Wednesday, August 26, 2020
It was never clear in the story if the McCourt family become effective in battling against destitution. It finished when Frank left Limerick for America and he saw the American Dream he had, well before he set his feet on that transport. Along these lines, the inquiry if the family endure the deficiencies they encountered althroughout that period was left hanging. Regardless of whether the family made due after Frank left Limerick was never referenced aside from that he, Frank, vowed to return to his family and he will discover his accomplishment in America, where he was conceived. At the point when I think back on my adolescence, I wonder how I made due by any means. It was, obviously a hopeless adolescence: the upbeat youngsters is not really worth your time and energy. More terrible than the common hopeless youth is the hopeless Irish adolescence and more awful you get is the Irish Catholic Childhood. (McCourt, n. pag) These lines opened the novel and just after these lines, the creator didn't portray his story with sharpness excpet humor. He was objective in all that he remembers for his story and there is no hint of self indulgence in his words. In this manner, these lines summed up the distress he had when he was extremely youthful and that it was so difficult to carry on with a real existence wherein you are not acknowledged by the individuals and the neighborhhod encompassing you decides to snicker as opposed to help. Your Name 2 I know when father does the awful. I know when he drinks the give cash and Mam is frantic and needs to begÃ¢â¬ ¦ yet I would prefer not to move in an opposite direction from him and race to Mam. How might I do that when I'm up with him early every morning with the entire world snoozing. (McCourt, n. pag) In these words, Frank attempts to assemble his adoration and regard for his dad notwithstanding his annoyance in his off-base doings particularly when Malachy utilizes his pay or the give cash in his dringking habbit. In spite of the anguish that his mom is encountering, Frank can't despise his dad. In this writings found in the eighth section of the book, he referenced that in spite of the fact that his dad is awful sooner or later particularly in utilizing the cash that should be utilized for the youngsters and the family, he venerates his dad so much and cherishes him like he adores his mom. In different pieces of the novel, he referenced the accompanying articulation: I think my dad resembles the Holy Trinity with three individuals in him, the one toward the beginning of the day with the paper, the one around evening time with the accounts and petitions, and afterward the person who does the terrible thing and returns home with the smell of bourbon and needs us to bite the dust for Ireland. (McCourt, n. pag) In these lines, Frank expressed his love for his dad that regardless of being a lush, he can't relinquish the minutes that he was the one beverages tea with him during the morning and the individual who cares to recount to a story consistently and have a chance with him. In spite of the fact that he detests his bad habit, he never did denounced his dad in being that way and he keep respecting and cherishing him notwithstanding his insufficiency to help their family. The opposite side of Malachy's character caught Frank's heart as a kid. In that manner, he can't abhor his dad at the same time, he despite everything sees how his mom feels. Your Name 3 Mam moves in the direction of the dead remains in the fire and sucks at the last piece of goodness in the woodbire butt got between the earthy colored thumb and the consumed center finger. MichaelÃ¢â¬ ¦ needs to know whether were having fish sticks and french fries today around evening time since he's ravenous. Mam says one week from now, love and he returns out to play in the path. (McCourt, n. pag) Frank's depiction of Angela is loaded with imagery. The cinders that he referenced represents Angela's dead dreams and expectations throughout her life while the appropriate response she provided for Michael with respect to the food, to Frank, it isn't developed bacause he realizes that it will never happen in light of the fact that they don't have cash and their dad were not sending any cash to them yet in spite of this, Frank figures out how to battle for his endurance and neediness. IÃ¢â¬â¢m on deck the first light we sail into New York. IÃ¢â¬â¢m sure IÃ¢â¬â¢m in a film, that it will end and lights will come up in the Lyric Cinema. . . . Rich Americans in top caps white ties and tails should get going home to bed with the lovely ladies with white teeth. The rest are going to work in warm agreeable workplaces and nobody has a consideration on the planet. (McCourt, n. pag) The last qoutation was primarily about Frank's fantasy that should be only a fantasy. At long last, he figured out how to satisfy this fantasy as he ventured his feet on that boat and cruised to America. Straightforward idea that America is a free nation and heading off to that spot will make hima free man. Liberated from the judgment of the individuals dressed in Limerick and he can be the individual he needed to be Although there was no affirmation on what befallen the family, their battle during the previous years to endure is one genuine case of enduring the disagreeable neighborhood and the catholic church which was depicted as harsh dictators. Your Name 4 The unimportant certainty that the family stayed flawless even without the dad is by one way or another persuading that they found a route in getting away from the destitution line sooner or later in their life. The greater part of all, the truth that they had the option to proceed with their life notwithstanding the chances is a significant enormous achievement as of now. The inquiry: Is the McCourt family fruitful in spite of its conspicuous inadequacies? the appropriate response is yes. The framily was bold enough to ask and request anything around them even coal. Regardless of whether they figured out how to do mischiefs in their yuounger years, the McCourt childrem reached skyward to escape the pverty life and battle against their oppressors. Regardless of whether Frank despised the Catholic Church, his confidence in God and his solid conviction that he will succeed brought him achievement and he will carry this accomplishment to his family.
