Role of IMF in poverty alleviation Research Paper

Role of IMF in poverty alleviation - Research Paper Example PRGF supported programs were derived from a member’s PRSP that ensured that the reforms it supported were owned by the county and oriented to realizing economic growth and poverty reduction goals (Vreeland 3). Although it may be too early to appraise the new framework’s success in achieving the objectives, it is time to evaluate progress to this day and discover shortcomings that may need course corrections in the initiative’s design and implementation. The IMF was initiated at the Bretton Woods Conference in 1944 and created by 29 countries in 1945. The international organization’s main objective was to help in the construction of international payment system after the Second World War. Member countries help to contribute funds through a quota system where countries that face payment imbalances can borrow money and other resources. Through the fund, and surveillance of member countries economies and self-correcting policies demand, the organization works to recover the economies of member countries. IMF headquarters is in Washington, D.C. (Jensen 3). The IMF works to promote world’s monetary cooperation and ensures that there is a financial stability, aid international trade, assists in employment issues and economic growth to alleviate poverty in the world. The IMF objectives are in the Articles of Agreement; they are: promoting international economic co-operation, employment, international trade, and the stability of the exchange rate by making finances available to members in order to meet the needs of the balance of payments (Woods 2). The IMF fosters economic stability and global growth. The organization offers advice to policy matters and financial support to member countries that are in economic difficulties. IMF works together with developing countries to help them achieve economic stability and poverty reduction. The justification for this support is that international capital markets work imperfectly, and

Altered Hematology & Cardiovascular System Case Study

Altered Hematology & Cardiovascular System - Case Study Example Hypoxia of central nervous system causes faintness and headaches while myocardial hypoxia results in palpitations and increased heart rates (Kumar et al 2005). She has a history of chronic blood loss which is due to menorrhagia. Other causes of chronic blood loss include gastrointestinal bleeding, malignant diseases and urinary bleeding. Chronic blood loss anemia results from blood loss in small amounts, which occurs over a long period of time and it results in iron deficiency anemia because the iron stores of the body are depleted. Consequently, the oxygen-carrying capacity of the red blood cells is reduced and the patient presents with signs and symptoms of anemia. The clinical features of the chronic blood loss anemia are not severe until the hemoglobin levels of the blood are extremely low (Emmanuel et al 2001). The shortness of breath of the patient is explained by the decreased oxygen content of the blood cell which is exacerbated due to exertion (Kumar et al 2005). As mentione d in the case she presented with severity of symptoms while playing golf at a high course which induced exertion. Chronic blood loss is a very important and common cause of iron deficiency anemia which is caused when all iron stores are depleted due to external hemorrhage over a long period of time. Iron deficiency anemia (IDA) presents with a peripheral blood film of microcytic and hypochromic red blood cells. The serum reserves of ferritin and hemosiderin are utilized in the initial stages of blood loss, however, when these stores have also been consumed, the symptoms of anemia manifest. Serum iron, ferritin and transferring levels are also reduced (Kumar et al 2005). Another... The paper tells that proper amount of rest and limitation of the daily activities to a certain extent will help the patient to control the signs and symptoms of CHF. The restriction of daily physical exertion will put less amount of workload on the heart and hence, improve the condition of the patient. The second step in managing the case is a proper diet plan. The patient should be advised to reduce the sodium content in his food items as this will reduce water retention in his body lowering the cardiac workload. The sodium content should be limited to 1.5 to 2g per day. Alcohol consumption should also be lowered down to only one drink per day which plays an important role in lowering the systolic blood pressure by 2-4 points. Chronic alcoholism is a very important cause of cardiomyopathy and if the patient shows a positive history of alcoholism he should be advised to consume a low to moderate amount of alcohol. Weight control and a dietary calorie limitation are recommended in the obese patients. They are advised to a body mass index of 18.5 to 24.9 and eat a healthy balanced diet comprising of green vegetables, fruits, and low-fat food items. Exercise including aerobic and strength training in CHF patients in an adequate amount also helps in improving the patient’s condition. The patient should be advised to exercise for 30 minutes five to six times a week and increase his physical activity. However, if he complains of angina pain, shows symptoms of respiratory distress, CNS symptoms or increased fatigue exercise should be stopped.

