Financial And Social Environment Risk

Financial And Social Environment Risk
Several elements and factors about financial and social environment risk should be considered when a portfolio is chosen. In this section, we present
the nature and classification of risk in the impact investment portfolio.
Nature of impact investment risk
Risk profile is determined by impact thesis and financial targets. It is believed that the types of risk in impact investments are similar to risks in
traditional investment in the same sector, region and instrument. Although the impact pursuit will not lead to additional risks compared to general
investment, perhaps the impact thesis can decide the scope of investment portfolio, then influence the risk profile indirectly.
Cross–market risks exists. The market does have some ... Show more content on Helpwriting.net ...
It can be divided into systematic risk and unsystematic risk. And in CAPM model, professional investors will take market risk into consideration when
calculating return in a quantitative way.
CAPM model (Ang, A., & Chen, J. (2007). CAPM over the long run: 1926–2001. Journal of Empirical Finance, 14(1), 1–40.) is: =risk free rate;
=expected market return; =Beta of the security, which represents its systematic risk, valuating the return viation compared to the whole market;
=expected security return; =market risk premium
Default risk
Default risk means if the company files for bankruptcy of if the municipality is mismanaged, it's possible that investors won't receive the return
promised. In general investments, default risk is not rare when investment managers invest in bonds, even pensions. As for impact investment, this
usual risk also exists. To know about the default risk of a security, a regular way is to watch its bonding rates, like Moody's and S&P.
Inflation risk
Financial planners like to assume that inflation runs about 3 or 4 percent a year over long periods of time. This allows planners and investors to
calculate expected "real" returns for an impact investment.(http://www.consumerismcommentary.com/four–risks–of–investing
/?WT.qs_osrc=FBS–126802610ChromeHTMLShellOpenCommand) Using Fisher's equation(Levi, M. D., & Makin, J. H. (1978). Anticipated
... Get more on HelpWriting.net ...

Aims And Objectives Of Barclays
Strategic Aims and Objectives
Barclays envisions itself as a leading transatlantic bank. It aims to generate sustainable value for its shareholders by emerging as one of the biggest
consumer, corporate and investment banks catering some 24 million customers in the Personal, Wealth and Business Banking domains. Barclays aims
to achieve this through its two business divisions namely Barclays UK and Barclays International. Following are some key strategic aims and
objectives of the Group.
1.The main divisions of the Group must be structured in ways consistent with ring–fencing regulatory requirements of the UK.
2.Deconsolidate Barclays Africa Group Limited (BAGL) by selling the long–held 62.3% stake.
3.Simplification of Barclays core business and running down of its non–core operations which pose great risks on the Group's profitability
4.Closure of Non–Core businesses affecting business profits. An example of this is ... Show more content on Helpwriting.net ...
The operational hazard profile and control condition is surveyed by business administration through particular gatherings which cover administration,
hazard and control. Organizations are required to report their operational dangers on both a consistent and an occasion driven premise. Key indicators
(KIs) allows Barclay to monitor its operational risk profile and let management know when risk levels go beyond acceptable ranges and make timely
decision. The Group recognizes and assesses all risks within every business and evaluates the key controls to mitigate those risks. These risk
assessments are checked regularly for assurance of businesses understanding the risks they

Investment and Market Risk Premium
Cost of Capital at Ameritrade Day 1
1.What factors should Ameritrade management consider when evaluating the proposed advertising program and technology upgrades? Why?
–They should see how revenues have changed after adopting the new ad program and technology upgrades
–They need to see ROI for their investments over time
2.How can the Capital Asset Pricing Model be used to estimate the cost of capital (required return) for calculating the net present value of a project 's
cash flows?
– it will help us determine the Cost of capital or discount rate which we can use to calculate NPV, in other terms the numerator will never change
(FCF), only the denominator will based on the cost of capital
3. What is the estimate of the ... Show more content on Helpwriting.net ...
So instead, we will look at comparable firms. Firms in the same industry pursuing the same types of projects will have the same sorts of risks, thus
their asset betas will be approximately the same. The returns we calculate for these firms, based on stock price movement, dividends, and stock splits,
are their equity betas.
These are influenced by the degree of leverage each company is using (recall that higher leverage leads to higher ROE, EPS and DPS, but also leads
to greater variability in earnings). Knowing the amount of debt in their capital structures (at market values), we can calculate the asset beta for each
comparable firm. Then we will average these to use as a proxy for Ameritrade's asset beta
Note:
An agent that mediates sales and exchanges between securities buyers and sellers at even lower commission rates than those offered by a regular
discount broker . As one might expect, deep discount brokers also provide fewer services to clients than standard brokers; such brokers typically
provide little more than the fulfillment of stock and option trades, charging a flat fee for each.
The problem that must be overcome in determining the implementation decision is the uncertainty of the cost of capital.
Other Methods of Estimating Cost of Equity Capital:
The EP Method r =

Risk Analysis : Financial Analysis Of The Stock Market And...
Introduction
According to Rosvall & Bohlin (2014:1), risk is the price of opportunities provided by the stock market for investors. If investors would like to
minimize risks of stock trading process, the portfolio investments are vital to be concentrated on (Anghelache & Anghelache, 2014:8). Besides,
Goetzmann & Kumar (2008:433) also stated that portfolio investment is a great choice for investors to eliminate risk.
This study has provided simulation of investment and process of establishing a portfolio. According to Markowitz (1952:77), the rule of portfolio
selection is investors should maximize the value of the future profits. Therefore, researchers utilized various analysis techniques to monitor
performance of the portfolio selected ... Show more content on Helpwriting.net ...
Despite strengths, some weaknesses also should be discussed. According to Murray & Frenk (2012:98), health–care system of US is only ranked at
37th in the world based on The World Health Report 2000. However, it should not be ignored that the cost of US health–care system is the highest in
2006. Main problem of health–care system is the large gap between pay and gain.
Moreover, there are also some opportunities and threats of US economy. First of all, electronic device and medical service in worldwide market are
much larger than before (Kaasinen, 2013:79). According to world report of Industry and information from 2016 to 2017, wireless communication
equipment has a significant growth rate at 2.89% (Baller et al.,2016:59). Furthermore, the combination among countries becomes tighter. The rules of
APEC, G20 and other international organizations force other countries to open their domestic market to multiple companies like APPLE and
Microsoft, unless they are willing to be separated from global market and provide convenient way to American companies to go through service trade
barrier.
Additionally, some threats also cannot be ignored. For example, though American companies are competitive in global market, there are also some
challengers from newly–developing countries like Huawei & Alibaba with more flexible strategies and lower costs. Portfolio structure
According to the research of

Effects Of Credit Risk On Financial Institutions
A common saying tied to many new endeavors, "Without risk, there is no reward". Financial institutions are no exception to this rule. The major risks
that all financial institutions are exposed to are credit risk, liquidity risk, operational risk, market risk, business risk, reputational risk, systemic risk, and
moral hazard (Perez, 2014). Of these top eight scenarios, credit, market, and operational risks are the three major risk factors that Jeanne D'Arc is
focused on mitigating during and following the business service project.
Credit risk indicates a decline in the credit assets' values before default that arises from the deterioration in a financial institution's portfolio quality.
Credit risk can also represent the volatility the loss in the credit asset's value and the loss in the current and future earnings from the credit (Perez,
2014). To prepare and accommodate inevitable losses stemming from our business credit card Jeanne D'Arc has budgeted for a loan loss reserve to
help protect the financial integrity and assets of the credit union.
Operational risk occurs in all day–to–day activities in banking. As the credit union is looking to attract a new type of member, this risk is can be
caused by inadequate internal processes, people, systems, and external events. Some examples of operational risk include people risk, hacking of the
core processing system, errors in information processing, data transmission, data retrieval, and inaccuracy of outputs (Perez, 2014).