Posted by Unknown at 5:01 PM
Saturday, August 22, 2020
What is animosity Does watching viciousness in TV, film and computer games ake individuals progressively forceful and bound to submit fierce acts in the public arena - Essay Example The subsequent changes in ordinary social relations may prompt consistent heightening in forceful activities. Due to the amazing manner by which the TV media has concentrated on savage and withdrawn conduct, the media purposely misleads, making the watchers frightful, dubious and pessimistic. In view of its inclination toward awful news, the media channels a discernment that the world is a brutal, hazardous spot. Accordingly, the watchers come to overestimate the pace of brutality. With these pictures blazing in their psyches each night, the watchers become negative, suspicious of others and pulled back, and stop to have faith in progress. Youngsters, who are not adult enough to recognize dream from reality, TV from life in the city, come to expect that demonstrations of savagery are adequate, all things considered, and become unequipped for making suitable informed decisions in the midst of contention. Youngsters who are over and over presented to diversion brutality are additionally bound to consider viciousness to be a successful method of settling strife. Be that as it may, playing fierc e computer games might be more unfavorable than review brutal TV programs or motion pictures since they are particularly captivating, intelligent, and require the player to relate on an individual level with the savage character of the game. Scandalous occasions have produced broad discussion with respect with the impacts of computer game viciousness. For instance, an across the country discussion followed with respect to what association computer games had to the 1999 Columbine High School (Littleton, Colorado, U.S.) slaughter where two understudies killed 13 and injured 23 preceding murdering themselves. While numerous inspirations were likely included, it is unimaginable to expect to distinguish correctly what incited these young people to shoot their colleagues and instructors yet savage computer games have been referenced as one potential contributing variable. The two understudies had frequently played
Posted by Unknown at 8:53 AM
Friday, August 21, 2020
8 Celebrity Memoirs to Read this Fall Im a huge fan of celebrity memoirs. Whether Im reading about travels in France with Julia Child or if Im devouring the illustrious career of Doris Roberts, I just have an affinity for celebrity memoirs. I honestly think it has something to do with my love for celebrity gossip, but lets not get into that. Celebrities are often these untouchable people. We see the characters they portray on the big screen and then we see their real lives on social media. In either of these respects, I find myself wanting to deeply know these people. I want to be their friends and I want them to give me life advice that helped them succeed or fail at whatever theyre doing. So of course I want to read these memoirs and see the world through the celebritys eyes. What was it like growing up? How did you become the figure you are? What were the naysayers saying? With that, heres eight memoirs coming out in Fall 2018 that I hope you add to your reading lists. Whiskey in a Teacup: What Growing Up in the South Taught Me About Life, Love Baking Biscuits by Reese Witherspoon Reese Witherspoonâs grandmother Dorothea always said that a combination of beauty and strength made southern women âwhiskey in a teacup.â We may be delicate and ornamental on the outside, she said, but inside weâre strong and fiery. Reeseâs southern heritage informs her whole life, and she loves sharing the joys of southern living with practically everyone she meets. She takes the South wherever she goes with bluegrass, big holiday parties, and plenty of Dorotheaâs fried chicken. Itâs reflected in how she entertains, decorates her home, and makes holidays special for her kidsâ"not to mention how she talks, dances, and does her hair (in these pages, you will learn Reeseâs fail-proof, only slightly insane hot-roller technique). Reese loves sharing Dorotheaâs most delicious recipes as well as her favorite southern traditions, from midnight barn parties to backyard bridal showers, magical Christmas mornings to rollicking honky-tonks. Itâs easy to bring a little bit of Reeseâs world into your home, no matter where you live. After all, thereâs a southern side to every place in the world, right? This Will Only Hurt a Little by Busy Philipps A memoir by the beloved comedic actress known for her roles on Freaks and Geeks, Dawsons Creek, and Cougartown who has become the breakout star on Instagram storiesâ¦imagine I Love Lucy mixed with a modern lifestyle guru (The New Yorker). Busy Philippss autobiographical book offers the same unfiltered and candid storytelling that her Instagram followers have come to know and love, from growing up in Scottsdale, Arizona and her painful and painfully funny teen years, to her life as a working