Running head: LITERATURE REVIEW FOR LEHMAN BROTHERS’ BANKRUPTCY PAPER LITERATURE REVIEW FOR LEHMAN BROTHERS’ BANKRUPTCY PAPER Lehman Brothers bankruptcy Article#1: The failure of Lehman Brothers and its impact on other financial institutions. The article interested in Dow Jones Industrial Average (DJIA) in the Lehman Brothers crisis by using the specific dates such as the day that Lehman Brothers announced their first quarterly loss until the day that Lehman Brothers filed for bankruptcy. In 2008, the failure of Lehman Brothers impacted not only the large primary bank but also savings, loans, and brokerage firm (Mark & Abdullah, 2012). This article traces the 3 years of daily stock return from the beginning of the year 2006 till the end of the year 2008 by forming the portfolio based on the firms’ Standard Industrial Code (SIC) and also the portfolio of the publicly traded financial institutions which had primary dealer status according to the New York Federal Reserve list on 15 September 2006. This article compares the effect of differences formed portfolio in the many event dates. The results show that in four differences event date, the portfolio is increasing and decreasing depending on the news. If the news is in a positive way such as the day that Korean Development Bank (KDB) announced that it was having a discussion with Lehman brothers regarding a possible investment in their firm, the portfolio is increasing and vice versa. I find the study and hypothesis of this article are very informative for learning of the fluctuation of the stock. Article#2: Derivatives in bankruptcy: some reasons from Lehman Brothers. The article talks about the beginning of the crisis, how the Lehman Brothers and other organization such as government cope with the problems, and also what is the effect of the action. Anyway, most of the article talks about the mechanism of derivatives. The resolution of the Lehman’ derivative contracts can classify in three types.First, most counterparties selected to terminate the contract as soon as possible after Lehman’s bankruptcy filing because holding the opening contracts could be a lose-lose situation. Second, some counterparties chose neither to terminate nor to continue making payments. Third, some counterparties who have lost their money on the contracts are trying to avoid paying the full value of their obligation. From this article, the effect is not staying only for Lehman brothers but it widespread to other company. At that time, the government attempted to curb the run on money market funds because the numerous investors withdrew their investment, fearing of loss in the money which relating to Lehman Brothers insolvency. The Lehman Brothers’ crisis teaches a lot of lessons for not only the investors but also the financial institution. Sometimes government support has been vital in keeping the market for structured securities alive (Henry, 2010). Article#3 The impact of large-scale asset purchases on the.

1. Running head: LITERATURE REVIEW FOR LEHMAN
BROTHERS’ BANKRUPTCY PAPER
LITERATURE REVIEW FOR LEHMAN BROTHERS’
BANKRUPTCY PAPER
Lehman Brothers bankruptcy
Article#1: The failure of Lehman Brothers and its impact on
other financial institutions.
The article interested in Dow Jones Industrial Average (DJIA)
in the Lehman Brothers crisis by using the specific dates such
as the day that Lehman Brothers announced their first quarterly
loss until the day that Lehman Brothers filed for bankruptcy. In
2008, the failure of Lehman Brothers impacted not only the
large primary bank but also savings, loans, and brokerage firm
(Mark & Abdullah, 2012). This article traces the 3 years of
daily stock return from the beginning of the year 2006 till the
end of the year 2008 by forming the portfolio based on the
firms’ Standard Industrial Code (SIC) and also the portfolio of
the publicly traded financial institutions which had primary
dealer status according to the New York Federal Reserve list on
15 September 2006. This article compares the effect of
differences formed portfolio in the many event dates. The
results show that in four differences event date, the portfolio is
increasing and decreasing depending on the news. If the news is
in a positive way such as the day that Korean Development
Bank (KDB) announced that it was having a discussion with
Lehman brothers regarding a possible investment in their firm,
the portfolio is increasing and vice versa. I find the study and
hypothesis of this article are very informative for learning of

