Financial risk management Essay Example | Topics and Well Written Essays - 250 words

Financial risk management - Essay Example man Sachs bank saw its profits decline due significant losses being realized from large subprime write downs which were followed by mortgage crisis meaning beneficiaries were unable to pay. The short selling of subprime mortgage securities to Lehman Brothers is blamed to have worsened the financial crisis to the detriment of both institutions. As a result, the bank approached the federal government for a bailout under the troubled asset relief programme (TARP). Since the loan came with high interest rates and short repayment period, the bank’s financial condition worsened and become highly geared. In summary, Goldman Sachs financial crisis can be classified as threefold, that is, financial malpractices among traders and top executives in trading mortgage securities (operational risk), mortgage industry crisis/ risks and high financial leverage. Risk management theories that can be used to explain the crisis an offer insights into possible solutions are discussed hereunder. Weinberg (2007) noted that the bank relied on incomes from trading to maintain its profit growth which was risky. Therefore, the bank should have maintained a prudent model to monitor the value at risk (VaR) for securities being traded. VaR model shows the maximum estimated loss for a portfolio factoring market related risks at a given time horizon (Esch, Kieffer and Lopez, 2005). Capital Asset Pricing Model (CAPM) would also have helped the bank to understand the behavior of capital markets and possibilities of excess, negative and optimal return on a portfolio by analyzing the securities market line (Elton et al., 2010). Brownian motion model of financial risk management though highlights useful risk strategies useful under normal circumstances was found to fail in providing rational understanding of financial turmoil (Borma and Sharma, 2011). Boma, S. & Sharma, D. (2011). â€Å" How much trust should risk managers place on â€Å"Brownian Motions† of financial markets?† International Journal

The Marketing Mix Promotion Strategies Case Study

The Marketing Mix Promotion Strategies - Case Study Example This strategic plan saturated the market making it more difficult for newer entrants to gain a step hold in the huge market. This move was also aimed at rivaling the sporting wears giant Nike. The acquisition was done in order to make the company more viable for consumers where they can create a synergy between both the companies so that they can challenge the rival. However, the acquisition led to mixed responses from the consumers resulting in a share value decline as well. Just before the Olympics fever gained momentum, Adidas took the initiative to launch another promotional campaign where they have highlighted their products and the ambassadors. This massive promotional campaign was launched in Europe and one could see huge structures of either Adidas shoes being loaded on a truck, or football players standing in a circle. All these initiatives were highlighting the presence of the brand in the forefront of such a major even in sporting history, whereby players are supporting their attire etc. The combination of the two big brands present in the shoe industry can termed to be a positive sign for the company. They can combine their efforts; match their strengths together in order to create a new level of a brand. However, there are threats of brand cannibalization which led to the main slump in prices when the merger news was spread around.