Different Ways To Communicate Electronically Information Technology Essay

Different Ways To Communicate Electronically Information Technology Essay Electronic communication has become a very popular means to communicate worldwide. Electronic communication is used for the transfer of different types of data and images through wire, electromagnetic, photo electronic or photo-optical system and radio. Electronic communication is so popular that many businesses and people consider it to be essential tool in our daily lives. The Potomac Knowledge Project from the Marino Institute states Electronic communications is interactive. It engages audiences in active, two-way communications; a self-selected audience, engaged and actively participating in the communications process. There are many ways to communicate electronically, each with benefits and risks related to business or personal use. It is likely that in the future, advances in technology and computer programming will enable us to communicate in ways we can only dream about today. Different Ways to Communicate Electronically Email. There are many different types of electronic communication including but not limited to: email, social media newsgroups, chat rooms, video conferencing, instant messaging, phone and fax. Email via the widely used internet is popular because people are able to write short messages, receive quick responses and include photographs or reports with formatted data quickly and efficiently. Sending information through the conventional or snail mail can be costly and time consuming. Using email for personal or professional purposes is an efficient means of communication. Social Media. Many newsgroups and chat rooms now use Facebook, MySpace and Twitter, a type of social media for communication purposes which lets the user give an instant message and receive an instant response with supporting live video images. Users are able to post messages to a particular group of people or to members of a specific club and comment instantaneously. Miscellaneous. Workplace-communication.com lists over fifty-five different types of electronic communication currently used in the workplace! Some other types of electronic communication that may not fall clearly in one of the above categories above are listed below: Fax Short-wave Radio Radio Broadcast Video Conferencing Skype Satellite Phone Texting Telephony Wikis Electronic communication has gained wide recognition, has innumerable practical applications and provides benefits for the user including quick communication, is cost effective and has easy access. The Benefits Work Related Environment. Many different types of organizations are using electronic communication facilities. Electronic communication provides the opportunity for groups of people in different geographical locations to communicate interactively through text, sound and video. Team members can work on and make contributions to the same document at the same time, engage in meetings and share information on projects. The ability to communicate and problem solve as a team increases the likelihood of an increase in productivity and customer satisfaction. In addition, many businesses are sponsoring discussion groups concerning issues related to the business (products, strategies, etc.) as a resource to offer further communication and marketing prospects. Electronic communication also enables people to work from home, called telecommuting. Working from home provides employees flexibility and saves office space, money spent on paper, printing and postal delivery. The communicated informatio n may be stored on disks, on computer hard drive files and is easily retrievable when needed. For Individual Use. For individual use electronic communication has become a way for people around the world to share pictures, graphics, conversations, and play interactive software games. People are able to communicate more economically when compared to phone or mail and are able to communicate quickly to friends and family who live a distance away. This type of communication has become a very important means of social communication. Careers in Electronic Communication. With the boom in technology and the computer industry, software services, electronic communication, programming, and security issues will provide growing opportunities for employment in the United States and worldwide. The demand for individuals and employees who are knowledgeable in the field of electronic communication will continue to increase. Working in electronic communications is a great option for those with marketable skills interested in securing employment in a fast growing field. The Risks Personal Mail is Insecure. Sending someone a personal electronic message can become a permanent record. It is easy to compromise your reputation by messaging something negative or offensive. Electronic messages are hard to stop once they have been sent and unlike paper messages they can be delivered instantaneously. Electronic messages are not secure and can be easily copied, resent or forwarded to others so you can never know for sure who will read it and form a negative opinion of you. It is also easy for someone to search all posted messages for your name as it travels through the internet; potential employers are now using this as a means to evaluate personality strengths and character when considering a potential hire. When sending a message you really have to think about whether or not you would like the public to read your message in the future. Tom Van Vleck , The Risks of Electronic Communication lists common