...takeover at the moment. As it is seen on its financial statements, Ashar corporation has been a very healthy corporation during the past few years. We can see that they have a really stable Income Statement, with high figures regarding their revenues, EBIT, Net Income. Even though, there is a decrease of the figures from 2004 to 2005, if we check in the Balance Sheet, it can be justified by the acquisition of fixed assets and long-term debt and equity. This can be a worrying figure since the company has already long-term debt, but if we look out of the box, we should know that steel companies, in order to grow and maximize their profit, they need to acquire a lot of fixed costs, which will be the base for their operations. It can be a bit risky because if the value of the steel goes down, then the debt to asset ratio will increase. Although all these possible outcomes, and looking forward in the future of the steel industry, it is not really probable that the price of the steel will substantially go down, due to the trend that has been following up in the last years. We also know that Ashar Corporation is a really diversified company, so we trust that this diversification gives us a substantial support in case any division of the company goes wrong. I think that if Ashar Corporation ends up acquiring Zellmont, it will certainly gain a lot of...
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...work, even though theses works are highly risky for their health. When it’s the time to go to school, they have to work in industries, ship breaking yards, mills etc to meet their needs of food. According to the Labor Law of Bangladesh 2006, the minimum legal age for employment is 14. According to this law, children under 14 should not be employed as laborers, but the real situation of the country shows a different picture. It shows that child laborers face the problems like low wages, poor food and also perilous working environment (UNICEF). These problems affect both their physical and mental health, and in this way the rights of children in Bangladesh are being violated every day. For example, according to J.Hasan, about 2000 child laborers, whose ages are between 10 and 14, are working in Sitakunda ship breaking yard in a highly risky environment. The working place is full of broken glass, steel spikes and piles of metal scraps, and the children work there from morning to evening, even in bare feet and hands. Therefore, they are highly vulnerable for any accident in this ship breaking yard, but no one pays attention to this immoral fact. In short, though there is child labor act in Bangladesh, it exists only theoretically. Children rights are being violated by employing them for risky tasks. Owners of the industries and other employers are exploiting the child laborers by paying them a very low wage. To improve this situation, Government should take effective steps to...
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...probability distribution of the outcomes is known over one where the probabilities are unknown. This behavior was first introduced through the Ellsberg paradox (people prefer to bet on the outcome of an urn with 50 red and 50 blue balls to on one with 100 total balls but for which the number of blue or red balls is unknown). There are a number of choices involving uncertainty and normally they can be classified in two categories: risky and ambiguous events. Risky events have a certain probability distribution over outcome while ambiguous events have some uncertainty over said probability distribution. The reaction is behavioral and still being formalized. Ambiguity aversion can be used to explain incomplete contracts, volatility in stock markets, and selective abstention in elections (Ghirardato & Marinacci, 2001) The distinction between ambiguity aversion and risk aversion is important but subtle. Risk aversion comes from a situation where a probability can be assigned to each possible outcome of a situation and it is defined by the preference between a risky alternative and its expected value. Ambiguity aversion applies...
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...Life Arts Project High Risk: Teens and risky sexual behavior Jamileth Powell College of New Rochelle Fall 2013 Children at Risk Evelyn Philippe The present topic is to explore the depths of high risk teenagers and risky sexual behavior. My inspiration for this project comes from my cousin personal experience with becoming pregnant of an early age young age due to her promiscuous behavior. My topic relates to the course content in terms of children at risk throughout my life arts project work I will provide an overview of research pertaining to adolescent's decision making, early sexual activity, and other risky behaviors, as well as describing the roles of parent and school on what they need in assisting teens in avoiding life altering decisions. The method that I will use is "How open are you" questionnaire that will pertain to my peers of which many are parents on how open are they in talking to their teens about sexual activity as well, as literature review. In my oral presentation, I will present my findings. The term risky behavior is almost always used in a sexual sense, implying behaviors and actions that increase the chance of contracting or transmitting disease, and the increase the chance of the occurrence of unwanted pregnancy. In today's society, sexual activity has become more prevalent amongst teenagers. This social issue has been argued by many, of the contributing factors that would cause teens to engage in sexual behaviors. The factors that contribute...