actress, mother, and famous best friend. Busy is the rare entertainer whose impressive arsenal of talents as an actress is equally matched by her storytelling ability, sense of humor, and sharp observations about life, love, and motherhood. Her conversational writing reminds us what we love about her on screens large and small. From film to television to Instagram, Busy delightfully showcases her wry humor and her willingness to bare it all. Ive been waiting my whole life to write this book. Im just so grateful someone asked. Otherwise, what was the point of any of it?? Cravings: Hungry for More by Chrissy Teigen Cravings: Hungry for More takes us further into Chrissyâs kitchenâ¦and life. Itâs a life of pancakes that remind you of blueberry pie, eating onion dip with your glam squad, banana bread that breaks the internet, and a little something called Pad Thai Carbonara. After two years of parenthood, falling in love with different flavors, and relearning the healing power of comfort food, this book is like Chrissyâs new edible diary: recipes for quick-as-a-snap meals; recipes for lighter, brighter, healthier-ish living; and recipes that, well, are gonna put you to bed, holding your belly. And it will have you hungry for more. Becoming by Michelle Obama In a life filled with meaning and accomplishment, Michelle Obama has emerged as one of the most iconic and compelling women of our era. As First Lady of the United States of Americaâ"the first African American to serve in that roleâ"she helped create the most welcoming and inclusive White House in history, while also establishing herself as a powerful advocate for women and girls in the U.S. and around the world, dramatically changing the ways that families pursue healthier and more active lives, and standing with her husband as he led America through some of its most harrowing moments. Along the way, she showed us a few dance moves, crushed Carpool Karaoke, and raised two down-to-earth daughters under an unforgiving media glare. In her memoir, a work of deep reflection and mesmerizing storytelling, Michelle Obama invites readers into her world, chronicling the experiences that have shaped herâ"from her childhood on the South Side of Chicago to her years as an executive balancing the demands of motherhood and work, to her time spent at the worldâs most famous address. With unerring honesty and lively wit, she describes her triumphs and her disappointments, both public and private, telling her full story as she has lived itâ"in her own words and on her own terms. Warm, wise, and revelatory, Becoming is the deeply personal reckoning of a woman of soul and substance who has steadily defied expectationsâ"and whose story inspires us to do the same. I Might Regret This: Essays, Drawings, Vulnerabilities, and Other Stuff by Abbi Jacobson When Abbi Jacobson announced to friends and acquaintances that she planned to drive across the country alone, she was met with lots of questions and opinions: Why wasnt she going with friends? Wouldnt it be incredibly lonely? The North route is better! Was it safe for a woman? The Southern route is the way to go! You should bring mace! And a common oneâ¦why? But Abbi had always found comfort in solitude, and needed space to step back and hit the reset button. As she spent time in each city and town on her way to Los Angeles, she mulled over the big questionsâ"What do I really want? What is the worst possible scenario in which I could run into my ex? How has the decision to wear my shirts tucked in been pivotal in my adulthood? In this collection of anecdotes, observations and reflectionsâ"all told in the sharp, wildly funny, and relatable voice that has endeared Abbi to critics and fans alikeâ"readers will feel like theyre in the passenger seat on a fun and, ultimately, inspiring journey. With some original illustrations by the author. My Squirrel Days by Ellie Kemper There comes a time in every sitcom actressâs life when she is faced with the prospect of writing a book. When Ellie Kemperâs number was up, she was ready. Contagiously cheerful, predictably wholesome, and mostly inspiring except for one essay about her husbandâs feet, My Squirrel Days is a funny, free-wheeling tour of Ellieâs lifeâ"from growing up in suburban St. Louis with a vivid imagination and a crush on David Letterman to moving to Los Angeles and accidentally falling on Doris Kearns Goodwin. But those are not the only famous names dropped in this synopsis. Ellie will also share stories of inadvertently insulting Ricky Gervais at the Emmy Awards, telling Tina Fey that she has âgreat hairâ"really strong and thick,â and offering a maxi pad to Steve Carell. She will take you back to her childhood as a nature lover determined to commune with squirrels, to her college career as a bench-warming field hockey player with no assigned position, and to her young professional days writing radio commercials for McDonaldâs but never getting paid. Ellie will guide you along her journey through adulthood, from unorganized bride to impatient wife to anxious mother whoâ"as recently observed by a sassy hairstylistâ"âdresses like a mom.