examples of not using good judgment when sending electronic commun ication: broadcasting or posting a funny message sending or posting an angry message using sarcasm or irony criticizing others in public posting a message or sending mail late at night sending a message about a person that you wouldnt want them to see Business Mail. When communicating with a business or company using electronic mail it is important to look for a guarantee that the company will keep your information for its use only and will not sell your name or address to other companies. Users also need to be guarded when receiving emails from businesses inquiring about personal account information, credit card or billing information as business scams or identity theft have become a significant concern in electronic communication. Computer Hacking or Virus. Secondly, a big concern with electronic communication is security. Your computer can be hacked and/or infected with a computer virus. Most often when hacking a hacker is trying to access personal information for illegal purposes. A computer virus can impact the computer system and network, can erase data on the C-drive, cause the user to be unable to open files, delete files, slow down transmission speed, may replicate information and share it with others, and can alter the structure of messages which can be misunderstood. Electronic viruses can be challenging to detect and to clean off of your computer. For a business, cleaning up viruses can be costly. Conclusion In conclusion, electronic communication does present challenges in security and more recently in fraudulent actions using users personal information for illegal purposes. The use of the Internet, computer and electronic communication has become widely used for business and personal use. With the advances in computer technology and the rapid increase in different types of electronic communication, this form of interaction will continue to grow in popularity for professional and private use. ELECTRONIC COMMUNICATION INTRODUCTION DIFFERENT WAYS TO COMMUNCATE ELECTRONICALLY Email Social Media Miscellaneous THE BENEFITS Work Related For Individual Use Careers in Electronic Communication THE RISKS Personal Mail is Insecure Business Mail Computer Hacking or Virus CONCLUSION

eighteenth amendment Essay -- essays research papers

The eighteenth amendment of the United States Constitution was ratified in the year 1919. This amendment made buying, sellieng, and producing alcoholic beverages illegal. However, this amendment did not stop some on the citizens in the United States, this included some of Louisiana’s own citizens.   Ã‚  Ã‚  Ã‚  Ã‚   Even though the making and selling of beer and wine was illegal the citizens did not seem to care to much. The majority of the people, who brewed their own beer and wine at home, and even the people who were involved in bootlegging were among the ones who did not believe that the amendment was constitution, and some did not get arrested with taking part in this illegal activity. The reason that the people did not get in trouble was because they were to many people who did not want to conform to the new rules on the constitution; so there would be to may people to arrest sine everyone was practically doing it. These people who were involved with selling alcohol made tons of money. One man was even able to purchase a new car with the money that he made. This man was named Mr. Hungerford. He was able to collect wine from the railroad cart that was caught trying to transport some alcohol. He stored the bottles in a family member’s barn till his neighbors ran o ut of their own and then sold his bottles at an inflated price. What this man did was illegal in the 1920s because of the eighteenth amendment, but the federal authorities did not have the heart to g...

Plato Defends Rationalism

Plato Defends Rationalism Plato was a highly educated Athenian Philosopher. He lived from 428-348 B. C. Plato spent the early portion of his life as a disciple to Socrates, which undoubtedly helped shape his philosophical theories. One topic that he explored was epistemology. Epistemology is the area of philosophy that deals with questions concerning knowledge, and that considers various theories of knowledge (Lawhead 52). Plato had extremely distinct rationalistic viewpoints. Rationalism is the claim that reason, or intellect, is the primary source of our fundamental knowledge about reality (55).By examining Plato’s philosophical position on the three basic epistemological questions, as well as analyzing his ability to justify the three anchor points of rationalism, it is clear to see that Plato was successful in defending rationalism. There are three basic questions that are the basis for determining the difference between each of the epistemological viewpoints. The first of these is: Is knowledge possible? In order to understand exactly what is being asked here, it is important to consider the agreed definition of knowledge as being a â€Å"true justified belief† (53).Plato believed that yes, it is possible to have knowledge. He claimed that as long as one has the ability to recognize something as false, they are capable of having knowledge. The second question is: Does reason provide us with knowledge of the world independently of experience? Plato would also answer yes to this question as well. Many objected to this, believing that knowledge was a result of sense experience rather than reason. Plato examined this theory (empiricism); he argued that, because the physical world is subject to change, there can be no real truth in