Market Risk Essays (Examples)

Part of the overall calculation of uncertainty according to iskMetrics recommendations, however, should include a calculation of correlative uncertainty (Finger 2007). The rationale for including this specific uncertainty in calculations is that it helps to account for inaccuracies and inadequacies in the model, determining the level of risk associated with incorrectly defined or changing correlations used by the model in other calculations and definitions (Finger 2007). An accurate calculation of uncertainty and risk will necessarily include a calculation of the correlative uncertainties attendant upon the model and the situation to which it is applied, providing not a necessarily more accurate view of direct risk, but a useful evaluation of the risk prediction's efficacy.

iskMetrics Calculations: Exposure and Uncertainty

An accurate and well-developed combined understanding of the exposure and uncertainty of a various investment venture or portfolio contributes a nearly complete understanding and assessment of the risks presented by that investment…

References

Andren, N.; Jankensgard, H. & Oxelheim, L. (2005). "Exposure-Based Cash-Flow-At-Risk under Macroeconomic Uncertainty." Journal of applied corporate finance 17(3), pp. 21-31.

Argentin, P. (2010). "Two-sided counterparty risk." RiskMetrics Group: On the Whiteboard. Accessed 24 September 2010.  http://www.riskmetrics.com/on_the_whiteboard/20100615 

Finger, C. (2007). "We identify two main versions of correlation risk -- parameter uncertainty and new financial products -- and examine the modeling challenges implied by each." RiskMetrics Group: Research Monthly. Accessed 24 September 2010.  http://www.riskmetrics.com/publications/research_monthly/20070400

The major difference between standard deviation and the beta is that the former measures the volatility against the asset's own mean, whereas beta measures the asset's volatility against the market. Standard deviation, therefore, allows the user to understand the asset's specific risk on its own, and can use this information to compare returns against historical average returns. This is valuable because the risk profile of an investment can be significantly different than that of the market, so the returns will be expected to be significantly different as well.

Standard deviation can also be used to measure against other means, for example against historic market returns. However, the beta coefficient is more effective as a measure against the market. Standard deviation and beta are both often used as measures on their own, without any model, because they communication the information clearly. In the capital asset pricing model, for example, the systematic…

Works Cited:

Investopedia. (2013). Definition of beta. Investopedia Retrieved April 10, 2013 from  http://www.investopedia.com /' target='_blank' REL='NOFOLLOW'>

. Research Design Rationale

1. Question format: In order to allow the research study to become embedded in the field of economics, the research question will use an applied question format. The purpose of the study is to develop a predictive method regarding player choices in the Prisoner's dilemma. It will explore the association of risk and cooperation or defection in the Prisoner's

Dilemma.

2. Research design: The research will use a deductive approach where the theory will be presented and tested through the methodology. The research will use quantitative research methods, which are suited for research where the information can be reduced to a numerical format. This is the case in the proposed study as both risk tolerance and the decisions made in the Prisoner's Dilemma can be reduced to numerical data and standard statistical methods applied.

III. Data/Information from Previous research

A. Literature Review

The literature review for…

Bibliography (Preliminary)

Agarwal, J. & Feils, D. (2007). Political Risk and the Internationalization of Firms: an Empirical

Study of Canadian-based Export and Fdi Firms. Canadian Journal of Administrative

Sciences. 24 (3): 165+. Questia Database.

Ansell, C. & Gash, a. (2008). Collaborative Governance in Theory and Practice. Journal of Public Administration Research and Theory. 18 (4): 543+. Questia Database.

risk and return for an investment portfolio that includes five asset categories: stocks, bonds, mutual funds, options, and precious metals. The purpose of diversified portfolio investment is to maximize portfolio expected return for a given level of risk, or to minimize risk for a specific level of expected return. This paper reviews mathematical formulae for modeling risk and return which provide a rationale for investment strategies and portfolio management. The paper also discusses risk and return objectives and expectations, along with investment risk profiles.

Risk vs. Return Measurement

In an ideal world, the typical investor would select investments whose attributes include high returns coupled with low risk. In reality, there are few of these kinds of investments available, consequently financial managers have gone to great lengths to develop methods and strategies that allow them to come as close as possible to selecting the ideal investment. One such financial theory for…

Piazza, J. (n.d.). Objectives and risk. Sensible Investment strategies Web site. Retrieved May 26, 2011 from http://www.seninvest.com/objectives.htm

Risk Measures. (2011). Investopedia Web site. Retrieved May 26, 2011 from  http://www.investopedia.com /' target='_blank' REL='NOFOLLOW'>

As a means to gain access to several million people who live a estern lifestyle, South Africa can be a good country to enter, but as a growth story it is much less exciting. Only when the GDP per capita of black and mixed-race South Africans begins to grow rapidly will the country be a truly attractive one for most companies. Arguably, the Human Development Index is a better measure, because it can reflect the overall potential of a nation like South Africa, where the development of one segment of the population is more critical to the market's potential than GDP, which is driven by another segment of the population.

A fourth reason why average per-capita income is not always the best indicator of an emerging market's potential lies in the Gulf States. Many Gulf States have very high average GDP per capita figures, driven by oil revenues. The lifestyle…

Works Cited:

Gibson, K. (2002). A case for the family-owned conglomerate. McKinsey Quarterly. Retrieved October 18, 2012 from  http://www.mckinseyquarterly.com/A_case_for_the_family-owned_conglomerate_1238 

Rajwani, S. (2011). How should firms deal with political risk? Cranfield University. Retrieved October 18, 2012 from  http://www.som.cranfield.ac.uk/som/p16495/Think-Cranfield/2011/May-2011/How-Should-Firms-Deal-with-Political-Risk 

Sargeant, N. (2006). What risks do organizations face when engaging in international finance activities? Investopedia. Retrieved October 18, 2012 from  http://www.investopedia.com /' target='_blank' REL='NOFOLLOW'>

The first economy could conceivable be at a strong low point when I need my money -- it has a higher degree of market risk. It is less likely, based on the correlation of price movements within that economy, that the economy will be down significantly. There is also less risk that it will be up significantly, but as a risk averse investor I am only considering the downside risk. Therefore, I would choose the option that has the least amount of downside risk.

The question cuts to the difference between market risk and firm-specific risk, and short-term and long-term risk. In this situation, the two economies have equivalent market risk in the long-run. They do not have equivalent levels of market risk in the short-run, however. In addition, there is a higher degree of firm-specific risk in the first economy because the firms are impacted by each other. In…

Capital

There are a number of financing options for small business. The two major categories are debt and equity. Debt comes in a variety of forms. Bank loans are common. Credit cards are used sometimes by startups; bond issues by larger firms. Debt is an attractive option for a number of reasons. Debt has a lower cost of capital, which is beneficial to many small businesses. As well, debt financing allows the owners of the company to maintain control, and this is usually considered to be quite important for many small businesses in particular. The downside to debt is that the company is then obligated to pay that debt back before it can reinvest profits back into the business - debt repayment is more important than reinvestment in terms of financial obligations (Parker, 2012).

Equity comes at a higher cost than debt. Equity is also means that some control is…

References

Mahmood, D. (2013). How to choose the right investment banker. Inc. Magazine. Retrieved May 31, 2014 from  http://www.inc.com/david-mahmood/how-to-choose-the-right-investment-banker.html 

Parker, T. (2012). Small business financing: Debt or equity? Investopedia. Retrieved May 31, 2014 from  http://www.investopedia.com /' target='_blank' REL='NOFOLLOW'>

isks in Export Market

There is need for companies to develop a professional approach before venturing into the exporting business. The management of the company is supposed to be committed extremely as well as devoting time and money in commencing the campaigns of export. A company is supposed to be ready to face greater competition as well as more stringent rules and regulations concerning products and packaging due to the variance in rules to which or across which the company will be exporting.

In the process of exportation, there are a number of risks that the company will face. These elements of risks are encountered in every commercial transactions as well as the complexity of the environments that exporters operate in. The content of this paper will analyze risks that a company can face while entering the field of exporting as well as discussing the roles of intermediaries in the…

References

Aaby, N. & S. Slater. (1989). Management Influences on Export Performance: A Review of the Empirical Literature1978-88. International Marketing Review, 6: 7-26.

Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, (2007). "Firms in International Trade," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 105-130, Summer.

Barney, J. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management, 17: 99-120.1997. Gaining and Sustaining Competitive Advantage. Reading, MA: Addison.