How Risks And Rewards Related On The Stock Market
How Risks and rewards are related in the stock market In the school, the three Rs were "readin ', 'ritin ', and 'rithmetic." In the financial world, the
three Rs, risk, reward, and relationship, stand for a fundamental principle of investing. Risk is directly related; in other words, a larger reward can
only be obtained by increasing the exposure to risk. If you undertake a more risky investment, you will be entitled to a higher rate of reward. It is has
always been better to be lucky rather than smart. You cannot rely on luck, so most of us must make do with smart. It is the best policy to assume that
the reward on an investment will bear a direct relationship to its risk. It is necessary, before making any investment that you make some... Show more
content on Helpwriting.net ...
The objectives of an individual investor may be to accumulate funds to purchase a home or other major acquisitions, to have sufficient funds to be
able to retire at a specified age, or to accumulate funds to pay for college tuition for children. An individual investor may engage the services of
financial advisor/consultant in establishing investment objectives. Earlier in this paper, we reviewed the different types of institutional investors. We
will also see that in general we can classify those in the first category as institutions with "liability–driven objectives" and those in the second category
as institutions with "nonliability driven objectives." Some institutions have a wide range of investment products that they offer investors, some of
which are liability driven and others that they offer investors, some of which are liability driven and others that are nonliability driven. Once the
investment objective is understood, it will then be possible to (1) establish a "benchmark" or "bogey" by which to evaluate the performance of the
investment manager and (2) evaluate alternative investment objective. How to diversify One of the great arguments that fund managers use is that it
is easier to diversify the portfolio with managed funds than it is for direct shares. The theory is that we should not hold shares in only one or two
companies – we need to

Risk Analysis of Stock Market
INTRODUCTION
Our assignment topic is "Risk analysis of Stock Market". To identify the stock market risk we have to do some calculation. In this assignment we
choose Coefficient of varience(CV) method We select five banks (Dhaka Bank Ltd., Prime Bank Ltd., Social Islami Bank Ltd., Sahjalal Bank Ltd. and
Premium Bank Ltd. ) of financial institution. 1.1 History of the Stock Market of Bangladesh
Dhaka Stock Exchange (Generally known as DSE) is the main stock exchange of Bangladesh. It is located in Motijheel at the heart of the Dhaka city.
It was incorporated in 1954. Dhaka stock exchange is the first stock exchange of the country. As of 18 August 2010, the Dhaka Stock Exchange had
over 750 listed companies with a combined market ... Show more content on Helpwriting.net ...
Step 2: To calculate the average price or mean value of each bank. Step 3: To calculate a value which comes from X–mean.
Step 4: To calculate the square value of X–mean.
Step 5: To divide the value (X–mean)^2 by (n–1)
Step 6: To find out the Root value of [{(X–mean)^2}/(n–1)] This is the value of Standard Deviation (Std.)
Step 7:To calculate the ratio between std. and mean. This is the value of CV.
Dhaka Bank: Month| Share price(TK)| _X – X| _(X – X)^2| MAR'11| 41.3| –1.35| 1.8225| APR'11| 39.1|–3.55| 12.6025| MAY'11| 41.4|–1.25| 1.5625|
JUNE'11| 44.7| 2.05| 4.2025| JULY'11| 46.9| 4.25| 18.0625| AUG'11| 44.5| 1.85| 3.4225| SEP'11| 41.7|–0.95| 0.9025| OCT'11| 42.3| –0.35| 0.1225|
NOV'11| 44.4| 1.75| 3.0625| DEC'11| 44.5| 1.85| 3.4225| JAN'12| 37.1| –5.55| 30.8025| FEB'12| 43.9| 1.25| 1.5625| TotalMeanStd.CV

Types Of Risk As Small Business Manager
Types of Risk
Introduction
There are all types of risks involved if one is small business manager or a manager of a larger corporation. The responsibilities on a day–to–day basis
can be vital towards the success of the organization. The company facilities can be associated with working capital, production, and sales. The manager
would need to reflect a common awareness of the potential risks that can be involved. Although, there can always be a risk involved in an organization,
the manager would and should have the capability to identify the type of risks that the company can surface. In this paper, one will provide a further
explanation on the various risks and along with presenting a way for financial managers on a moderate approach towards these risks.
Property Risks Property risks defined under a business can comprise of various things that can cause damage to a property of the business. For
example, a business can be damaged due to a flood. According to Pielke, Downton, & Miller, (2002), "Flood damage has increased in the United
States, despite local efforts and federal encouragement to mitigate flood hazards and regulate development in flood–prone areas" (p. 1). Although flood
insurance is not federally required, in some cases, individuals can be financially vulnerable to floods. If and when flood insurance is available,
disaster assistance is usually a loan that one must repay with interest. In essence, there is not a sure way to avoid things from

Risks Faced By Financial Institutions
UNIVERSITY OF SARAJEVO
FACULTY OF ECONOMICS
UNIVERSITY OF BOLTON
ISLAMIC BANKING MASTER STUDIES
"CREDIT RISK IN ISLAMIC FINANCE"
Module title: Risk Management in Islamic Finance
Student: 3669/15 IB
Tutor: Mohammad Sabri, PHD
Risk
Risk is contemporary and continuous challenge in the world of finance. In general, risk is understood as a situation where an uncertainty of desired
results exists, as well as the undesirable consequences. Risk is studied as a subject within several social sciences and these include statistics, economics,
financial management and insurance. Examination of risk in each of these sciences has specific aspects that differ from those in others.
Credit Risk
Risks faced by financial institutions (both conventional and Islamic financial institutions) in the operations that they perform are of different nature and
types: exchange rate risk, trade risk (or market risk), political risks, risks that represent changes in the value of assets and good, etc. Credit risk is
deemed to be the most significant type of risk which is faced by financial institutions and in their relationship with the owners of wealth. Credit risk
relates to the debtor's ability to repay the debt at the specified time, and in accordance with the conditions stipulated in the contract signed and agreed
upon to. The debtor's inability to abide by his obligations will lead to a loss, breach of contract and therefore will become a risk for the institution.
The existence of

Art As An Alternative Investment : Returns, Risks And...
2.2 Art as an Alternative Investment: Returns, Risks and Correlation with Financial Market 2.2.1 Return Rate and Risk Based on art market indices,
attention has been drawn to investigate the risk–return rate of art investment and the correlation between the art market and other markets in the
academic field. Some representative researches on return rate and risk of artwork investment were considered to be the starting point of growing
interest in art investment among academics. Goetzmann (1993) estimates an average annual return rate of 3.2% during 1916–1986, which is higher
than the stock return but still lower than bonds. He further claims that artwork investment can achieve a high return rate in the long term. Buelens and
Ginsburgh (1993) divide the data that was constructed by Baumol (1986) into different schools time periods and examine the return rate respectively.
Their results show that except the period of war and general insecurity, paintings achieve higher return rates than financial assets. Mei and Moses
(2002) estimate an annual real return rate of 4.9% from 1900–1999, which is outperforming certain fixed–return securities while underperformed
stocks. They point out that art returns are above inflation and tend to be greater than government bonds but less than equities. In contrast to the
findings that artwork is a profitable investment comparing to conventional financial assets, a number of academic studies address the issue of art price
movement over time

