...to the doctrine of assumption of risk and the applications to this case. The appellate court denied their motion for a new trial and stated “that the sports injury statute applied to participants in any sport.” The Assumption of Risk doctrine states that “when a risk or danger is obvious such that it is widely known by reasonable people under the particular circumstances and necessary such that it is impossible or unreasonably difficult or expensive to eliminate, the person engaged in the dangerous activity assumes those obvious and necessary risks,” such as with the risks of falling in downhill skiing and risk that when done in groups other skiers will fall. The plaintiff in attempt to appeal stated that the assumption of risk only applied to the ski resort operators and their actions not that of other skiers, and that the defendant could be accountable for comparative negligence, as the skier was negligent and that negligence caused the plaintiff’s injuries.The sports injury doctrine, relating to 12 V.S.A. § 1037 “which established that there are inherent dangers to be accepted by skiers as a matter of law.” The motion for a new trial was denied and “ found that the sports injury statute applied to participants in any sport,” not just the operators. “While skiers fall, as a matter of common knowledge, that does not make every fall a danger inherent to the sport. If the fall is due to no breach of duty on the part of the defendant, its risk is...
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...list out the main models and methods applied to estimate the cost of capital for Midland’s three divisions, general assumptions made and the corresponding justifications. In the second section, Calculations, I not only compute the cost of capital based on the general assumptions previously made, but also discuss specifics of each division and the additional adjustments or assumptions made to justify my estimates. SECTION 1: Main models and methods applied and corresponding assumptions 1. Constant Debt-ratio Weighted Average Cost of Capital (WACC): WACC=rdDV1-t+reEV Assumptions: * WACC: as constant debt ratio is the underlying assumption to derive the WACC model, constant debt ratio should be reasonably assumed to be applied by Midland and its three divisions. According to the case, Midland optimizes its debt levels by regularly reevaluations against its energy price and stock price level and each division has its own target debt ratio. Although the actual capital structure sometimes deviates from the target due to factors such as market value of specific collaterals, it is safe to assume that the debt ratio averages out at the target ratio in the long run, given that the target ratios are not adjusted frequently. Therefore, the debt ratio can be viewed as a constant and thus WACC is applicable. * Capital structure: as assumed above, target debt ratio is employed in calculation. * Tax rate/t: Effective tax rate should be applied to calculate the cost of capital....
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...Farah Allen Risk Paper #2 2/24/13 This case study evaluates the approach used in the evaluation of tender submissions. The application is used successfully for large high technology procurements. It is basically a two part process or two phase system. In Phase I, the goal is to establish a risk baseline that individual tender responses can be compared to. Phase 2 builds on Phase 1 where the goal is to compare the individual tender’s approach to the potential effects of risk on the project. The two phase process is a systematic process which helps to ensure the greatest attention and effort is focused on the high risk areas for the project. 1. Which case study does a better job at identifying risks? Explain why. Phase 1 and Phase II use the same process for identifying risk; therefore there is an equal level of performance. Determining which case study does a better job of identifying risks is made much easier by applying the definition. “Risk identification determines what might happen that could affect the objectives of the project, and how those things might happen.” The process should be comprehensive to ensure all key elements have been identified. The preferred method for risk identification is brainstorming. In Phase I and II the project team uses a risk WBS as noted in figure13.2 for Phase I and figure 13.11 in the text. The risk WBS was developed using brainstorming as discussed in Chapter 2, and each risk WBS item is reviewed. Any required clarification is...
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...Assignment 4 by Thoai Tran Gia WORD COUNT CHARACTER COUNT 11456 68244 TIME SUBMITTED PAPER ID 06-JAN-2014 09:46PM 386608752 Assignment 4 GRADEMARK REPORT FINAL GRADE GENERAL COMMENTS 30 PAGE 1 PAGE 2 PAGE 3 PAGE 4 Instructor This is a comprehensive plan that carefully identifies what quality means and how it will be managed. The linkage between the quality definition, the management strategy and the project is a strong point. Although quality strategy is clearly identifed, it is not well argued using the literature. Arguments do not draw from repected quality writers and issues are not based on documented problems. To make your plan stand up to criticism and to justify resources needed for implementation, your ideas need to be backed up. One of the best ways to do this is by using the literature show why procurement is important; show why document control is important - there is lots of good literature on this. Good ideas are not enough - you need to back them up. Dispite the weakness in rationale, I felt the report was of an excellent standard. The effort put into the quality definitiion really paid off. Well done. Submitted 1 day late. I've deducted 2 marks for being late. In a project situation missing a deadline without notice can be catastrophic - especially when you are tendering. Make sure you hit your deadlines! /40 Comment 1 Good summary. Dont forget to include your recommendations. Define your...