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... * Situation 6.: Raising debt to finance a manufacturing plant for Solar-Electro. * Situation 11.: An intercompany loan to Solar-Electro from Welburn skews the financial statements. Likelihood of financial difficulties. * Situation 1.: Solar-Electro may not have the experience, knowledge, and regulations necessary to succeed in their industry. * Situation 5.; Auto-Electro comprises a significant portion of Pinnacle’s accounts receivable and have not recently made payments. * Situation 6.: Raising debt for construction may strain Solar-Electro’s cash flows, as well as Pinnacle’s. * Situation 9.: Pinnacle is required to keep its current ratio above 2.0, but it is only at 1.75 and has been declining over the last three years. * Situation 10.: Pinnacle has a dispute with the IRS. Management integrity. * Situation 7.: A Pinnacle vice president owns Todd-Machinery who provides services to Pinnacle. * Situation 8.: Increased turnover amongst higher-level auditing staff. * Situation 10.: Pinnacle’s dispute with the IRS. * Situation 11.: The intercompany loan to Solar-Electro from Welburn. Section B. Pinnacle’s acceptable audit risk is medium. The main reason for giving this audit risk a medium is because of the intercompany loan from Welburn to Solar-Electro. The Solar-Electro division of Pinnacle is what is risky, but Pinnacle has proven itself with the diesel engine, so the company as a whole does not show as being risky. Section...
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...IT operation, security and management issues to an external service provider or vendor, outsourcing any portions of an organization's Information System has significant risks that can sometimes become detrimental to the outsourced organization. According to the Commission on Government Outsourcing, "when outsourcing an organization exposes itself to significant risks in terms of security, accuracy, and completeness of information (Holroyd City Council, 2008)". Comprised in the rest of this document is an exclusive examination of four different outsourcing activities and the associated risks that an organization needs to be aware of. Let me begin with the use of an external service provider for data storage for an organization. This situation is mostly attributed to midsized and few large business with less capital to develop and operate a databases of their own. They may neither have the finance to purchase and operate a database adequately nor the additional funding to hire a skilled IT team to manage a database in-house. In an attempt to effectively and securely manage their data at a lower and affordable budget, many of these organizations choose to outsource their data storage. Even though outsourcing of their database helps an organization to save on cost, there are many risk involve with outsourcing data to external service providers. Among the risks associated with outsourcing an organization's data is vulnerability of data. An organization's outsourced data faces...
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...Arguelles, Amanda Marie Co, Darlene Angelini R. Assignment 2 I. Given: U W e W Where α is a parameter (1a) To prove that more is preferred than less, we need to show that this individual’s preferences are nonsatiated. This can be shown by satisfying the condition, would show that for every one unit increase in wealth, satisfaction will increase as well. For this utility function, we will get: U (W ) 0 . This W U (e W ) 0 (e W )( ) 0 e W 0 W Because W > 0, we can then conclude that more is preferred to less consumption given the utility function. (1b) To prove that the consumer is risk averse we must show that this utility function has diminishing marginal utility wherein the condition that the marginal utility from an extra increase of utility decreases as your payoff increases. Hence, this would represent risk-aversion since the bigger the amount of money that is at stake, the higher satisfaction from winning is offset by an even higher dissatisfaction from losing. For this utility function we get: U 2 (e W ) 0 must be satisfied. This means 2W U 2 (e W ) U 2 (e W ) ( e W )( ) 2e W 0 0 2 2 W W Since the second order derivative of the function gives a negative value, we could say that the consumer is risk averse. (2a) There are two measures of risk aversion that was developed by Pratt and Arrow. The first measurement would be the absolute risk aversion coefficient/index. This measurement...
