Why Should an Organization Implement an ERM Application?

 Risk management is one of the most important components in empowering an organization to achieve its ultimate vision. With proper risk management culture and knowledge, team members will be “speaking” the same language, and they will leverage common analytical abilities to identify and mitigate potential risks as well as exploit opportunities in a timely fashion. In order to consolidate efforts, the existence of an integrated framework is crucial. This is why an ERM is necessary to the fulfillment of any organization’s goals and objectives. In your final research project for the course, your task is to write a 7-10 page paper discussing the following concepts:

• Introduction – What is an ERM?
• Why Should an Organization Implement an ERM Application?
• What are some Key Challenges and Solutions to Implementing an ERM?
• What is Important for an Effective ERM?
• Discuss at least one real organization that has been effective with implementing an ERM framework/application.
• Conclusion – Final thoughts/future research/recommendation

The paper needs to be approximately 7-10 pages long, including both a title page and a references page (for a total of 9-12 pages). Be sure to use proper APA formatting and citations to avoid plagiarism.Your paper should meet the following requirements:

• Be approximately seven to ten pages in length, not including the required cover page and reference page.
• Follow APA7 guidelines. Your paper should include an introduction, a body with fully developed content, and a conclusion.
• Support your answers with the readings from the course, the course textbook, and at least FIVE scholarly journal articles to support your positions, claims, and observations, in addition to your textbook. The school Library is a great place to find supplemental resources.
• Be clearly and well-written, concise, and logical, using excellent grammar and style techniques. You are being graded in part on the quality of your writing.

what determines which assets you plan to invest in?

Final Project Topic: Asset Management & Portfolio Construction
Overall goal
Come up with and test with a portfolio strategy a set of rules that determines how much you invest in a given
asset at a given point in time.
Possible assets include the risk-free asset, individual stocks, existing portfolios of stocks constructed by others
(e.g. industry portfolios from Ken French’s website), exchange-traded funds (including bond funds, which is an
easy way to add bonds to your portfolio), currencies, and cryptocurrencies. You can take negative positions in
stocks, funds, and currencies i.e. you can short them. You cannot take negative positions in cryptocurrencies —
it is quite difficult to short crypto. Altogether, your weights should add up to 1 if you propose a long-only portfolio
and sum up to 0 if you propose a long-short portfolio.
A static portfolio buys once and does not rebalance. In a static portfolio, asset weights evolve just based on the
performance of those assets. For example, if I invest 50% in Apple and 50% in Microsoft and Microsoft does
better than Apple over the next month, then the value of my Microsoft position increases more than the value of
my Apple position, and thus my portfolio weights tilt towards Microsoft.
A dynamic portfolio rebalances at some frequency. This rebalancing is a key part of an investment strategy.
Keep in mind that maintaining fixed weights requires rebalancing. In the example above, to get back to a 50/50
split between Microsoft and Apple, I would need to sell some Microsoft shares and buy Apple shares. You can
use other information to inform your rebalancing — maybe you want to go long small firms and short large firms
and rebalance when a small firm gets to be large? This is just an example.
Deliverables

1. Describe your investment thesis i.e. what views of the market, the economy, or specific asset classes or
   assets. Broadly speaking, what is the strategy? Which assets do you plan to hold long? Short? How will
   you rebalance? Explain how the strategy aligns with your investment thesis. In coming up with your
   strategy, spend some time researching data availability. Will you be able to assess historical
   performance of your strategy given the data you have access to? If not, revise your strategy.
2. Describe your strategy in detail: what determines which assets you plan to invest in? How often do you
   plan to rebalance? What will guide your rebalancing i.e. what will determine how you change portfolio
   weights?
   Collect historical data for assets in your strategy. How far back you go depends is up to you — consider
   data availability, relevance of past episodes to your expectations of future performance, etc. If your
   allocation rules (rules for determining portfolio weights) depend on some piece of information other than
   returns, collect that historical information too. Discuss the overall performance of assets in your strategy,
   perhaps by looking at some time-series plots and summary statistics. What did you learn? Now that you
   know the data better, revise your strategy. Explain your revisions.
3. Backtest your strategy: evaluate how your strategy would have performed in the past using historical
   data. Collect past returns on your assets. Make sure you don’t “cheat” i.e. form your portfolios based on
   information that was not available to investors at the time. For example, if your idea is to go long stocks
   with high profits and short stocks with low profits, make sure you don’t use end-of-year profits to choose
   portfolio weights at the start of the year. Investors don’t have a crystall ball!
   BU.232.610 – Computational Finance – Stuart Urban – Page 2 of 2
   Consider how well your portfolio does on a raw and risk-adjusted basis? Useful risk-adjusted
   performance measures are Sharpe Ratio, factor model alpha (CAPM, or some other model for example
   the Fama-French 3-factor model), and the Traynor’s ratio, which divides the alpha by the standard
   deviation of model residuals and thus captures how “risky” the alpha is.
   Discuss your results. If you want to adjust your investment strategy to improve its historical
   performance, you can do it. But, as long as your strategy is reasonable given the preliminary analysis
   and well-motivated, we won’t grade you on investment performance.
4. No matter how well your portfolio has done in the past, it’s possible that it will do poorly in the future.
   How much of a loss would you be willing to take before giving up on your strategy and cashing out?
   Minus 10%? Minus 20%? Pick your loss limit.
   Using a simulation, determine how likely you are to reach your loss limit if you keep investing into your
   portfolio strategy for the next year? Assuming that, if you do, you pull your money out of the market,
   what is your expected return over the next year? How does it depend on your expectations for the return
   on the strategy itself? Compare returns with and without the stop loss limit. Do you think it’s a valuable
   restriction to have?

