An Analytical Approach for Solving Fractional Financial Risk System

Abstract

This article introduces an innovative analytical method tailored to address the complexities of non-linear FFR ("fractional financial risk") models. The LRPS ("Laplace residual power series") approach non-linear FFR models empowers risk analysts to more accurately assess portfolios and predict potential losses spanning diverse risk categories. These encompass credit risk, market risk, model risk, liquidity risk, and operational risk. By expanding the array of techniques for risk modeling, this study offers a valuable asset for refining risk assessment and management strategies across these distinct risk domains. Through the utilization of the LRPS approach, this methodology rapidly generates accurate solutions, providing an efficient pathway for approximating the intricate non-linear FFR models intrinsic to risk modeling. By means of numerical simulations and graphical representations, the article effectively demonstrates the efficacy of the LRPS technique. This study not only offers a practical and time-efficient tool for financial risk analysis but also contributes valuable insights to the advancement of novel techniques within the realm of financial risk management.