Satisfaction guarantee policies decrease the riskiness of trying out these services.
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The collateral, or "margin", required for clearing the contracts highlights their riskiness.
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Given the riskiness of Child's creative processes, the novels can't be equally good.
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The true riskiness of private equity would only become apparent in a prolonged bear market.
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Unlike private banks, public lenders often fail to focus on the riskiness of a project.
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A credit score is a three-digit number that indicates your riskiness as a borrower.
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Is Elizabeth's biggest threat right now Philip — or is it her own riskiness, unchecked without him?
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As a closeted lesbian teenager, that was exciting to me—the (seemingly) riskiness of it all.
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The government, MetLife says, initially said it would do the latter when looking at a firm's riskiness.
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Measuring the riskiness of dividends is also one way to look at the market as a whole.
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Assessing the riskiness of tiny firms, lengthy projects or new technologies requires skilled staff and sophisticated systems.
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But by keeping tuition very low at community colleges, we can minimize the riskiness of the gamble.
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The incident highlights the riskiness of the vehicles—and of the fast-growing micromobility business around the world.
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Investors are buying into the riskiness of stocks, but they're also buying the security of the bond market.
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"The riskiness is related to the industry and possibly the company's increased leverage level," the first source said.
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The economist is also now worried younger investors do not realize the riskiness of new trad-able assets.
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Samuelson vigorously disputed the dogma of long-termism, which says that the riskiness of stocks diminishes as time passes.
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Higher debt levels increased the riskiness of the system and encouraged central banks to cut rates when markets wobbled.
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Two common measures of riskiness in this market are debt service coverage ratio (DSCR) and loan to value (LTV).
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For funds, returns can vary widely depending on the riskiness of the borrower and the terms of the deals.
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The confusion over who really pulls the strings makes it difficult for regulators to assess the riskiness of the deals.
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The penalty varies in increments, starting at 1% of risk-adjusted assets and rising depending on five gauges of riskiness.
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It's a machine that matches excess liquidity to loan assets, while also offering a view of the riskiness of those assets.
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In other words, the prices of bonds (and corporate loans) have not accurately reflected the riskiness of the underlying borrower's credit.
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That may reflect the riskiness of the move, which was welcomed by many but met with confusion and outrage by others.
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This watershed moment in reporting sexual harassment was likely many people's first public exposure to the riskiness of reporting sexual harassment.
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Stress tests also rely primarily on risk-based capital ratios, which vary based on the perceived riskiness of a bank's assets.
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After that, it will tell banks how much extra capital they need to hold based on the individual riskiness of their lending.
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If the Fed were less considerate, asset prices would be jumpier, making investors more attuned to the inherent riskiness of their portfolios.
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It is meant to act as a "backstop" to a bank's core capital ratios which are based on the riskiness of assets.
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"Size is only one indicator of the riskiness of a firm and the risk of it damaging the financial sector," Powell said.
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You'd choose the riskiness and average interest rate of the portfolio and automatically invest in all the loans in one tier for instance.
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That poses a problem for international regulators trying to identify the buyers behind major acquisitions and to assess the riskiness of these deals.
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Broadway is known for its riskiness, but "Paramour" in particular has faced an uphill climb to profitability since its opening on May 25.
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That's because a second set of capital requirements, based on assets' riskiness, would be set higher than the leverage ratio after the changes.
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The city's computers will automatically assess and rate the riskiness of each worker's recent travels in terms of possible exposure to the virus.
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Banking regulators should permit financial institutions to hold and lend cyber currencies, but they need to carefully monitor the riskiness of such endeavors.
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Powell has also supported reducing the frequency of federal stress tests and revealing more about the way the Fed judges the riskiness of big banks.
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The son, Matt Morrey, actually treated two of the plaintiffs in the bellwether trial but also testified more broadly about the riskiness of the DePuy product.
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Apply the same to Fannie and Freddie credit support fee and at the same level as would be required for a giant bank of equivalent riskiness.
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This increase is less an indicator of the riskiness of the underlying loans and more of a consequence of the strong economy and liquid capital markets.
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This reasoning says that if you limit the sorts of stocks you invest in, you limit your potential return and add to the riskiness of your investment.
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These increased from RUB74 billion at end-1Q16, mostly due to Fitch's reassessment of the riskiness of some exposures, but also due to moderate additional net issuance.
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Part of this is the result of prevalent seed capital, something that has likely increased the riskiness of the startups that seek funding through platforms like these.
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He'd use government to force or bribe corporations to locate plants here — the guarded order of national corporatism over the wide-open riskiness of free-market capitalism.
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It just requires some balls and a bit of riskiness, but some people don't have the balls to risk something — but they're not at fault for that anyways.
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They find a relationship between the riskiness of a fund's assets and the proportion of political trustees (such as state treasurers) and worker trustees elected by scheme members.
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As public health officials increasingly warned about the riskiness of large gatherings, and after a part-time usher was diagnosed with the virus, the drumbeat for closing grew louder.
