An accessible overview of the theory and practice of Bayesian Methods in Finance This first-of-its-kind book explains and illustrates the fundamentals of the Bayesian methodology and their applications to finance in clear and accessible terms. Bayesian Methods in Finance provides a unified examination of the use of Bayesian theory and practice in portfolio and risk management- explaining the concepts and techniques that can be applied to real-world financial problems. This book is a guide to using Bayesian methods and, notably, the Markov Chain Monte Carlo toolbox to: incorporate prior views of an analyst or a fund manager into the asset allocation process; estimate and predict volatility;