Theoretical perspectives on risk management strategies in financial markets: Comparative review of African and U.S. approaches

Abstract

This review paper presents a comparative analysis of risk management strategies in African and U.S. financial markets, focusing on theoretical perspectives, effectiveness, adaptability, and regulatory influences. By examining the application of Modern Portfolio Theory, Behavioral Finance, and the Black-Scholes model across these diverse regions, the study highlights the importance of tailoring risk management practices to local market conditions and challenges. The paper contributes to the field by proposing a hybrid theoretical approach that integrates quantitative models with qualitative insights, offering a nuanced understanding of global risk management. Future research directions are suggested, including exploring behavioral finance, technological advancements, regulatory evolution, and cultural factors in risk management. This comparative study underscores the dynamic nature of financial risk management and its critical role in global financial stability. Keywords:  Risk Management, Financial Markets, Comparative Analysis, Theoretical Perspectives, Regulatory Influence, Cross-Regional Variation.