Role of Bank Capital
Introduction
The main aim of this report is to identify the key roles played by bank capital in the banking business. This report briefly outlines the main functions
of bank capital and takes a brief look at the benefits of bank capital to the bank and the banking industry. It is hoped that from reading this paper a
general understanding of the roles of bank capital in the banking business can be gained.
Bank Capital
A bank 's capital also known as equity is the margin by which creditors are covered if the bank 's assets were liquidated. A bank must hold enough
capital to protect lenders and depositors from losses and also allow the bank to meet its customer requirements. Banks must maintain capital levels
equal with the amount of risks ... Show more content on Helpwriting.net ...
Normally this risk can also be managed easily by hedging interest rate changes by the use of derivative instruments.
However unanticipated system wide shocks result in a greater demand for liquidity and are far more difficult to deal with. At such times significant
liquidity demands emerge from both a banks asset and the liability side. Refinancing short–term debt in the money markets is liability related and
off–balance–sheet exposures can unexpectedly come onto the assets side of the balance sheet. Therefore a bank must be prepared when there is a
market wide scramble for liquidity and be able to manage funding challenges and unplanned asset expansions simultaneously by having sufficient bank
capital.
Promote economic growth
A strongly capitalized banking sector also is better able to promote innovation, whether in the form of new products, new services or new distribution
channels. Banks do not just hold capital to overcome distress, but also because it provides them with financial flexibility. Banks with a strong capital
base can take advantage of growth opportunities. A strong banking sector made up of banks with strong capital bases, is better able to supply credit to
businesses and fund

External Forces That Expect The Risk Of The Stock Market
information provided from our equity analyst, we expect the risk–free interest rate in the US to be 6.75%.
Next will look at the U.S. equity risk premium, which will also be used in the best and worst–case scenarios. According to What is 'Equity Risk
Premium', retrieved from http://www.investopedia.com/terms/e/equityriskpremium.asp, "Equity risk premium, also referred to as simply equity
premium, is the excess return that investing in the stock market provides over a risk–free rate, such as the return from government treasury bonds."
This value was also provided by our equity analyst and resulted in a value of 5.50%. According to this information it follows that the expected return
on investing in the U.S. stock market is 12.25%, ... Show more content on Helpwriting.net ...
The larger the per capita income the greater amount of tax revenue Country X will have at its disposal to pay off debt. According to "Determinants
and Impact of Sovereign Credit Ratings", by Richard Cantor and Frank Packer, per capita income affects sovereign credit rating because "the
greater the potential tax base of the borrowing country, the greater the ability of a government to repay debt. This variable can also serve as a proxy
for the level of political stability and other important factors". Per capita income will be most affected by the Country X's economic experience. Some
key questions to consider about Country X's economic growth 'will Country X be able to produce a stable economy that has a low unemployment rate?'.
GDP: GDP is a measurement for the size of the economy. If the government and businesses are investing in the domestic economy it is expected to
stimulate economic growth and can potentially lead to increased exports of goods, lower unemployment, increased income, increased revenue, and
government surplus. Innovation in technology will be key focus of Country X to decrease unemployment and increase exports. There is also hope that
Latin America will become a world leader in biofuel production, which could be a key export.
Inflation: According to "Determinants and Impact of Sovereign Credit Ratings", by Richard Cantor and Frank Packer, inflation "points to structural
problems in the government's finances. When a

The Risk of Corporate Bond Market
Purchasing a corporate bond has three primary risks attached to it; 1) market risk, 2) industry risk, and 3) company risk. The US corporate bond
market has trended lower over the last few years although recently the rates have risen relative to the last year. The market risk is that bond investors
will continue to see the same type of rates in US Treasuries as they do in the corporate bond arena and will have no reason to purchase corporate
bonds. Last month the corporate bond yield averaged 2.12% and the 10–year average is 2.57%, so it still has a way to go to even get back to its
10–year average. Since it is only a one–year bond that is being considered, the market risk is probably not as high as the industry risk or the specific
company risk. Considering the industry risk; the airline industry is not an industry that is considered a safe and secure haven for corporate bond
issues, having witnessed a number of bankruptcies and slowdowns, bond investors usually demand higher rates from this industry. As for specific
company risk, Southwest Airlines (SWA) has the reputation of a relatively well managed firm, which continues to show a profit albeit a much lower
earnings per share in 2011 than in 2012. SWA is still in a growth mode; in 2011 they purchased Airtran and increased their presence into a total of 72
cities. Additionally, the company is repurchasing shares and quickly paying down debt. I would purchase a Southwest 1–year bond with a yield of
approximately 5%. The

Moral Hazard in Banking Essays
Moral Hazard in Banking Moral hazard is an asymmetric information problem that occurs after a transaction. In essence, a lender runs the risk that a
borrower will engage in activities that are undesirable from the lender's point of view, making it less likely that the loan will be paid back. Gary H.
Stern's article, "Managing Moral Hazard with Market Signals: How Regulation Should Change with Banking", addresses the moral hazard problem
inherent to the financial safety net provided by the government protection of depositors. Interest rates do not reflect the risk associated with bank
activity, which in turn causes banks to finance higher–risk projects with price tags that are not parallel to the risk level. A solution... Show more content
on Helpwriting.net ...
After the passage of the FDICIA, two trends have emerged that have further exacerbated efforts in regulating moral hazards. The first trend is
increased asset concentration among larger banks. Over time, more assets have flowed into fewer banks, and as a result more TBTFs were
incubated in the process. The second trend to emerge is increased complexity of banks. Increase of bank sizes involved not only structural growth
but also geographic reach. Larger banks begin to offer a greater scope of offerings. With this plethora of change amid increased sizing, new skills
needed to be developed in order to manage the new risk. The complexity and size of banks and their associated offerings caused a greater level of
asymmetry between regulators and bank managers.
Opponents of the safety net provided by the government have offered several alternate options, one of which is little government intervention, if at all.
Such Laissez Faire approach, according to Stern, is that they do not credibly address the potential for instability in the banking system nor the TBTF
problem. The absence of a federal safety net creates the potential for bank panics which would have a substantial cost to our economic system.
Privatization will not eliminate the expectations in the material market making risk harder to price. Under the suggested system,

