Wharton collaborative research

Here is a short note on potential research with Wharton. Please review and
edit and then we can send some indication to the Wharton guys. ----------

The objective would be to define the amount of risk an enterprise can take,
and the difference between this and the actual amount of risk the enterprise
chooses to take based on the capital structure and reporting structure. In
particular, one can view Enron as a hierarchy of companies, and assuming we
can separately quantify the risks of each unit, what framework would one use
to analyze risk at Enron?
A related question is how one should represent risks in the different
units? Risks may be of different types --- short-term volatility risk,
catastrophic risk, liquidity risk, etc --- what should one focus on for a
first cut?
Another related question is to decide on the optimal amount of insurance
both at the unit level and the enterprise level, and relate the decision to
get insurance to the cost/benefit of insurance.