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...become more and more complicated in order to associate with change of business structure. Consequently, this had led to rising of financial risk to investors invisibly. Hence, investors would like to speculate and hedge the financial risk as much as possible when do financial decision. Derivative financial instruments such as options, futures and others have been introduced and more commonly used to manage financial risk for improving decision making in this dynamic competitive environment. Options are defined as securities which one party has the right (no obligation) to buy or sell underlying assets with certain price within a certain/specific period of time (Hull, 2012). The option can be either call (right to buy) or put (right to sell) in the form of American options (exercised any time until expiry date) or European options (exercised on expiry date) as either traded options (standard option contracts) or overt-the-counter options (tailor made options). Due to various choices of options, different option pricing models such as Put-Call Parity, Black-Scholes, Cox-Rubenstein Binominal, Risk-Neutral valuation, the Greeks and others has been developed and applied in current financial market. Black-Scholes Option Pricing Model (BS) BS is designed and introduced by Fisher Black and Myron Scholes in 1973 with the assumptions of the market is efficient, returns are lognormal distributed, no commission or transaction cost is charged, no dividend is paid, no penalties...
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...Retention Assumptions Customer retention/attrition is estimated by the Company to arrive at the adjusted revenue, however, no support is provided for the 75% of probability of retention.(Exhibit XI) Retention rate can be expected by conducting statistical analysis of historical customer turnover and revenue growth rates. When historical customer data of sufficient quality is not available, it may be necessary to rely on management estimates or industry data. Probability of retention is important because it will have a huge impact on customer value and goodwill impairment. The following table will illustrate how different retention rates can affect goodwill impairment. For the next step, we will ask management for historical customer attrition data or other support to confirm the accuracy of the 75% retention rate assumed. Retention Rate | Customer Relationship value | Goodwill | Goodwill Impairment | 65% | 21 | 27 | 130 | 70% | 24 | 24 | 133 | 75% | 28 | 20 | 137 | 80% | 32 | 16 | 141 | 85% | 37 | 11 | 146 | Discount Rate Assumptions Appraisal Professionals LLC, used the Capital Asset Pricing Model to compute a Weighted Average Cost of Capital for discounting the cash flows of MMN Builders. In order to do this, the appraisers took into a consideration a lot of difference assumptions that our team would like further clarification on. One of the assumptions for this calculation is the estimates of the Size Premium (SSP) and the Additional Risk Premium (ARP)...
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...negligence that would most likely be used by Donahue would be the assumption of risk defense. The requirements of the assumption of risk defense are: 1) knowledge of the risk and 2) voluntary assumption of the risk. Given that the plaintiff voluntarily entered into a risky situation, knowing there was risk involved, the defendant should not be liable for any damages. For example, according to www.leagle.com, “Peterson was an eleven-year old boy who indicated during depositions taken in February 2006 that he was an experienced skier. Peterson stated that he had been skiing since the age of two, that his whole family skied, that he had been part of a ski racing team for four years, and even that he had raced the morning of the accident.”1 All of these facts indicate that Peterson was an experienced skier and knew the risks involved. Furthermore, www.leagle.com also states that Peterson “…was also uphill of Donahue and in control of his skiing at the time of the accident.”2 Still, according to Court Listener, “Peterson argued that Minnesota law has not recognized primary assumption of the risk between skiers. However, other cases support the inference that recognition of primary assumption of the risk between skiers would be consistent with the law. Such cases include, Manns v. Afton Alps, which affirmed summary judgment on the grounds that ski patrol volunteer riding on a snowmobile had primarily assumed risk of collision with a snowboarder and, Cooper v. Powder Ridge Ski...
