A less obvious partnership would be in the development of new products, services, or technologies designed to meet future customer needs. New partnerships offer the opportunity to be partners by design. These new partnerships offer more options because the organization is limited only by its imagination. But selecting the right partner can be a daunting [...]
To simulate a realistic decision-making process we apply a backtesting methodology. Sample means and risk measures are estimated for the subperiod January 1987 to September 1998. In those cases where the return series is adjusted for autocorrelation the estimation of the desmoothing parameters is also based on the shortened sample period. Then the portfolios are [...]
So far three methodologies for a quantitatively driven process of portfolio construction have been examined. The results of the empirical study show that the way of accounting for skewness, kurtosis and autocorrelation in return series has significant impact on portfolio weights. Measured by riskadjusted performance numbers as well as stochastic dominance criteria, the identified differences [...]
The VIX Index reflects the equity and options markets’ expectation of earnings volatility. Companies with deteriorating credit statistics are more likely to experience high equity price volatility than companies with a stable credit trend. As financial profiles of companies improve and the uncertainty about their future earnings declines the hedging costs to invest in those [...]
Lower rated bonds or bonds with higher spreads behave more like equities in falling equity markets (crisis scenario). For high-yielding bonds (highyield debt), the strike price (the value of indebtedness) is normally closer to at-the-money than in the case of investment grade bonds. The high-yield market spread is correlated with the S&P 500 as a [...]
It is harder to assess the risks inherent in a business decision than to identify them. Risks that lead to frequent losses, such as an increasing incidence of employee-related problems or difficulties with suppliers, can often be overcome using past experience. Unusual or infrequent losses are harder to quantify. Risks with little likelihood of occurring [...]
New personnel, a loss of key personnel, poor succession planning and poor people management can lead to dislocation. However, the main cause of dislocation within this category is behaviour: everything from laziness to fraud and exhaustion to simple human error can be catalysts, resulting in risk being realised. An example is the financial scandal that [...]
You’ve assessed your ability to meet your own needs and have noted a gap between your future goals and present capabilities. You’ve looked at your organization and concluded that partnering with another could help you fill this gap. You’ve judged your capacity to be a good partner by understanding the material and ethereal realms of [...]
My name is Emily Mortimer. I'm an academy professor with a degree in economy and considerable experience in training both students and private contractors in matters of business, finances and money management.