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Regulators have also been trying to get banks to use standardized models to assess the riskiness of the loans on their books rather than use internal risk assessment models.
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If investors were getting properly compensated in that part of the bond market, the yield should be closer to 10 percent, or more, considering the riskiness of the underlying debt.
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Analysts centered on her "riskiness" as a candidate, the "curse of the frontrunner," her inability to "pick a lane" and how "'Medicare for all' wrecked" her campaign, but not Sanders's.
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"Thus, while policymakers should be alert to periods of rapid credit expansion or increasing riskiness of credit allocation, they should pay special attention when they take place together," the organization advised.
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Falling capital levels have been seen at lenders who use their own computer models to work out the riskiness of loans on their books and therefore how much capital to hold.
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But there are some things governments can do to encourage vaccine makers to take up the challenge despite its riskiness, including providing grants and other financial incentives to spur their involvement.
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But the riskiness of the move is a reminder of how North Korea uses its nuclear program in an extremely destabilizing fashion, and will continue to do so in the future.
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But, even if you buy the notion that this a good move in the long run, it certainly adds to the riskiness of waiting an extra year for an all-new design.
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The riskiness of the biotech business was underscored this summer when a trial of Juno's lead drug candidate, JCAR015, was put on hold after three of the patients on a trial died.
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Poor performance by a large bank, such as reporting large loan losses, will trigger a decline in its stock price, creating market pressure to reduce the bank's riskiness and strengthen its capital.
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"Frankie Goes to Hollywood wasn't really a political band, but the riskiness and boldness of the video from a political point of view is something you'd never see now," Mr. Carney said.
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The BoE's Financial Policy Committee said it would tell banks by the end of the year how much extra capital they need to hold, based on the riskiness of their individual lending.
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The House passed a bill in December with bipartisan support to replace the threshold with a five-part test focused on the riskiness of a bank or firm's assets and business practices.
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Last month the House passed a bill that would scrap asset thresholds altogether, directing the Fed to focus instead on the business model of a bank when assessing its riskiness and oversight.
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The German lender's share price has fallen substantially over the past decade, and politicians and regulators in Germany are pushing for it to make radical changes to reduce its riskiness and improve profitability.
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He's also undertaken significant but little-noticed alternations in supervision of Wall Street that increase the riskiness of the banking system, plus drastic changes to immigration policy that go far beyond wall construction.
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"Both mortgage credit growth and house price inflation have eased to more sustainable rates, reducing the riskiness of banks' new housing lending," said governor Adrian Orr in the bank's half-yearly financial stability review.
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Nevertheless, the impact from moving to ECL is likely to vary from bank to bank even in the most prepared systems, reflecting the underlying riskiness of their assets and their own internal system capabilities.
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" What that boils down to, Wolff said, is the index has now become "somewhere between a counterintuitive factor and a pretty weak factor in telling us what the actual riskiness of the market is.
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When we add in the way in which Jones's mind and body are changing, the dances themselves take on a new sort of vulnerability, a new riskiness far from the formalism of the '70s.
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During 2013 the spread between yields on Italian and German 10-year government debt - a sign of Italy's perceived riskiness - hovered between 2 percent and 2.5 percent, not too far above the current 1.6 percent.
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Bank lobbyists are pushing for lawmakers to scrap the asset threshold, which banks and lawmakers have called arbitrary, and replace it with a test that measures several factors — size included — to determine a bank's riskiness.
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The stockmarkets of developing countries have flipped in and out of fashion over the past 20 years as investors have switched from naive enthusiasm about their long-term growth prospects to heightened concern about their riskiness.
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That once-a-year measurement encourages big banks that are close to a regulatory boundary to take temporary measures in order to shrink activities, such as lending in repo markets, that can push up their riskiness scores.
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The proposed class action, filed in the U.S. District Court in Manhattan, accuses Standard & Poor's of fraud and misrepresentation for giving Curacao-based Lifetrade Fund B.V. an investment-grade rating for five years despite the riskiness of the venture.
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"By allegedly misleading investors about the riskiness of these securities, Mr. Mangione prioritized his and his employer's bottom line over principles of honesty and fair dealing," said Chad Readler, the Acting Assistant Attorney General for the Justice Department's Civil Division.
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But, according to the sources, it is set to waive the immediate examination of the financial models which contain the basic assumptions underpinning a bank's business and are essential to understanding their riskiness - a process that can take more than a year.
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You'd expect to see a risk curve that starts shallow at T-Bills (which are as close to riskless as can be), that then curves dramatically upwards to junk bonds (which offer more reward to compensate for the riskiness of the bet).
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The 11th U.S. Circuit Court of Appeals on Wednesday ruled that a lower court judge had improperly before a 2014 trial found ex-CEO Alan Levan's statements on an earnings call related to the riskiness of its real estate portfolio were false.
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It's more than a little plausible that the riskiness of Zahedi's work makes it hard for him to find backers and scared off more mainstream TV companies — no normal executive would want to greenlight a show on which he himself would become a character.
