The global financial crisis of 2008, followed by the Covid-19 pandemic, has made fundamental changes to the way financial markets work. Interventions by central banks, designed to save economies from major dislocations, have shaken some of the basic concepts investors have been applying for decades. As a result, we need to revisit these ideas with fresh eyes and update them for a new era.

Critically discuss why traditional methods of risk measurement, such as the standard deviation of historic returns, are no longer sufficient to quantify future risk.