2. the fluctuation of the stock.
Article#2: Derivatives in bankruptcy: some reasons from
Lehman Brothers.
The article talks about the beginning of the crisis, how the
Lehman Brothers and other organization such as government
cope with the problems, and also what is the effect of the
action. Anyway, most of the article talks about the mechanism
of derivatives. The resolution of the Lehman’ derivative
contracts can classify in three types.First, most counterparties
selected to terminate the contract as soon as possible after
Lehman’s bankruptcy filing because holding the opening
contracts could be a lose-lose situation. Second, some
counterparties chose neither to terminate nor to continue
making payments. Third, some counterparties who have lost
their money on the contracts are trying to avoid paying the full
value of their obligation. From this article, the effect is not
staying only for Lehman brothers but it widespread to other
company. At that time, the government attempted to curb the
run on money market funds because the numerous investors
withdrew their investment, fearing of loss in the money which
relating to Lehman Brothers insolvency. The Lehman Brothers’
crisis teaches a lot of lessons for not only the investors but also
the financial institution. Sometimes government support has
been vital in keeping the market for structured securities alive
(Henry, 2010).
Article#3 The impact of large-scale asset purchases on the
S&P500 index, long-term interest rates and unemployment.
This article shows the remaining effect of Lehman Brothers that
the government should settle. After the bankruptcy of Lehman
Brothers, the Federal Reserve moved rapidly to reduce the
federal funds rate. This shows that the US economy needs to be
stabilized. The Federal Reserve Bank initiated three round of
monetary policy which known as quantitative easing (QE) and
encourages the investment spending. There are many arguments
that disagree with this policy. After that the Federal Reserve
Bank still using the QE policies. They launched not only one

3. time but also three times. As a result of QE strategies, the
balance sheet of Fed has expanded from about $1 trillion of
assets prior to the crisis to over $4 trillion during the third
quarter of 2014 (Ramaprasad & A.G. & Mary, 2015). This
article carefully studies the QE impacting long-term interest
rates, a stock market, and unemployment. The result of the
hypothesis shows that the QE did not impact the 10-year note
rate. The impact of QE on equities has been significant only the
high volatility regime and the implications for unemployment
did just in the low volatility regime. The article concludes that
the Fed’s channel of QE that initially targeted the lowering of
long-term interest rates was less successful than the targeting of
equities that turned out to be more successful.
Article#4 The Lehman Brothers effect and bankruptcy cascades.
The main point of this article is about the Lehman default event
which quantified as an almost immediate effect in the
creditworthiness of all financial institution in the society
because everybody believes that the Lehman is a too-big-to-fail
financial institution. This article developed the structural model
of correlated multi-firm default which leads to contagious
jumps in credit spreads of business partners and assumed that
all the properties have the effective credit rating which follows
the dynamics of co-evolution with the credit rating of the other
firms in economic network. The amplification effect is the
direct consequence of the collective linkage between the firm
credit ratings in our society which is organized dangerously.The
article concludes that the U.S. government declined to bail out
Lehman makes the firm subsequently failed. Creditors suffered
from significant losses and made an adverse effect on the
market even the government tried to persuade investors to
continue doing business with Lehman. After that government
intervened by providing an emergency loan to the primary
insurance company but it makes the situation worse because this
loan becomes the company most senior debt and implied losses
for previously senior creditors. This situation does not remain
only in the U.S. money market funds. The crisis affects the

4. world’s financial market (Sieczka & Sornette & Holyst, 2011).
Article#5 Long-range dependence in the risk-neutral measure
for the market on Lehman Brothers collapse
The discussion of this article is the long-range dependence in
the risk-neutral stock return process of the S&P500 index
options market. The long-range dependence has been repeatedly
used to describe properties of financial time series such as stock
prices, foreign exchange rates, market indices, and commodity
prices. The relevance of these properties in the context of
financial modeling, their relation with the basic principles of
financial theory and possible economic explanations for their
presence in financial time series. There are a variety of markets,
instruments, and periods such as excess volatility, heavy tails,
an absence of autocorrelations in returns, volatility clustering,
and volume or volatility correlation. The model that was used in
this article to observe the long-range dependence together with
fat-tails is the parametric model of fractional Levy process
along with the option pricing model. This article applied the
mathematical equation to find the less error model to explain
the market risk-neutral price process. From the empirical, the
long-range dependence in the risk-neutral process of S&P500
index options market.Moreover, the long-range dependence
becomes stronger in the Lehman crisis season than the case of
one month before the Lehman Brothers collapse. This article
may obtain a better arbitrage-free model which remains further
research (Shin Kim, 2016).
References
Barkhausen H. (2010). Derivatives in bankruptcy: some lessons
from Lehman brothers.
The journal of structure finance,15(4), 7-14 Retrieved
from
https://eds.b.ebscohost.com/eds/pdfviewer/pdfviewer?vid=4&si
d=409d64b7-e460-
46c1-b1fd-8197bec420dd%40pdc-v-sessmgr03
Bhar R. & Malliaris A. G. & Malliaris M. (2015). The impact of