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I have long advocated for the leverage ratio, because while imperfect, it is harder to manipulate than the risk-weighted framework in which big banks can use their credit and market risk models to determine the riskiness of on- and off-balance sheet transactions.
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To a certain degree, this push by the agency to require funds to be more liquid and disclose the riskiness of their investments mirrors the regulatory demands that commercial and investment banks face in terms of higher capital requirements and restrictions on trading activities.
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But when researchers accounted for patient characteristics and health conditions and the riskiness of the surgery, they found the likelihood of death was cut by about half in the hospitals with the highest volume of frail patients compared to those with the lowest volume.
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Pushing up the minimum size for enhanced supervision is seen by some as increasing the riskiness of the U.S. banking system because banks newly exempt from enhanced supervision might take greater risks and become more likely to fail, thereby triggering a financial crisis comparable to the last one.
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"A period of high credit growth is more likely to be followed by a severe downturn or financial sector stress over the medium term if it is accompanied by an increase in the riskiness of credit allocation," the IMF said in its Global Financial Stability Report in April.
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I THINK IT IS A LITTLE BIT DIFFERENT TO LOOK AT THE LEVEL OF A MARKET AT A POINT IN TIME AND ASSUME IT IS ACCURATE THAN IT IS TO LOOK AT A MEASURE OF VOLATILITY AND HOW MUCH A MARKET FLU FLUCTUATES AS INDICATION OF RISKINESS OF AN ENTERPRISE.
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Alternatively, a significant weakening of capital adequacy, as reflected in the Prism FBM capital model score falling to 'adequate' or below, growth of the financial leverage ratio to over 30%, a return to net loss, or further growth in the riskiness of the investment portfolio could result in negative rating action.
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At stake is the design of new molecules for life-saving drugs, helping banks to adjust the riskiness of their investment portfolios, a way to break all current cryptography and develop new, stronger systems, and for scientists at CERN, a way to glimpse the universe as it was just moments after the Big Bang.
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Tannehill's passes this season traveled an average of 9.7 yards — third-longest in the N.F.L. behind Matthew Stafford and Jameis Winston — but according to the N.F.L.'s NextGen statistics, his 70.3 percent completion rate was an N.F.L.-best 8.1 percentage points higher than he should have been able to produce based on the riskiness of his throws.
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Fed Vice Chair for Supervision Randal Quarles in May downplayed the riskiness of the leveraged loan business, saying the media has blown concerns out of proportion, with stories analogous to "the Earth must be getting hit by an asteroid" and concluding that the build-up of debt is not comparable to the mortgage market collapse that triggered the financial crisis.
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However, the study leaves many questions unanswered: The data didn't account for how access to marijuana and drug safety education may play a role in the variations among different regions in the US. Also, because the data assessed perceived risk of monthly marijuana smoking specifically, it's unclear how people across the US might perceive the riskiness of edibles or vaping the drug.
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Nevertheless, the Hippocratic-Galenic practice of bloodletting was practiced into the 19th century, despite its empirical ineffectiveness and riskiness.
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Stark, Oded and Szczygielski, Krzysztof (2019). “The likelihood of divorce and the riskiness of financial decisions.” Journal of Demographic Economics 85(3): 209-229.
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A rational investor should not take on any diversifiable risk, as only non-diversifiable risks are rewarded within the scope of this model. Therefore, the required return on an asset, that is, the return that compensates for risk taken, must be linked to its riskiness in a portfolio context—i.e. its contribution to overall portfolio riskiness—as opposed to its "stand alone risk". In the CAPM context, portfolio risk is represented by higher variance i.e.
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Walker KF, et al. The dangers of the day of birth. 2014-05. Accessed 2016-07-30. Micromorts can be used to measure riskiness of various day-to-day activities.
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As above the model is used to determine the maximum amount of debt the project company can maintain: in any year the debt service coverage ratio (DSCR) should not exceed a predetermined level. DSCR is also used as a measure of riskiness of the project and, therefore, as a determinant of interest rate on debt. Minimal DSCR set for a project depends on riskiness of the project, i.e. on predictability and stability of cash flow generated by it.
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The CAPM returns the asset- appropriate required return or discount rate—i.e. the rate at which future cash flows produced by the asset should be discounted given that asset's relative riskiness. Betas exceeding one signify more than average "riskiness"; betas below one indicate lower than average. Thus, a more risky stock will have a higher beta and will be discounted at a higher rate; less sensitive stocks will have lower betas and be discounted at a lower rate.
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An asset class is a group of economic resources sharing similar characteristics, such as riskiness and return. There are many types of assets that may or may not be included in an asset allocation strategy.
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71, pages 393–410. In their study, they showed that a competitive loan market suffers from the credit rationing problem. The credit rationing means that, among borrowers who appear to be identical, some get loans whereas others cannot not borrow although they are willing to get loans for the given interest rate. The information asymmetry in this economy can be described in the following way: Borrowers have different profitability and riskiness of their investments but lenders do not have enough information to sort out borrowers based on profitability and riskiness.
