Post. 30 Nov 2018.

“It’s as if the roll of each die were influenced by fluctuations in temperature, magnetic field, humidity, and such. Even if each die is affected differently by these fluctuating systematic forces, the systematic character of the fluctuation means that the average over many dice will itself fluctuate. In fact, the fluctuation of the dice average is just the sum of all the covariances of each die with every other die. That average fluctuation is systematic risk.”

Excerpt From

Fischer Black and the Revolutionary Idea of Finance

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