...VALUE AT RISK VaR is a predictive (ex-ante) tool used to prevent portfolio managers from exceeding risk tolerances that have been developed in the portfolio policies at a certain confidence level under normal market conditions. The usual holding periods are one day or one month. The confidence level is intuitively a reliability measure that expresses the accuracy of the result. The higher the confidence level, the more likely we expect VaR to approach its true value or to be within a pre-specified interval. Analytical VaR is also called Parametric VaR because one of its fundamental assumptions is that the return distribution belongs to a family of parametric distributions such as the normal or the lognormal distributions. Analytical VaR can simply be expressed as: | | where: * VaRα is the estimated VaR at the confidence level 100 × (1 - α)%. * xα is the left-tail α percentile of a normal distribution . xα is described in the expression where R is the expected return. In order for VaR to be meaningful, we generally choose a confidence level of 95% or 99%. xα is generally negative. * P is the marked-to-market value of the portfolio. Objectives of VaR measurement * It facilitate risk reporting and control decisions. * The simplicity of VAR measurement greatly facilitated dealers’ reporting of risks to senior managers and directors. * VAR also proves useful in dealers’ risk control efforts. * Commercial banks, use VAR measures to quantify...
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...JFT2 Task 1 A1 The two motivational theories the board members Bill Bailey and Scott Parker should employ to motivate and support or oppose the merger between the Utah Symphony and the Utah Opera are McClelland’s Need Theory and Adam’s Equity Theory. Bill Bailey the highest ranking officer as chairman of the Utah Opera board is tasked with conducting business in an orderly fashion. As chairman, it is Bill’s job to lead the other board members from varying points of view or decisions to making decisions that are in the best interests of the organization he presides over. Finally, it is Bill’s job to set the overall direction and strategy of the organization. For Bill, McClelland’s Need Theory is most appropriate considering his position on the proposed merger. This theory comprises of three needs; the need for achievement, the need for affiliation and the need for power. The need for achievement is to accomplish something difficult (Kreitner & Kinicki, 2010). Bill has two primary concerns regarding the merger. One is the financial strength of the opera versus the symphony. The opera had established a reserve fund and as a result was more financially stable and had a more flexible business model. Second, is that the opera could potentially become a tier one arts organization as a result of the merger but in doing so could also potentially lose its identity. Bill could look at these two challenges as something worth accomplishing. Historically, there haven’t been a lot...
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...RISK AND RISK MANAGEMENT OF RURAL AND AGRICULTURAL FINANCE (MD. IBRAHIM KHOLILULLAH, DEPT OF AG.FINANCE, BAU MOB: 01718996557) INTRODUCTION When discussing rural finance in Bangladesh, the foremost issue that merits mention is that loans to agriculture are generally offered only by specialized agricultural banks, since commercial banks and microfinance institutions largely refrain from financing the sector. There are many reasons for this, the most important of which is that this finance is strewn with risks, some of which the state is most likely to address. Hence, the governments hold ownership of these banks and their capital, and finance and support them. Agricultural banks are exposed to the above two risks. These dual risks continually expose them to losses and bank ruptcy unless they have excellent risk management practices and/or are financially supported by the government. Some of the risks that the banks encounter are, inter alia: operational risks, market risks, credit risks, and inadequacy of capital. These interrelated banking risks are faced by all commercial banks, agricultural banks and governmental banks. They may be created as a result of inadequate fund allocation, weak labour regulations, mismanagement, an unsuitable operating environment, weak training programmes, bad credit transactions and price fluctuations. Two problems must be mentioned in this regard: difficulty in measuring banking risks, and the lack of specialized management of most agricultural...