knowledge that is based solely on one’s senses.He then used the examples Justice, Goodness, and Equality to justify his argument that there are some things that we cannot come to know through experience alone, th us casting doubt on the empiricist theory. Plato expands on the teachings of Socrates, and acknowledges the concept that we already have ideas or principles that are contained in our mind prior to experience, called innate ideas (73). The third and final question is: Does our knowledge represent reality as it really is? To this question, he would answer yes. Plato’s distinction between innate ideas and sense experience bring us to understand his true sense of reality.Our innate ideas are the foundation from which we are able to possess rational knowledge. Rational knowledge, as Plato explains, gives us the ability to differentiate between invariable â€Å"Forms† (Universals) and the ever changing characteristics that are recognized through sense experiences. Plato believes that knowledge of Universals provide us with knowledge of the fundamental features of reality, which are nonphysical, eternal, and unchanging (81). The three anchor points of Rationalism expand on th e question discussed above, Does reason provide us with knowledge of the world independently of experience?The first anchor point is: Reason is the primary or most superior source of knowledge about reality (72). Plato proves this point to be true by determining that it is through unchanging, Universal knowledge, that we come to find reality. The second anchor point is: Sense experience is an unreliable and inadequate route to knowledge (73). Plato questions the reliability and adequacy of sense experience, due to the fact that there are things that we are simply unable to experience in the physical world. If knowledge comes strictly from experience, and we are unable to experience some things, how is it that we come to find such knowledge?Plato also argues that sense experiences are subject to individual interpretation, and are ever changing. Knowledge cannot be based on inconstant perception. The final anchor point of rationalism is: The fundamental truths about the world can be k nown a priori (independently of, or prior to, experience): They are either innate or self-evident to our minds (73). Plato believed that knowledge was contained in our soul from preexistence, and was independent of human experiences. He came to the conclusion that it is from these innate ideas that we are able to recognize reality.Plato’s view on epistemology is extremely consistent with that of rationalism. He was able to successfully justify his beliefs, not only by proving his theory, but also by disproving alternative theories. Plato recognized the fact that knowledge is possible. He believed that the ability to identify something as false can only come from knowing truth. This was the first step in his philosophical journey. In his quest to determine the source, and explore the characteristics of knowledge, he made several valid arguments.Plato’s strongest argument was that we cannot base our knowledge directly on experience, because there are circumstances in whi ch our senses do not provide us with reliable truths. Not only did this make it apparent that experience is not concrete enough to act as a basis for knowledge, thus disproving the imperialistic theory, but it also helped justify his theory of Universals. Plato was able to prove that reason, by way of innate ideas, leads us to knowledge, as it was defined above, a true justified belief.This rational knowledge, in turn, leads us to the knowledge of reality. Plato spent much of his life studying philosophy, and the concept of knowledge. After finding fault in other epistemological theories, he was led to develop a philosophy of his own. Plato’s approach toward epistemology was considerably different from that of other philosophers in his day. His rationalistic viewpoints were extremely influential. He brought light to the concept of Universals, which had a great impact on the work of philosophers after him.Plato was able to explain knowledge from all aspects, which set him apar t from others. Plato was not only able to conclude that knowledge is possible, he was also able to explain how knowledge is obtained. By examining Plato’s philosophical position on the three basic epistemological questions, as well as analyzing his ability to justify the three anchor points of rationalism, it is clear to see that Plato was successful in defending rationalism.Works Cited Lawhead, William F. The Philosophical Journey: An Interactive Approach. 5th ed. New York: McGraw-Hill, 2011. 52-81. Print

Reviews on Financial Risk Management Essay

The definition and types of financial risk III. Risk management and the theoretical foundation IV. The process of financial risk management V. The challenges faced by the modern financial risk management theories ?Abstract? Financial risks are exposures of uncertainties for those participants in financial market. Financial risks can be divided into four categories: market risk, credit risk, liquidity risk and operational risk. Risk management has become more and more crucial for a market participant to survive in the highly competitive market. As the development of the global financial market, there are many phenomena that cannot be explained by traditional financial risk management theories. These phenomena have accelerated the development of behavioral finance and economic physics. The financial management theories have already improved a lot over the past decades, but still facing some