Cornelius Bothma (2012). Managing your export risk. EXPORTHELP. Retrieved April 13, 2012 from  http://www.exporthelp.co.za/modules/10_risk/intro.html

isk, eturn and Their Evaluation

isk & Performance Indicators

Since this is a small business, therefore raising equity capital through public stock issue is less likely than debt or whatever form of paper issued to angel or venture investors. Therefore while a larger, publicly traded firm would consider the return on equity version of the short form DuPont equation, a small, more closely-held concern would focus on return on assets (OA). If OA is net income over sales times sales over total assets, i.e. net income over total assets, then any action that could increase the numerator, total income, or shrink the denominator(s) should increase OA compared to past performance within the firm and the competition outside it. If competitors all use the same (best) plant, then maximizing efficiency of the same assets through process or brand innovation; input cost reductions, and also financial performance like minimizing payables days over…

Reference

Investopedia (2011). How to calculate required rate of return. Forex. 25 Feb. 2011. Retrieved

from  http://www.investopedia.com /' target='_blank' REL='NOFOLLOW'>

Market Patterns

One industry that has shifted in the past few years in terms of its structure is the smartphone operating system market. A few years ago, most of the early smartphones were based around proprietary operating systems. Palm and Blackberry dominated the market. Apple joined the industry with the introduction of the iPhone, but more recently other firms have entered the market as well, including Google (Android), indows, Symbian and other systems. The market has moved from a stable oligopoly of four firms basically between two firms into a market that is much closer to monopolistic competition. However, there is the risk that as operating systems shake out, the market could return to an oligopoly of just three operating systems (est & Mace, 2007).

In the short-run, firms in this industry will seek to gain market share through differentiation. The products are slightly differentiated from each other -- they…

Works Cited:

West, J. & Mace, M. (2007). Appropriability, proximity, routines and innovation. Druid Summer Conference 2007. Retrieved February 4, 2012 from http://www2.druid.dk/conferences/viewpaper.php?id=1675&cf=9%20{^

Seppala, (no date). Monopolistic competition. University of Illinois. Retrieved February 4, 2012 from http://www.econ.uiuc.edu/~seppala/econ102/lect15.pdf

Watkins, T. (no date). The transaction cost approach to the theory of the firm. San Jose University. Retrieved February 4, 2012  http://www.sjsu.edu/faculty/watkins/coase.htm 

Blodget, H. (2011). Android is destroying everyone, especially RIM -- iPhone dead in water. Business Insider. Retrieved February 4, 2012 from http://articles.businessinsider.com/2011-04-02/tech/30089528_1_android-phones-google-s-android-smartphone-market

This was because they were seeing one of their primary competitors (Travelers) merging with Citicorp (which created a juggernaut of: insurance, banking and brokerage activities). At which point, executives at AIG felt that in order to: maintain their dominance in the industry and offer new products they should become involved in similar activities. The difference was that they would grow the company by expanding into areas that were considered to be speculative to include: commodities, stocks, options and credit default swaps. The way that this was accomplished is by purchasing a host of businesses that were involved in these activities. This is significant, because it meant that a shift would take place in: how managers were accounting for risks and the kinds of activities that they were becoming involved in. With the newly acquired companies; bringing over executives that did not practice the same kind of strategies for dealing with…

Bibliography

Travelers, Citigroup Unite. (1998). CNN. Retrieved from:  http://money.cnn.com/1998/04/06/deals/travelers/ 

US saw 13 Bank Failures Every Month in 2010. (2011). Economic Times. Retrieved from: http://articles.economictimes.indiatimes.com/2011-01-02/news/28424370_1_medium-banks-bank-failures-problem-banks

Baum, C. (2009). The Impact of Macro Economic Uncertainty. Boston College, Boston, MA.

Byoun, S. (2007). Financial Flexibility. Baylor University, Waco, TX.

Market Efficient espect Set Information Impossible Makes Abnormal Profits

Market Efficient

In his work, Fama argued that given the massive use of resources by the brokerage firm to conduct studies on trends in the industry, the effects of changes in interest rates on corporate balance sheets and expectations of managers and/or political analysts of the companies should be able to systematically beat a generic portfolio with the same risk characteristics.

Since, according to Fama, professional in every situation, the analyst has a fifty percent chance of beating the market; although its specific capabilities did not exist he would beat a lot of the market. The analyst did "help" the market to be efficient if all the investors, in fact, would hold portfolios composed of stock indices, would open up significant opportunities for professional traders to take advantage of the situation. But the movement of traders to that "new market" would…

References

Arrow, K.J., 1959. 'Toward a theory of price adjustment', in M. Abramovitz (ed.), The Allocation of Economic Resources, and Stanford: Stanford University Press, pp. 41 -- 51.

Aumann, R.J., 1964. "Markets with a Continuum of Traders," Econometrica, Vol. 32, No. 1/2, Jan. - Apr., pp. 39 -- 50.

Clifton, J.A., 1977. "Competition and the evolution of the capitalist mode of production," Cambridge Journal of Economics, vol. 1, no. 2, pp. 137 -- 151.

Frank, R., 2008. Microeconomics and Behavior 7th ed. (McGraw-Hill) ISBN 978-007-126349-8.

Conclusion

There are discrepancies encountered in conducting the valuation and risk of a private company. There arises these factors that if investigated can impact the process accordingly. The first research question that I suggest is investigating if the tax risk and equity market value exhibit a concave association, which is consistent with the optimal tax risk level from a valuation of equity standpoint. The second topic that can be researched upon is the changes facing the risk and value valuation service area for businesses and how they impact the practice. Finally, a study on how the Merger and Acquisitions revised standards are impacting business deals.

eferences

Chandra, U., & o, B.T. (2008). The role of revenue in firm valuation. Accounting Horizons,

22(2), 199-222. etrieved from http://search.proquest.com/docview/208923683?accountid=35812

Darrough, M., & Ye, J. (2007). Valuation of loss firms in a knowledge-based economy. eview of Accounting Studies, 12(1), 61-93. doi: http://dx.doi.org/10.1007/s11142-006-9022-z

Bernier, G.,…

References

Chandra, U., & Ro, B.T. (2008). The role of revenue in firm valuation. Accounting Horizons,

22(2), 199-222. Retrieved from  http://search.proquest.com/docview/208923683?accountid=35812 

Darrough, M., & Ye, J. (2007). Valuation of loss firms in a knowledge-based economy. Review of Accounting Studies, 12(1), 61-93. doi:  http://dx.doi.org/10.1007/s11142-006-9022-z 

Bernier, G., & Ridha, M.M. (2010). On the economics of postassessments in insurance guaranty funds: A stakeholders' perspective. Journal of Risk and Insurance, 77(4), 857-892.

Risk Management [1]

If you believe a stock will appreciate and want to risk little to speculate that the stock will rise what are your option?

Holding a call option is fairly low risk because it would allow me to buy future stocks at a current price. An increase in stock value would limit my losses and allow me to profit by means of leveraged speculation. As a holder exercising a call option, I would be able to benefit from the same profit in underlying stock by paying only a minimal amount of money. By risking only a small percentage of my capital towards an insurance premium, I am potentially able to benefit from trends and hedge away risks within the call-option deadline.

Potential losses can be offset against either long-or-short stock portfolios by means of trading call strategies. A Fiduciary call would allow for a reduced capital outlay by…

isk and Insurance Management

isk is believed to be a newly coined word of assurance (for example, Ewald, 1991: 198). One of the broadly shared suppositions regarding insurance is that it spins around an instrumental concept of risk. Possibility and the amount of influence make up a technical concept of hazard/risk and hazard administration is chiefly worried about reviewing these possibilities and influences (for an overview see Gratt, 1987). For instance, external profits of financial or political occurrences lay down thresholds for the availability of associated risk guesstimates or reckonings (Huber, 2002).

So, the range of the risk groups cannot be clarified by risk judgment single-handedly; peripheral circumstances that could be political, financial or inclusive of image, arts and manners, are also required to be taken into account. Therefore, if risks are not be present, per se, but are deliberately selected, we can go a step ahead and presume them…

References

Douglas, M. And Wildavsky, A. (1982) Risk and Culture. An Essay on the Selection of Technical and Environmental Dangers. Berkeley: University of California Press.

Evers, A. And Nowotny, H. (1987) Uber den Umgang mit Unsicherheit. Die Entdeckung der Gestaltbarkeit von Gesellschaft. Frankfurt / Main: Suhrkamp.

Ewald, F. (1991) 'Insurance and Risk' in Burchell, G., Gordon, C. And Miller, P. (eds.) The Foucault Effect: studies in governmentality . London: Harvester Wheatsheaf.

Gratt, L.B. (1987) 'Risk Analysis or Risk Assessment: a proposal for consistent definitions' in Covello, V. And Lave, L. (eds.) Uncertainty in Risk Assessment, Risk Management and Decision Making, Advances in Risk Analysis (4). New York: Plenum Press.

Market Potential Index

There are eight indicators on the market potential index: market size, market intensity, growth rate, consumption capacity, commercial infrastructure, receptivity, economic freedom and country risk.

The market size is the largest weight. The measures used are urban population and electricity consumption, I guess as proxies for the number of people who have at least the possibility of having money.

Market intensity is based on the gross national income per capita and private consumption as % of GDP, measures that reflect the wealth of the country and presumably telling something about purchasing power.

Growth rate is based on the growth rate in energy use and the real GDP growth rate, looking at how fast the market is growing.

