trends in China;231 6.3.1;Introduction;