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However, as above, since both hurdle rate and cash flows (and hence the riskiness of the firm) will be affected, the financing mix will impact the valuation of the firm, and a considered decision is required here. Finally, there is much theoretical discussion as to other considerations that management might weigh here.
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Increased savings in the current period raises the expected value of future consumption. Hence the consumer reacts to increased income riskiness by raising level of saving. Yet increases in saving will also increase the variability (variance) of future consumption. This in turn gives rise to two conflicting tendencies of income and substitution effects.
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When personified, gambling was historically feminine, as “an enchanting witchery.” Russell, Gillian. “Faro’s Daughters”: Female Gamesters, Politics, and the Discourse of Finance in 1790s Britain.” Eighteenth-Century Studies (2000): 33.4, p. 495, quoting Charles Cotton’s The Compleat Gamester (1674) In other words, “female emotionality, irrationality, and vulnerability” was linked to unpredictability and dangerous riskiness of games of chance.
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U.S. attitudes toward legalization and decriminalization started dramatically liberalizing in the 1990s, and a 2018 study in Social Science Research found that the main drivers of these changes in attitudes were a decline in perception of the riskiness of marijuana, changes in media framing of marijuana, a decline in overall punitiveness, and a decrease in religious affiliation.
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The episode first aired on April 20, 2012 in the United States, and was watched by an estimated 3.03 million viewers. Television critics praised the riskiness of the episode premise and the actors' performances while also expressing doubt about its place during the season. The episode was nominated for the 2013 Hugo Award for Best Dramatic Presentation (Short Form).
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Immelt's reorganization of GE has been accomplished in part through a number of acquisitions. He underscored the riskiness of an acquisition-based growth strategy in 2011 when he said, "You can't do a lot of deals, and have them all be great." Geographically his strategy has focused on two areas: China and Europe. GE's efforts in China have been central to Immelt's vision.
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Corporation data (Bordino et al. (2012)). The application of Internet search data gives promising results in solving different financial problems. The authors in Kristoufek (2013b) discuss the application of GT data in portfolio diversification problem. Proposed in the paper diversification procedure is based on the assumption that the popularity of a particular stock in Internet queries is correlated with the riskiness of this stock.
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In other words, the cost of normal profit varies both within and across industries; it is commensurate with the riskiness associated with each type of investment, as per the risk–return spectrum. Only normal profits arise in circumstances of perfect competition when long run economic equilibrium is reached; there is no incentive for firms to either enter or leave the industry.Lipsey, 1975. pp. 285–59.
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Normal profit varies both within and across industries; it is commensurate with the riskiness associated with each type of investment, as per the risk- return spectrum. Only normal profits arise in circumstances of perfect competition when long-run economic equilibrium is reached; there is no incentive for firms to either enter or leave the industry.Lipsey, 1975. pp. 285–59. Profits can be theorized by the phenomena of equilibrium or disequilibrium.
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For loans made against properties that the borrower already owns, the loan to value ratio will be imputed against the estimated value of the property. The loan to value ratio is considered an important indicator of the riskiness of a mortgage loan: the higher the LTV, the higher the risk that the value of the property (in case of foreclosure) will be insufficient to cover the remaining principal of the loan.
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A micromort is a unit of risk measuring a one-in-a-million probability of death (from micro- and mortality). Micromorts can be used to measure riskiness of various day-to-day activities. A microprobability is a one-in-a million chance of some event; thus a micromort is the microprobability of death. For example, smoking 1.4 cigarettes increases one's death risk by one micromort, as does traveling by car.
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Properties with more than one lien, such as stand- alone seconds and home equity lines of credit (HELOC), are subject to combined loan to value (CLTV) criteria. The LTV for the stand-alone seconds and Home Equity Line of Credit would be the loan balance as a percentage of the appraised value. However, in order to measure the riskiness of the borrower, one should look at all outstanding mortgage debt.
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This is met with an opposite force, as higher riskiness makes it necessary to save more in order to protect oneself against very low levels of future consumption. This explains the negative income effect on consumption. A step forward was led by Kimball (1990) who defined the characteristic of "prudence". The measure of absolute prudence was defined as q =-U'"/U", and the index of relative prudence as p=-wU"'/U" (i.e.
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One such was Pinero, whose play The Second Mrs Tanqueray Alexander presented in May 1893. Like Lady Windermere's Fan it featured "a woman with a past", but unlike Wilde's play it ended in tragedy. It was thought daring at the time, but Alexander knew his audiences and kept to what Pearson called his "safe path of correct riskiness". It ran for 227 performances in its first production and was later much revived.
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Interest rate parity rests on certain assumptions, the first being that capital is mobile - investors can readily exchange domestic assets for foreign assets. The second assumption is that assets have perfect substitutability, following from their similarities in riskiness and liquidity. Given capital mobility and perfect substitutability, investors would be expected to hold those assets offering greater returns, be they domestic or foreign assets. However, both domestic and foreign assets are held by investors.
