...Introduction “The key is not to eliminate risk; it is to measure it and manage it wisely” (Steiger, Strong, & Wilson, 2009). In the world of finance, the most difficult objective to achieve for individuals, corporations, and small businesses is the balance between financial risk and reward. This paper will look at both historical tools and avenues modern technology has adopted to create a balance for financial investors in the market today and how these tools are implemented in today’s businesses. Identifying opportunities and recognizing the risk associated with them is crucial to financial growth and success. Entities are continuing to find ways of leveraging risk by using different modeling tools to understand the source of risk, measure risk and transfer risk (Schwartz, 1996). Due to the expansion and growth of companies into new markets, risk has become an increasing concern for many businesses. It is clear through the recent market crash that more robust risk management tools must evolve with the changing investment practices that are taking place in today’s society. “The world’s financial markets have exploded with new products and new techniques such as derivatives and securitizations giving rise to huge new markets” (Epetimehin, 2012). If implemented strategically and used correctly, risk management tools can aid businesses in their journey of financial success and help them develop finely tuned investment planning and business strategies (Anonymous, 1983)...
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...CRM Assignment | Risk Profile & Risk Map | | | | | | Corporate Risk Management Assignment Risk Profile Significance | Likelihood of Occurrence | Risk Type | Risk Definition | Risk Description | 10 | 5 | Operational Risk | Aviation fuel price risk | ATF cost represents the largest category in airlines operating expenses and place the airline stability at long term risks. The prices of ATF have risen significantly in one & half year and constitute nearly 40% of ticket prices. | 9 | 5 | Market Risk | Hedging risk | Current high prices and the volatility in the prices of the fuel is making hedging strategy very difficult to implement | 9 | 5 | Personnel risk | Operational risk | Airline engineers strike recently and competitive offerings of the competitors is placing a strategy risk in front of the top management as the increase in the personnel cost can further increase the pressure on the operating margins of the airline. | 9 | 5 | Market Risk | Competition risk. | Airline industry is highly competitive in nature and with air travel becoming a commodity business, being competitive on price is key for the survival of any airline. | 8 | 5 | Exchange rate risk | Market risk | Airline has its payables in many currencies and with the volatility in the exchange rates airline is exposed to exchange rate risk | 7 | 4 | Economic risk | Market risk | Ongoing recession In US has cut deeply into profits of the airline and has raise questions over...
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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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...Strategic Risk Analysis The current strategic objective of FreshMade Cheese Farms is to further new market opportunities by including international subsidiaries as part of the business strategic plans. The mission of FreshMade Cheese is to be a global leader in the cheese industry. The first step in realizing that mission is to capture 75% market share of the cheese industry in New Zealand. The subject of this analysis examines the New Zealand market expansion risks and opportunities supporting the business mission and objectives. External Influences and Risks External influences beyond the control of the business add risk but are a part of the competitive environment and risk analysis (Pearce & Robinson Jr., 2009). This section presents the significant external forces and risks in the New Zealand subsidiary expansion. Legal and Regulatory Legal and regulatory environments influence businesses and FreshMade Cheese Farms is no different. The Foreign Corrupt Practices Act (FCPA) enacted in 1977 makes bribes of foreign officials, agents, employees, or other similar foreign representatives illegal (Cheeseman, 2010). Many foreign countries have standard practices of accepting bribes or using similar influences to do business in the country. U.S. businesses are not allowed to operate in this fashion under the FCPA (Cheeseman, 2010). One of the main New Zealand laws that FreshMade Cheese must consider is the Overseas Investment Act of 2005. This legislation outlines...
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...HIPAA Security Standards: Guidance on Risk Analysis Introduction The Office for Civil Rights (OCR) is responsible for issuing annual guidance on the provisions in the HIPAA Security Rule.1 (45 C.F.R. §§ 164.302 – 318.) This series of guidances will assist organizations2 in identifying and implementing the most effective and appropriate administrative, physical, and technical safeguards to secure electronic protected health information (e-PHI). The guidance materials will be developed with input from stakeholders and the public, and will be updated as appropriate. We begin the series with the risk analysis requirement in § 164.308(a)(1)(ii)(A). Conducting a risk analysis is the first step in identifying and implementing safeguards that comply with and carry out the standards and implementation specifications in the Security Rule. Therefore, a risk analysis is foundational, and must be understood in detail before OCR can issue meaningful guidance that specifically addresses safeguards and technologies that will best protect electronic health information. The guidance is not intended to provide a one-size-fits-all blueprint for compliance with the risk analysis requirement. Rather, it clarifies the expectations of the Department for organizations working to meet these requirements.3 An organization should determine the most appropriate way to achieve compliance, taking into account the characteristics of the organization and its environment. We note that some of...
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...i [pic] RISK ANALYSIS Project or System Name U.S. Department of Housing and Urban Development Month, Year Revision Sheet |Release No. |Date |Revision Description | |Rev. 0 |1/31/00 |SEO&PMD Risk Analysis | |Rev. 1 |5/1/00 |Risk Analysis Template and Checklist | |Rev. 2 |6/14/00 |Minor changes per Office of Administration | |Rev. 3 |4/12/02 |Conversion to WORD 2000 Format | | | | | | | | | | | | | | |Risk Analysis Authorization | | ...