The Islamic Financial Services Board Essay
With respect to risk management in Islamic banks, Islamic Financial Services Board (IFSB, 2005), [26], issued guiding principles for risk management
in Islamic financial institutions, the board pointed out that these guiding complement the general guiding principles issued by the Basel Committee. to
cover specific aspects of the institutions of the Islamic financial services. As follows:
Credit Risk: It must be placed, a strategy for financing, using various instruments in compliance with Shariah, appropriate methodologies for measuring
and reporting the credit risk exposures arising under each Islamic financing instrument, shall have in place Sharia –compliant credit risk mitigating
techniques appropriate for each Islamic financing instrument.
Equity Investment Risk: It must be placed appropriate strategies, risk management, and reporting processes in respect of the risk characteristics of
equity investments, including Musharakah and Mudarabah investments. Ensure that their valuation methodologies are appropriate and consistent, and
shall assess the potential impacts of their methods on profit calculations and allocations.
Market Risk: It must be placed an appropriate framework for market risk management (including reporting) in respect of all assets held, including
those that do not have a ready market and/or are exposed to high price volatility.
Liquidity Risk: It must be placed a liquidity management framework (including reporting) taking into account separately

Internal Control And Recommendations Of Nissan
Risks
Risks – Sources, Internal Control and Recommendations
Risks Related to Financial Markets:
1.Liquidity:
An automotive business is always in need of liquidity to provide for the needs of working capital of normal day to day operations, research and
development, capital expenditure for expansion needs and repayment of debt due by the firm. Liquidity is secured through external funding, cash and
cash equivalents and internal generation of cash flows.
For the year ended 31 March 2016, Nissan's cash and cash equivalents stood at 944 billion yen. Nissan also has 512 billion yen of committed credit
lines that are available to be drawn. From an external funding perspective, Nissan has several sources at hand namely bond and issue of commercial
papers, long and short term loans and credit from banks.
Controls: Nissan has ... Show more content on Helpwriting.net ...
However, considering the extensive capital expenses by peers like Tesla, Daimler it becomes increasingly imperative that Nissan has access to higher
cash levels to avoid technological obsolescence.
2.Financial Market
Nissan being an MNC it is exposed to several financial market risks which include Forex risks, interest rates and commodity prices. Not all risks can
be eliminated through derivative investments. Although it is not possible to eliminate all the risks with the use of derivative products, Nissan does
hedge commodity and currency price risks.
a)Foreign exchange:
Nissan products and services are produced in 19 countries all over the world and sees sales from more than 170 countries and regions. As a result,
Nissan has various forex exposures from different countries and currency both from procurement and sales activities.
Controls: To minimize foreign exchange risks Nissans, seek to limit them same through derivative products that comply with the internal policies and
procedures for risk management and the operational rules concerning derivative

FINC 351 Final Exam 2 Essay
University of Maryland University CollegeFINC 351
Final Examination
Answer the following questions in your own words (do not cut–and–paste from the textbook or other sources). Remember to provide citations and
references as appropriate.
1. Distinguish between pure risk and speculative risk. List and explain in detail the three kinds of pure risk.
Pure risk exists when there is uncertainty as to whether loss will occur. There is no possibility that a gain is presentedп‚ѕonly the potential for loss.
Speculative risk exists when there is uncertainty about an event that can produce either a profit or a loss.
Pure risks: Personal – personal risks affect an individuals' income/expenses or assets.
Pure risks: Property – if a person owns ... Show more content on Helpwriting.net ...
Credit risk is the risk that the bank will not be able to repay funds when they ask for them.
Currency risk is the potential risk of loss from fluctuating foreign exchange rates when an investor has exposure to foreign currency or in
foreign–currency traded investments.
These risk can be minimized by using appropriate hedging techniques such as futures, options, and swaps, and by implementing controls that limit the
amount of exposure taken by market makers.
4. You are a claims specialist for YYZInsurance Company and your policyholder has purchased a trampoline to be placed in their backyard. They tell
the neighbor's kids they cannot use the trampoline, but while the policyholder was on vacation one of the neighbor's kids jumped on the trampoline
and fell, breaking his arm. Who is negligent? Include in your answer a review of the four elements that prove negligence.
The trampoline is an attractive nuisance. Attractive nuisance is objects that are potentially hazardous or dangerous condition that might attract children
to enter a piece of property in order to play with or explore the hazardous condition or object in question.
It's hard to tell who was negligent. It was not mentioned if there was a privacy fence put up, a "No Trespassing" sign posted on the property, or the
parents were made aware. If the homeowners did not have either of those things then they are negligent. Even though, they

Air Canada Case
The overall problem in this case is how Air Canada will handle quadrant one risk, and how much of these risks will they hedge. Volatility in this
industry, such as changes in fuel prices, have been eating at Air Canada's profits. They currently purchase fuel futures for thirty four percent of needed
fuel. Air Canada is also hedging on interest rates, exchange rates and personal stock price fluctuations. It seems like their business model is not
flexible or adequate if they need to insure and hedge almost every single risk they encounter. This decision mainly focuses on how this airline should
handle risks and to critique their current strategy in terms of effectiveness. The main player in this problem is Air Canada, who recently merged with...
Show more content on Helpwriting.net ...
Of course turning a profit and cutting costs are still important to the airline. Adjusting the risk level, of the main four risks, is most important to the fact
that it is diminishing their profitability. Many risk elements exist within Air Canada environment. They mention many risks, like catastrophic ones, but
these are insured against. Other risks they insure are ones that do not occur often, but have heavy penalties. The operational risk that Air Canada
accepts are the ones that happen often, but have a low impact compared to catastrophic ones. The risks that concern the airline the most are the
quadrant one high frequency, high severity risks. These risks include fluctuations in fuel price, interest, exchange rates and stock price. Information I
would like to know is how the smaller, low–cost airlines handle this type of risk. Small airlines seem mostly unaffected by this price volatility, and
continue to grow organically. It is possible that these large airlines are too complex in structure and cannot freely move with the environment and thus
resort to consolidation to make up for it. I would also like to know if Air Canada can move its expenses into its own territory instead of losing money
on the exchange rate in the United

Finance: Weighted Average Cost of Capital and Market Risk...
Cost of Capital questions and practice problems
Questions
1. What does the WACC measure?
2. Which is easier to calculate directly, the expected rate of return on the assets of a firm or the expected rate of return on the firm's debt and equity?
Assume you are an outsider to the firm.
3. Why are market–based weights important?
4. Why is the coupon rate of existing debt irrelevant for finding the cost of debt capital?
5. Under what assumptions can the WACC be used to value a project?
6. How should you value a project in a line of business with risk that is different than the average risk of your firm's projects?
7. Maltese Falcone, has not checked its weighted average cost of capital for ... Show more content on Helpwriting.net ...
If Dot.com's marginal tax rate is 38%, what is its after–tax cost of debt?
7. Reactive Industries has a market value of debt of $20 million, with a rate of return of 6%, a market value of preferred stock of $10 million, with a rate
of return of 8% and a market value of common stock of $50 million, with a rate of return of 12%. Its tax marginal tax rate is 35%. What is its WACC?
8. The common stock of BCCI has a beta of 0.90. The T–bill rate is 4% and the market risk premium is estimated at 8%. BCCI's capital structure is
30% debt, having a 5% YTM, and 70% equity. What is BCCI's cost of equity capital? It WACC? BCCI pays tax at 40%.
9. RiverRocks is considering a project with the following projected free cash flows:

|0 |1 |2 |3 |4 |
|–50 |10 |20 |20 |15 |
The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRock's WACC is
12%. Should it take on this project? Why or why not?
10. RiverRocks (whose WACC is 12%) is considering an acquisition of Raft Adventures (whose WACC is 15%). What is the appropriate