The consumption capacity is measured with consumer expenditure and income share of middle class. This is similar to market intensity, but with a focus on consumers and the middle class,…

References

Global Edge (2014) website, various pages. Global Edge. Retrieved December 13, 2014 from  http://globaledge.msu.edu/mpi 

Koetsier, J. (2013). Tablets will outsell laptops 6 to 1 by 2017 as mobile PC market hits 579.4 million. Venture Beat. Retrieved December 13, 2014 from  http://venturebeat.com/2013/05/06/tablets-will-outsell-laptops-6-to-1-by-2017-as-mobile-pc-market-hits-579-4-million/

This can cloud your judgment, which as a trader or investor it is imperative to think with a clear head. When you are placing the hedge, it is set at a logical point that is determined without emotions. This increases the chances that you have reduced your risks by eliminating the emotionalism that accompanies the markets. (Carr, 2002)

Another reason why hedging is effective, is it allows you to protect your downside using as little working capital as possible. ecause hedging involves using options, means that the overall amounts of upfront costs are low. This means, that going into the hedge you know what your maximum down side will be (the premium). You can also reduce the amounts of risk by purchasing the options with expirations that are coming up, within the next 30 to 60 days. This is important, because the closer the option moves to the expiration date,…

Bibliography

Carr, P. (2002, October 1). Static Hedging of Standard Options. Retrieved February 27, 2010 from Fordham

University website: http://www.bnet.fordham.edu/crif/WorkingPapers/crifwp02010.pdf

Maynard, M (2008, October 1). Southwest Has First Loss in 17 Years. Retrieved February 26, 2010 from New York

Times website:  http://www.nytimes.com/2008/10/17/business/17air.html?_r=1

Administrative and political distance risk is most seen from the standpoint
of legal and financial institutions, the monetary systems and political
associations and the role of foreign governments in defining the barriers
to entry for foreign businesses. Geographic distance risks have more to do
with the physical distance and varying climates. The geographic distance
set of risks also capture the lack of potential infrastructure due to
remoteness. The economic distance risk assessments include the different
information or knowledge process workflows throughout a culture and the
blind-spots this causes for many companies in creating the strategies to
move into another company. There are many risks also present in the
economic distance of given foreign nation, emanating from the differences
in consumer incomes and wide variations in costs and quality of natural,
financial, and human resources.
In assessing the risks of global expansion, it is critical to consider the
use of analytical…

References:
Ghemawat (2001) - Distance Still Matters: The Hard Reality of Global
Expansion. Harvard Business Review. Pankaj Ghemawat. Harvard Business
School Press. Cambridge, MA September, 2001.

isk management is the greatest benefit offered by a strategic, forward-thinking approach to management. In an uncertain economic environment, companies must constantly 'hedge their bets' as to what is the superior choice between mutually exclusive alternatives. Strategic management promotes the efficient use of resources by forcing companies to constantly anticipate the future, plan ahead, and make the best economic choices possible, given the company's current framework of knowledge. No company can predict everything that may happen but the consistent data-gathering that is required in a strategic management approach and trend-monitoring allows the company to be more flexible and responsive.

As well as avoiding bad decisions, effective strategic management also means knowing when to take advantage of possible opportunities and invest in good decisions. isk management entails knowing when to take calculated risks, even if this means a major allocation of organizational resources, such as for a new form of technology…

References

Wade, Mike. (2005). Resource-based view of the firm. York University: Theories used in research. Retrieved January 20, 2011 at http://www.istheory.yorku.ca/rbv.htm

Risks From International Business

What are some risks of international business that may not exist for local business?

There are many risks inherent in competing on a global or internal level compared to being a local business. As the chapter suggests, there is a much greater level of economic and socio-political pressure on governments to work together for the common good of the global economy. Despite these best intentions, global macroeconomic factors often cause nations to restrict or unnecessarily increase the cost of transactions and trade based on fear over the trading partner's economies. Such is the case for American companies attempting to gain sales within China, whose government holds nearly $1.1 trillion in U.S.-based debt. China and the United States are two of the more powerful economic forces in the global economy, and as their economies go, so goes the world. What this means for international businesses is that…

Risk-Free

Government bonds are called risk-free because they will be paid back. he underlying assumption is that the U.S. reasury can always print more money in order to finance the payback of these bonds. hat does not by any means make the bonds truly risk-free, but they are guaranteed to return face value. here are actually a few different ways in which government bonds are risky.

A recent change to the more orthodox view of government bond risk is that U.S. government bonds were downgraded in 2011, something that had never happened previously. his has not changed the market view of U.S. government paper, but it does imply that, according to one rating agency at least, the bonds of some other governments are less risky than the bonds of the U.S. government. hat said, the risk conditions of U.S. bonds have not changed. hey are still considered risk free because…

The risk of default in U.S. government bonds, aside from political shenanigans like the debt ceiling debacle in the summer of 2011, lies largely with the federal budget. This is known as sovereign risk. The sovereign risk of the United States, and several other developed nations, is very low. With other countries, however, there are genuine budget issues that make default a possibility. In the Eurozone, for example, nations like Greece are struggling to meet their debt payments. With Greece, there is no ability for the government to print more money in order to cover its obligations, and that increases the sovereign risk. Nations that have their own currencies do not have this type of risk, but still have sovereign risk to the extent that they could find themselves one day without enough cash to pay their obligations.

It should be noted that part of the reason that government bonds give a return is not related as much to risk as it is to providing the incentive to invest. Governments issue debt because they need to raise funds. If there was no return given on that debt, nobody would invest. Therefore, there must be some sort of return offered, in order to entice investors. The rate is typically set in regard to the opportunity cost of capital, and the market yield will reflect the market's views about the sovereign risk associated with debt.

Thus, risk free securities are not truly risk free. There is the risk of default, although this risk is very minor. There is the risk as well that the value of the investment will not be much. In the event of hyperinflation, for example, the value of the money might be very low. However, the value will always be paid out because the Treasury can print that money. The interest rate reflects, in addition to an enticement to invest, the combined risk of default and the risk associated with expected future interest rate moves.

Risk Sales Forecast

Budgeting, Sales Forecasts, and Ethical Consideration

Sales forecasts and the budget preparation process in general, serves as a cornerstone for effective operations management. hen this practice is performed with strict adherence to good business ethics it is one of the key components of the entire business planning process. ith reliable estimates the organization can plan appropriates. Financial planning and estimation includes forecasted sales and revenues, expenses, and required cash flow to operate the business.

The budget will then combine all of the different estimates into a comprehensive document that can be used to plan for the future and to make business decision. The first activity in the budgeting process is usually a sales forecast. Once an organization determines what their projected levels of sales will be for any period, they can then estimate the other expenses based on this forecast. Accuracy of the sales forecast therefore is…

Works Cited

Decker, R., & Gnibba-Yukawa, K. (2010). Sales Forecasting in High-Technology Markets: A Utility-Based Approach. The Journal of Product Innovation Management, 115-129.

Todd, S., Crook, T., & Lachowetz, T. (2013). Agency Theory Explanations of Self-Serving Sales Forecast Inaccuracies. Sciedu Press, 13.

Market Audit

The first point that has to be looked into is the health of the company, Colorado Australia. The company is passing through a bad phase and this is not the time for a product launch as generally no new introduction can make money for a period of time after launch. When the company launching the product is itself in a relatively poor condition of finances, then it is less likely to take risks that will be required for the successful development of the new product. Here the situation is likely to be of a new brand in a new market, rather than a totally fresh launch. The company is already exporting substantial quantities and it is possible even the same item is being exported for sale by another organization under a different brand name. It may be possible that expansion of sale of quantities under that arrangement may…

REFERENCES

"Before You Buy Hiking Boots" Retrieved from http://shoes.about.com/od/athleticshoes/bb/bybhikingboots.htm

Accessed 12 October 2005

"Colorado dashes hopes of retail recovery" (August 5, 2005) Retrieved from  http://www.smh.com.au/news/Business/Colorado-dashes-hopes-of-retail-recovery/2005/08/05/1123125885090.html  Accessed 11 October 2005

"Colorado Group Ltd.: (Australian Stock Exchange: CDO)" Retrieved from http://www.onesourceexpress.com/companyreports/default_ec.asp?keyid=44678842& camp=EC5001& GCID=C15112x004& ovchn=INK& ovcpn=International& ovcrn=onesource-international-1& ovtac=PIB Accessed 11 October 2005

This is equity risk. Equity risk can be measured -- either with standard deviation or more typically with the beta coefficient. This risk must be addressed, because the upside movement of the stock was something that was paid for with the lower rate of interest payments.