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...Country Risk Analysis: John D. Young MGT 448 January 16, 2010 Stephen Thomas Country Risk Analysis When entering any market, analyzing the business risks is an important process. Many sources of risk exist and responsible organization will examine every possible source in preparation for managing a variety of issues. These risk types include political, legal, and regulatory risk, exchange and repatriation of funds risk, competitive risk, taxation and double taxation risk, market risk, distribution and supply chain risk, physical and environmental risk, social and cultural risk, and cyber-risk or technological risk. Political, Legal, and Regulatory Risks Politically, China faces some stability issues. China has a Communist government. In many cases, this regime has led to stability that has helped the country reach the more recent levels of economic improvement, despite some notable discontent among its people (Cai & Li, 2009). However, since reaching a more prosperous economy China has been at odds with itself. Balancing its communistic central government with capitalistic economic centers has been unsuccessful. Additionally, the development of the nation has led to a large disparity between the classes with some rural regions looking as they did decades ago whereas urban centers rival New York and Tokyo in excess (AMBest Co Inc., 2011). This generates a lack of trust in smaller regional centers and towns that threatens to create instability in China (Ke...
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...ON THE ENTERPRISE RISK MANAGEMENT PLAN OF MH GROUP HOLDINGS A risk is an event or condition that, if it occurs, may produce positive or negative effects on a company’s objectives. The risk management process therefore identifies, assesses, controls, monitors and reports the exposures that an entity faces. This report defines the exposures associated with MH group; how they will be identified, assessed and managed and also outlines how the risk management activities will be performed, recorded and monitored on a regular basis. This report is presented by the Risk Manager to the Board of directors on the risk management analysis of the following entities of the group; MHA, USA-based professional baseball team and the Canadian textile manufacturing and distributing entity. The steps for accomplishing this are outlined in the following sections. The focus has been to identify pure risks rather than speculative risks. Government regulations and natural catastrophes?? 1) Risk Identification and assessment for MHA The risk identification process entails the evaluation of environmental and operational factors as well as the organisational structure. Information is gotten from the financial reports, audit report, industry reports, site visits, employee questionnaires and contracts/agreements with contractors and suppliers. The holding’s revenue has tripled since 2001; a detail examination of loss histories would add valuable information to risk management analysis. The assessment process...
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...standards, empower patients and serve as the backbone of emerging care delivery and payment reform models. Meaningful Use part 1 has come and gone with the implementation of Electronic Medical Records (EMR). Meaningful Use part 2 and part 3 are heating up as portals, imaging and storage requirements are the latest requirements in scope. As part of Meaningful use stage 2 rolls out larger image workloads will cause networks to slow down and stall (Bolan, 2013). Information Technology and outsourcing potentials are the areas of discussion for this risk analysis briefing. Of particular interest are resolving server data and energy costs increases, potential security breaches and hacker vulnerability, storage of medical images and disaster recovery of images after a natural disaster. Finding solutions for these issues will come with risks that will need to be identified and analyzed to determine best response and a plan to monitor. Risk Identification First on the list to address are issues relating to server and energy costs, storage of medical images, maintaining security and disaster recovery. The volume and length of time data and images are required to be stored long term as required by the HITECH Act threatens to quickly surpass existing storage capability. Primary servers, back-up servers, racks and other equipment maintenance and repair are costly since these are replaced and upgraded every few years. Also only 50 percent of...
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...Memorandum: ------------------------------------------------- Subject : Risk and Option Analysis of Proposed Venture Introduction With reference to the company’s new announced project about exploring the meeting market of Country A, we have some points which I think would be useful to consider before undertaking the project. Background: Rephrasing the whole project definition and scope as you provided in the annual presentation, our company is going to explore the Moroccan market. Our company, Xava Coffee and Confectionary is undoubtedly among the best companies of the country. Being a multinational company having our operations in France, Germany and North America, we are fully equipped with the abilities to explore new markets. We are already exporting a significant amount of coffee to the emerging markets such as China and India. Now the company is thinking to set up a production plant in Country A to market the coffee in Country A market as well as explore from there to the Mediterranean countries and the Middle East. The project appears to be financially viable as it has reasonable IRR and satisfactory NPV however; the project would carry significant risks. Key Points of proposed project: Being a multinational company, it is our long term benefit to explore and develop new markets. We have a unique advantage of production facilities within and outside our border with strong international market links. We have customers in three continents of the...