Measuring Stock Market Risk Essay
Case Problem 1: Measuring Stock Market Risk
As indicated by the case study S&P 500 index was use as a measure of the total return for the stock market. Our standard deviation of the total return
was used as a one measure of the risk of an individual stock. Also betas for individual stocks are determined by simple linear regression. The variables
were: total return for the stock as the dependent variable and independent variable is the total return for the stock. Since the descriptive statistics were a
lot, only the necessary data was selected (below table.)
A) Selected descriptive statistics follow:
Variable N Mean StDev Minimum Median Maximum Microsoft... Show more content on Helpwriting.net ...
Johnson & Johnson and P & G stocks had the least volatility than the other individual stocks. But, regardless of Johnson & Johnson and P & G tock's
exhibit they had less volatility, it wasn't enough volatility to be over the market. Therefore all of the individual stocks are more volatile than the
market as a whole. The diversification embodied in the S&P 500 reduces its volatility.
B) The estimated regression equation relating each of the individual stocks to the S&P 500 is shown below. The value of [pic]for each equation is also
shown.
Microsoft = 0.00040 + 0.458 S&P 500R–Sq = 7.1% Exxon Mobil = 0.00926 + 0.731 S&P 500R–Sq = 12.1% Caterpillar = 0.015000 + 1.49 S&P
500R–Sq = 32.9% Johnson & Johnson = 0.00521 + 0.009 S&P 500 R–Sq = 0.0% McDonald's = 0.00930 + 1.500 S&P 500R–Sq = 33.8% Sandisk =
0.04300 + 2.600 S&P 500R–Sq = 12.3% Qualcomm = 0.01410 + 1.410 S&P 500R–Sq = 18.7% Procter & Gamble = 0.00548 + 0.507 S&P 500R–Sq =
12.9%
The betas (slope of estimated regression equation) for the individual stocks can be obtained from the regression

Energy Markets And Risk : Capacity Assignment
Energy Markets & Risk: Capacity Assignment
Introduction
Wind is an intermittent energy source; as the wind is not constant, wind turbines do not produce the same amount of electricity all the time. This causes
difficulties as the penetration of wind power increases, and wind generation become relied upon by the network operator. This report looks at the
impact of wind power on the capacity of a power system to meet demand.
Conventional generation, including coal, gas & nuclear, provides the base load in the UK. These plants have high reliability, and much of the time
spent offline is planned. Wind power however is reliant on the weather, which is hard to predict average levels more than a couple of days ahead, and
almost impossible for ... Show more content on Helpwriting.net ...
This dispatchability is important as it allows supply to increase or decrease quickly according to changes in demand. For example, to ramp up to daily
peak load in the evening, or to back up supply after a fault in another generator.
To ensure that the lights stay on, power system operators need to understand the ability of the system to meet the demand, known as generation
adequacy. Risk indices are used to model the likelihood that the supply will not meet the demand. Two main measures exist, the Loss of Load
Expectation (LOLE) for the future season, which measures the expected number of time periods that supply will not meet demand and the Loss of
Load Probability (LOLP), used in this report & generally in the UK, models the likelihood that that the demand at time t will not be met by the supply
at t, the demand at time of annual peak is usually used.
When making decisions on renewable capacity, it can be useful to work out how much conventional supply can be replaced. Due to the reasons
discussed, wind turbines cannot fully replace conventional generators due to their lack of dispatchability, and their inherent variability. Capacity Value
is a statistical measure of the amount of supply a generator can be relied on to provide, and makes comparison with conventional generators easier.
This report measures the Capacity Value using the Effective Load

Ge Sessions
GE Sessions
One way that GE ensures leaders play an active role in governance is by conducting regular annual review periods for key operating functions within
the Company, including compliance, environment, health & safety, and people development. This allows GE to create a cycle of continuous
improvement at the senior level and incorporate evolving best practices. These sessions provide a vital system of accountability and allow topical
focus as needed through the year. They create a singular point of focus to surface any issues, review performance and disseminate new information.
Session/councilTiming Global Leadership MeetingJanuary Session DCompliance reviewOngoing throughout year–once per business CEC ... Show
more content on Helpwriting.net ...
Credit risk is the risk of financial loss arising from a customer or counterparty's failure to meet its contractual obligations. GE faces credit risk in its
lending and leasing activities and derivative financial instruments activities.
Market risk is the risk of potential loss in value of investment and other asset liability portfolios, including financial instruments, caused by changes in
market variables, such as interest and currency exchange rates and equity and commodity prices. GE is exposed to market risk in the normal course of
business operations as a result of ongoing investing and funding activities.
Event risk includes the possibility of adverse consequences both within and beyond GE's control. Examples of event risk include natural disasters,
availability of necessary materials, guarantees of product performance and business interruption.
1
Inside GE: The Session C Development Process
In late June when General Electric Company Chairman and CEO Jeff Immelt announced that GE would reorganize its 11 businesses into six
industry–focused segments, he pointed out that the company has
"a profound commitment to investors that we will always attract, train and promote great people."
His words undoubtedly had a personal impact for the countless numbers of GE employees who have gone through the company's highly praised, annual
integrated business and leadership process called
Session C.
Each year, GE businesses and staff review their needs and

Factors Affecting Risk Premium Of Emerging Market
Factors in Risk Premium of Emerging Market Can't Be Ignored: Evidence from China's Stock Market
Most companies set hurdle rates by determined their own weighted average cost of capital (WACC) plus premiums for additional risk factors.
During the past eight years, the WACC of most U.S. companies has been in the range of 7% to 9%, which is about 3% to 5% lower than it is in
those emerging markets such as China and India. Research led by Gregory V. Milano and Jeffrey L. Routh suggested that companies should use lower
hurdle rates while investing in growing nations. According to their research, hurdle rates are simply set too high by some companies because they
"exaggerate the risks" and "underestimate the growth potential of emerging markets". In my opinion, some certain kinds of risks can't be ignored
while investing in the foreign market, especially in the emerging market. The following are four pieces of evidence from China's stock market:
A Young Stock Market
Compared to global standards, the development of China's financial market still remains an early stage. It has existed for only 25 years since Deng
conducted the reform and opening–up policy in China. As a result, the market is not yet mature and full of rumors and speculators. Mom–and–pop
investors who have only limited understanding of what the market is and, more importantly, how it works are everywhere in the stock market. These
individual investors drive more than 80 percent of trading on bourses in Shanghai and

Fina 4355
1. What is political risk and what are the most significant elements to be considered?
Political risk is any governmental actions that diminish value of the firm operating with the boundary or influence of that government
Most significant elements: Nationalization: Confiscation: Expropriation: Contract repudiation
Currency inconvertibility:
2. Describe in details of your study into one of your countries from your selected website addressing political risk
Libya
Political instability: Since January 2010, there have been varying degrees of political instability and public protests, including demonstrations which
have been marked by violence, in Libya. Some political regimes in Libya are threatened or have changed as a result of ... Show more content on
Helpwriting.net ...
5) Excess and surplus insurance: a hybrid form of cross–border insurance trade, found in U.S. It exists when insured, denied the desired coverage of a
licensed insurer, places risk with a nonadmitted insurer.
9. Property rights are the foundation of our economic growth. What are these property rights and how do they contribute to this growth
Property rights include: (1) the right to own and alienate real and personal property, (2) the right to contract and (3) the right to be compensated for
damage resulting from the tortuous conduct of others.
Contribute: Without a well–defined system of private property rights and a mean to enforce these rights, markets do not function well. Moreover,
private financial services will not flourish unless individuals' ownership interests in property are well defined and protected.
10. Describe the U.S. market for non–life insurance. Include the type of market and products and methods of distribution. U.S is the world's largest
nonlife market for decades. The market is highly competitive. Virtually any type of nonlife insurance is available. Some nonlife insurance policies are
property insurance policies, liability insurances policies, and package insurance policies. Insurers use multiple distribution channels to reach their
customers. Brokers also figure prominently in the market.
11. What are the 4 market issues in the US? 1) State regulation: U.S insurance

