scholarly journals On the Relationship between Investment Risk and Insurance Solvency Optimum

2020 ◽  
Vol 29 (1) ◽  
pp. 84-91
Author(s):  
Borbála Szüle
Keyword(s):  
Interest Rates ◽  
Research Question ◽  
Optimal Investment ◽  
Risk Level ◽  
Investment Risk ◽  
Insurance Sector ◽  
Insurance Portfolio ◽  
Investment Portfolios ◽  
Portfolio Size ◽  
The Relationship

Solvency is a key issue in the insurance sector. Investments can have significant risks, and a compelling research question is whether the solvency optimizing investment risk corresponds to the lowest possible risk level. This question is even more topical with some interest rates approaching very low levels in many countries. The paper aims to answer this question. Theoretical results suggest that if insurance risk and investment risk are uncorrelated, solvency optimizing investment portfolios with non-risk-free components may exist, and the level of optimal investment risk may inversely depend on the insurance portfolio size.

scholarly journals Methodology and Models for Individuals’ Creditworthiness Management Using Digital Footprint Data and Machine Learning Methods

Mathematics ◽  
2021 ◽  
Vol 9 (15) ◽  
pp. 1820
Author(s):  
Ekaterina V. Orlova
Keyword(s):  
Interest Rates ◽  
Additional Data ◽  
Risk Level ◽  
Gradient Boosting ◽  
Cluster Number ◽  
New Approach ◽  
Credit Risks ◽  
Stochastic Gradient Boosting ◽  
The Stability ◽  
Digital Footprints

This research deals with the challenge of reducing banks’ credit risks associated with the insolvency of borrowing individuals. To solve this challenge, we propose a new approach, methodology and models for assessing individual creditworthiness, with additional data about borrowers’ digital footprints to implement comprehensive analysis and prediction of a borrower’s credit profile. We suggest a model for borrowers’ clustering based on the method of hierarchical clustering and the k-means method, which groups actual borrowers having similar creditworthiness and similar credit risks into homogeneous clusters. We also design the model for borrowers’ classification based on the stochastic gradient boosting (SGB) method, which reliably determines the cluster number and therefore the risk level for a new borrower. The developed models are the basis for decision making regarding the decision about lending value, interest rates and lending terms for each risk-homogeneous borrower’s group. The modified version of the methodology for assessing individual creditworthiness is presented, which is to reduce the credit risks and to increase the stability and profitability of financial organizations.

scholarly journals Was the Gibson Paradox for real? A Wicksellian study of the relationship between interest rates and prices

2014 ◽  
Vol 21 (2) ◽  
pp. 139-163 ◽  
Author(s):  
Jagjit S. Chadha ◽  
Morris Perlman
Keyword(s):  
Interest Rates ◽  
Positive Relationship ◽  
Formal Model ◽  
Natural Rate ◽  
Market Rate ◽  
Long Run ◽  
Advanced Economies ◽  
The Uk ◽  
Gibson Paradox ◽  
The Relationship

We examine the relationship between prices and interest rates for seven advanced economies in the period up to 1913, emphasising the UK. There is a significant long-run positive relationship between prices and interest rates for the core commodity standard countries. Keynes ([1930] 1971) labelled this positive relationship the ‘Gibson Paradox’. A number of theories have been put forward as possible explanations of the paradox but they do not fit the long-run pattern of the relationship. We find that a formal model in the spirit of Wicksell (1907) and Keynes ([1930] 1971) offers an explanation for the paradox: where the need to stabilise the banking sector's reserve ratio, in the presence of an uncertain ‘natural’ rate, can lead to persistent deviations of the market rate of interest from its ‘natural’ level and consequently long-run swings in the price level.