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Return period is useful for risk analysis (such as natural, inherent, or hydrologic risk of failure).Water Resources Engineering, 2005 Edition, John Wiley & Sons, Inc, 2005. When dealing with structure design expectations, the return period is useful in calculating the riskiness of the structure. The probability of at least one event that exceeds design limits during the expected life of the structure is the complement of the probability that no events occur which exceed design limits.
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With more upper level management involved in this new system (who were paid in part through stock options), shareholder value became a higher priority since the workers benefited more through it. The rapid development of the M-form in the middle of the 20th century didn't happen by chance- select firms noticed an opportunity to increase profit and efficiency, as well as allow themselves the freedom to expand while decreasing the riskiness assumed in using the other organizational methods.
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William Goetzmann, Stephen Brown, and Alok Kumar believe that Cowles' study was incomplete and that W.P. Hamilton's application of the Dow theory from 1902 to 1929 produced excess risk-adjusted returns. Specifically, the return of a buy-and-hold strategy was higher than that of a Dow theory portfolio by 2%, but the riskiness and volatility of the Dow theory portfolio was lower, so that the Dow theory portfolio produced higher risk-adjusted returns according to their study.
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But by offering to pay an interest rate more than 5% the firm gives investors an incentive to buy a riskier bond. For a valuation using the discounted cash flow method, one first estimates the future cash flows from the investment and then estimates a reasonable discount rate after considering the riskiness of those cash flows and interest rates in the capital markets. Next, one makes a calculation to compute the present value of the future cash flows.
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The six letters to the inquisitor were written early on in her visionary career (1384), when Raimond stopped writing for her due to fear and restrictions. In these letters, Constance showed her desire for safety as there was urgency in her voice. Constance, aware of the riskiness of her proclamations, warned the inquisitor that the voice promised divine vengeance on Toulouse for any harm done to her. She insisted that this threat came from the voice and not from her.
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Jensen's alpha was first used as a measure in the evaluation of mutual fund managers by Michael Jensen in 1968."Alpha", Risk Encyclopedia The CAPM return is supposed to be 'risk adjusted', which means it takes account of the relative riskiness of the asset. This is based on the concept that riskier assets should have higher expected returns than less risky assets. If an asset's return is even higher than the risk adjusted return, that asset is said to have "positive alpha" or "abnormal returns".
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His main area of research is game theory and economic theory, with additional contributions in mathematics, computer science, probability and statistics. Among his major contributions are studies of strategic foundations of cooperation; strategic use of information in long-term interactions ("repeated games"); adaptive and evolutionary dynamics, particularly with boundedly rational agents; perfect economic competition and its relations to models of fair distribution; and riskiness. Hart edited, with Robert J. Aumann, the first three volumes of the Handbook of Game Theory with Economic Applications (1992, 1994, 2002).
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In this tradition, Medici the board game is based on the pricing of risk: each lot of commodities has an uncertain future value based on how cards are drawn from the deck, what other players buy, and other factors. In order to play the game well, players must judge and price the risk attached to each lot of cards, buying them for a price appropriate to their expected value and the riskiness of the investment. Medici placed 5th in the 1995 Deutscher Spiele Preis.
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Normal Accidents: Living with High-Risk Technologies is a 1984 book by Yale sociologist Charles Perrow, which provides a detailed analysis of complex systems from a sociological perspective. It was the first to "propose a framework for characterizing complex technological systems such as air traffic, marine traffic, chemical plants, dams, and especially nuclear power plants according to their riskiness". Perrow argues that multiple and unexpected failures are built into society's complex and tightly coupled systems. Such accidents are unavoidable and cannot be designed around.
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Thirdwatch's technology uses behavioral analysis, elastic linking, proxy detection and machine learning to detect and prevent fraud. Their flagship product MITRA uses ensemble AI models to generate a risk score out of 100 which then classifies a transaction as fraudulent or genuine. Their platform Mitra prevents fraud in digital, banking and e-commerce transactions in real time using AI. The Mitra AI captures 200+ parameters and flags every transaction in real time as red or green. It generates a risk score also which defines riskiness of the transaction.
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A 2018 study in Social Science Research found that the main determinants of these changes in attitudes toward marijuana regulation since the 1990s were a decline in perception of the riskiness of marijuana, changes in media framing of marijuana, a decline in overall punitiveness, and a decrease in religious affiliation. Marijuana legalization polled as very popular in 2019 according to three major national polls. In fact, research indicates that communities with legal, recreational marijuana use have seen home values rise more quickly than communities where recreational use remains illegal.
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Richard Combs of The Monthly Film Bulletin was negative, writing, "That story counts for less than gimmicks, and characters less than both, might be judged from the lack of resonance in the one narrative revelation, concerning Darth Vader and Luke Skywalker." Bruce McCabe of The Boston Globe said, "This is a respectable sequel to 'Star Wars' but not as good," explaining that "[t]he sequel is more calculated. The spontaneous energy of the original, which grew out of the arcane riskiness of the project, is missing."McCabe, Bruce (May 21, 1980).