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...of risk management as a sub-field in the theory of finance traces back to the increasing volatile markets of the 1970s. Risk management revolution crept up as fixed exchange rates were being demolished and new theory were advancing rapidly. As trading increased rapidly, unpredictable events such as financial disasters crept up to bring to light the need for improving risk management tools. Over the past few years, the Value-at-Risk (VaR) model has evolved into the most popular risk assessment tool in finance (Lucas, 2001). The VaR method captures market risks in an asset portfolio, which is the loss in portfolio value within a specific period using an specific confidence interval. Despite being widely used and accepted, it has attracted criticism over its incapability to produce reliable estimates of risks. Upon implementation, VaR systems involve various simplifications and assumptions as the tool forecasts future assets using historical market, which may not reflect the environmental scenario in future. This means the VaR is only useful when it predicts risks accurately (Lucas, 2001). To verify the consistency and reliability of VaR calculations, it is necessary to back test the model with appropriate statistical standards. Back testing entails comparing actual profits and losses to projected VaR estimates as an apt form of reality check (Lucas, 2001). Where the results reveal inaccurate estimates, the models are re-examined to identify the incorrect assumptions, parameters...
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...4.2.5 Critical accounting judgements and key sources of estimation uncertainty This section describes the critical judgements that the Group has made in the process of applying the accounting policies. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). The accounting policies applied by the group also comply with IFRS as issued by the International Accounting Standards Board (IASB). This means that we are required to make estimates and assumptions. We believe that, of the company's significant accounting policies (see note 2 - Significant accounting policies to our Consolidated Financial Statements included in this report), the following may involve a greater degree of judgement and complexity, which in turn could materially affect the net income if various assumptions were changed significantly. Critical judgements in applying accounting policies The following are the critical judgements, apart from those involving estimations (see below), that the Group has made in the process of applying the accounting policies and that have the most significant effect on the amounts recognised in the financial statements: Revenue recognition - gross versus net presentation of traded SDFI volumes of oil and gas production As described under Transactions with the Norwegian State (see note 2 - Significant accounting policies to our Consolidated Financial Statements included...
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...Risk Paper #2 Case Study – Tender Evaluation Marjorie Spitz Keller Graduate School of Management PROJ 595- Project Risk Management Instructor: Professor Bill Lewis Week 7 Date: April 20, 2013 Introduction In a tender evaluation process, it is vital to identify, assess and quantify risks that might be associated with the tender. According to Cooper, Grey, Raymond and Walker (2005), risk management is vital in the tender evaluation process, because risks associated with specific tender responses are identified at an early stage, so they can be addressed explicitly in the tender evaluation. The high-risk areas on which the greatest attention and effort should be focused in the evaluation of tender responses are identified. (Managing Risk in Large Projects and Complex Procurements.Ch.13, pg 148). The goal of this paper is to compare and contrast the two phases of the case study Tender Evaluation. “Phase 1 is concerned with establishing a baseline against which tenders can be assessed, prior to bids being received. Phase 2 compares each submitted tender offer with the baseline, to develop a comparative risk assessment for each one.”(Cooper, Grey, Raymond and Walker, 2005). Both phases are important in order to understand the risks during the tender evaluation process. ...
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...Introduction This report identified five dimensions of risks that would potentially influence the valuation of the early-stage biotechnology investment. This report then compared and contrasted the real and financial options that could be used in risk management strategies for Wahoo Genomics under certain assumptions. After analyzing the differences and similarities between the real and financial options, the report proposed to set up a coherent risks management strategy under prescribed assumptions. 1. Identification and Analysis of Risks 1.1 Technological Risk Generally, there are five dimensions of risks that companies face, including technological risk, economic risk, financial risk, performance risk and legal/regulatory risk (Triantis 2000). Among the five dimensions of risks, the technological risk affects the valuation of Wahoo Genomics’ early-stage biotechnology investment most. The technology risk arises often in the R&D stages, especially for companies in the pharmaceutical industry (Triantis 2000). All of the five stages of Wahoo Genomics’ R&D events involve a high level of technological risks. For instance, 95% of new animal drugs are abandoned during the phase of preclinical trial stage. Such high failure rate indicates a high level of R&D outcome risk, and such risk is compensated by potential high returns for investors. Specifically, a high volatility estimate reflects management’s expectations of the probability that the drug can successfully...
