#CVaR

Editorial hero illustration in a minimalist financial-editorial style: a lone investor figure standing at a fork where a smooth upward-sloping path splits into two divergent trails — one trail narrows sharply and drops into a shadowed steep ravine (representing a bad outcome), the other trail widens and rises gently into open light (representing a good outcome).

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When the Downside Is Capped: Rethinking Portfolio Rules Under a CVaR Limit

A new continuous-time analysis shows that capping expected losses in the tail doesn't just make investors more cautious across the board — it makes them cautious in an asymmetric, state-dependent way, and it comes with a provably convergent algorithm to compute the optimal policy.