Diversification of any equity portfolio can be done on a number of other variables. The diversified portfolio will contain exposure to a wide range of firms and industries, and preferably a high level of geographic diversification as well. Modern portfolio theory holds that as few as three companies can result in a diversified portfolio but ideally the portfolio would have at least thirty. The portfolio should include a wide range of types of instruments as well, so that the risk inherent in the convertible is offset by the performance of other instruments, companies and products in the portfolio. ith the market, the CAPM beta…

Works Cited:

Investopedia. (2013). Definition of convertible bond. Investopedia. Retrieved April 10, 2013 from  http://www.investopedia.com /' target='_blank' REL='NOFOLLOW'>

Fact 9:

Europe's more liberal drug policies are not the right model for America.

Fact 10:

Most non-violent drug users get treatment, not jail time. (Legalization, 2010).

Conclusion

There are no benefits for society in the legalization of marijuana. The money from the taxing of the marijuana will end up being use to regulate and enforce the dispensaries. The money to treat the addiction will be another source of lost revenues from the taxation.

Increased usage by underage teens will be the same as cigarettes and alcohol and will increase as the price drops as it did in the Dutch experiment. Kids will be introduced onto the drug culture that leads to the use of the harder narcotics as a result of the increased access to the marijuana. The benefits will be just moved from one area to other areas of criminalization.

eferences

DEA website. 2010. etrieved on May 10,…

References

DEA website. 2010. Retrieved on May 10, 2010 from  http://www.pbs.org/newshour/extra/features/jan-june01/drugs_marijuanaharm.html 

"Feature: Hundreds of Los Angeles Medical Marijuana Dispensaries Face Closure Under New Rules Passed by Council" 2010. Retrieved on May 10, 2010 from  http://stopthedrugwar.org/chronicle/618/los_angeles_medical_marijuana_dispensary_ordinance_approved 

Joffe, a. & Yancy, W. "Legalization of Marijuana: Potential Impact on Youth." 2004. PEDIATRICS Vol. 113 No. 6 June 2004, pp. e632-e638. Retrieved on May 10, 2010 from  http://pediatrics.aappublications.org/cgi/content/full/113/6/e632 

"Legalization- Arguments Pro and Con." 2010 Retrieved on May 10, 2010 from  http://www.libraryindex.com/pages/2395/Legalization-ARGUMENTS-PRO-CON.html

isk Management Plan

A&D High Tech

Introduction to the Plan

Company Background

isk Planning

Charter, Scope, Plan, and WBS

Scope of the isk Management Plan

102.2 isk Management Plan Components

112.3 esponsibility

112.4 Expected Monetary Value Analysis

isk Management Identification

123.1 Determine the isks

133.2 Evaluate and Access the isks

133.3 Qualitative and Quantitative Processes

143.4 Compare and Contrast Techniques

isk Matrix

144.1 Major and Minor isks for the isk Matrix

144.2 isk Matrix Template

144.3 eviews

Corrective Action and Monitoring

155.1 Type of Corrective isk Management

155.2 Corrective Plan

155.3 Corrective Action for isks

Evaluation

Section 6 -- esults, Conclusion, and Follow-Up

156.1 esults

166.2 Conclusion

166.3 Follow-Up

Section 7 - eferences

Section 1 -- Introduction

Introduction to the Plan

This project involves a company named A&D High Tech which operates within the computer products industry and sells computer products, accessories, and services to consumers and small businesses. The…

isk Management in Family Owned Businesses

A family business can be simply described as "any business in which a majority of the ownership or control lies within a family, and in which two or more family members are directly involved" (Bowman-Upton, 1991). In other words, it is a multifaceted, twofold structure consisting of the family and the business meaning that the involved members are both the part of a job system and of a family system (Bowman-Upton, 1991).

Most families seek stability, intimacy, a sense of community, and belonging through the family business (Hess, 2006). On the other hand, whenever family and business are mentioned together, a majority of people think of continuous conflict, competition and contention (Crenshaw, 2005). However, "successful family businesses do not let the family destroy the business or the business destroy the family" (Hess, 2006).

The family-owned businesses are the backbone of the world financial system.…

References

Barrese, J., & Scordis, N. (2003). Corporate Risk Management. Review of Business, 24 (3), Retrieved August 17, 2012 from  http://www.questia.com/read/1G1-111508707/corporate-risk-management 

Bodine, S.W., Anthony, P., & Walker, P.L. (2001). A Road Map to Risk Management: CPAs Can Help Companies Manage Risk to Create Value. (Consulting). Journal of Accountancy, 192 (6), Retrieved August 17, 2012 from  http://www.questia.com/read/1G1-80750205/a-road-map-to-risk-management-cpas-can-help-companies 

Bowman-Upton, N. (1991). Transferring Management in the Family-Owned Business. Retrieved August 14, 2012 from http://archive.sba.gov/idc/groups/public/documents/sba_homepage/serv_sbp_exit.pdf

Caspar, C., Dias, A.K., & Elstrodt, H. (2010, January).The Five Attributes of Enduring Family Businesses. Retrieved August 15, 2012 from http://www.businessfamily.ca/cert_register_files/Web Downloads/McKinsey Quarterly - Jan 2010.pdf

Of course, this is a good thing for customers on short-term, but is negatively affects other companies on the market. This is because smaller competitors and especially those that intend to enter the market addressed by IBM find it at least difficult to provide product prices in accordance with those provided by IBM. These smaller companies do not have the ability of reducing their production or operating costs, which does not allow them to introduce competitive prices on the market. This way, they are clearly disfavored by IBM's position and market power.

In addition to this, in a field like it, it is imperative to make continuous investments into the research and development activity. This requires significant capital amounts from these companies. The investment levels that IBM reaches cannot be reached by many of these companies. This makes it difficult for these companies to keep up with IBM and its…

Reference list:

1. Oates, J. (2009). IBM Faces EU Monopoly Probe. Enterprise. Retrieved November 14, 2010 from  http://www.channelregister.co.uk/2009/01/20/ibm_eu_probe/ .

2. Annual Report (2010). IBM. Retrieved November 15, 2010 from  http://www.sec.gov/Archives/edgar/data/51143/000104746910001151/a2195966z10-k.htm .

3. Monopoly: A Brief Introduction (2006). Linux Information Project. Retrieved November 15, 2010 from  http://www.linfo.org/monopoly.html .

4. O'Gara, M. (2010). EC Opens Two Antitrust Investigations of IBM. Retrieved November 15, 2010 from http://soa.sys-con.com/node/1478919.

To rebuild their image, the company would try a number of different strategies, none of which would prove to be successful. This would hurt the market share of Gap to the point that many analysts now believe that it may be advantageous to spin off the company's: Old Navy, anana Republic and Gap stores. What this shows, is how a company can begin to lose its way when it is not focused on adjusting to changes in consumer tastes and trends. In the case of Ann Taylor, they need to be aware of this hazard, as it can have an adverse impact on the long-term viability of their business. (Reingold)

A second challenge that Ann Taylor can be wrestling with is a lack of focus on the part of management. In this case, managers must understand the role that their decisions will have on their organization. Where, executives must clearly…

Bibliography

10Q. Ann Taylor, 2010. Print.

Ann Taylor Stores. Yahoo Finance, 2010. Web. 31 Oct. 2010

Ann Taylor Stores. Yahoo Finance, 2010. Web. 31 Oct. 2010

Ann Taylor Stores. Yahoo Finance, 2010. Web. 31 Oct. 2010

3. How the quality of service changed and why?

The quality of service increased significantly as all practices areas of the hospital better aligned to the cultural norms, values and needs of each ethnic population represented by the segments served. The quality also increased because the staff also began to better understand the unique needs of the patients being served, with more emphasis on interpersonal communication than had been the case in the past. This personalization aspect of leadership works both ways; the hospital staff had a much better appreciation and understanding of the unique needs of the population they were serving, and the potential patients and customers developed familiarity and trust with the providers. The next step for the hospital is to create a means to continually evaluate the level of satisfaction they are delivering to patients. The hospital could use the SEVQUAL metrics to evaluate the level of…

References

Barrett, H., Balloun, J., & Weinstein, a.. (2009). How variation in management perceptions affects organizational performance. Quality and Quantity, 43(3), 451-461.

Paul Hughes-Cromwick, Sarah Root, & Charles Roehrig. (2007). Consumer-Driven Healthcare: Information, Incentives, Enrollment, and Implications for National Health Expenditures. Business Economics, 42(2), 43-57.

Ravichandran, K., S. Prabhakaran, and S. Kumar. 2010. Application of Servqual Model on Measuring Service Quality: A Bayesian Approach. Enterprise Risk Management 2, no. 1, (January 1): 145-169.

Wrenn, B.. (2006). Marketing Orientation in Hospitals: Findings from a Multi-Phased Research Study. Health Marketing Quarterly, 24(1/2), 15.

They were just so intense, so focused, so transaction-driven, there literally wasn't time for people to put ideas out and discuss and debate them."