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...Decision Making Analysis Discussion Summary MGT/230 09/07/2015 Decision Making Analysis Discussion When Ann Mulcahy became the CEO of Xerox she was born into an environment full of conflict and strife. Inheriting a disastrous mess and the company drowning in debt, she had to make bold, decisive decisions that took the company away from its’ entrenched way of doing things. Conflict was definitely one of the characteristics of management that Mulcahy dealt with when she became the acting CEO of Xerox. Mulcahy had been with the company for thirty years and had held various positions in human resources, sales, and was the creator and leader of a desk jet printer division. In the video it says that Mulcahy considered the people of Xerox to be her family. This fact must have taken a heavy toll when she needed to make decisions about cutting costs and restructuring the company. Within the first year of Mulcahy taking over she cut one billion in costs, and included in that one billion was the deskjet printer division that she herself created. Job elimination was certainly part of Mulcahy’s plan to reduce costs, the source material does not specify whether or not employees were repurposed to different divisions or if many were subject to straight layoffs or if it was a combination of the two. It was fortunate that Mulcahy had a wealth of knowledge of how different departments operated before she became CEO. Having a from the ground up background with the company undoubtedly gave...
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...In the file MGT 448 Week 5 Learning Team Assignment Final Global Business Plan Paper you can find overview of the following parts: 1. Introduction 2. Comprehensive Analysis Outline 3. Regional Analysis: Regional Alliances and Economic Integration 4. Regional Analysis: Physical Environment and Its Effect on Trade 5. Regional Analysis: Political Stability 6. Regional Analysis: Economic Conditions 7. Regional Analysis: Finance Options Available 8. Regional Analysis: Social, Health, and Environmental Conditions 9. Regional Analysis: Terrorism Threats 10. Country Analysis: Political Stability 11. Country Analysis: Economic Conditions 12. Country Analysis: Finance Options Available 13. Country Analysis: Physical Environment and Its Effect on Trade 14. Country Analysis: Social, Health, and Environmental Conditions 15. Country Analysis: Cultural Considerations 16. Organization and Product or Service Analysis: Description of the Organization 17. Organization and Product or Service Analysis: Product Needs Assessment 18. Organization and Product or Service Analysis: Description of Product to Meet the Need 19. Country Risk and Strategic Planning Analysis 20. Political, Legal, and Regulatory Risks 21. Exchange and Repatriation of Funds Risks 22. Competitive Risk Assessment 23. Taxation and Double Taxation Risks 24. Market Risks: - Product - Price - Place - Promotion 25. Distribution and Supply Chain Risks 26. Physical and Environmental Challenges 27. Social and Cultural Risks 28. Cyber/Technology...
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...In the file MGT 448 Week 5 Learning Team Assignment Final Global Business Plan Paper you can find overview of the following parts: 1. Introduction 2. Comprehensive Analysis Outline 3. Regional Analysis: Regional Alliances and Economic Integration 4. Regional Analysis: Physical Environment and Its Effect on Trade 5. Regional Analysis: Political Stability 6. Regional Analysis: Economic Conditions 7. Regional Analysis: Finance Options Available 8. Regional Analysis: Social, Health, and Environmental Conditions 9. Regional Analysis: Terrorism Threats 10. Country Analysis: Political Stability 11. Country Analysis: Economic Conditions 12. Country Analysis: Finance Options Available 13. Country Analysis: Physical Environment and Its Effect on Trade 14. Country Analysis: Social, Health, and Environmental Conditions 15. Country Analysis: Cultural Considerations 16. Organization and Product or Service Analysis: Description of the Organization 17. Organization and Product or Service Analysis: Product Needs Assessment 18. Organization and Product or Service Analysis: Description of Product to Meet the Need 19. Country Risk and Strategic Planning Analysis 20. Political, Legal, and Regulatory Risks 21. Exchange and Repatriation of Funds Risks 22. Competitive Risk Assessment 23. Taxation and Double Taxation Risks 24. Market Risks: - Product - Price - Place - Promotion 25. Distribution and Supply Chain Risks 26. Physical and Environmental Challenges 27. Social and Cultural Risks 28. Cyber/Technology...
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...Britanie Baker Decision Making Analysis Summary April 27, 2015 MGT/230 Ronald Sprague Decision Making Analysis Summary “The business executive is by profession a decision maker. Uncertainty is his opponent. Overcoming it is his mission” John McDonald. This statement is the best description for Anne Mulcahy. CEO of Xerox, Anne Mulcahy, is a very successful CEO who started her made her way up the corporate latter starting in sales. Anne Mulcahy was dedicated to the success of Xerox, and had to make difficult decisions in order to make the company see growth in profits again. In order to fulfill her vision of the success of Xerox she had to sell divisions, and lay off employees. All though these were tough decisions to make Anne had to do what was necessary to save Xerox from bankruptcy. Ms. Mulcahy cut a billion in cost in her first year as CEO. She also made the executive decision to put money into new technology as a way of reinventing Xerox. During week two Learning Team A had to answer questions based on this information. Learning Team A discussed how Xerox embraced characteristics of taking risk, and characteristics of managerial decisions. Throughout the discussion it was clear that most of the team members in Learning Team A agreed that Xerox embraced risk taking. The reason for this is that Xerox was on the verge of falling into bankruptcy. In order to save the company Anne Mulcahy had to cut, terminate positions, and sell divisions in order to...