Analyze how the effectiveness of global leadership development is evaluated in your organization or one you’ve worked for in the past. 

Write a minimum of 200 words response to each post below. Reference minimum of 2 articles per post.

You will see the original post, which the two posts below responded to, and you will respond to the response posts 1 and 2. 

Original question:

Analyze how the effectiveness of global leadership development is evaluated in your organization or one you’ve worked for in the past.  Provide recommendations based on our readings and your own research.  

Discuss what issues have been included in the updated Dot Com Disclosures, focusing on those issues that are unique to electronic media and devices.

In recent years, the FTC has expanded its guidance regarding deceptive advertising to include ads on social media and mobile devices. Discuss what issues have been included in the updated Dot Com Disclosures, focusing on those issues that are unique to electronic media and devices. How might this limit marketers?

What environmental concerns should Shari and Carlton have as they consider purchase and development of this property?

Shari and Carlton live outside a small but bustling city in Ohio. They are looking to invest in property just outside of town, hoping to build a housing development on the land to meet the growing needs of the community. There is a 100-acre parcel just beyond the city limits that used to hold a small manufacturing business, but that company declared bankruptcy and shut down about 20 years ago.
What environmental concerns should Shari and Carlton have as they consider purchase and development of this property?

What law covers this situation?

George borrowed money from a local lender but has stopped making payments. The lender sold the loan to Collect-It, a debt collection agency. Collect-It called George, but he wasn’t home, so Collect-It discussed the debt with George’s wife Amal.
What law covers this situation? Is Collect-It’s discussion with George’s wife permitted?

Must R.W. Davis Co. and Oyster Bay Inc. register their contracts as securities? Explain.

R. W. Davis Co. and Oyster Bay Inc. are corporations organized under the laws of the Commonwealth of Virginia. R. W. Davis Co. owns large tracts of property along the shores of the Chesapeake Bay in Virginia and Maryland. Davis keeps some of the land for its own use and sells real estate contracts for the rest. Davis sells the land for a uniform price per waterfront foot and conveys title to the purchaser when the full purchase price had been paid.
Most purchasers of the land lease it back to Oyster Bay Inc., a service company that will grow oysters in the adjacent waters, and harvest, pool, and market the oysters, providing profits to the purchasers of the land. Oyster Bay holds “full and complete” possession of the land specified in the services contract and leaves the purchasers of the property no right of entry and no right to the oysters that are grown and harvested. In its advertising materials, Davis stresses the experience and superiority of Oyster Bay’s service.
Davis markets the land through a resort hotel it owns in Virginia Beach and promises significant profits in its sales pitch to those who express interest in the oyster beds. Most purchasers of the land are not Virginia residents or watermen. Most often, they are business and professional people inexperienced in aquiculture and lacking the skill or equipment to tend to the oyster beds by themselves.
Must R.W. Davis Co. and Oyster Bay Inc. register their contracts as securities? Explain.

How will the agency demonstrate it is not overstepping its investigative powers?

6. Solar Solutions manufactures and installs solar panels and other “clean energy” products, so the Environmental Protection Agency (EPA) was surprised when a company employee reported to the agency that Solar was dumping toxic chemicals, used in the manufacture of the solar panels, into a nearby underground cavern system.
7. What tools does the agency have to investigate these reports?
8. How will the agency demonstrate it is not overstepping its investigative powers?
9. If the agency finds violations and prosecutes Solar Solutions and its executives, will they have the same Constitutional rights as criminal defendants? Explain.

How can they address those concerns?

Alison and her cousin Alec are both CPAs and have been in business together as partners for ten years. Now that they are successful—with the families and personal assets to prove it—they are concerned about being held personally liable for the partnership’s obligations.
How can they address those concerns?

Did this transaction violate the business judgment rule?

Margolis was the vice president of Real Estate, Inc. and recommended that the directors of the corporation purchase a particular piece of property for the company’s new manufacturing plant. Four of the eight directors on the board are also members of a separate LLC that owned the property. This fact was not disclosed to the rest of the board.

The directors voted unanimously to purchase the property on the same day Margolis made the recommendation. The price that Real Estate, Inc. paid for the property was 30 percent above the fair market value at the time of the board’s vote.

Did this transaction violate the business judgment rule? What issues are raised here?