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The rating agencies that banks are most strictly governed by, referred to as the "Big Three" are the Fitch Group, Standard and Poor's and Moody's. These agencies hold the most influence over how banks (and all public companies) are viewed by those engaged in the public market. In recent years, following the Great Recession, many economists have argued that these agencies face a serious conflict of interest in their core business model. Clients pay these agencies to rate their company based on their relative riskiness in the market.
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In June 2010, Vickers became Chair of the Independent Commission on Banking (ICB) founded in the United Kingdom. The ICB's task is to consider both structural and non-structural reforms to the UK banking sector to promote financial stability and competition (in the aftermath of the banking crisis of 2008). The commission made its final recommendations to the UK government in September 2011, namely the introduction of the ring fencing of retail from investment banking in order to protect against financial riskiness. In Autumn 2011, Vickers returned to Oxford to teach the first-year undergraduate Introductory Macroeconomics course.
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An increase in counterparty risk reduces lending banks’ expected payoffs from providing unsecured funds to other banks and thus lowers their incentive to transact with one another. This is a result from Stiglitz and Weiss (1981): the expected return on a loan to a bank is a decreasing function of the riskiness of the loan. Stiglitz and Weiss also show that increases in funding costs can lead safe borrowers to drop out of the market, making the remaining pool of borrowers more risky. Thus, adverse selection may have exacerbated strains in interbank lending markets once Libor rates were on the rise.
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HOLC "residential security" map of Philadelphia, classifying various neighborhoods by estimated riskiness of mortgage loans.The HOLC maps are part of the records of the FHLBB (RG195) at the National Archives II . In the United States and Canada, redlining is the systematic denial of various services by federal government agencies, local governments as well as the private sector either directly or through the selective raising of prices. Neighborhoods with a high proportion of minority residents are more likely to be redlined than other neighborhoods with similar household incomes, housing age and type, and other determinants of risk, but different racial composition.
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The risky-shift effect (see groupshift) is the increased likelihood for a group to support or partake in a risky decision or action. Larger groups permit a wider responsibility diffusion than the groups of two or three. As group size increases, the likelihood also increases that the group contains at least one highly risky and influential member who would be able to win over all the others. This demonstrates how larger group size and the increased riskiness of one person can cause the diffusion of responsibility from all group members to only the decisive, risk-taking member.
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It was thought daring at the time, but Alexander knew his audiences and kept to what Pearson called his "safe path of correct riskiness". It ran for 227 performances in its first production and was later much revived. The title role was first played by Mrs Patrick Campbell, who made her name in the part.Mason, p. 63 The Importance of Being Earnest in 1895, with Allan Aynesworth as Algernon (left) and George Alexander as Jack Between Pinero's play and the work with which Alexander's name has become most closely associated – The Importance of Being Earnest – came Alexander's most conspicuous failure.
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By 1803 Dutch investors held one-quarter of the U.S. federal debt; De Vries and Van der Woude, p. 144 The appetite for such placements abated a little after the first defaults of foreign governments (like the French in 1793), but even under the Batavian Republic (which itself absorbed the bulk of available funds after 1795) investment in foreign funds did not fall-off completely. This may have been because Dutch investors did not always realize the riskiness of this type of investment. They were often badly served by the merchant banks, who had a vested interest in protecting their sovereign clients to the detriment of the bondholders.
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A trick play, also known as a gadget play, gimmick play or trickeration, is a play in gridiron football that uses deception and unorthodox tactics to fool the opposing team. A trick play is often risky, offering the potential for a large gain or a touchdown if it is successful, but with the chance of a significant loss of yards or a turnover if not. Trick plays are rarely used not only because of the riskiness, but also to maintain the element of surprise for when they are used. Trick plays take advantage of defenses' expectations and conventional wisdom, the set of basic principles to which most offenses adhere.
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Therefore, using policy variation is an improvement over much of the current e-cigarette research to date that fails to separate the causal effect of e-cigarette use from preferences to gradually increase the riskiness of tobacco product use over time. These studies using policy variation generally conclude that e-cigarettes are displacing smoking, which aligns with cigarette use rates falling while e-cigarette use rates are rising.This contrasts with much of the literature not using policy variation and spuriously concluding that e-cigarettes are gateways to subsequent cigarette use, which does not align with observed patterns of tobacco use. There are varied reasons for e-cigarette use.
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Businesses benefit because they are assured a predictable and constant revenue stream from subscribed individuals for the duration of the subscriber's agreement. Not only does this greatly reduce uncertainty and the riskiness of the enterprise, but it often provides payment in advance (as with magazines, concert tickets), while allowing customers to become greatly attached to using the service and, therefore, more likely to extend by signing an agreement for the next period close to when the current agreement expires. source from Johnson Cornel, university of TUIR. In integrated software solutions, for example, the subscription pricing structure is designed so that the revenue stream from the recurring subscriptions is considerably greater than the revenue from simple one-time purchases.