5. large-scale asset purchases on
The S&P 500 index, long-term interest rates and unemployment.
Applied economics,
47(55), 6010-6018
http://dx.doi.org/10.1018/00036846.2015.1061646
Johnson M. & Mamun A. (2012). The failure of Lehman
brothers and its impact on other
financial institutions. Applied financial economics,22, 375-385
http://dx.doi.org/10.1080/09603107.2011.613762
P. Sieczka & D. Sornette & J.A. Holyst. (2011). The Lehman
Brothers effect and bankruptcy
cascades. The European physical journal B,82, 257-269
http://dx.doi.org/10.1140/epjb/e2011-10757-2
Young S.K. (2016). Long-range dependence in the risk-neutral
measure for the market on
Lehman Brothers collapse. Applied mathematical finance,23(4),
309-322
http://dx.doi.org/10.1080/1350486X.2016.1268926
Minimum 500 words total: 2-3 Paragraphs each question.
1. Discuss three techniques used in planning and controlling the
quality of a project. (20 points)
2. Quality is the degree to which a product of service fulfils
requirements and provides value for its price - Discuss. (20
points)
3. Describe how as a Project manager, you would go about

6. defining and meeting client expectations. (20 points)
4. Describe contingency plan (20 points)
5. Discuss Project planning phase risks and give examples. (20
points)
On September 15, 2008, New York-based investment bank and
financial services firm Lehman Brothers filed for Chapter 11
bankruptcy. The bankruptcy filing, which remains the largest in
American history, had many far-reaching effects on both
domestic and foreign economies. The bankruptcy of Lehman
Brothers and resulting Credit Crisis of 2008 led to sweeping
domestic financial regulatory reform. New legislation, such as
the Dodd-Frank bill – coupled with the creation of the
Consumer Financial Protection Bureau stand as two examples of
measures the government took to guard against future disasters
in the wake of this historic bankruptcy. Nevertheless, it took
years for investor and consumer confidence to reenter the
market.
Use the research you did in the Week 3 Literature Review as a
foundation for this assignment. Write a seven-to-eight-page
paper in which you:
· Describe how the crisis impacted other businesses.
· Choose an industry that was hit the hardest or one that
benefited from the collapse and describe how managers in that
industry responded to the events.
· Provide examples of lessons managers need to keep in mind in
the post-2008 business environment.
· Explain whether or not an event of this magnitude could occur

7. again, given regulations implemented after the crisis.
· Explain if the American economy is weaker or stronger today
as a result of the Lehman Brothers’ bankruptcy and resulting
reforms and provide an explanation.
· Provide an example of how this monumental bankruptcy and
the resulting credit crisis affected you or someone you know.
For instance, you could share a decision you made about your
career or investments, or how someone you knew or their
business or management decisions were affected.
· Use five quality academic resources, three of which must
come from your Week 3 Literature Review. Cannot be
Wikipedia, Investopedia, etc. Usage of the Strayer University
Library is strongly recommended.
Your assignment must follow these formatting requirements:
· Be typed, double spaced, using Times New Roman font (size
12), with one-inch margins on all sides; citations and references
must follow APA or school-specific format. Check with your
professor for any additional instructions.
· Include a cover page containing the title of the assignment, the
student’s name, the professor’s name, the course title, and the
date. The cover page and the reference page are not included in
the required assignment page length.
The specific course learning outcomes associated with this
assignment are:
· Examine the concepts related to financial management and the
financial environment.
· Examine the various alternatives to managing and mitigating
business and financial risk with the use of forwards, futures,
swaps, and options.
· Develop strategies to protect a firm from financial distress.
· Analyze the key concepts related to credit management.
· Examine effective processes related to short-term asset
management.
· Examine financial management concepts in a not-for-profit
environment.
· Use technology and information resources to research issues in

8. corporate finance.
· Write clearly and concisely about corporate finance using
proper writing mechanics.