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tail risk

tail risk  n.— «“Tail risk,” as it is known to quantitative traders, for where it falls in a bell-shaped probability curve. Tail risk, broadly speaking, is whatever financial cataclysm is believed by markets to have a 1 percent chance or...

probability neglect

probability neglect  n.— «Humans are the only species that understand risk, but we also engage in what’s called “probability neglect.” This is when we ignore probabilities and worry about more traumatic possibilities...

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