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Typically, the documents a beneficiary has to present in order to receive payment include a commercial invoice, bill of lading, and a document proving the shipment was insured against loss or damage in transit. However, the list and form of documents is open to imagination and negotiation and might contain requirements to present documents issued by a neutral third party evidencing the quality of the goods shipped, or their place of origin. Companies also use debt in many ways to leverage the investment made in their assets, "leveraging" the return on their equity. This leverage, the proportion of debt to equity, is considered important in determining the riskiness of an investment; the more debt per equity, the riskier.
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This was the main intuitive observation of Stiglitz and Weiss. They realised that an individual that is willing to accept a higher interest rate in her loan is doing so because she knows that the riskiness of her project is such that there is lower probability of repaying the loan. In a limited liability setting, where the personal assets of the borrower might not be taken as collateral, the borrower might not object to paying a high enough interest rate, as she knows that the probability of the project succeeding is low, so probability of repayment is low. Even if the project does succeed, the returns will be high enough for a profit to be left after repaying the loan.
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Importantly, the discount rate should reflect the riskiness of the benefits. Treynor noticed, however, that when the stream of benefits lasted that long, its present value was extremely sensitive to the choice of discount rate; simply by changing the rate, a desirable project could appear undesirable, and vice versa. Treynor resolved to try to understand the relation between risk and the discount rate, and this was the impetus for his most famous "idea in the rough", the Capital Asset Pricing Model. Treynor began working in the Operations Research department at the consulting firm Arthur D. Little (ADL) in 1956. In 1958, he spent his three weeks of summer vacation in a cottage in Evergreen, Colorado, and generated 44 pages of mathematical notes on the risk problem.
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Anti-war march in St. Paul, Minnesota, March 19, 2011 During the tail end of the Cold War, U.S. peace activists largely concentrated on slowing the superpower arms race in the belief that this would reduce the possibility of nuclear war between the U.S. and the USSR. As the Reagan administration accelerated military spending and adopted a tough, challenging stance to the Russians, peace groups such as the Nuclear Freeze and Beyond War sought to educate the public on what they believed was the inherent riskiness and ruinous cost of this policy. Outreach to individual citizens in the Soviet Union and mass meetings, using then-new satellite link technology, were part of peacemaking activities in the 1980s. In 1981, Thomas started the longest uninterrupted peace vigil in U.S. history.
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Now, assume type B project returns are also uniformly distributed, but their range is from $50 to $150. Type B project returns also have an expected value of $100, but are more risky. Now assume that the bank knows that two types exist, and even knows what fraction of the potential borrowers applying for loans belong to each group, but cannot tell whether an individual applicant is type A or B. The implication to the bank of the difference in the riskiness of these projects is that each borrower has a different probability of repaying the loan, and this affects the bank's expected return. The bank would thus like to be able to identify (screen) the borrower types, and in the absence of other instruments to do so, it will use the interest rate.
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Because financial theory states that the value of an investment is determined by both the amount of and risk of its expected cash flows to an investor, it is worth noting ROIC and its relationship to the weighted average cost of capital (WACC). The cost of capital is the return expected from investors for bearing the risk that the projected cash flows of an investment deviate from expectations. It is said that for investments in which future cash flows are incrementally less certain, rational investors require incrementally higher rates of return as compensation for bearing higher degrees of risk. In corporate finance, WACC is a common measurement of the minimum expected weighted average return of all investors in a company given the riskiness of its future cash flows.
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The hurdle rate should reflect the riskiness of the investment, typically measured by volatility of cash flows, and must take into account the project-relevant financing mix.Prof. Aswath Damodaran: Estimating Hurdle Rates Managers use models such as the CAPM or the APT to estimate a discount rate appropriate for a particular project, and use the weighted average cost of capital (WACC) to reflect the financing mix selected. (A common error in choosing a discount rate for a project is to apply a WACC that applies to the entire firm. Such an approach may not be appropriate where the risk of a particular project differs markedly from that of the firm's existing portfolio of assets.) In conjunction with NPV, there are several other measures used as (secondary) selection criteria in corporate finance; see Capital budgeting #Ranked projects.
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Unfortunately, the discount rates would vary between investors and an individual's risk preference is difficult to quantify. It turns out that in a complete market with no arbitrage opportunities there is an alternative way to do this calculation: Instead of first taking the expectation and then adjusting for an investor's risk preference, one can adjust, once and for all, the probabilities of future outcomes such that they incorporate all investors' risk premia, and then take the expectation under this new probability distribution, the risk-neutral measure. The main benefit stems from the fact that once the risk-neutral probabilities are found, every asset can be priced by simply taking the present value of its expected payoff. Note that if we used the actual real-world probabilities, every security would require a different adjustment (as they differ in riskiness).