These constraints to effective management oversight and innovation were further exacerbated when the company went private in 2001. According to Stopper, "ARAMARK went from a leveraged buyout situation in 1984, with only some 50 people having equity in the company, to an initial public offering (IPO) in 2001 with 97% ownership by employees. It was a huge cultural shift. Many employees incurred debt in order to have ownership in the company. In his view, HR's power and influence came from performance and creating value, not from advancing or acceding to personal agendas."

To their credit, though, Hayes reports that the company finally took action to remedy this situation by creating an action project team to assess the potential threats involved in retaining the status quo and…

Works Cited

About ARAMARK." (2007). ARAMARK Corporation. [Online]. Available:  http://www.aramark.com/MainLanding.aspx?PostingID=336&ChannelID=187 .

Alleyne, Sonia (2007, July). "40 Best Companies for Diversity: In Our Third Annual Survey, We Focus on Supplier Diversity and Senior Management Representation-How Much Companies Spend with Black Suppliers and Who They Let into the Corporate Suite." Black Enterprise 37(12): 106

Caddell, Cathy L. (2004, October). "Taste of Chicago." Corrections Today 66(6): 46

Goldberg, Karen (1996, July 18). "How to Feed 10,800 Athletes." The Washington Times 13.

isks of Using Computer-Based Procurement

Every complex project requiring the collaborative effort of an organization involves the use of materials, goods, and services that are integrated within the overall project design. The procurement process used to obtain these vital resources is central to the successful accomplishment of project objectives, because every aspect of the management process, from sourcing supplies to shipping products to customers is contingent on procuring the most productive third-party partnerships. The vendor selection process is used to aid project managers in the effective procurement of essential items and services, with a rigorous screening methodology used to identify the most competent and qualified shipping companies, manufacturers, distributors, and equipment suppliers. Another way project managers have refined the procurement process is through the implementation of computer-based tools, with advances in technology enabling researchers to identify a project's critical path through a complex series of algorithms, software programs, and other…

References

Morris, P. And Pinto, J. (2007) The Wiley guide to project technology, supply chain, & procurement management. Hoboken, NJ: John Wiley and Sons, Inc.

Sollish, F. And Semanik, J. (2011) Strategic Global Sourcing Best Practices. Hoboken, NJ: John Wiley and Sons, Inc..

Most developed economies, however, allow the market to set exchange rates, only influencing currency values through indirect means such as the increased or reduced sale of bonds to foreign entities and individuals, or through other means of international wealth exchange. Essentially, all manipulations of exchange rates and actions based on predictions of exchange rates are focused on the forward exchange rate, or the predicted rate of exchange between two currencies at a future point in time.

The spot exchange rate, on the other hand, is the rate of exchange at the current moment in time. It is through a comparison of the spot rate and the forward rate of exchange -- inasmuch as it can be predicted with any accuracy -- that companies and businesses make decisions that affect either the exchange rate itself (in the case of some governments, notably China in the modern period), or more often make…

References

Christofferson, Peter F. Elements of Financial Risk Management. San Diego: Elsevier Sciences, 2003.

Comptroller of the Currency Administrator of National Banks. Interest Rate Risks. 1997. Accessed 19 March 2010.  http://www.occ.treas.gov/handbook/irr.pdf 

Cusatis, Patrick and Martin R. Thomas. Hedging Instruments and Risk Management. New York: McGraw Hill, 2005.

Dun & Bradstreet. Financial Risk Management. New Delhi: McGraw Hill, 2008.

The more knowledge of a market an entrepreneur has the better. This includes the litigious side of the market. When an entrepreneur sets up a business, even employing the proper employee dynamics, financial decisions and logistical moves, legal issues can doom the entire operation. Entrepreneurs can avoid much of this type of risk by fully understanding their business, and by having prior experience with the product or industry. It is important to understand as well that overseas markets are not the same as domestic ones, and many issues are likely to arise out of unique and different legal environments, exclusive to overseas markets and products. Entrepreneurship is a veritable minefield when it comes to risks. These risks are inherent, and without them there would not be the same kinds of satisfaction and payoff that occurs with them intact. When entrepreneurs are made fully aware of these risks and how to…

Secondary markets can help to bundle capital with the best managers of that capital, which can be used to generate capital in the primary markets, but in general the primary market is more efficient at allocating capital and of the two is the only one that truly generates new capital, as it funds actual production (Harris 2003).

4)

The Hussman strategic growth fund most closely aligns with my need for long-term financial growth and security, as I am still many years away from retirement, I do not need to take any unnecessary risks in order to achieve more aggressive growth. Though such a fund might be an appropriate secondary investment, the bulk of my capital should be somewhere safer and more assured (Hussman 2009).

eferences

Haris, L. (2003). Trading and exchanges: market microstructure for practitioners. New York: Oxford University Press.

Hussman. (2009. Accessed 24 September 2009. http://www.hussmanfunds.com/…

References

Haris, L. (2003). Trading and exchanges: market microstructure for practitioners. New York: Oxford University Press.

Hussman. (2009. Accessed 24 September 2009. http://www.hussmanfunds.com/

Investopedia. (2009). Accessed 24 September 2009.  http://www.investopedia.com /' target='_blank' REL='NOFOLLOW'>

ISK Management - CAPM and APT

Capital Asset Pricing Model and Arbitrage Pricing Theory

The contemporaneous business community is extremely competitive, meaning as such that the organizational leaders strive harder than ever to overcome the competitive forces. Virtually, they have to hire and retain the best skilled staff members; they have to develop and offer the best quality products and services and they must be able to raise the interest of a vast and large customer base. All these constitute competitive advantages.

Yet, another element which has to be granted the adequate attention is that of the management of assets. The specialized literature offers a multitude of definitions of the concept of asset, yet the underlying idea is basically the same. Stickey, Weil and Schipper (2009) for instance argue that an asset is "a probable future economic benefit that a firm controls because of a past event or transaction" (p.108).…

References:

Bailey, R.E., 2006, The Economics of Financial Markets, Cambridge University Press, ISBN 052184827X

Cheng, B., Tong, H., 2008, Asset Pricing: A Structural Theory and Its Applications, World Scientific, ISBN 9812704558

Fabozzi, F.J., Markowitz, H., 2002, The Theory and Practice of Investment Management, John Wiley and Sons, ISBN 0471228990

Fabozzi, F.J., Focardi, S., Kolm, P.N., 2006, Financial Modelling of the Equity Market: From CAPM to Cointegration, John Wiley and Sons, ISBN 0471699004

Small usiness' Need for a CPA

One of the critical investments a small business can make to mitigate loss and risk is hiring a CPA and putting that CPA on the 'management team.' As Wells notes in his groundbreaking research, "Denise, a bookkeeper for a small trucking firm in irmingham, Alabama, wishes she had never heard of Ralph Summerford, CPA. ecause of his thoroughness, Denise is facing several years in prison for embezzling $550,000 from her employer. At least she will look good standing before the sentencing judge: Denise spent a great deal of her illegal loot on head-to-toe cosmetic surgery. She blew the rest on a shiny new Lexus, luxury vacations, clothing and jewelry. And, of course, Denise had to have a big house to store all of her finery." (Wells, 2003)

Surprisingly, it was not at all the fancy standard of living that made her employer suspicious. "The…

Bibliography

Wells, Joseph. 2003. Protect small business: small companies without adequate internal controls need CPAs to help them minimize fraud risk. Journal of Accountancy.

Small Business Administration. 2005. www.sba.gov.

Federal Reserve Bank. 2004. www.federalreserve.gov.

AICPA. 2005. At www.aicpa.org/antifraud/training/homepage/htm.

It is however important to come up with an integrated proactive management of real property in order to cover most of the risks that affect this market sector.

The requirement for the integrated property management

So as to achieve the required alignment between the strategic decisions of a business and other elements like the organization structure, enabling physical environment and work processes, it is necessary that organizations come with clear methods of managing their property. Proactive management of real estate/corporate property is one of the ways of ensuring that the property is not at risk. It however demands that very clear strategic positions are taken by senior management with clarity of the expected deliverable in measurable terms.

Fig.2 Proactive real estate management

Source

Source: Then (1996).

Conclusion

The market value of commercial property has been fluctuation over time. The last three years has however seen it suffer a heavy hit…

References

Appraiser BC Appraisals Inc. What is a cost approach appraisal method  http://www.bcappraisalsinc.com/faq/what-is-a-cost-approach-appraisal-method.html  (2011).

Deutsche Bank. Real estate markets still in grip of financial crisis (2008)

<  http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000235517.PDF 

Forsyth, S. Why the Market Value of Commercial Property Can Rise & Fall Over Time.(2010)

Risk Management

Fuel prices are a major contributor to the profitability of an airline, as they tend to be more volatile than ticket prices. In response to this variability, airlines typically engaging in fuel price hedging strategies. On the operational level, many airlines rely on a focus on shorter average flight distances. This keeps the fuel cost down relative to passenger revenue. However, the most common method of dealing with fuel price volatility is to utilize a financial hedge, typically a series of either futures or forwards to lock in the price of fuel.