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...Risk Analysis Estimating Methods - Scheduling Risks As Applied to the Panama Canal Case Study 11/8/2010 Kendrick argues that establishing project planning is a necessary key requirement of managing project schedule risk (2009, p.334). Regardless of how thoroughly a project manager works to ensure that a project’s schedule is accurate, he or she cannot fully control the inevitable and random influences that may negatively impact their project schedule. Equipment failures, nature, and sick employees are just a few of the uncontrollable factors that may jointly cause a project manager to miss their project’s target date. In preparation for these risks, a project manager needs discipline to devise an appropriate, risk-controlled project schedule. These Kendrick states that scheduling risks fall into three categories (2009, p.71): * Delays - Usually caused by material delivery and availability issues. * Estimates - Minimize this risk by using better estimation procedures. * Dependencies - When one project depends on other projects or systems, a failure or delay in any area can cause a domino effect. Risk Identification is the process of documenting risks that threaten a project and determining which of those risk have the potential to cause the most impact it. The act approximating the degree of impact a risk may have on a project schedule is referred to as estimating. This paper discuses two tools or techniques of estimating scheduling risks used to predict...
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...1，short-term liquidity risk The short-term liquidity risk of IBM appears low. A,The current and quick ratios were steady during the three years and at healthy levels. The current ratio, which indicates the amount of cash available and other current assests of the firm, hovers around 1.2, which is common. The ratio reaches its peak in the year 2009 which is 1.3593, and decreases slightly in 2010. Accounts report inventories at acquisition cost. The quick ratio has the same trend with current ratio, and hovers around 1. [pic] C Despite the additional short-term borrowing and stretching of payments to suppliers, the operating cash flow to current liabilities ratio remained steady and well above the 40 percent threshold for a healthy company. The ratio declined to 45.61% in the 2006 which was the lowest level in the 7 years. The decline may be because in the year 2007, IBM had raised great amount of long-term debt. So, such decline should not be a major concern. [pic] D, The working capital activity ratios were steady and healthy for the industry too. The inventory turnover hovers around 20, and increased slightly over the 7 years. It may because that IBM is paying more effort on service and IT solutions. Other turnovers, the accounts receivable turnover and the accounts payable turnover did not change much. The days of working capital remains at a high level. It may result from the reason that the major customers of IBM are firms and government agents, other than...
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...Risk assessment is comprised of nine steps a few of the most important are first to analyze the likelihood of a risk by conducting a risk analysis. The second key step is to determine what happens if a risk, which is the possibility of an issues occurring and what are the steps to handle the situation as it arises. Policies and a process outlining the steps required. This also includes maintaining normal operating procedures during downtime. In order to prepare for downtime procedures and disaster recovery several steps are needed first a full inventory of all systems, servers, applications and the process of system support should be identified. This identification is critical because it lays the foundation for reestablishing the operation when a disaster strikes. It also allows the hospital return to normal operating procedures post disaster. Oglebay Hospital, has started with the qualitative approach. The qualitative approach assuming the real possibility that a disaster is eminent. I think they have done a good job at identifying the risk as well as the impact to their hospital. They are located in a flood plain and the fact that the facility floods is not a question of if but when will it happen again. They have taken measures...
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...Country Risk and Strategic Planning Analysis Paper University of Phoenix MGT/448 Kathryn Hayman December 19, 2011 Team C has decided to conduct a country risk analysis for the country of Mexico. The selected business venture is about laptop computers. When it comes to global business ventures there also comes a great amount of risks. In the following paragraphs is an analysis of the following risks; political, legal, and regulatory risks, exchange and repatriation of funds risks, competitive risk assessment, taxation and double taxation risks, market risks, distribution and supply chain risks, physical and environmental challenges to entering and operating in a target market, social and cultural risks, and cyber or technology risks. A description of how these risks would be managed and a summary of the strategic planning process will be explained. Mexico has a moderate political risk according to AM Bests Country risk report. Mexico ties with large, developed countries that are very strong has help them in this aspect when it comes to their political risk. NAFTA North American Fair Trade Agreement also helps in this respect since it is now one of the largest free trade areas. This agreement was established between the Unites States, Canada, and Mexico and became effective on January 1, 1994. This alliance has brought economic growth and rising standards to the citizens of these three countries. There are many advantages of NAFTA, being that it has created...
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...Objective: The objective of this paper is to test whether the technical analysis indicator MACD is effective in real trading. We will use the S&P 500 Index as our samples, and our main idea is to find the average return and VaR when we buy at the time MACD shows a “golden cross” and sell at the time when there is a “death cross”. MACD: Before we do the test, let’s start to define the MACD as well as its components. MACD is one of the most popular indicators used in the technical analysis. And it is mainly comprised of MACD line, signal line, and the histogram. MACD line and the signal line are calculated by using the EMA (exponential moving average) function, while the histogram is the difference between the MACD line and signal line. MACD line is the difference between exponential moving averages of 12 day stock price and the exponential moving averages of 26 days stock price. The signal line is the exponential moving averages of 9 day MACD. (12, 26, 9) is the well-recognized moving average lengths used in the industry, but can be altered with other appropriate numbers. MACD Line = EMA [stockprice, 12] – EMA [stockprice, 26] Signal Line = EMA [MACD, 9] Histogram = MACD Line – Signal Line In technical analysis, there is a basic rule to apply the MACD into practice, say when the MACD line up crosses the signal line, the stock price is expected to rise in the short term, while the MACD later on down crosses the signal line, the stock price may be expected to go down...
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