â Well, sassy hairstylist, Ellie Kemper is a mom. And she has been dressing like it since she was four. Ellie has written for GQ, Esquire, The New York Times, McSweeneyâs, and The Onion. Her voice is the perfect antidote to the chaos of modern life. In short, she will tell you nothing you need to know about making it in show business, and everything you need to know about discreetly changing a diaper at a Cibo Express. American Like Me: Reflections on Life Between Cultures by America Ferrera America Ferrera has always felt wholly American, and yet, her identity is inextricably linked to her parentsâ homeland and Honduran culture. Speaking Spanish at home, having Saturday-morning-salsa-dance-parties in the kitchen, and eating tamales alongside apple pie at Christmas never seemed at odds with her American identity. Still, she yearned to see that identity reflected in the larger American narrative. Now, in American Like Me, America invites thirty-one of her friends, peers, and heroes to share their stories about life between cultures. We know them as actors, comedians, athletes, politicians, artists, and writers. However, they are also immigrants, children or grandchildren of immigrants, indigenous people, or people who otherwise grew up with deep and personal connections to more than one culture. Each of them struggled to establish a sense of self, find belonging, and feel seen. And they call themselves American enthusiastically, reluctantly, or not at all. Ranging from the heartfelt to the hilarious, their stories shine a light on a quintessentially American experience and will appeal to anyone with a complicated relationship to family, culture, and growing up. In Pieces by Sally Field One of the most celebrated, beloved, and enduring actors of our time, Sally Field has an infectious charm that has captivated the nation for more than five decades, beginning with her first TV role at the age of seventeen. From Gidgets sweet-faced girl next door to the dazzling complexity of Sybil to the Academy Award-worthy ferocity and depth of Norma Rae and Mary Todd Lincoln, Field has stunned audiences time and time again with her artistic range and emotional acuity. Yet there is one character who always remained hidden: the shy and anxious little girl within. With raw honesty and the fresh, pitch-perfect prose of a natural-born writer, and with all the humility and authenticity her fans have come to expect, Field brings readers behind-the-scenes for not only the highs and lows of her star-studded early career in Hollywood, but deep into the truth of her lifelong relationshipsâ"including her complicated love for her own mother. Powerful and unforgettable, In Pieces is an inspiring and important account of life as a woman in the second half of the twentieth century. What memoirs are you excited about? Sign up for True Story to receive nonfiction news, new releases, and must-read forthcoming titles. 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Posted by Unknown at 5:51 AM
Sunday, May 24, 2020
Sample details Pages: 1 Words: 283 Downloads: 9 Date added: 2019/10/10 Did you like this example? Mizuko Kuyo is a term used to describe a Japanese Buddhist ceremony that focuses on a dead fetus or a stillborn child. The origin of this celebration can be traced back to the honor of Jizo (i.e. a god whose major role was to transport dead fetuses or children to the other world).Ã This ceremony has considerably expanded in the last half century because of the growing number of abortions among the Japanese. DonÃ¢â¬â¢t waste time! Our writers will create an original "Mizuko Kuyo" essay for you Create order William R. LaFleur made a significant contribution to the description of the primary aspects of the ceremony (Mizuko kuyo). This essay seeks to describe two important aspects to a kuy?. The two major aspects of kuy? are the therapeutic and commercialized aspects that determine the perception of different people towards the ceremony. Regarding the therapeutic aspect of this ceremony, LaFleur explained that kuy? is organized to enable people to understand that abortion is becoming trivialized and to offer the Japanese and other parents with a therapy that enable them to understand their emotions and persevering the losses they encounter during an abortion (LaFleur, 34).Ã This aspect makes people pose a positive attitude towards kuy? and accelerates its existence in most of the communities in the entire world. On the other hand, kuy? contains a commercialized aspect that entails the acquisition of financial benefits from the ceremony. LaFleur outlines that kuy? involves the purchase of a statue of JizÃ ´, the boats, or bodhisattva, connected with children and their safety. The purchase and the writing of ema and the wooden plaques are among the commercial aspects of kuy?. From the outlined aspects by LaFleur, one can conclude that kuy? is a complicated ritual that contains a range of interpretation and numerous features.