Relationship-Specificity, Contract Enforceability, and Income Smoothing

2013 ◽  
Vol 88 (5) ◽  
pp. 1629-1656 ◽  
Author(s):  
Yiwei Dou ◽  
Ole-Kristian Hope ◽  
Wayne B. Thomas
Keyword(s):  
Incomplete Contracts ◽  
Optimal Investment ◽  
Income Smoothing ◽  
Additional Risk ◽  
Specific Investment ◽  
Specific Investments ◽  
Contractual Obligations ◽  
The Cost ◽  
The Relationship

ABSTRACT: Contracting parties, such as the firm and its supplier, have cost-reducing incentives to make investments that support the unique transactions between them. However, to the extent that one party may renege on its contractual obligations, the other party incurring the cost of the relationship-specific investment bears additional risk and is less willing to invest such that sub-optimal investment occurs. In countries where enforceability of explicit contracts is particularly weak, parties have incentives to signal their willingness to fulfill implicit claims and maintain long-term relationships. We predict that firms engage in income smoothing to send such a signal to their suppliers. Consistent with these expectations, we find that firms that both reside in countries with weak contract enforceability and operate in industries with a greater need for relationship-specific investments tend to smooth reported income more. We further decompose income smoothing into “informational” and “garbled” components and find that results are driven by the informational component of income smoothing. Our results support the important role that accruals play in providing information in the presence of incomplete contracts. JEL Classifications: F14, K12, L14, M41, M43

Policy as Assemblage

2011 ◽  
Vol 10 (4) ◽  
pp. 611-622 ◽  
Author(s):  
Radhika Gorur
Keyword(s):  
International Student ◽  
Research Question ◽  
Student Assessment ◽  
Research Work ◽  
National Policy ◽  
International Student Assessment ◽  
Documentary Analysis ◽  
Policy Work ◽  
The Relationship ◽  
Research World

In this article, the author tells the story of her search for appropriate tools to conceptualise policy work. She had set out to explore the relationship between the Programme for International Student Assessment (PISA) of the Organisation for Economic Co-operation and Development (OECD) and Australia's education policy, but early interview data forced her to reconsider her research question. The plethora of available models of policy did not satisfactorily accommodate her growing understanding of the messiness and complexity of policy work. On the basis of interviews with 18 policy actors, including former OECD officials, PISA analysts and bureaucrats, as well as documentary analysis of government reports and ministerial media releases, she suggests that the concept of ‘assemblage’ provides the tools to better understand the messy processes of policy work. The relationship between PISA and national policy is of interest to many scholars in Europe, making this study widely relevant. An article that argues for the unsettling of tidy accounts of knowledge making in policy can hardly afford to obscure the untidiness of its own assemblage. Accordingly, this article is somewhat unconventional in its presentation, and attempts to take the reader into the messiness of the research world as well as the policy world. Implicit in this presentation is the suggestion that both policy work and research work are ongoing attempts to find order and coherence through the cobbling together of a variety of resources.

scholarly journals Asymmetric Macroeconomic Shocks and Asset Price Behaviors in Selected African Countries

2021 ◽  
Vol 11 (2) ◽  
pp. 90
Author(s):  
Saliu Mojeed Olanrewaju ◽  
Ogunleye Edward Oladipo
Keyword(s):  
Real Estate ◽  
Interest Rates ◽  
Asset Prices ◽  
Asset Price ◽  
Panel Cointegration ◽  
African Countries ◽  
Vector Autoregressive ◽  
Macroeconomic Variables ◽  
Real Estate Prices ◽  
The Relationship

This study examines the relationship between Asset prices (Stock and Real estate prices) and Macroeconomic variables in four selected African countries. The study employs the Westerlund Error Correction Based Panel Cointegration test and Eight-variable Structural Vector Autoregressive model to examine the relationship between asset prices and macroeconomic variables. Findings from the study confirm that no long-run relationship exists between both Asset prices and macroeconomic variables. The study equally reveals that portfolio diversification benefits of both stock and real estate markets are more pronounced in the period of a boom than the recession period in Africa. The results also show that GDP growth rate shock exerts a significant impact on both asset prices during expansion and recession periods. The study reveals that foreign interest rates and World oil price shocks are better predictors of both stock and real estate prices during the crisis period than in the expansion period.

scholarly journals Organizational culture and perceived effectiveness: a case study of an insurance company

2019 ◽  
Author(s):  
Milica Slijepcevic ◽  
Jelena Krstic
Keyword(s):  
Organizational Culture ◽  
Organizational Climate ◽  
Organizational Effectiveness ◽  
Research Question ◽  
The Other ◽  
Insurance Company ◽  
Effective Utilization ◽  
Other Hand ◽  
Culture And Climate ◽  
The Relationship

