There are three aspects of the financial engineering :

1) Security Pricing  :

    - Primary securities (stock, bond) 

    - Derivative securities ( forwards, options, futures, swaps ) 

2) Portfolio selection 

   - Single period models ( Markowitz Portfolio Selection)

   - Real options (实物期权）

3) Risk Management （risks in a portfolio)

   - Tail Risk ： possibility of large loss (尾部风险）

  经济增长、流动性和尾部风险（tail risk）是决定市场走向的三个关键因素，其他的因素如估值、定位、动量等虽然也有影响，但都会受到上述三个关键因素的左右，甚至是主宰。

       --Value at Risk and Conditional value at risk