challenges. Therefore, this report will review some important issues in the financial risk management; introduce some theoretical foundation of financial risk management, and discuss the challenges faced by the modern financial risk management. I. Introduction Financial risk is one of the basic characteristics of financial system and financial activities. And financial risk management has become an important component of the economic and financial system since the occurrence of financial in human society. Over the past few decades, economic globalization spread across the world with the falling down of the Bretton Woods system. Under above background, the financial markets have become even more unstable due to some significant changes. Many events happened during the decades, including the â€Å"Black Monday† of the year 1987, the stock crisis in Japan in 1990, the European monetary crisis in 1992, the financial storm of Asia in 1997, the bankruptcy of Long-Term Capital Management in 1998, and the most recent global financial crisis triggered in the year 2008. All these changes brought enormous destruction of the smooth development of the world economy and the financial market. At the same time, they also helped people realized the necessity and urgency of the financial risk management. Why did the crisis happened and how to avoid the risk as much as possible? These questions have been endowed more significant meaning for the further development of the economy. Therefore, this report will review some important issues in the financial risk management; introduce some theoretical foundation of financial risk management, and discuss the challenges faced by the modern financial risk management. II. The Definition and Types of Financial Risk The word â€Å"risk† itself is neutral, which means we cannot define risk a good thing or bad. Risk is one of the internal features of human behavior, and it comes from the uncertainty of the future results. Therefore, briefly speaking, risk can be defined as the exposure to uncertainty. In the definition of risk, there are two extremely important factors: first is uncertainty. Uncertainty can be considered as the distribution of the possibility of one or more results. To study risk, we need to have a precise description about the possibility of the risk. However, from the point view of a risk manager, the possible result in the future and the characteristic of the possibility distribution are usually unknown, so subjective factors are frequently needed when making decisions. The second factor is the exposure to uncertainty. Different human activities were influenced at different level to the same uncertainty. For example, the future weather is uncertain to everyone, but the influence it has over agriculture can be far deeper than that over finance industry or other industry. Based on the above description about risk, we could have a clearer definition of financial risk. Financial risk is the exposure to uncertainty of the participants in the financial market activities. The participants mainly refer to financial institutions and non-financial institutions, usually not including ndividual investors. Financial risk arises through countless transactions of a financial nature, including sales and purchases, investments and loans, and various other business activities. It can arise as a result of legal transactions, new projects, mergers and acquisitions, debt financing, the energy component of costs, or through the activities of management, stockholders, competitors, foreign governments, or weather. (Karen A. Horcher). Financial risk can be divided into the following types according to the different sources of risk. A. Market risk. Market risk  is the  risk  that the value of a portfolio, either an investment portfolio or a trading portfolio. It will decrease due to the change in value of the market risk factors. The four standard market risk factors are stock prices, interest rates, foreign exchange rates, and commodity prices. The influence of these market factors have over the financial participants can be both direct and indirect, like through competitors, suppliers or customers. B. Credit risk. Credit risk  is an investor’s risk of loss arising from a borrower who does not make payments as promised. Such an event is called a  default. Almost all the financial transactions have credit risk. Recent years, with the development of the internet financial market, the problem of internet finance credit risk also became prominent. C. Liquidity risk. Liquidity risk  is the risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss. Liquidity risk arises from situations in which a party interested in trading an  asset  cannot do it because nobody in the  market  wants to trade that asset. Liquidity risk becomes particularly important to parties who are about to hold or currently hold an asset, since it affects their ability to trade. D. Operational risk. Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. Nowadays, the study and management of operational risk is getting more attention. The organizations are trying to perfect their internal control to minimize the possibility of risk. At the same time, the mature theory of other subjects, such as operational research methods, are also introduced to the management of operational risk. Overall, financial risk management is a process to deal with the uncertainty resulting from financial markets. It involves assessing the financial risks facing an organization and developing management strategies consistent with internal priorities and policies. Addressing financial risks proactively may provide an organization with a competitive advantage. It also ensures that management, operational staff, stockholders, and the board of directors are in agreement on key issues. III. Risk Management and the Theoretical Foundation Financial market participant’s attitude towards risk can be basically divided into the following categories. A. Avoid risk. It is irrational for some companies to think that they can avoid the financial risks though their careful management because of the following reasons. First of all, risk is the internal feature of human activities. Even though it doesn’t have direct influence, it could generate indirect influence though the competitors, suppliers or customers. Moreover, sometimes it might be a better choice for the manager of the company to accept risk. For example, when the profit margin of the company is higher than the market profit margin, the manager can increase the value of the company by using financial leverage principle. Obviously, it will be harder to increase the value of a company if the manager is always using the risk avoidance strategy. B. Ignore risk. Some participants tend to ignore the existence of risks in their financial activities, thus they will not take any measures to manage the risk. According to a research of Loderer and Pichler, almost all the Swedish multinational companies ignored the exchange rate risk that they are facing. C. Diversify risk. Many companies and institutions choose to diversify risk by putting eggs into different baskets, which means reaching the purpose of lower risk by holding assets of different type and low correlation. And the cost is relatively low. However, as to small corporations or individuals, diversifying risk is somehow unrealistic. Meanwhile, modern asset portfolio theory also tells us that diversifying risk could only lower the unsystematic risk, but not systematic risk. D. Manage risk. Presently, most people have realized that financial risk cannot be eliminated, but it could get managed though the financial theory and tools. For instance, participants can break down the risk they are exposed to by using financial engineering methods. After keeping some necessary risk, diversify the rest risk to others by using derivatives. But why do we need financial risk management? In other words, what is the theoretical foundation of the existence of financial risk management? The early financial theory argues that financial risk management is not necessary. The Nobel Prize winner Miller ;amp; Modigliani pointed out that in a perfect market, financial measures like hedging cannot influence the firm’s value. Here the perfect market refers to a market without tax or bankruptcy cost, and the market participants own the complete information. Therefore, the managers do not need to worry about financial risk management. The similar theory also says that even though there will be slight moves in the short run, in the long run, the economy will move relatively stable. So the risk management that is used to prevent the loss in short term is just a waste of time and resource. Namely, there is no financial risk in the long run, so the financial risk management in the short run will just offset the firm’s profits, and therefore reduce the firm’s value. However, in reality, financial risk management has already roused more and more attention. The need for risk management theory and measures soar to unprecedented heights for both the regulator and participants of the financial market. Those who think risk management is necessary argue that the need for risk management is mainly based on the imperfection of the market and the risk aversion manager. Since the real economy and the financial market are not perfect, the manager can increase a firm’s value by managing risk. The imperfection of the financial market is shown in the following aspects. First, there are various types of tax existing in the real market. And these taxes will influence the earning flow of the firm, and also the firm’s value. So the Modigliani ;amp; Miller theory does not work for the real economy. Secondly, there is transaction cost in the real market. And the smaller the transaction is, the higher the cost. Last but not least, the financial market participants cannot obtain the complete information. Therefore, firms can benefit from risk management. First, the firm can get stable cash flow, and thus avoid the external financing cost caused by the cash flow shortage, decrease the fluctuation range of the stock and keep a good credit record of the company. Secondly, a stable cash flow can guarantee that a company can invest successfully when the opportunity occurs. And it gets some competitive advantage compared to those who don’t have stable cash flow. Thirdly, since a firm possesses more resource and knowledge than an individual, which means it could have more complete information and manage financial risks more efficiently. If the manager of a firm is risk aversion, he can improve the manager’s utility through financial risk management. Many researches show that the financial risk management activities have close relation to the manager’s aversion to risk. For example, Tufano studied the risk management strategy of American gold industry, and found that the risk management of firms in that industry has close relation to the contract that the managers signed about reward and punishment contracts. The managers and employees are full of enthusiasm about risk management is because that they put great amount of invisible capital in the firm. The invisible capital