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...a recent study using functional magnetic resonance imaging (fMRI), images taken of the brains of young men revealed major differences in what is called “white matter” between two separate groups of participants. The University of Turku in Finland under the direction of SINTEF claims young men that make quick decisions in risky situations have a highly developed neural network and are “smarter” than low risktakers. First each participant was given a personality test to assess the risk-taking propensity and susceptibility to peer influence. By doing this the researcher was able to separate the 17 right-handed, 18-19 year old males into two groups, high and low risk takers. The two groups reported to the Department of Radiology of the Turku University Hospital for two practice sessions. During the sessions they were shows a driving game with sets of 20 stop-light intersections. They learned how to play the game and then reported back for four testing sessions in an MRI scanner. The first two sessions were performed under a non-competition social setting and the last two sessions by surprise were under social pressure of a peer competition situation. Measurements were taken of the participants at each moment that decisionmaking took place wether to stop at the yellow light or try and make it through. Results showed that high risk-takers didn't hesitate for long before they made the decision. Low risk-takers found themselves hesitating and thinking about possible outcomes...
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...Case 2: Ethics To adjust or Not to Adjust: The case of BNB Credit Union ACCT 315-01 September 5 2013 Personal Ethical Code What do you consider to be right and wrong? I am a Buddhist. What I believe to be right is to follow five precepts of Buddha: abstaining from harming living beings, stealing, sexual misconduct, lying, and intoxication. In addition, I will follow rules and regulations made by specified society or countries or organizations. On the other hand, not following the conducts mentioning above will result in wrong doings for me. What is your priority in life? My priority in life is to stay alive with good health and to obtain a regular and sufficient income. My top priority is to make my family, as well as the people around me happy by providing love, support, financial security, care and protection. How far are you willing to go to make money? I do not have specific limits when it comes to money, but I need a sufficient income to afford a normal, comfortable life. Truthfully, I want as much money as I could get, but it must be from honest and legal business practice. Honestly, since my country, Myanmar, is a developing country, I would like to make enough to contribute to my society. How do you wish to treat others? I will treat people in a nice and friendly manner, even if they are not treating me nicely during our first meeting. However, the next time we meet, I will be careful with people who were not nice to me because they could possibly...
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...in theory and in practice, because risk management costs money but does it actually add more value to a corporation? This article explores the circumstances where the management of risk may lead to an increase in the value of a corporation. Risk, in this context, refers to the volatility of returns (both positive and negative) that can be quantified through statistical measures such as probabilities, standard deviations and correlations between different returns. Its management is about decisions made to change the volatility of returns a corporation is exposed to, for example changing a company’s exposure to floating interest rates by swapping them to fixed rates for a fee. Since business is about generating higher returns by undertaking risky projects, important management decisions revolve around which projects to undertake, how they should be financed and whether the volatility of a project’s returns (its risk) should be managed. The volatility of returns of a project should be managed if it results in increasing the value to a corporation. Given that the market value of a corporation is the net present value (NPV) of its future cash flows discounted by the return required by its investors, then higher market value can either be generated by increasing the future cash flows or by reducing investors’ required rate of return (or both). A risk management strategy that increases...
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...Introduction Managing portfolio and investing in stocks is very risky and could be tricky, as a result, financial experts and investors view it as necessary or smart to know what to expect when they invest. Due to this, different statistical models have emerged to attempt to scientifically measure the potential returns on an investment. The Capital Asset Pricing Model (CAPM) and the Arbitrage Pricing Theory (APT) are two of such models. The purpose of this essay is to critically compare the Arbitrage Pricing Theory with the Capital Asset Pricing Model as used by fund managers in the United Kingdom. Captial Asset Pricing Model (CAPM) When Sharpe (1964) and Lintner (1965) proposed the Capital Asset Pricing Model (CAPM), it was seen as a leading tool in measuring if an investment will yield in positive or negative returns. It attempts to explain the relationship between investment risk and expected reward of risky securities (Ushad, 2011; Reilly and Brown, 2011; Heshmat, 2012). The CAPM helps to determine the required rate of return for any risky asset (Reilly and Brown, 2011). “The CAPM states that the expected return on a security or a portfolio equals the rate on a risk-free security plus a risk premium” (Heshmat, 2012: 504). It indicates that the expected return on an asset has a positive linear relationship with the non-diversifiable risk of the security (beta) (Heshmat, 2012). Ushad (2011) explains that the CAPM is based on the premise that higher returns should be...