Midland: Cost and Equity Market Risk Essay
1. How are Mortensen's estimates of Midland's cost of capital used? How, if at all, should these anticipated uses affect the calculations?
Mortensen's cost of capital estimates are used for a variety of purposes at both the divisional and corporate levels. Examples include internal analyses
such as financial accounting, performance assessment and capital budgeting, while others are used for strategic planning purposes such as merger and
acquisition, as well as stock repurchase decisions (Luehrman and Heilprin, 2009, pg.1). When used at the divisional rather than corporate level, special
consideration should be given to the fact that Midland's divisions are not publicly traded entities, and therefore do not have individual Beta ... Show
more content on Helpwriting.net ...
This implies an increase in standard error and deviation from the correct estimation.
3. Should Midland use a single corporate hurdle rate for evaluating investment opportunities in all of its divisions? Why of why not?
Midland should not rely on a single corporate hurdle rate for evaluating investment opportunities across all divisions because each division is
subject to fundamentally different forces such as political volatility, and high future expenditures. For example, R&E is expected to have
capital expenditures in excess of $8 billion over the years 2007 and 2008 while worldwide refining capabilities are expected to decrease leading to
possible investments in this division of Midland. The Exploration and Production division faces an entirely different set of challenges as oil reserves
become more difficult to reach as in the case of arctic and deep water drilling operations, and consequently more expensive to exploit. In addition,
political instability has become increasingly prevalent in investment considerations as oil production in areas such as the Middle East and Africa have
grown. Civil and political upheaval in these regions threatens disruption of oil production and lead to greater volatility of prices (pg.2).
4. Compute a separate cost of capital for the E&P and Marketing & Refining divisions. What causes them to differ from one another?
The cost of capital

Green Tree Investments, Llc Essay
Green Tree Investments, LLC ("GTI") is a limited liability company incorporated in 2001 under the Delaware Limited Liability Company Act. GTI is
managed by seven partners with a combined 140 years of experience, whose expertise spans multiple industries. As of September 30, 2016, GTI
manages approximately $9.7 billion in various alternative investments. Investors may attain the potential diversification benefits of alternative
investments by customizing a portfolio to meet the Investor's needs. With our combined experience, GTI is providing a prospectus for a new
investment platform called the Green Hedge Fund for which we are selecting companies displaying growth in the green energy sector.
Competitive Advantage
At GTI our research is multi–faceted as we evaluate companies from a variety of perspectives. During the research process, we consider traditional and
growth–oriented valuation metrics, earnings growth and the quality of earnings, changes in analysts' estimates for revenue and earnings, and measures
of investor sentiment. Recently, a report by REN21 (Renewable Energy Policy Network for the 21st Century) reported two facts that set the stage for
the growth of green energy. First, in 2015, the global economy experienced the largest annual increase of renewable energy; second, developing
economies spent more than developed countries on increasing their use of green energy. Another notable fact to mention is that the substantial increase
in green energy

Risk And Return Analysis : Risk
Risk and Return Analysis
Risk has a role in individual's lives around the world and that role can be influenced by an individual's character and their daily life. Risk and return is
affected by time when investing occurs. Time relates to the amount of time in the market which offers the highest chance of returns. The investment
time frame will determine the amount of impact that investors will see, investment choices includes stocks and bonds (Kinicki, Cornett, Adair,
Nofsinger, 2016).
Risk is when there is an opportunity for a return on an investment that will be not the same as anticipated. When investing in an investment instrument,
there are risks and the level of risk differs contingent on specific investment, the source of risk also is subject to the investment. The economy can be a
change where the investments can be changed and can drastically increase or decrease. Investment returns is the total amount that can be earned or
lost in any investment. Risk and return are essentially connected. The relationship between risk and return is the higher the risk there is a possibility
of a larger return. The relationship of risk and return is by quantities of investment. Between the higher risk and the lower risk is a return that rises with
an increase in risk. The high potential for returns is when there is lower risk (Kinicki, Cornett, Adair, Nofsinger, 2016).
Different assets allocation contains separating and distributing an investment portfolio among many different

Ethical Risk Analysis Of Sam Israel III A Wall Street Market
The world of buying and selling finical clams via Hedging takes patience, skill and a knack for the market however, when greed over powers
business ethics risk are investable. These risk includes a finical lost for the investor and possible massive prison time for fraudulent practices for the
assailant individuals who are responsible for the wrong doing. Sam Israel III a Wall street investment with a flair for the market founded the Bayou
Group LLC in 1995 alongside James Marquez and the CFO Daniel Marino (Hedgecovest, 2008). These partners intended produce high returns for
investors promising that the fund would be worth $7.1 billion in ten years (Hedgecovest, 2008). From the investors view point this estimate was an
attainable goal especially

Factors Responsible For The Global Financial Crisis
Introduction
In this essay, we are trying to look at the factors responsible for the global financial crisis in 2008–09 which started in US and later spread across the
world. By now, a lot of studies have been done on the global financial crisis of 2008. We explain briefly the role of the financial engineering which
leads to combination of various financial securities, the actual risk of which is not clearly assessed and hence leading to the financial crisis. There were
also some serious lapses in regulation and failure of the rating agencies in assessing the risks assumed by the financial products which accentuated the
crisis.
In the USA and other developed countries, financial engineering created financial derivatives and financial ... Show more content on Helpwriting.net ...
Economic derivatives could be so unsafe that they could even a great cause of financial disasters. This is because many investors turn to financial
derivatives market to direct them into future funding, rather than of observing at the genuine market. This can lead to market distortions and hence can
be extended to other parties of the market connected in the market and thus financial position of a country can be obstructed badly. Derivative
instruments were created after 1970s as a way to manage risk and create insurance downside. They were created in response to the frequent oil market
shocks, inflation and drops in the stock markets. Hence the initial intend was to defend against the risk and protect against the downside. However, the
derivatives became speculative tools often used to take more risk in order to maximize profits and returns. Derivatives do ensure against the risk when
used properly, but when the packaged instruments became too complicated that neither the borrowers nor the rating agencies understood them or their
risk and hence the initial premise just failed. Not only did investors, like pension fund, got stuck holding securities that in reality turned out to be
equally as risky as holding the underlying loans, bank got stuck as well. Banks held many of these instruments on their books as a source of fixed
income requirements and hence using these derivatives instruments as a collateral. However, later it was found out that they had less