Posted by Unknown at 5:17 PM
Thursday, May 14, 2020
Sample details Pages: 12 Words: 3650 Downloads: 1 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? Managing Credit Risk is very important. Managing risk as well as returns is very crucial in order to sustain organization. In order to attract a large pool of customers variety of products with different options, advantages need to be offered. DonÃ¢â¬â¢t waste time! Our writers will create an original "The importance of managing credit risk in the market" essay for you Create order Bank must have ample amount of capital as reserves to meet sudden requirements. Risk can arise if borrowers who are not creditworthy are given loan extensions, this can also lead to liquidity problems for the bank and financial institutions. In order to avoid such situations banks need to monitor various parameters on regular basis. Risk may arise due to macroeconomic factors such as depression or recession in economy, changes in the interest rates, risk may arise due to counterparty default on terms of principal or interest payments. Managing Credit risk becomes important because in this globalized era everyone financial institution is linked to many financial firms. Decline in rating of one or delinquency by one institution may lead to catastrophe all over. Timely management of credit risk not only prevents personals associated but also helps in sustaining overall equity of the firm. 1.2. Purpose of the study: To analyze what type of risk one can face in terms of credit risk. How to asses these risks in a timely manner and how to take preventive measures when risk arises. Several Risk Mitigation techniques have been explained which showcase how one can mitigate risk after reaching a certain threshold. Different methods and models have been discussed 1.3. Significance of the study: Through this we will be able to differentiate what type of risk an organization is facing and what measures need to be taken. One understands how important it is to measure risk in timely manner. Different models have different limitations and need to be used properly so that gaps may get covered up. 2. LITERATURE REVIEW 2.1 Credit is defined as the terms, or an obligation to present resources, cash or other forms of funds (on- and off-balance sheet), secured or unsecured to a counterparty who is obliged to pay back, the amount along with the fee and interest thereon. 2.2 Credit Risk is the Financial Risk arising when counterparty is not able to meet the scheduled payments in accordance with agreed terms. Investor in such case losses on principal payments, Interest payments, reduced cashflow and incurs receivables expenses. Some examples: When a business is not able to pay an employee its wages. A consumer is not able to make interest or principal payments in case of mortgage. A firm/company declares insolvency. 2.3 Credit Risk can be broadly categorized into following three categories: Default Risk Credit Spread Risk Downgrade Risk Default Risk is when a borrower has not met his/her legal obligations as written down in the indenture. A default is when one fails or is unwilling to pay back the debt amount. It includes all debt obligations bonds, mortgages, loans, and promissory notes. Distinction from insolvency and bankruptcy Default is a condition in which one has not paid debt which he is obliged to. Insolvency incorporates legality when a debtor skips one or more scheduled payments. Bankruptcy involves supervision by court of law to proceed over any financial dealings in case of default or Insolvency. Credit Spread Risk is the difference in yield between securities arising due to different ratings assigned. It depicts the additional yield one earns from security with more credit risk as compared to a security which has lesser risk. The credit spread is often quoted with reference to the yield on a risk-free benchmark. There are several methods for measuring credit spread risk such as Z-spread and OAS. Downgrade Risk is the risk when a security/bond or any financial instrument faces down trigger of credit ratings assigned by well known and certified rating agencies such as Crisil, Moodys etc. The risk arises from declining situation of a corporation. 2.4 CREDIT RISK MANAGEMENT PROGRAMME Managing Credit Risk is of supreme importance and is properly assessed by all Financial Institutions. Good Credit Risk Mitigation techniques involve properly maintaining risk adjusted return across various dimensions such as maturity, interest rates, liquidity, currency exchanges etc. A broad credit risk management programme involves: ÃÆ'Ã ¢Ã ¢Ã¢â¬Å¡Ã ¬ÃâÃ ¢ Effectively identifying existing Financial Risk and promptly finding solutions. ÃÆ'Ã ¢Ã ¢Ã¢â¬Å¡Ã ¬ÃâÃ ¢ Establish effective processes to have a good documentation, receivables and credit rating processes. ÃÆ'Ã ¢Ã ¢Ã¢â¬Å¡Ã ¬ÃâÃ ¢ Credit Portfolio should be assessed on regular basis and regressed against various parameters in order to mitigate risk and align other parameters in sync with the environment. 2.5 CREDIT RISK ASSESSMENT Several Methods have been adopted worldwide in order to asses risk arising from various activities. 2.5.1 Credit Rating Agencies: Ratings are given by external and internal agencies. External Sources: Crisil, Fitch, SP any many such rating organizations evaluate creditworthiness of bond issuers. Ability of the debtor is assessed as to how timely he can make principal and interest payments and ratings are granted accordingly. Internal Sources give ratings which are at the point and through the cycle. Through the cycle assessment provides default probability at the worst condition in the business cycle and is useful in making lending decisions. At the point approaches assessment relate to changes in cyclical conditions and are more appropriate for capital allocation. Some basic points considered while assigning ratings by these agencies: The amount and composition of existing debt. The stability of issuers cash flow. The issuers ability to meet scheduled payments of interest and principal on its debt obligation. Asset protection Management Capability. Measures used to measure Credi t Risk are LGD (Loss Given Default), Probability of Default (PD). Traditional Measures to asses Credit risk using PD are- 2.5.2 Expert System: It is based on the opinion of experts and evaluates on the basis of 5 Cs. Character: It refers to management integrity and its commitment to repay the