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...mortgage banks and repacked them to MBS. People like Mike Francis were link to the global of money. Mike Garner, an employee at Silver State Mortgage, the largest private mortgage bank in Nevada, bought the individual mortgages and bundled 200 or 300 of them together, and then sold them up the chain to Wall Street investment banks, to guys like Mike Francis. The pool of money demand for these bundled mortgages was increasing. Mike Garner’s bank had to lend to people who would not qualify for traditional loans. Many of these people had no income and no assets. Mike Garner’s bank lowered the standards to issue as many as mortgages. People didn’t have to show W-2 to get loan approval from Mike Garner’s bank. Mike Garner approved more and more risky loans as he and other employee were paid...
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...the emerging markets of Africa less risky and a more attractive proposition than western multinationals? - MSc BD7 Ping SUI Introduction: As an important global player and the main drive for economical growth, China’s massive investment in Africa has drawn the world’s attention. People can see European multinationals everywhere in Africa in the 80s, while now Chinese companies seem to take over the leading role. For example, in Angola, China helped to build the Angola Benguela railway, which is the longest railway Angola has had so far; in Nigeria, Chinese Telecom companies “Huawei” has a dominating presence both in fixed and wireless services by taking more than 90% of the market share. Not only can you find commodities made in China everywhere, but Chinese companies now build the infrastructures in many African countries too. On the contrary, the presence of European multinationals is not as strong as the Chinese ones: the amount of the funds flowing from Europe to Africa has decreased from 70% to 17% since the 70s; Western Europe’s share of overall international trade with Africa has decreased from 51% to 28%, while China has taken the place and become the biggest trading partner Africa has by surpassing America in 2009. Why are European MNCs less and less preset in Africa? What are the difficulties they have encountered? Do Chinese companies have same barriers? Why do the Chinese companies find the African market less risky and more attractive compared to the...
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...other well. In order to deal with the “information poor” and meet the goal of becoming more global, NIBCO consulted Boston Consulting Group (BGG) for future information system plan. After recognizing and analyzing NIBCO’s current situation, BGG recommended the ERP system which can help NIBCO better move forward. 2. Why did it choose a Big Bang approach, rather than the 3-to-5 year plan suggested by the consulting firm? Firstly, the business initiatives were demanding a quicker implementation, 3-to-5 year is quite a long time. Secondly, some team members worried that the company would just get to the point where it would say “enough is enough” without executing the whole plan, they will just focus on this part but ignore the plan from the whole company view. And thirdly, some companies who had used the “go-slow” approach were not as successful as they expected, it is a little risky to spend 3-to-5 years to implement this probably not successful plan. On the other hand, the benefits of the Big Bang would be multimillion dollar operational improvements and reductions in inventory costs. And the consulting costs under Big Bang would be lower than the 3-to-5 year plan. 3. Describe the pros and cons of a Big Bang approach, versus a less risky rollout strategy. If you had been the IS head at NIBCO, what approach would you have recommended and why? I searched for the internet and found some pros and cons for Big Bang. Pros are as follows: “No one has to operate their...
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...insurance companies' higher prices of their policies for young drivers. Automobile insurance policies come in a board range of prices depending on the drivers’ status, experience, car condition, and so on. The majority of car insurance companies have various discount options depends on vehicle equipment, driving history and habits, driver's education and affiliation for their policy holders, yet young drivers who aged 24 and less pay approximately double price of other aged drivers because insurance companies recognize young drivers as high risky drivers. This study will qualitatively and quantitatively examine the level of risky driving behavior by aged groups with 400 samples. Then, the research will define the relationship between risky driving behavior and young drivers aged 24 and under. Additionally, the study assume that there is relationship between risky driving behavior and drivers experience. Keywords: young driver, insurance, risky driver, novice driver, car crash, expensive I. Statement of the problem In 2011, there are approximately 211.87 million licensed drivers in the U.S. and its rate is 84.6 percent of total U.S. population. In the same year, 253.10 million automobiles were registered in the U.S.(United States Department of Transportation, 2013). This is a huge...
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