The first thing to realize is that the company cannot perfectly hedge the top end of the fuel price range. At some point, the price paid is going to have to be lower than the top price or the airline will lose a lot of money when the price drops again. During a major run-up, like…

Works Cited:

Bachman, J. (2008). Southwest sees fuel hedges' pesky side. Business Week. Retrieved January 19, 2012 from  http://www.businessweek.com/lifestyle/travelers_check/archives/2008/10/southwest_sees.html

Phishing Spea Phishing and Phaming

The following is intended to povide a vey bief oveview of examples of some the most dangeous and pevasive secuity isks in the online and netwoked wold. One of the most insidious of identity theft is known as phishing. The tem 'phishing' efes to the pactice of "fishing fo infomation." This tem was oiginally used to descibe "phishing" fo cedit cad numbes and othe sensitive infomation that can be used by the ciminal. Phishing attacks use "…spoofed emails and faudulent websites to deceive ecipients into divulging pesonal financial data, such as cedit cad numbes, account usenames and passwods, social secuity numbes etc." (All about Phishing) . Thompson ( 2006) clealy outlines the basics of a phishing attack.

A typical phishing sends out millions of faudulent e-mail messages that appea to come fom popula Web sites that most uses tust, such as eBay, Citibank, AOL, Micosoft…

references the CISA Review Manual, 2006.

Thompson, S.C. (2006). Phight Phraud: Steps to Protect against Phishing. Journal of Accountancy, 201(2).

This study by Thompson provides some significant aspects that the business owner and customers in online commerce should pay attention to. These include basic but important aspect that should include in e-training; for example, never e-mail personal or financial information or never to respond to requests for personal information in e-mails. This provides useful background to the issue of risk identification and is also related management of this threat.

Wetzel R. ( 2005) Tackling Phishing: It's a Never-Ending Struggle, but the Anti-Fraud Arsenal Continues to Grow. Business Communications Review, 35, 46+.

This study A sheds light on the implications in term of the costs of identity fraud to financial institutions. The study underscores the severity of the vulnerabilities faced by today's organizations in the online world. The author refers to the obvious cost to intuitions like banks and also discusses hidden costs that relate to the erosion of customer confidence as a result of ID theft.

For example, in the early 1990's the 'Intel Inside' of computers was great for computer sales. That is until the Intel brand name took a major hit for allowing a faulty chip to make its way to the market. The internet-based Word-of-Mouth made the 'Intel Inside' a marketing nightmare.

The Word-of-Mouth and Buzz marketing approach coupled with the internet are more effective than any available print or television ad currently used because consumers are too overly saturated by those mediums. This new approach of the future was recently used and studied for the popular film 'Fahrenheit 911' and the blockbuster results in revenues clearly show that this new approach is the wave of the next generation.

Conclusion

In conclusion, the world of marketing has changed and our more global and technologically advanced social and business environment will make marketers reevaluate their approach. Marketing executives can no longer go about in…

References

Bianco, Anthony, Lowry, Tom, Berner, Robert, & Arndt, Michael (2004). The Vanishing Mass Market. Business Week, July 12, 60-68.

Durgee, Jeffrey F., Gina Colarelli O'Connor, and Robert W. Veryzer. "Translating values into product wants." Journal of Advertising Research Vol. 36 (1996).

Khermouch, Gerry & Green, Jeff (2001, July 30). "Buzz Marketing: Suddenly This Stealth Strategy Is Hot -- but it's Still Fraught with Risk." Business Week Online. Retrieved on May 4, 2005, at  http://www.businessweek.com/magazine/content/01_31/b3743001.htm 

Silverman, George (1997, November). How to Harness the Awesome Power of Word of Mouth. Direct Marketing Magazine, 32-37. Retrieved on May 4, 2005, from Market Navigation, Inc., Web Site:  http://www.mnav.com/H2HarnWOM.htm

(Dunn, 2009)

Arumemi-Ikhide believes that Arik can succeed due to a combination of the opportunity -- helped by economic and air transport reforms in Nigeria -- and the capability to deliver a high quality product." (Dunn, 2009) Also stated by Arumemi-Ikhide is that this "will be a key in differentiating it in the international market and providing feeder traffic. That will be the lifeline for the international network. That's what sets up apart from our rivals." (Dunn, 2009)

Martin Russell states in the report entitled: "Arik Air: The Future of African Aviation" that both the "internal opinion of African air travel and that of onlookers overseas was bleak before the arrival of Nigeria's newest treasure, Arik Air." (2008) Russell states that the aviation industry is African is "hampered by somewhat less predictable weather and frequent storms" resulting in aviation in African being "far from predictable with temperamental skies that readily…

Bibliography

Nigeria's air traffic grows by 31% during 2008; defies global slump (2009) TradeInvest Nigeria Thu, 05 Mar 2009. Online available at:  http://www.tradeinvestnigeria.com/news/957188.htm 

Lawal, Lateef (2009)FG Invests Over N7b In Air Navigation, Safety, Search & Rescue - Nigeria Masterweb Daily News. Online available at: http://www.nigeriamasterweb.com/blog/

More Frequencies to Foreign Airlines Put Nigerian Carriers at Risk (2009) The Guardian -- Travels 17 Jul 2009. Online available at:  http://www.ngrguardiannews.com/travels/article01//indexn2_html?pdate=170709&ptitle=More%20frequencies%20to%20foreign%20airlines%20put%20Nigerian%20carriers%20at%20risk 

Dunn, Graham (2009) Arik Air: Pressing Ahead with International Plans. 3 June 2009. Airline Business. Online available at:  http://www.flightglobal.com/articles/2009/03/06/323508/arik-air-pressing-ahead-with-international-plans.html

Specification of Thesis's Main Point:

Goldman (2009) surmises that today's economic crisis has changed many aspects of financial reporting, one of which is the calculation of the cost of capital.

Three Supporting Opinions/easons:

Utilizing much of his own personal, professional experience as well as other sources, Goldman's (2009) three supporting opinions all highlight the impact today's economic crisis has had. He quotes Marc Panucci, an SEC associate chief accountant, in his first supporting opinion. Panucci agrees with Goldman's theory that the turbulent economic environment of today requires changes to existing disclosures, in order to meet disclosure requirements. This is especially true when meeting disclosure requirements in liquidity, risks and uncertainties, and credit risks.

The Internal evenue Service is Goldman's (2009) second supporting source. Not known for their empathy, the IS has eased rules so that homeowner's facing tax liens can sell or refinance their homes. In fact, in some instances,…

References

Goldhorn, M. (Jan/Feb 2009). Market turmoil require new ways to build capital. The Value Examiner. pp. 23-30.

Credit isk Management

Banks are an important part of the economy of any nation. Traditionally, the banks operate as financial intermediaries serving to satisfy the demand of people in need of various forms of financing. Through this, banks enable people to purchase home and businesses to expand. These financial institutions therefore facilitate investment and spending that are responsible for fueling the growth of the economy. In spite of their vital role in the economy, they are nevertheless prone to failure and just like other types of businesses, they also go bankrupt. Unfortunately, the failure of banks can have many and significant implications than any other type of business. As witnessed during the great depression, and in recent times following the global economic crisis and recession, the stability or lack of it in the banking system could trigger economic epidemics that would impact millions of people. With respect to this, it…

References

Bank for International Settlements (BIS). (2001). Consultative Document -- Overview of The New Basel Capital Accord. Basel Committee on Banking Supervision.

Basel Committee on Banking Supervision (1988) "International Convergence of Capital Measurement and Capital Standards" (www.bis.org/publ/bcbs04A.pdf).

Benston, G.J. (1998) "Regulating Financial Markets: A Critique and Some Proposals." Hobart Paper no. 135. London: Institute of Economic Affairs.

Blundell-Wignall, A., Atkinson, P. And Roulet, C. (2013). Bank Business Models and the Basel System: Complexity and Interconnectedness. OECD Journal: Financial Market Trends, Issue 2.

International Financial Markets and Institutions:

Throughout the globe, today's landscape of international financial market and institutions has continued to experience several changes that require practitioners to examine new models. The need for practitioners to examine new models that are relevant to the state of these markets and institutions has also been necessitated by the recent events that contribute to financial crises, which have been very dramatic. Actually, the recent financial crisis has had significant impacts on the financial institutions and markets resulting in the need for changes. International financial markets and institutions have become an important aspect of economies because they affect daily life. This is primarily because they involve the huge flow of different types of funds in the entire economy that in turn impact the profits of businesses, production of goods and services, and economic well-being of countries. In some cases, the events in these institutions and markets…

References:

Accounting Education (2010), International Capital Market, Accounting Education, viewed 7

June 2012,

Australian Securities Exchange (n.d.), Absolute Return Funds, Australian Securities Exchange,

viewed 7 June 2012,

Taxation and double taxation risks

Australia imposes taxes on resident economic entities and the Australian-sourced income of non-residents. However, "Australia's capacity to tax non-residents may be limited where the non-resident is resident in a country with which Australia has concluded a double taxation agreement (DTA)," including the United States (Ellison 2009, p.8). DTAs allocate taxing rights to the country of residence of the taxpayer (Ellison 2009, p.8).

