ABSTRACT
By mid-2009, swine flu was seen as a serious global problem. The booms of the swine flu and shipping assets may have equivalent factors behind them, with a pandemic boosting the perception of a health risk, in contrast to shipping booms that dramatically reduce our perception of risk exposure. The traditional dimensions of risk are the volume of exposure and the frequency of the event that is assumed to be risky. With shipping investments, there are a number of challenges such as default risk and liquidity risk. Monte Carlo simulations are exposed to self-serving bias, dishonesty, adverse selection, and many other cognitive biases of daily life. Stochastic financial simulations use the gambling metaphor to illustrate uncertainty, complexity, and unpredictability. Both liquidity and default risk analysis need scenario-based assessments that consist of pessimistic, moderate, and optimistic scenarios. The most critical problem is with the optimistic or pessimistic scenario.