Instruments Used for Hedging Exchange Rate Risks in the...
Instruments used for hedging exchange rate risks in the forex market, based on the practices of HSBC Brazil
Final Paper
International Financial Management
Since Multinational Corporation's performance is affected by exchange rate fluctuations the assessment of their vulnerability relating to unexpected
developments in the foreign exchange market is one of the biggest challenges for risk management. Due to the prevailing volatility of financial markets,
finding mechanisms to hedge companies against exchange rate risks when trying to achieve excess return becomes increasingly crucial. The basic idea
of hedging strategies is to compensate potential losses that may be incurred by an investment by assuming a position in a contrary or ... Show more
"This financial derivative represents a contract sold by one party (option writer) to another party (option holder). The contract offers the buyer the
right, but not the obligation, to buy (call) or sell (put) a security or other financial asset at an agreed–upon price (the strike price) during a certain
period of time or on a specific date (exercise date)" [8]. The bank receives a soi–disant, option premium once its services for the covered deal have
been enlisted.
Stop–Loss–Forward
A Stop Loss Forward (SWAP with limiter) is a hedge transaction whereby a company can negotiate today, a fixed price for a future purchase of a
certain amount of US–Dollars. Doing so, the company can protect itself from Dollar appreciation against the Real (Debt becomes more expensive).
Simultaneously, a maximum negative adjustment is determined in case of appreciation of the Real against the Dollar. Consequently, the company
knows in advance the maximal cost of the hedging contract and has therefore less unexpected deviation from its original financial plan.
Export–Lock
The "Export Lock" is a currency exchange instrument which pay offs fall on a future date. It is offered in two different forms: with a fixed interest
rate and with allowance for exchange rate fluctuations. In case of a fixed rate contract, the exchange rate for the future export

What Are the Main Risks Faced by Banks and How Does a Bank...
What are the main risks faced by banks and how does a bank attempt to manage these risks?
A Bank is a financial intermediary that acts as an economic firm producing goods and services. With this view in mind it's easy to see that a bank
exists to make a profit. In order for a bank to be successful and make a profit, it has to take risk. A bank that is averse to risk will be a stagnant
institution unable to adequately serve its customers effectively and produce a profit. However, a banking institution that takes excessive or
unnecessary risk is also likely to run into trouble. All risk is uncertain but with bounds the probability of an outcome can be predicted using
expectation. A bank can also run into trouble if it decides to take a... Show more content on Helpwriting.net ...
They can also reduce the risk that consumers who are approved a loan default by taking out security in the consumers. For example in the case of most
mortgages and larger personal loans this is taken in the form of the consumers' home. Doing this provides the consumer with a much greater incentive
to keep up to date with repayments and not default.
Another type of risk faced by banks is Liquidity Risk. The liquidity risk faced by the bank is that it has to have the ability to meet any financial
obligations it has, using its available equity, when they are called upon, without suffering heavy or crippling losses. If a bank were unable to satisfy
its depositors' demands a 'bank run' may occur. This occurs when depositors lose confidence in the bank and rush to withdraw their deposits. An
example of this recently was with Northern Rock who lost their consumers' confidence and triggered the first run on a British bank in over a hundred
years. The resulting bank run caused a severe liquidity crisis, which then transformed into a solvency crisis for the bank. It was at this point the
government had to intervene and bail the bank out to safeguard Northern Rocks customers' savings. To make sure that a bank is able to come good on
its liabilities it must constantly make sure that adequate liquidity is maintained, that is to maintain a balance between its primary liabilities (clients
deposits at the bank), that could be called upon to be paid on demand, and

Financial Risks Of The Financial Risk Of Companies Listed...
1. Introduction Financial risk is a major concern world–wide and there are numerous studies to support the necessity to investigate it. Lee (2006)
defines financial risk as the additional risk that the firm's stockholders bear when the firm is financed with debt as well as equity. Clarke (2010)
explains that the recent turmoil, bank–runs, global equities sell–off and the "credit crunch" demonstrate sophisticated and interconnected nature of the
financial markets making the seemingly localized problem to become a global financial risk. This reiterates the importance of studying the financial
risk of companies listed onthe securities market. Studies show that a financial crisis although not explained by any one single cause, emanates from
poor financial management which eventually spreads to other areas of the economy (McGuigan, McNally & Wyness, 2012). Studies on the developing
countries indicate that it is necessary to change policies and controls in financial risk management. Gemech, et al. (2011) point to the impact of high
uncertainty of commodity prices on financial risk management in developing countries as an effort to prevent or reverse the deterioration in their
balance of trade, and mitigate short term volatility. 2. Background The Nairobi Securities Exchange (NSE) individually and cumulatively affects the
economy of Kenya. DiBella (2011) points out that an inadequate number of investors

Questions on Market Risk
Dr. Sudhakar Raju
FN 6700
ASSIGNMENT 4 – QUESTIONS ON MARKET RISK (VALUE AT RISK)
1.What is meant by market risk?
2.Why is the measurement of market risk important to the manager of a financial institution?
3.What is meant by daily earnings at risk (DEAR)? What are the three measurable components? What is the price volatility component?
4.Follow bank has a $1 million position in a five–year, zero–coupon bond with a face value of $1,402,552. The bond is trading at a yield to maturity of
7.00 percent. The historical mean change in daily yields is 0.0 percent, and the standard deviation is 12 basis points.
a.What is the modified duration of the bond?
b.What is the maximum adverse ... Show more content on Helpwriting.net ...
15.What are the advantages of using the Back Simulation (Historical Simulation) approach to estimate market risk? Explain how this approach would
be implemented.
16.Export Bank has a trading position in Japanese Yen and Swiss Francs. At the close of business, the bank had ВҐ300,000,000 and SF 10,000,000.
The exchange rates for the most recent six days (Day 0 being today) are given below:
DAY 012345
Japanese Yen112.13112.84112.14115.05116.35116.32 Swiss Francs1.41401.41751.41331.42171.41571.4123

a.What is the foreign exchange (FX) position in dollar equivalents using the FX rates on Day 0 (today)?
b.What is the definition of delta as it relates to the FX position?
c.What is the sensitivity of each FX position; that is, what is the value of delta for each currency today?
d.Assume that you have data for the 500 trading days preceding today. Explain how you would identify the worst–case scenario with a 95 percent
degree of confidence?
e.Explain how the five percent value at risk (VAR) position would be interpreted for business tomorrow?
17.What is the primary disadvantage to the historical (back) simulation approach in measuring market risk? What affect does the inclusion of more
observation days have as a

How Do Economic Risks Affect Investment Decisions
Under a global environment, sometime it becomes necessary for an organisation to have an international view. For those companies who want to
enlarge their size or expand their market, they may consider investing abroad as a possible choice. Usually, the decision is made under a proper
estimation. But since there are many risks in a foreign environment, it may be hard for the company to make an evaluation. Basically Investors decide
where to invest based on their perceived economic risks, political risks, and legal risk (Sandler and Enders 2004). So this essay will evaluate how
these risks affect organisations decision when they want to invest abroad, try to find out whether there are good ways that company can use to reduce
the effects of these risks and make a suitable decision.
1.0LITERATURE REVIEW
To invest abroad, firstly company should concern about the effect of economic risk. The arguments on the effects are variance. On the one hand, there
is a point of view showed that the FDI organizations are not influenced significantly by a country's specific economic risk. The explanation for this is
that important elements in companies' evaluation of risks are already contained in the other variables (Bevan and Estrin 2004). On the other hand, some
previous study shows there are different ways that economic risks can affect investment decisions through different ways. For instance, exchange rate
risk, inflation risk and currency risk are all affect FDI organisation very much