includes human capital and specific skills. So the financial risk management of the firms became some natural reaction to protect their devoted assets. In conclusion, although controversy is still going on about the financial risk management, there is no doubt that the theory and tools of financial risk management is adopted and used by market participants, and continue to be enriched and innovated. IV. The Process of Financial Risk Management The process of financial risk management comprises strategies that enable an organization to manage the risks associated with financial markets. Risk management is a dynamic process that should evolve with an organization and its business. It involves and impacts many parts of an organization including treasury, sales, marketing, tax, commodity, and corporate finance. Company’s financial risk management can be divided into three major steps, namely identification or confirmation risk, measure risk and manage risk. Let’s illustrate it using the market risk as an example. First, confirm the market risk factors that have a significant influence to the company, and then measure the risk factors. At present, the frequently used measure of market risk approach can be divided into the relative measure and absolute measure. A. The relative measure method It mainly measures the sensitivity relationship between the market factors fluctuations and financial asset price changes, such as the duration and convexity. B. The absolute measure methods It includes variance or standard deviation and the absolute deviation indicator, mini max and value at risk (VaR). VaR originated in the 1980s’, which is defined the maximum loss that may occur within a certain confidence level. In mathematics, VaR is expressed as an investment vehicle or a combination of profit and loss distribution of ? -quantile, which stated as follows: Pr ( ? p ;lt;= – VaR ) = ? , where, ? p said that the investment loss in the holding period within the confidence level (1 –? ). For example, if the VaR of a company is 100 million U. S. ollars in 95% confidence level of 10 days, which means in the next 10 days, the risk of loss that occurred more than 1 million U. S. dollars may of only 5%. Through this quantitative measure, company can clear its risks and thus have the ability to carry out the next step targeted quantitative risk management activities. (Guanghui Tian) The last step is management risk. Once the company identified the major risks and have a quantitative grasp of these risks through risk-measurement methods, those companies can use various tools to manage the risk quantitatively. There are different types of risk for different companies, even the same company at different stages of development. So it requires specific conditions for the optimization of different risk management strategies. In general, when the company considers its risk exposure more than it could bear, the following two methods can be used to manage the risk. The first way is changing the company’s operating mode, to make the risk back to a sustainable level. This method is also known as â€Å"Operation Hedge†. Companies can adjust the supply channels of raw materials, set up production plants in the sales directly or adjust the volume of inflow and outflow of foreign exchange and other methods to achieve above purpose. The second way is adjust the company’s risk exposure through financial markets. Companies can take advantage of the financial markets. Companies can take advantage of the financial markets wide range of products and tools to hedge its risk, which means to offset the risk that the company may face through holding a contrary position. Now various financial derivative instruments provide a sufficient and diverse selection of products. Derivative products are financial instruments whose value is attached to some other underlying assets. These basic subject matters may be interest rates, exchange rates, bonds, stocks, stock index and commodity prices, but also can be a credit, the weather and even a snowfall in some ski showplace. Common derivatives include forward contracts, swaps, futures and options and so on. V. The Challenges Faced by the Modern Financial Risk Management Theory Over the recent years, as the focus of risk management hifts from a control function to one of global financial optimization, the concern shifts from modeling the behavior of engineered contracts in selected markets to modeling the evolution of the entire economy. This change of focus calls for a vastly improved ability to model the time evolution of economic quantities. (Sergio Focardi). While those who do risk management are interested in predicting if assets will go up or down, the over-riding interest is in the relationship in movement to different assets. Though linear methods such as variance-covariance help to understand the co-movements of markets, a different set of tools is necessary to better manage risk. (Jose Scheinkman). Paradigms such as learning, nonlinear dynamics and statistical mechanics will affect how risk – from market and credit risk to operational risk – is managed. While the first attempts to use some of these tools were focused on predicting market movements, it is now clear that these methodologies might positively influence many other aspects of economics. For instance, they could be useful in understanding phenomena such as price formation, the emergence of bankruptcy chains, or patterns of boom-and-bust cycles. Lars Hansen, Homer J. Livingston professor of economics at the University of Chicago, remarks that these new paradigms will