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...Page » Business and Management Business of Baseball In: Business and Management Business of Baseball Mgt. 110 Business of Baseball Jordan Core 1. Baseball is full of decisions; every single last pitch is a decision, whether to pitch it high, low, inside, outside. The coach must make the decision of which players to play on certain nights and whether or not to take a pitcher out of the game. I think baseball has the most decisions to be made out of all the “big four” sports. Most decisions in baseball are structured problems, they are easily definable. If a slugger keeps hitting the fastball, it’s time to make the decision of pitching him curveballs away from his hotspot in the strike zone. There is a standardized way of handling almost every type of player and situation. Granted, there may be certain decisions that are unstructured problems and are not faced everyday by the manager such as a star player going down with an injury. The manager must make the decision of how to fill the void left by the injury. If you believe in it, luck can be an unstructured problem as well. In baseball all decision makers are faced with either risk or uncertainty. I don’t believe there is any certainty in any sport. Even the best pitchers have games where they falter so nothing is to be expected. To be the best manger you can be in baseball you have to have as much risk as you can and as little uncertainty as possible. Knowing you will never have total certainty you have to make...
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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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...Team A: Jaime Borgarin, Julian Contreras, Ibeth Sanchez MGT/448 Global Buisness Strategies May 11, 2012 Professor Quinton Murphy I. Region Analysis A. Regional Alliances and Economic Integration 1. NAFTA 2. United States B. Physical Environment and its Affect on Trade 1. Close Proximity to the U.S. 2. Access to Oceans C. Political Stability 1. Authoritarian Law 2. Democratic Desires D. Economic Conditions 1. Weak Economy 2. Weak Financial Markets E. Finance Options Available 1. Foreign Owned Banks F. Social Health and Environmental Conditions 1. Little Regulation 2. Pollution G. Terrorism Threats 1. Lack of Terrorism 2. High Rate of Violent Crimes 3. Drug Trafficking II. Country Analysis A. Political stability 1. Relatively low geopolitical and domestic political risks in Mexico will increase over the long-term. 2. The war on terrorism has already tightened US border security and immigration rules, opening an important social safety valve for Mexico. 3. Hardening US counter-drug policy in Mexico could heighten already high social tensions. 4. Domestic political risk will increase by continued weak governance. B. Economic...
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...Buying a House MGT/230 August 13, 2013 Buying a House In everyday life, human beings have to make decisions. While some decisions appear simple, others are complex and require one to take time deliberating on them. In their context, some of the decisions that people have to make include changing of careers, joining learning institutions, buying a home or even opening a business, among others. This essay explores the process I followed while I finally decided to buy a home. While making a decision to buy a home, I engaged six processes. Firstly, I established a constructive surrounding that would allow me to identify my objectives (Taylor, 2010). Additionally, I consulted with my parents and friends to avoid making a decision on my own, which might not be good at the end. While making consultations, I allowed all involved parties to give their opinions, with an aim to come up with the best decision. Secondly, I embarked on generating alternatives, with an aim of making a comprehensive final decision. I employed brainstorming in order to generate more ideas (Montgomery & Lipshitz, 2004). I managed to gather ideas that provided me with reliable alternatives. Thirdly, I embarked on exploring the alternatives in order to determine the implications, risks, and validation (Jasper, 2007). I managed to identify the risks I was likely to encounter while buying a house, the effects of my decision. In terms of validation, I engaged cost analysis, and determined...