loans. Capital: It examines the relationship between equity and debt. Capacity: refers the ability of borrower to generate cashflow or liquidate short term assets to repay its debt obligation. Collateral: It includes the assets offered as security for the debt as well as other assets controlled by the issuer. Cycle: It considers how the current state of economy will impact exposure to credit risk. This is a subjective method. In order to minimize subjectivity we go for Neural Network which are flexible systems that include various conditions in a streamlined way in the final decision making process. Weights are updated based on the historical data input; this helps in training Neural Networks. This is very costly process and data may over fit. 2.5.3 Credit Scoring Models: These models they basically help in calculating Probability of default and Loss Given Default which is required to calculate Credit VAR. Expected Loss and Unexpected Loss are calculated by banks in order to mitigate risk arising from the counterparty. Expected Losses are covered through reserves maintained by the banks. Unexpected losses are met through economic capital. Threshold is reserved through VAR analysis at 99% confidence interval over a 1 year horizon period. VAR (Credit Risk) = Z (Value) x sigma x Value of the firm x .08 Economic Capital = VAR (at 99% Confidence Interval) Expected Loss. According to Basel 2 a minimum of 8% needed to be reserved in lieu to protect against credit risk. 1) Losses are marked in the x-axis; y-axis denotes percentage return. 2) Loss more than the Credit VAR is defined as the tail losses. They have very low probability of occurrence. Basel II IRB, area is 1-99.9% = 0.1% with 1 year horizon. 3).EC (confidence) = Credit V AR (confidence) Expected Loss (EL).Ãâ EC refers to the region between EL and Credit VAR. 2.5.4 Merton Model: It showcases that value of equity is equivalent to a call option on firms assets where strike price of the assets is equal to the value of the debt. At expiration, the value of equity is equal to either zero or the difference between the value of the assets and the value of the debt, whichever is greater. The value of the equity is the function of following inputs: Market value of the assets Volatility of the market value of the assets Risk free rate The time until the option expires The exercise price As for the calculation part let us suppose the firms only debt issue is a zero coupon bond with a face value of F, due to maturity date of T. If the firm is unable to pay the principal at T, then the firm is bankrupt and the equity claimants receive nothing. Alternatively, if the firm value at T, V(t) is large enough to pay the principal amount, then the equity holders have claim to the balance, V(t) F. These two pay off possibilities are the same as the payoffs for a call option, with the firm value as the underlying asset and the principal amount as the exercise price. The value of the equity at T is: S (t) = Max (V (t) F,0) The value of debt is D (t) = F Max (F V (t), 0) Calculating Probability of Default Intensity based models assume defaults occur randomly and a hazard rate determines the probability of default. Intensity based models decompose the credit spread on debt to provide estimates of both the PD and the loss given default by utilizing the following relationship: CS = PD x LGD CS represents the credit spread, which is the difference between the yield on risky debt and the risk free rate. This is essentially a measure of expected loss since it is the spread that exceeds the risk free rate. Thus a researcher can approximate the probability of default from the credit spread and the loss given default. Recall that loss given default is equal to one minus the recovery rate. Probability of default could also be calculated using the following expression (assuming LGD = 100%) Market Price of Bond = [(Face value of bond) x (1 PD)}] / (1 + risk free rate) 2.6 Mitigating credit risk Risk-based pricing: Those borrowers who are prone to defaults are charged higher rates of interest by Lenders. Various parameters such as purpose of loan , Ratings assigned by agencies, Loan-Value ratio and yields (spreads) are evaluated. Covenants: A note in an indenture, or any agreement stating that these activities will be carried out and these will not be. Financial Analysis is done at regular intervals Due to significant change in certain Financial Ratios lender can request the borrower to repay the loan in full. Credit Insurance: Lenders can hedge counterparty risk by purchasing Insurance. This process helps in transfer of risk from Lenders to Insurance Firms (Third party) Credit Default Swap is a type of instrument in which one party makes payments to other party. The purchaser of the CDS seeks credit protection and will make fixed payments to the seller of the CDS for the life of the swap, or until a credit event occurs. Tightening: By lowering the amount of credit extended, Lenders can mitigate risk fully or partially. Say for Example, a distributor tries to lessen his credit risk by reducing payment scheme from 30 to 15 to a retailer. Diversification: Diversifying to a large number of borrowers reduces the risk plus lending it to different sectored departments further lowers the credit risk. Deposit insurance: Central Government in many countries has established a process known as Deposit Insurance so that the bank can derive some monetary benefit from the Central Bank. This scheme prevents a run on the bank situation. Credit risk mitigation (CRM) It helps in managing credit risk in an efficient and mechanized way. Offers a widespread approach so that can be used across range of institutions. Offers great amount of flexibility and is consistent with the environment. 