bring to asset pricing and risk management at enhanced understanding once the implicit underlying fundamentals are better understood. He says â€Å"What needed is a formal specification of the market structure, the microeconomic uncertainty, and the investor preferences that is consistent with the posited nonlinear models. Commenting on the need to bring together the pricing of financial assets and the real economy, he notes that an understanding of what’s behind pricing leads to a better understanding of how assets behave. â€Å"For risk management decisions that entail long-run commitments,† he observes, â€Å"it is particularly important to understand, beyond a purely statistical model, what is governing the underlying movements in security prices. † Blake LeBaron, professor of economics at the University of Wisconsin-Medison, observes that there is now more interest in macro moves than in individual markets. But traditional macroeconomics typically provides only point forecasts of macro aggregates. In the risk management context, a simple point forecast is not sufficient; a complete validated probabilistic framework is needed to perform operations such as hedging or optimization. One is after an entire statistical decision-making process. The big issue is the distinction between forecasts and decisions. (Blake LeBaron) Arriving at an entire statistical decision-making process implies reaching a better scientific explanation of economic reality. New theories are attempting to do so through models that reflect empirical data more accurate than traditional models. These models will improve our ability to forecast economic and financial phenomena. The endeavor is not without its challenges. Our ability to model the evolution of the economy is limited. Prof. Scheinkman notes that unlike in a physical system where better data and more computing power can lead to better predictions, in social systems when a new level of understanding is gained, agents start to use new methods. Prof. Scheinkman says â€Å"Less ambitious goals have to be set. Gaining an understanding of the broad features of how the structure of an economic system evolves or of relationships between parts of the system might be all that can be achieved. Prof. Scheinkman remarks that we might have to concentrate on finding those patterns of economic behavior that are not destroyed, at least not in the short-run, by the agent learning process. VI. Conclusion The theory foundation of modern financial risk management is the Efficient Markets Hypothesis, which notes that financial market is a linear balanced system. In this system, investors are rational, and they make their investment decision with rational expectations. This hypothesis shows that the changing of the future price of financial assets has no relation with the history information, and the return on assets should obey normal distribution. However, the study of economic physics shows that financial market is a very complicated nonlinear system. At the same time, behavioral finance tells us that investors are not all rational when making decisions. They usually cannot completely understand the situation they are facing unlike hypothesized. And most times they will have cognitive bias, when they use experience or intuition as the basis of making decisions. It will lead to irrational phenomena like overreaction and under reaction when reflected on investment behaviors. Therefore, it will be meaningful to study how to improve the existing financial risk management tools, especially how to introduce the nonlinear science and behavior study into the measurement of financial risk.

Early Roman Architecture essays

Early Roman Architecture essays The Romans gained much of their engineering skill from the Etruscans and drew on Etruscan and Asian models for the semicircular arch. From them, the Romans learned the use of the keystone arch, which enabled them to build extremely strong and durable structures. Many of these engineering and architectural projects are still standing. Some are still in use after two thousand years like this bridge in Spain. Early Roman architects were influenced by Greek post-and-lintel construction. But the Greek design was limited in its capabilities to span large distances and being able to bear heavy loads while not falling down of its own weight. Post and lintel construction comprises a flat piece of stone bridging a space between two upright supports. Post and lintel supports have a flaw. When a heavy weight is placed on the middle of the span too much stress may be put on the stone and it can break in the middle. The Romans solved this problem by using a type of construction called voussoir arch with keystone. The engineering principle of the arch is quite simple. The circle is the strongest structural shape. The arch is just half of this perfect form. To create a voussoir arch, tapered stone blocks were cut then arranged like the diagram at the right. It was then stood up on its ends. The ends rested on piers made of stone blocks or bricks mortared together with pozzolana cement in the typical Roman arch bridge. The cement was named after a local mountain that the ingredients of the cement came from. The weight of the stone and concrete of the bridge itself compressed the tapered stones together, making the arch an extremely strong structure. During construction, the voussoir's were supported by a temporary wooden frame until the keystone was inserted. The Roman invention of the arch allowed architects to build larger structures than ever before. The extension of the arch idea lead t ...