Market risks (four Ps)

Demand and overall economic growth has remained strong in Australia (product), although high inflation (price) is of a concern for many residents. Growth tends to be centered in urban areas (place/distribution), while rural areas are often underserved in terms of goods and services. The greater diversity of Australia's growing Asian and European allow for potential new sources of economic growth (promotion and marketing).

eferences

Australia economic analysis. (2010). Economy watch. etrieved February 22, 2010 at http://www.economywatch.com/economic-analysis/australia.html

Ellison, Minter. (2009).…

References

Australia economic analysis. (2010). Economy watch. Retrieved February 22, 2010 at  http://www.economywatch.com/economic-analysis/australia.html 

Ellison, Minter. (2009). Doing business in Australia. Retrieved February 22, 2010 at  http://www.minterellison.com/public/connect/resources/file/ebe2744c07a0264/RG-DoingBusInAus2009.pdf 

Foreign exchange: Expatriates. Managing Forex. Retrieved February 22, 2010 at  http://www.exfin.com/foreign-exchange-expatriates

27-29) This provoked financial demands and awareness of the people in different parts of the world. People and businesses are dissatisfied with the traditional financial systems due to lack of opportunities for investors. Businesses today require more diversified portfolios for investments because this will reduce their investment risks and increase the probability of future capital flows.

Increased capital mobility has increased the importance of exchange rates which is serving as a monetary policy channel in some industrialized economies. In mid 2000s, there was a sharp shift in the flow of international investments and savings (geographic pattern) resulting in the segmentation of current account imbalances. This was also a major contributing factor. Additionally, the domestic financial markets were also affected by the change in regulatory environment. The two important factors for this are as follows:

1. apid growth of OTC (over-the-counter) markets of derivatives in terms of complexity as well as…

References

Bekaert, G., Harvey, C. And Lundblad, C. 2005. Does financial liberalization spur growth? Journal of Financial Economics 77, 3 -- 55.

Edison, H., Klein, M., Ricci, L. And Slok, T. 2004. Capital account liberalization and economic performance: survey and synthesis. IMF Staff Papers 51, 111 -- 115.

Kaminsky, G. And Reinhart, C. 1999. The twin crises: the causes of banking and balance-of payments problems. American Economic Review 89, 473 -- 500.

Klein, M. 2005. Capital account liberalization, institutional quality and economic growth: theory and evidence. Working Paper No. 11112. Cambridge, MA: NBER, pp.19-21.

In addition, a series of joint ventures in which West German steel firms joined with East German firms and Krupp, Klockner, and Thyssen of Germany was pursuing other developmental initiatives in eastern Europe as well. Likewise, Arbed of Luxemburg was involved in steelmaking facilities in the former East Germany. According to Mangum et al., "The rising market for improved galvanizing for automobiles, appliances, canning, and other uses is producing a rash of joint ventures throughout the world. Some of these are internal to various countries and others involve international partners" (p. 74).

As a result, nearly 30% of the world's steel supply is now produced by plants belonging to companies that did not exist just 3 decades ago (Ahlberg, Pitkanen & Storsch 1999). As these authors point out, "Such upstarts have entered a global market that since 1980 has grown by less than 1% a year -- an average combining…

References

Ahlberg, J., A. Pitkanen and L.L. Schorsch. 1999. "Forging a New Era for Steel." The McKinsey

Quarterly 83.

Altunisik, M.B. And O. Tur. 2004. Turkey: Challenges of Continuity and Change. New York:

Routledge.

People's United Bank

The market value of People's United Financial (NASDAQ: PBCT) is $11.94 (current stock price) * 358.06 million shares outstanding = $4.275 billion. The book value of the debt is $19.802 billion. This gives People's United a total worth of $24.077 billion, weighted as 17.75% equity and 82.25% debt. The beta for the equity is 0.27. The risk free rate is 0.352% (Yahoo! Finance, 2011) and the traditional 7% market risk premium can be used. Using CAPM this gives a cost of equity of The cost of debt must also be calculated in order to determine the weighted average cost of capital of People's United. Being a retail financial institution, the vast majority of People's United's liabilities (90.5%) come in the form of deposits. Some of these pay no interest, and others pay out in savings, interest-bearing checking and money market accounts. Total interest expense for 2010 was…

Works Cited:

MSN Moneycentral. (2011). PBCT. Retrieved August 5, 2011 from  http://investing.money.msn.com/investments/stock-price?symbol=U.S.%3aPBCT 

Yahoo! Finance: Advanced bond screener. Retrieved August 5, 2011 from http://reports.finance.yahoo.com/z1?b=1&so=a&sf=m&tt=1&stt=-&pr=0&cpl=-1&cpu=-1&yl=-1&yu=-1&ytl=-1&ytu=-1&mtl=12&mtu=24&rl=-1&ru=-1&cll=-1

Investopedia. (2011). Weighted average cost of capital -- WACC. Investopedia. Retrieved August 5, 2011 from  http://www.investopedia.com /' target='_blank' REL='NOFOLLOW'>

The advantages of a qualitative analysis approach are that it overcomes the challenge of accurate calculations of figures for asset value, cost of control etc. In a way less demanding procedure on the staff. Qualitative risk management projects can normally start to display noteworthy results in a matter of weeks, on the other hand those institutions or businesses that choose to employ a quantitative approach may experience limited benefit over months, or even a number of years of effort. The disadvantage of a qualitative analysis is that the consequential data is hazy and quite a number of strict decision makers, particularly the ones who have accounting backing or finance knowledge, may be hesitant to use the relative figures during a qualitative risk assessment.

The use quantitative approaches however also have got a number of drawbacks which include the following;

Dependence upon the scope and accuracy of specific measurement scales.

The…

References

Artur Rot, (2008). It Risk Assessment: Quantitative and Qualitative Approach it Risk

Assessment: Quantitative and Qualitative Approach Proceedings of the World Congress on Engineering and Computer Science WCECS 2008, October 22-24, 2008, San Francisco, USA.

Vocus PRW Holdings, LLC. (2010). Significant Risks Identified in Information Technology

(it) Project Management. Retrieved April 20, 2011 from  http://www.prweb.com/releases/Vonya_Global/IT_Project_Management/prweb4328924.htm

The main hazards related to LNG include:

upture due to Corrosion

upture while excavation

upture while excavation

upture during an earthquake

upture due to mechanical failure

upture at compressor

upture at inspection stations

Uncontrolled detonation of explosives

Blow-out of gas at head and subsequent fire

Gas leak from infrastructure

Fire involving combustible

Construction damage

LPG or Diesel

Diesel pump fire involving equipment brittle fracture valve Leaks

Welding failure welding casting failure

Mechanical overstressing of equipment Vibration

pump Corrosion

joint Erosion

Failure due to external loading or impact

Internal Explosion

Underground pipe rupture of transmission pipeline

Pipe rupture at main line valve sites.

upture of adjacent gas pipeline

Uncontrolled detonation of explosives

Gas leak from pipeline infrastructure

Drop of pipe from pipe lifts

Accommodation fire involving combustible construction LPG or Diesel

Diesel fire involving mobile fuel tanker

Uncontrolled release of LNG

Uncontrolled release of refrigerant gas

Uncontrolled release of by- product…

References

Acutech Consulting (2009). The HAZOP (Hazard and Operability) Method

http://www.acusafe.com/Hazard_Analysis/HAZOP_Technique.pdf

American Petroleum Institute (August 2009). Analysis of U.S. Oil Spillage. p26

http://www.api.org/Newsroom/safetyresponse/upload/Analysis_us_oil_spillage.pdf.

Policies need be established that dictate how currency is used (Homaifar, 2003).

Trends in international banking suggests that within Europe while the euro may still be the standard currency used, often throughout the world and in international banks generally, much of currency is denominated in the form of dollars (Bertuch-Samuels & amlogan, 2007; Homaifar, 2003). The United States dollar has represented the gold standard among international financial institutions because the U.S. has relatively little exchange rate fluctuation, which lowers the potential risk within the international financial marketplace. To gain operational independence and affirm prices will remain stable, banks want to ensure the currency they use is issued in a country that is stable and holds prestige (Homaifar, 2003). This can easily be assessed by evaluating a country's financial systems, determining whether the banking systems are strong and offer policies and provisions for conducting business using foreign currency as well as…

References

Bertuch-Samuels, a. & Ramlogan, P. (2007, Mar). The Euro: Ever more global. Finance and Development, a Quarterly Magazine of the IMF. 44(1): 1. Accessed 11, May, 2007:  http://www.imf.org/external/pubs/ft/fandd/2007/03/bertuch.htm 

Blount, E. (1998). Taming global market risks. ABA Banking Journal, 90(3): 38.