2.7 Some of the Methods to Mitigate Credit Risk are: 2.7.1 Collaterals: An institution/Bank or any Financial Services firm has a credit exposure which is safeguard by cash or any equivalent Financial Instrument serving as Collateral. Some part of the total Loan or the full amount is collateralized in the process. No collateral requirement higher than secured issue should be posted. These reduce the risk by a larger amount as in case of adverse events these collaterals can be encashed to meet the sudden liquidity, cashflow risk arising due to counterparty risk. 2.7.2 Netting: It is a legal agreement that enables counterparties with multiple derivative contracts to net their obligations. This reduces credit and liquidity risk exposures by eliminating large fund transfers resulting from each individual transaction. Instead of large transfers, smaller net payments are made by the counterparty with the net liability. Let us consider Bank XYZ has a portfolio of N derivatives contracts with counterparty MNO, and suppose that no default value of the i th contract is equal to V (i). Furthermore, the amount recovered if default occurs is the recovery rate times the no default exposure. If netting clauses were not enforced, the financial institution would suffer losses of: LGD x (i=1 to N) SIGMA (Max (V, 0)) When the netting credit risk mitigation technique is implemented, the net loss would be: LGD x Max ( (i =1 to N ) SIGMA (V ( i ),0 ) ) 2.7.3 Guarantees and Credit Derivatives Guarantee given by certain Institutions which specializes in that particular sector. Some initial coverage or protection is provided by these institutions. 2.7.4 Downgrade Triggers: When the rating of a certain party falls below specified levels, a trigger is set and this enables the counterparty to clear off the contract at its current market value. 2.8 Credit Risk Management Process 2.8.1 Credit Processing/Appraisal In this process all the required information is gathered and screening of applicants is undertaken. The next step in line is to assess the obligors how efficiently they can make scheduled payments. These institutions should ensure that benefits are only given to those creditworthy customers who have ensured that they can timely deliver and have stability of the cashflow. These institutions generally accept collateral from borrowers so as to mitigate risk. These institutions then relax in their drilling process; they become less efficient in collecting information from borrowers. They should have in mind that securing loan through collateral does not signify that stability of cashflow from the client/counterparty will be timely. The working capital should not be derived from collaterals or guarantees. The working capital should be based on proper analysis of sales, historical background, stress testing and Scenario Analysis. Some measures should be adopted as follows: Pe riodic valuation of the collaterals should be done. Legal issues and credit downgrade issues should be tackled immediately. Regular audit of financial statements should be undertaken. 2.8.2 Credit-approval/Sanction A set of guidelines should be written down by all the institutions based on which decision will be taken. Every blueprint developed should be approved by the senior members. Regular checking should be done by board of members. Decisions such as renewal of credit ters, analysis of existing credit policies and proposition of new terms is carried out. Some points to be kept in mind: Committee/personnel handling credit approval task should be kept away from the CRM responsibility. Approval should be structurized and should consist of a well defined hierarchy; who should be responsible for screening the entire process depending on the size and nature of credit. 2.8.3 Credit Documentation This process is important and is required for every step in the credit cycle. Activities such as credit rating, monitoring, valuation etc. are documented. A standardized report regarding every step need to be drafted and should be made available to every person in the concerned department. 2.8.4 Credit Administration Following should be done to administer credit risk: Files and related documents should not be moved from their respective locations and should be kept in order; The obligor is making regular and apt payments. Collaterals are properly valued and monitored thereon. Timely and accurate information is conveyed to the top officials. Proper Role Allocation is done. Back office, front office and middle levels are in sync with each other. 2.8.5 Disbursement A letter should be delivered to the customer to make him aware of all the terms and condition. A duplicate letter should be signed by the client and should be submitted to the institution. No funds should be released prior approval by the concerned authorities. 2.8.6 Monitoring and Control of Individual Credits Funds if allotted for a particular client should only be used for his purpose and not anywhere else. Obligors should comply with bounded promises; Manage audit reports and financial statements. Budgeting and Projections 2.8.7 Monitoring the Overall Credit Portfolio (Stress Testing) Economy Downturn: Continuous evaluation of the economy is to be carried out because recession, interest rates, inflation etc have severe impact on the portfolio. Market Risk need to be evaluated because in the era of globalization various markets are inter-related and have strong dependencies. Liquidity Mismatch may arise due to cashflow instability, this needed to be tracked and projections regarding such instances should be made well in advance. Contingency plans should be developed and reviewed by senior management periodically. 2.8.8 Managing Problem Credits/Recovery Recovery Process with respect to Customers: Seniority: It determines the priority order of the claimants with respect to the assets when the firm defaults. Higher the seniority higher will be the recovery rate. Collateralization: It showcases how different assets have been assigned to different claimants in the event of default. The allocation value and liquidity of the assets will determine the recovery rate. Some of the recovery Functions used: Beta Distribution: Two input statistical parametric distribution using mean and variance. This is a very flexible process. Kernel Estimation: A non parametric technique which uses probabilistic method to assign probabilities to events. Conditional Recovery model: Parametric technique that uses multiple factors to asses recovery. Covariances, volatility, mean etc are calculated. 