Discuss the various ways in which modern investors manage the risk in Essay

Discuss the various ways in which modern investors manage the risk in their portfolios - Essay Example Many of the participants in risk trading take particular points of view, and suffer losses when their points of view are not realized. It may also be that the risks in some of the more complex positions currently being taken are not always well understood by the institutions arranging the deals. In addition, risk control systems in some institutions are so weak that management cannot determine when institutional survival is being jeopardized. There are also aggregate problems, because the failure of one institution can bring about failure of others. Finally, there are presently few sources of aggregate statistics that would permit informed observers to assess exactly what the potential dangers in individual institutions’ positions might be. On the positive side, the percentage of capital at risk in derivatives trading has been estimated at some 10 percent of the total capital of the world’s banks. In addition, individual companies have sustained large losses from derivatives trading without creating serious externalities. For example, when Barings Bank failed in 1995, many of the other banks trading with Barings had become aware of the unusual risks it was taking and had reduced their positions with Barings (J. Rosenhead, J. Mingers, 2001). Basically, the perception of risk is the result of an investors thought processes. Let us say that the investor speculates that a new factory will be able to produce V volume of goods that can be sold for P price. The question is: Where do V and P come from? Some say that V and P spring from the imagination while others maintain that V and P are a result of a deliberate cognitive process of logic and dispassionate judgment. Perhaps these, and other conjectures concerning the thought process of the human mind, are all part of a businessmans assessments of the projected values of price and volume. These values, when properly manipulated with costs,

Importance Of The Education Essay Example | Topics and Well Written Essays - 1250 words

Importance Of The Education - Essay Example Consequently, they adapt easily to their environment, hence promoting their success. Further, the liberal education grants the learners the ability to get involved in more than a single field. This follows the different skills acquired that help the students to change their careers whenever viable opportunities arise. Liberal studies also give individuals opportunities to pursue their passions in life. Involvement in one’s passion increases the motivation of the individual. Therefore, an individual strives to give the best, which contributes to success in life. Given the continued advancements in technology, students get equipped with skills that apply widely, instead of specific skills that may get outdated with time. As a result, the individuals remain relevant to the society as they draw on the universal skills to cope with the changing times in the society. In â€Å"Behind the Boom in Chinese Students at U.S. Colleges,† Naomi Rovnick argues that Chinese students who acquire an American education have a better chance of being employed by western companies in China because they acquire ‘a broader cultural perspective’, which makes it easier for them to get integrated into such companies. The fact that â€Å"multinationals tend to prefer hiring sea turtles because they come with better inter-cultural skills† explains this (Rovnick 1). Then they go to study, the students get to learn how to relate with people from different cultures, thus enlarging the perspectives they hold in life.