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Regulatory arbitrage can result in parts of entire businesses being unregulated as a result of the arbitrage. This process can increase the overall riskiness of institutions under a risk insensitive regulatory regime, as described by Alan Greenspan in his October 1998 speech on The Role of Capital in Optimal Banking Supervision and Regulation. The term "Regulatory Arbitrage" was used for the first time in 2005 when it was applied by Scott V. Simpson, a partner at law firm Skadden, Arps, to refer to a new defence tactic in hostile mergers and acquisitions where differing takeover regimes in deals involving multi-jurisdictions are exploited to the advantage of a target company under threat. In economics, regulatory arbitrage (sometimes, tax arbitrage) may refer to situations when a company can choose a nominal place of business with a regulatory, legal or tax regime with lower costs.
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Applying this framework to the market for credit, asymmetric information concerning the types of projects to be financed might lead to bad projects driving out good projects. De Meza and Webb's contribution is to show how the opposite might happen – that is, how good projects might draw in bad. Under some plausible conditions, the most crucial being that expected returns differ between different projects (whereas all projects in the Stiglitz and Weiss model have the same expected return but different levels of riskiness), they show that there cannot be a credit-rationing equilibrium. So the main difference here compared to Stiglitz and Weiss is that there is no specific level of the interest rate at which banks maximise profits – a small rise in interest rates if there is excess demand for credit will attract entrepreneurs and will not drive away existing borrowers.
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In a framework similar to Stiglitz and Weiss, one can imagine a group of individuals, prospective borrowers, who want to borrow funds in order to finance a project, which yields uncertain returns. Let there be two types of individuals, who are observationally identical, and only differ in the riskiness of their projects. Assume type A individuals are low risk compared to type B, in the sense that the expected return on type B projects is a mean preserving spread of type A projects; they have the same expected return, but higher variance. For example, imagine that type A returns are uniformly distributed (meaning that all possible values have the same probability of occurring) from $75 to $125, so that the value of type A projects is at least $75 and at most $125, and the expected value (mean) is $100.
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Most arrangers manage their risks by buying and selling protection on single- name CDS or on the CDX indexes and therefore they usually avoid taking positions in CDS that cannot readily be traded. Probability Distribution around mean default probability of 10%, N=100, rho of 0% and 10%. Created using Gaussian Copula model and 5,000 simulationsBespoke portfolios can have very different default correlation characteristics from credit indices with similar distributions of riskiness. Bespoke portfolios almost invariably have numbers of reference securities similar to those of the major credit indices – 100 to 125 reference securities – but bespoke portfolios can include reference securities that have highly correlated default probabilities, either because they are issued by different subsidiaries of the same parent company, because they include closely related but separate companies, or because the bespoke portfolios include much higher concentrations in single industries than occurs in credit indices.
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His profit becomes the excess of whatever revenues he can extract from the farm less the rents payable, less his administration, levying and collection expenses. The skill of the tenant of a farm is therefore firstly in negotiating a favourable rent which he does by overstating the riskiness (variability) of the cash flow stream in question and secondly in his management of the debts thus assigned to him, that is to say his skills as a debt-collector and manager in general. He must also be satisfied that he has the ability to enforce payment of the debts, ultimately by use of a court of law, in which he must pay the standard fee for bringing a suit, under the legal system generally instituted by the government authority which is the lessor of the farm. He does not act as the lessor's agent but as a principal.
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In October 2012, ArcelorMittal Orbit was nominated and made the Building Design magazine shortlist for the Carbuncle Cup—an award for the worst British building completed in the past year, which was ultimately awarded to the Cutty Sark renovation. Jay Merrick of The Independent said that "[Orbit's] sculptural power lies in its ability to suggest an unfinished form in the process of becoming something else", describing how its artistic riskiness elevated it above the banal artworks of the public art movement that have been built elsewhere in Britain's towns and cities. Merrick was of the opinion that it would be either loved or hated, being a design which is "beautifully fractious, and not quite knowable". Jonathan Glancey of The Guardian described Orbit as "Olympian in ambition" and a "fusion between striking art and daring engineering", and said that, the Aquatics Centre apart, it represented the architecturally striking Joker in the pack, given that the rest of the landscaping and architecture for the Games "promises little to get excited about".
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In 2015, Tadas Karosas invested in an alternative investment startup “Welltrado”, which is currently being developed. In 2014, the businessman co-founds and invests into a Kenyan solar energy startup “Pawame”, which is currently being developed. In 2014, he founded and invested in an startup company “SNAPnSAVE”, operating in the South African Republic and currently being developed. In 2009, companies run by Tadas Karosas began implementing e-commerce platform “Amazingsales.com” in Belgium, Holland, and Germany. The enterprise was sold in 2012. In 2004, Tadas Karosas founded a cosmetics and perfumery import and wholesale company “Kruzas Nordic Cosmetics Distribution”. A year later, he opened a SPA and massage center chain “East Island”, which was subsequently sold successfully. “Kruzas Nordic Cosmetics Distribution” expanded to Latvia and Estonia in 2007 and 2009 and sold to a Finland-based “Berner Ltd”. In 2007, the entrepreneur founded an entertainment website and web TV “ctv.lt”, which was sold in 2011. In 2001, Tadas Karosas founded “Gelvoros saugos konsultacijos” – debt collection and management company, providing information about companies' riskiness level.
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