Research question: This paper studies the relation between organizational culture and perceived organizational effectiveness of an insurance company in a developing country with an emerging economy.Motivation: The main objective of the research is to determine whether there is a correlation between organizational culture and climate as a narrower concept, on the one hand and perceived organizational effectiveness on the other hand. Some authors noted a correlation between these organizational aspects. For example, Yan (2016) empirically confirmed that organizational culture positively and significantly correlates with organizational effectiveness. The relationship between organizational culture and organizational effectiveness was also examined by Cox and Trotter (2016), Chen (2017) and Deem, De Lotell and Kelly (2015). Idea: Starting from the findings of other authors that organizational culture indeed affects effectiveness, the authors of this paper wanted to examine whether this relation existed in  a state-owned insurance company in an emerging economy and if so, how to use this  to improve employees’ performance and overall business results. Data: They conducted the research in June 2017 on the sample of employees of Dunav Insurance Company and obtained six hundred and sixty six valid questionnaires. Tools: The questionnaires consisted of five general questions about demographic variables and twenty-nine closed-ended questions related to the topic. The researchers assessed the correlation between variables by Spearman Rho Coefficient and Chi-Square significance. Findings: The results showed the relationship between a number of aspects of organizational culture and climate on one hand and perceived organizational effectiveness on the other hand. Research results showed that the evaluation of effective utilization of working hours and professional capabilities is largely connected with the aspects of organizational climate that reflect poor working conditions and unethical attitude of employees. However, the evaluation of effective utilization of professional capabilities also relates to the perception of predominant aspects of an organizational climate that inspire positive internal relations. Contribution: The results presented in the paper can be used as the basis for organizational and managerial decision-making to improve work processes in the observed organization.

scholarly journals Coastal erosion risk assessment in the coastal area of Muara Asam Asam, Tanah Laut Regency

2021 ◽  
Vol 325 ◽  
pp. 01023
Author(s):  
Rizki Adriadi Ghiffari ◽  
Haryo Dwito Armono
Keyword(s):  
Risk Assessment ◽  
Coastal Area ◽  
Coastal Erosion ◽  
Coastal Areas ◽  
Risk Level ◽  
Residential Areas ◽  
Economic Activities ◽  
Dry Land ◽  
Erosion Risk ◽  
The Relationship

Coastal erosion is the process of land erosion in coastal areas due to waves and ocean currents which reduce land and can adversely affect socio-economic activities in coastal areas. Coastal erosion risk assessment in the estuary is a development of previous research, because the erosion and accretion processes do not only occur along the shoreline, but also on the side facing river water bodies, due to the confluence of fluvial and marine processes. The landward shift of the shoreline in the Muara Asam Asam coastal area has reached 90 meters in the last 28 years, and has been detrimental because the area is a densely populated area with major economic activities in the fisheries and agriculture sectors. This study aims to determine the coastal erosion risk level zones based on the relationship among vulnerability and consequence parameters, through distance decay weighted based method. The results indicate that Muara Asam Asam has high risk zones of coastal erosion, especially in densely populated residential areas and dry land agriculture on the west side of the estuary, due to the lack of implementation of preventive measures through hard coastal structure and coastal zoning policy to protect socio-economic activities and coastal ecological environments.

scholarly journals APLIKASI DATA MINING UNTUK PERBANDINGAN MANAJEMEN LABA TERHADAP TINGKAT RESIKO INVESTASI PADA PERUSAHAAN PERBANKAN DI INDONESIA STOCK EXCHANGE

2017 ◽  
Vol 1 (1) ◽  
pp. 28
Author(s):  
Andika Prajana
Keyword(s):  
Data Mining ◽  
Rough Set Theory ◽  
Stock Exchange ◽  
Financial Statements ◽  
Financial Accounting ◽  
Risk Level ◽  
Investment Risk ◽  
Financial Report ◽  
Financial Condition ◽  
Accrual Basis

The financial report is a means of communicating financial information to parties outside the corporation. The preparation of financial statements, an accrual basis was chosen because it is more rational and fair in reflecting the company's financial condition in real terms, but the other can use the accrual basis to the management to provide more flexibility in choosing accounting methods for not deviate from the rules applicable Financial Accounting Standards. In this study, comparative analysis Persistency Profit Management with Investment Risk level by applying the Application of Data Mining with Rough Set Theory in order to find a pattern or knowledge that can be used as a basis to predict what action will be performed in managing earnings management and banking conditions in company's future. 

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