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...I. ASSUMPTION OF RISK A. Current Status The Restatement (Second) of Torts §343 provides that a possessor of land is subject to liability for physician harm caused to his invitees by a condition on the land, if but only if, he: a. knows or by the exercise of reasonable care would discover the condition, and should realize that it involves an unreasonable risk of harm to such invitees, and b. should expect that they will not discover or realize the danger, or will fail to protect themselves against it, and c. fails to exercise reasonable care to protect them against the danger. Section 343A of the Restatement provides: a possessor of land is not liable to his invitees for physical harm caused to them by any activity or condition on the land whose danger is known or obvious to them, unless the possessor should anticipate the harm despite such knowledge or obviousness. Sections 343 and 343A of the Restatement (Second) of Torts preclude liability for a possessor of land where an invitee is injured as a result of a condition whose danger is known or obvious to the invitee, unless the possessor anticipated the injury despite the invitee’s knowledge or the obviousness of the condition. Restatement (Second) of Torts §343A(1). As the cases below illustrate, where a danger is “open or obvious,” the possessor of land does not owe the invitee a duty to take precautions against or warn of open or obvious dangers. Under Pennsylvania law the assumption of the risk doctrine applies...
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...using models 1 2.1. Model error 1 2.1.1. Wrong or simplifying assumptions 1 2.1.2. Over dependence on historical data 3 2.1.3. Black swans 4 2.2. Implementing a model wrongly 4 3. Improvements of the usage of models 5 4. Conclusion 7 1. Introduction The financial sector plays crucial roles that mobilize savings and allocate credit in economic performance. In recent years, there has been significant technological development within the financial sector, which has enable banks to effectively manage their internal risk through the application of risk models. The use of models to measure risks is the preferred approach by most banks, for example Goldman Sachs applies the Value at Risk model. However, according to Office of the Comptroller of the Currency (2011, p1), “the expanding use of models in all aspects of banking reflects the extent to which models can improve business decisions, but models also come with costs”. Besides, in a recent study (Jorion 2009), it is argued that many financial institutions experienced large losses over the past few decades due to limitations of using sophisticated models. Therefore, it is essential for Andrew Bank Ltd. to have an in-depth understanding of disadvantages relating to using models and solutions to improve these model risks. 2. Analysis for problems associated with using models “Risks are uncertainties resulting in adverse variations of profitability...
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...Rf + (i [E(rm) – Rf] = Rf +(im / (m (E(Rm) – Rf / (m) Where E(Ri) is expected return on asset i, Rf is the risk-free rate of return, E(Rm) is expected return on market proxy and (i; is a measure of risk specific to asset i. This relationship between expected return on asset i and expected return on market portfolio is also called the security market line. If CAPM is valid, all securities will lie in a straight line called the security market line in the E(R), (i frontier. The security market line implies that return is a linearly increasing function of risk. Moreover, only the market risk affects the return and the investor receive no extra return for bearing diversifiable (residual) risk. The set of assumptions employed in the development of the CAPM can be summarized as follows [Sears and Trennepohl (1993)]: 1. Investors are risk-averse and they have a preference for expected return and a dislike for risk. 2. Investors make investment decisions based on expected return and the variances of security returns, i.e. two-parameter utility function. 3. Investors behave in a normative sense and desire to hold a portfolio that lies along the efficient frontier. These three assumptions were also made in the development of the Markowitz and Sharpe single-index portfolio analysis models. In addition to these three, CAPM also makes the following assumptions. 4. There exists a riskless asset and investors can lend or invest at the...
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...project manager and applied them to my life. From taking this class, I have learned to use Microsoft Project and understand better different tools that every project manager has to use to be more efficient. I also learn about planning and any contingency and the most important create good communication with the people around and management risks. The Project management provides great life skills and I would like to improve my weakness and keep working with my strengths. My strengths in this class is my ability to set goals and be disciplined enough to reach those goals by the deadline. This class forced me to become more organized and also plan ahead. There are many aspects of planning used in project management that we can use in other areas of our life. Think about planning a vacation. There are many jobs that needed to be completed before the vacation day. You need to decide where do you want to go, how much is your budget, etc. To keep yourself from getting overwhelmed you can use your project management planning skills by building a schedule, define the team that will be helping plan the vacation, create a cost management plan, etc. Assumptions.- We have all been in a situation where we made assumptions about a situation, but didn’t validate those assumptions so the outcome we had in mind was altered. If we start realizing while we are planning or working on a task that assumptions are being made during the process, then we can begin validating the assumptions so they do not...
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