2.9 Credit Risk Portfolio Models: Credit Risk+: It measures risk for every obligor using a set of risk factors. It is a two outcome model; default or no default. Each obligors PD is based on its credit rating and sensitivity to each risk factor. The defaults are uncorrelated across obligors. The risk parameters are supposed to follow a definite distribution such as gamma distribution. Credit Metrics: The first step is to determine credit ratings. Then use historical transition rating matrix to determine PD. Use 1 year forward rate to get current price of zero coupon bond and then calculate VAR at a given confidence level. This method totally relies on co-relation analysis. KMV Portfolio Manager: Expected default probabilities for each obligor are calculated. This method gives us what is the firms value and volatility. This method uses current equity in the model which integrates current event to the model. There is minimal lag regarding updating of these ratings. Expected return is calculated using CAPM which factorizes the correlation structure. Credit Portfolio View: They depict macroeconomic changes using transition matrices, also economic cycle is being included in the data to be analyzed. An econometric model is used to asses the risk. Autoregressive process measurement is done. Next step is to compose sector indices for the variables. Index value is used to estimate default rates. Simulated values are regressed against historical values and results are used to make decision making process. KMV Award Approach: This model is used to determine default rates. Basic steps to be followed are: There is one issue of equity and debt, and the debt is in the form of a zero-coupon bond that matures at a given date. Default can only occur at the maturity date. The value of the firm is observable and follows a lognormal diffusion process. The risk free rate is constant through time. There is no negotiation between equity and bondholders. There is no need to adjust for li quidity. Default point is then calculated as follows: Short Term Liabilities + 0.5 x Long Term Liabilities Short Term Liabilities + (0.7 x Long Term Liabilities 0.3 x Short term Liabilities) 3. SUMMARY AND CONCLUSION This seminar paper guides us through Credit Risk and its type. We learn what credit risk is and what its scope is, also we come across different types of risk and segregate among them this helps particularly banks in setting aside reserves for each department to meet daily requirements and safeguard against adverse events. Next most important thing we have analyzed is the credit risk management technique which involves process oriented scheme to prepare data and evaluate with the help of seniors, to document the findings and properly asses that factors are in sync with the stated data. The next learning sector was the credit risk mitigation techniques such as netting. Netting is a widely used concept in which an obligor having multiple exposures to counterparty reduces his exposure by paying net amount rather than submitting full amount. Collateralization is yet another concept learnt through this seminar paper. Collaterals are posted as security by borrowers in order to safe guard investors. These collaterals should be properly valued and any change in its value should be reflected in the documents. Guarantees and promissory notes are provided in order to facilitate investor and keep him away of the potential threats. Next we learnt how actually firms/ banks and financial institutions Mitigate risk through a standardized process. Firstly risk factors are analyzed, weights are assigned and their sensitivity is analyzed. Reports are documented and presented to the senior officials. We have learnt that the entire process is error free and accurate if followed, minimal chances of fraud etc are to be seen. Every step adds value to the process and any sudden change is included using various models such as KMV, Merton. These models give an insight as to how industry officials actually asses such a widespread risk. This gives an insight as to how models relate real world risk and integrate theoretical knowledge to the sector. Various concepts such as expe cted loss, unexpected loss, economic capital, VAR were seen and understood. In the end it is enough to conclude that credit risk management is a very important process which every firm needs to carry out in order to sustain in this competitive world. Risk Mitigation is complex and requires stress testing and scenario analysis with reference to historical data side by side as well.
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Wednesday, May 6, 2020
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Tuesday, May 5, 2020
Question: How Education is life itself. Answer: When I joined the course on education and came for attending the first class, I was very confused, as I had never attended something like this before in life, and hence did not know how far I will be able to respond to the same. When the participants were being asked for their reason behind joining the course, most of them responded saying that this course would facilitate the hike in pay scale. But I had three main objectives in mind, behind joining this course. The first and foremost one, is that I intend to nurture the inner potentiality of my students, making them not only academically strong, but socially prepared for tomorrow. Secondly, I want to provide love, support and confidence to my students, so that they can be motivated to improve their skills in future. Finally, the sense of accomplishment over the victory of my students, is too big a reward for me, to reject. I believe that on completion of the course, I will be able to know the means of fulfilling these objectives mo re fully. As a part of an activity in the course, I was really fascinated by the PowerPoint presentation, explaining the two different branches of the philosophy of knowledge- Epistemology and Ontology. While the former deals with the source of knowledge and the process of how we acquire it, the latter revolves around the concept and nature of existence and non-existence of the things surrounding us (Prawitz, 2012). Since Epistemology concerns with the nature and limits of knowledge, as a teacher, it shall help me in knowing how to design my curriculum and deliver my lecture in class. Again, from Ontological studies, I hope to learn to interpret as well as accept various perspectives of the students of a single topic. Whatever the philosophical study of knowledge be, I have realized that any form of knowledge is highly beneficial for us, and all our lives, we should be able to explore various facets of knowledge to keep learning (Turner, 2013). Reference List: Prawitz, D. (2012). Truth and proof in intuitionism. InEpistemology versus ontology(pp. 45-67). Springer Netherlands. Turner, R. B. (2013).Expert teaching: Knowledge and pedagogy to lead the profession. Routledge.
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