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...Mgt. 110 Business of Baseball Jordan Core 1. Baseball is full of decisions; every single last pitch is a decision, whether to pitch it high, low, inside, outside. The coach must make the decision of which players to play on certain nights and whether or not to take a pitcher out of the game. I think baseball has the most decisions to be made out of all the “big four” sports. Most decisions in baseball are structured problems, they are easily definable. If a slugger keeps hitting the fastball, it’s time to make the decision of pitching him curveballs away from his hotspot in the strike zone. There is a standardized way of handling almost every type of player and situation. Granted, there may be certain decisions that are unstructured problems and are not faced everyday by the manager such as a star player going down with an injury. The manager must make the decision of how to fill the void left by the injury. If you believe in it, luck can be an unstructured problem as well. In baseball all decision makers are faced with either risk or uncertainty. I don’t believe there is any certainty in any sport. Even the best pitchers have games where they falter so nothing is to be expected. To be the best manger you can be in baseball you have to have as much risk as you can and as little uncertainty as possible. Knowing you will never have total certainty you have to make the most accurate decision you can and it seems now the more stats you put into making your decision...
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...Decision Making Process April 16, 2012 University of Phoenix MGT/230 We are often faced with decisions in both business and our personal lives. Sometimes making those decisions are not so difficult and sometimes they can be extremely risky and difficult to make. When I think of a time in my life in which I had been faced with an important decision, I think of my work. I had been employed with a company for a little over three years. My job was sometimes stressful but overall I was satisfied. Soon later an individual whom I previously worked with offered me a position at another company. Not only would taking the position increase my pay, but it would also place me in higher titled position as well. There are six stages in the decision making process. Stage one is to identify and diagnose the problem, two: create alternative solutions, Three: evaluate those alternatives, Four: make the decision, Five: implement, and Six: evaluate. The decision I made was to stay with the company I was already working for. It was very difficult for me being that I was a single mother, could use the extra pay , and promotion. I know what many of you may be thinking, this doesn’t make sense how could she turn down the extras. However, when I made my decision I evaluated the long term effects. I had no idea how stable this organization was and the contract on the position was only three years. This doesn’t mean I would have had to left the company after three years but there was no guarantee...
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...Decision-Making Process Paper Jackie Gonzalez MGT/230 June 9, 2014 Decision-Making Process Paper Making decisions is something most all do on a daily basis. How do you know if you make the correct decision? There are many factors to be taken in consideration while in the process for decisions. For example, when you make a personal decision to take on a new job role; knowing how to evaluate all aspects becomes crucial. About a year ago, I was offered a position within my organization as a Sales and Service Advisor. I knew from the beginning my current position as a Sr. Branch Associate was not where I wanted to stay at, so I began to evaluate my options. I brainstormed all the pros and cons of taking the new job role. I researched further as to how each pro and con would benefit and affect the organization, me directly, and my family. I came to analyze any potential risks, I would have based on my decision. Then, I had to determine what had more value and importance to me. From there on I made the choice to stay with my current job role. Even though from day one I knew I did not want to stay with the same position, I decided not to move because I would then be doing something that may have steered me away from my career goal. In comparison to the material on Ch. 3 of Management: Leading and Collaborating in a Competitive World, I believe the decision making process I took was quite similar because both had a root cause for decision making, made an evaluation of choices...
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...Krystal Simmons Decision-Making Process MGT/ 230 Nov 09, 2014 Decision-Making Process Every day in our daily lives, we make decisions in different situations. Some of those decisions are easy to make and others are quite difficult to implement. The organized decision-making process will help to control this issue and bring positive outcomes for people enrolled in it. I will provide in this paper decision-making process when I had to make a personal decision, such as enrolling in college. People face a wide range of opportunities every day, as well as certain challenges supporting this process, and the most difficult thing in the life of a person finishing school is to become enrolled in college of his or her dream. The decision-making process may become challenging for people due to the lack of structure and entail risk, uncertainly and conflict ( Managerial Decision Making, Chapter 3 pg 87). That is why people trying to make some important personal or professional decisions should have some appropriate model to follow in order to avoid such challenges. In the text, there are six steps or stages of decision-making process which may be attached to any problem or decision. First, it is important to identify and analyze the problem. My problem was the enrolling in college, as I wanted to enter a good college to build my future professional career. It was a tough decision to make because I was not sure if I am taking the right decision. In order to take this decision, I analyze...
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