Risk Factor Based Portfolio Investment Strategies
CHAPTER 1 INTRODUCTION INTO RISK–FACTOR BASED PORTFOLIO INVESTMENT STRATEGIES
1.1 What is factor–based investing?
Consider one of the most urgent problems of modern financial management, namely portfolio management. Analysis of this issue primarily is
interesting for the head of analytical department of banks and investment companies and private investors.
Risk (also found in the literature, the term total risk) of stockssecurities is the uncertainty of its income at the end of the investment period. Risk is
measured by the dispersion of the yield of a security over a fixed time interval, for example, month, quarter, year, and so on. The definition of risk is
the most common, although there are others.
A systematic or market risk of ... Show more content on Helpwriting.net ...
The regression coefficient is called the beta of the security and it is a characteristic of its market risk. The index which adequately reflects the state of
the economy in whole and includes share prices of large companies in various market sectors is taken as a market index. Typically, the basis for
calculating the index capitalization is taken of its constituent securities.
This interpretation under review of the overall risk of a security as the sum of proper and improper risk is not the only one. Often, the overall risk is
represented as a sum of three terms, where the third component acts as a risk sector to which the company. Finally, you can use a multi–factor model.
For the investment portfolio beta is calculated by adding the betas of its constituent securities, multiplied by the corresponding weight (weight of each
security in the portfolio is equal to the quotient of the total value of its portfolio to the value of the total portfolio). The most interesting finding in
terms of portfolio management lies in the fact that a well–diversified portfolio does not have its own risk. A change of its yield equals to the change of
yield market index multiplied by the beta portfolio. This means that the behaviour of a well–diversified portfolio of nothing (up to multiplication by a
constant) differs from behaviour of the market index.
The main task, set and

Risk-Averse Consumers Toward High Involvement Product...
Abstract In highly competitive markets with increasing unpredictability and decreasing product differentiation, brand loyalty is a central element of
marketing strategies and tactics. Brand loyalty generates benefits like substantial entry barriers to competitors, better ability to respond to competitive
threats, greater sales and revenues and the customer's lower sensitivity to marketing efforts of competitors. In the context of product and brand
management, a number of studies have shown various effects of risk aversion on consumers' decision making. This conceptual paper aims to discuss
about how risk–averse consumers behave in choosing particular brand in smarthphone market and how that risk aversion lead to the brand loyalty, brand
... Show more content on Helpwriting.net ...
And by 2015 they predicted total sales of smartphone in Indonesia will reach 18.7 million, surpassing sales of smartphone in other ASEAN countries.
Graph 1.1 ASEAN smartphone sales
Main issues and Conceptual Discussion
In Indonesia, the development of smartphone is very rapid. There are several brands coming in to this country make consumers freely choose which
brands are suitable for them. However, the price of the smartphone is not cheap for some group of consumers, so that this product is kind of high
involvement product which means that before deciding to buy this product consumers need to consider several brands and then compare those brands,
because consumers want to make sure that they buy the right product. So, if the product is not suitable as they expect, there will be any risks for the
consumers, such as financial risk that comprises loss of money; functional risk that involving the product performance; physic risk; social risk and
psychological risk.
In the decision making context, consumers tend to avoid or minimize those

Essay Risk Management
What is risk?
"Simply put, risk is uncertainty. The more risk you take, the more you stand to lose or gain. You cannot expect high returns without taking substantial
risks."
Tossing a dice, is at basic level a risky endeavor. The outcomes are thrown open to uncertainty. You takerisk everytime you act, from crossing the
street; to buying a stock. Generally when people talk about risk, they focus on financial risk. In terms of finance, it is the risk that a company or
individual could lose some or all of the original investment, possibly resulting in inadequate cash flow to meet financial obligations. ... Show more
The patterns of any particular investment will detail the relative risks and rewards undertaken with each investment. Risk focuses on the future and our
ability to forecast that future. In turn, the ability to predict the future is largely dependent on what you've learned from the past. The best you can do is
to study the record and draw on experience – your own and that of others.
There is no easy scientific method that will guarantee all risks will be identified. Examine all sources of risk from the perspectives of all stakeholders.
Each source needs to be identified so that your analysis can consider the contribution each makes to the gains and losses of the risk.
You can identify risks through: flow charting, system design review, systems analysis history, failure analysis incidents or complaints interviews/focus
groups
SWOT Analysis survey or questionnaire
Some types are of risks are relatively more or relatively less important depending on the situation and application. In some theoretical models of
financial processes, some types of risks or

The Effects Of Exposure Levels On The Group 's Exposure
Scenario Analysis is the same as stress testing which capture the Group's exposure to unlikely but plausible events. Many different scenarios are run, in
order to account for significant movements in credit spreads, interest rates, commodity prices, and exchange rates.
Citi performs stress testing on a regular basis to estimate the impact of extreme market movements. It is performed on individual positions and trading
portfolios, as well as in aggregate inclusive of multiple trading portfolios. Citi's independent market risk management organization, after consultations
with the businesses, develops both systemic and specific stress scenarios, reviews the output of periodic stress testing exercises, and uses the
information to assess the ongoing appropriateness of exposure levels and limits.
FACTOR SENSITIVITY
Factor sensitivities are defined as the change in market factors affecting a current position, like the Treasury, by a single basis point. Citi practices
calculating, monitoring and limiting all factor sensitivities across their entire material risk portfolio. Essentially, the factor sensitivities take the single
basis point exposure and ensure that these levels are monitored across the firm. This appears to be a manual process of which requires a large amount
of time to keep up with. I also question the usefulness of such a calculation.
In addition, the firm claims that these measurements are used to assess the amount of interest rate swaps that must be

Enterprise Risk Management ( Erm )
Introduction
вћўWhat is Enterprise Risk Management (ERM)?
Enterprise Risk Management (ERM) is process of planning, organizing, leading, and controlling the activities of an organization in order to minimize
the effect of risk on an organizations capital and earnings.
ERM expands the process to include not just risks associated with accidental losses, but also financial, strategic, operational, and other risks.
вћўBenefits of Enterprise Risk Management In Finance
Financial Incentives
Awareness of risks involved in process will help align resources which may increase productivity and revenues, as well as improve service delivery
capabilities.
Enhanced Internal Communication
Effective communication lead to enhanced staff morale and help promote teamwork.
Improved decision making
ERM helps stimulate increased accountability, defined success criteria, improved performance reporting and clearer performance measurement.
Enhanced Partnerships
Enterprise Risk Management process highlights opportunities for working across the enterprise on providing integrated response to multiple tasks and
pathways to seizing opportunities.
вћўEnterprise Risk Management (ERM) framework

Any organization implementing ERM should develop an overall framework to ensure that the fundamental requirements are addressed. The decisions
are generally to adopt published framework or develop a customized framework based on the unique requirements of an organization.

Financial And Social Environment Risk

Recommended

Recommended

More Related Content

More from Crystal Williams

More from Crystal Williams (20)

Recently uploaded

Recently uploaded (20)

Financial And Social Environment Risk