Homaifar, G.A. (2003). Managing global financial and foreign exchange rate risk. New York: John Wiley & Sons.

Lim. E.G. (2006), the Euro's challenge to the dollar: Different views from economists and evidence from COFER and other data, IMF Working Paper, No. 06(153). Washington: IMF.

Wal-Mart Accounting and Finance

Determine whose rate of return (i.e., local or parent currency returns) Wal-Mart should use when evaluating foreign direct investment opportunities and justify the position.

Foreign Direct Investment (FDI) is an international flow of capital that provides a parent company or multinational organization with control over foreign affiliates. The behavior of exchange rates influences FDI activity. Exchange rates are defined as the domestic currency price of a foreign currency. Exchange rates can influence both the total amount of foreign direct investment that takes place and the allocation of this investment spending across a range of countries (Bogoslaw, 2009).

Wal-Mart is among many multinational companies that have expanded production and distribution networks globally to take advantage of opportunities for higher local rates of return, market share, and accessibility to production inputs (Nathan, 2012). This -- along with foreign government import restrictions, opening of new markets and invitation for…

References

Bogoslaw, D. (2009). Emerging Markets: Time to Invest?. Businessweek Online, 8.

Huang, Q., Nijs, V., Hansen, K., & Anderson, E. (2012). Wal-Mart's Impact on Supplier Profits. Journal Of Marketing Research (JMR), 49(2), 131-143. doi:10.1509/jmr.10.0256.

Marshall, J. (2000). Minor Change, Big Impact. Financial Executive, 16(6), 11.

Nathan, A.J. (2012). Wal-Mart in China. Foreign Affairs, 91(3), 190-191.

VIX is a measure of the market's expectations for 30-day volatility, usually of a broad index like the S&P 500. The VIX is calculated using the prices of a variety of options on the index. The implied volatility of these options is used, and the VIX is sometimes referred to as a fear gauge and a measure of overall market risk (Investopedia, 2012).

There are two versions of the VIX. The first is for the S&P 500 and the second is for the S&P 100. The former is considered to be more representative of the broad market than the latter (Bail, no date). Options are priced, of course, with a mix of risk premium and time value. For market index options, that risk is assumed to simply be market risk. Therefore, options on that will contain a time value and a market risk premium. It is the latter that is…

Works Cited:

Bail, M. (no date). Measuring stock market volatility. The Daily Reckoning. Retrieved March 12, 2012 from  http://dailyreckoning.com/measuring-stock-market-volatility/ 

Investopedia. (2012). Definition of VIX. Investopedia. Retrieved March 12, 2012 from  http://www.investopedia.com /' target='_blank' REL='NOFOLLOW'>

International Finance

Exchange ate Movements for the U.S. And Australian Dollar and Hedging

On the 9th June 2013 the initial $90,000 investment was worth $94,724.9. Knowing that the exchange rate on that date was AU $1.0525 to the U.S. dollar, meaning that U.S. $1 would purchase $1.0525, it is possible to determine that the total investment had purchased AU $99,697.96 (Oanda, 2013).

On the 7th June the exchange rate has changed to $1.1019, with the given fund value of AU $99,697.96, the change leaves a fund that is worth U.S. $90,478.23 (Oanda, 2013).

It is possible to look at the exchange rate movements over a period of time taking data from Oanda (2013). The tables below present that value for the last week, the last week of 2013 and the last week of 2011.

Part A

Table 1; Exchange rates for 1st - 7th July 2013

Exchange rate

7th July…

References

Bychuk, Oleg V; Haughey, Brian, (2011), Hedging Market Exposures: Identifying and Managing Market Risks, Wiley Finance

Giddy, (2002), Homepage, [online] retrieved from http://giddy.org/giddyonline/index.htm

Oanda.com, (2013), OANDA, the Currency Site, [online], retrieved from  http://www.oanda.com/convert/fxhistory

Small Medium Enterprise Set Up

Mission statement

Business goals

Marketing

Market research (location and size of market)

Market segmentation (which segments will you target)

Marketing plan

Products/services and target market(s)

Placement

Promotions and advertising

Pricing policy

Evaluation of marketing

Operations

Legal and licensing requirements

Organisational structure and staffing

Insurance and security issues

Business premises

Equipment required

Production process

Critical risks/contingency plans

Financial projections

Capital expenditure forecast

Sales forecast

Cash flow forecast

Projected profit and loss statement

Owner's personal expenses (continued on next page)

Environmental responsibility and Eco-sustainability

Implementation timetable

Conclusions and future directions

Executive Summary

Business Plan Structure

The business plan will focus on establishing a new kind of insurance company in Australia called Jade Insurance. Their basic goals are to offer clients with low cost solutions, better service and more personal attention on host of products. This will be achieved through working with local and overseas carriers. The idea…

References

General Insurance Industry Survey, 2010, KPMG, viewed October 25, 2013

Global Insurance Market Trends, 2012, OECD, viewed October 25, 2013

Insurance Facts and Figures, 2012, PWC, viewed October 23, 2013

Market Presentation, 2013, Lloyds, viewed October 23, 2013

Investments

Investment returns are the amount that the investment is worth (upon sale), net of taxes, over and above the price paid for the investment. The returns can be expressed either in absolute terms, or in annualized terms. The return on an investment that cost $1,000 and is sold for $1,060 a year later is as follows:

Open

Close

eturn

% eturn

This graph shows that the odds of an outcome increase as the expected return approaches 6%. If there were an infinite number of scenarios, the graph would look like this, but the tails on the y axis would by fully extended infinitely as the probability of an outcome approaches zero.

The expected rate of return on the Treasury bonds is the weighted average of the probabilities and returns listed in the table. Thus:

Probability

eturn

W.Avg

-14

-1.4

-4

-0.8

Expected eturn

The expected return therefore is 6%…

References

Investopedia (2015). CFA level 1. Investopedia. Retrieved August 5, 2015 from  http://www.investopedia.com /' target='_blank' REL='NOFOLLOW'>

Long-Term Investment Decisions

aising Prices

Keeping prices inelastic is one way to ensure that a pricing strategy does not impact the reasons for a consumer's purchasing of the product. If price is elastic, it rises and falls with various factors that impact its cost -- and this in turn more than likely will have an impact on whether or not a consumer will buy (unless brand loyalty is the main reason for purchasing, consumers will buy when a product is offered at a "discount" price and move to a different or "off" brand when the price is higher) (Stone, 2010).

However, with products such as low-calorie frozen, microwavable food there is not likely to be a high degree of brand loyalty unless the product has shown itself to be significantly better than other products. Even then any price inflation could upset the consumer base and alter demand. Thus an inelastic…

References

Chaudhui, S. (2015). Study finds e-cigarettes contain chemical tied to 'popcorn lung'.

The Wall Street Journal. Retrieved from  http://www.wsj.com/articles/study-finds-e-cigarettes-contain-chemical-tied-to-popcorn-lung-1449681247 

Jefferys, D. (2001). The regulation of medical devices and the role of the Medical

Devices Agency. Br J Clin Pharamacol, 52(3): 229-235.

market structures in detail and analyses the pricing strategies that the firms have to undertake when they operate in different regimes. The case study on Toyota is considered next, which indicates that firms competing in various structures does not only have to focus on price and quantity ceteris paribus, they also have to consider external and internal variables that have a bearing on these decisions.

Introduction to Market Structures

Market structures are important parts of economic theory as they model market behavior that can help economists explain activities in industry with ease. Market structures, hence are basically models that define market behavior with respect to certain criteria so that it becomes simpler to compare events in real life to the postulated scenario as described in theory in order to be able to determine casualties and to define optimal strategies that firms operating in different market structures can use.

There are…

References

Bennett, D., Hagiwara, Y., & Kitamura, M. (2011, September 5). Toyota Bets on Japan. Bloomberg Businessweek, pp. 70-73,. Retrieved from http://web.ebscohost.com/ehost/detail?sid=fbe40510-c02e-4a4c-afc8-b21dbb1445c3%40sessionmgr11&vid=1&hid=10&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&AN=60477158

Cusumano, M.A. (2011). Technology Strategy and Management Reflections on the Toyota Debacle. Communications of the ACM, 54 (1), 33-35.

John Petersen (2011). Bernstein and Ricardo Report: Cheap Will Beat Cool in Vehicle Electrification. Retrieved from http://www.altenergystocks.com/archives/2011/11/bernstein_and_ricardo_report_cheap_will_beat_cool_in_vehicle_electrification.html

Lipsey, R.G., & Chrystal, K.A. (2007). Economics. Oxford: Oxford University Press. Retrieved from  http://books.google.com.pk/books?id=HgXWV8JMC10C&printsec=frontcover&dq=Economics+lipsey&hl=en&sa=X&ei=qPIuT9DdPM7wrQeQ_LzYDA&redir_esc=y#v=onepage&q=Economics%20lipsey&f=false