Professional Documents
Culture Documents
By Tahsen Alqatawni
W. Callian
Since the early 90s, the globalizations are accelerating. This caused
the world economy to serious structural shifts. These issues arise during increasing of competitive pressure. During that period, featured a lo of new financial instruments and the most important one it is the financial derivatives (Alqatawni, 2013).
trading in derivatives is a zero sum game: One derivatives traders gain is necessarily balanced by anothers loss(Heinemann, 2011).
Option: The purchaser of an Option has rights with out any obligations to buy or sell the asset during a given time for a specified price.
Future contract: is standardized, transferable, exchangetraded contract to buy or sell a standard quantity and quality of an asset or security at a specified date and price.
Stripped Mortgage-Backed Securities (CMBS): A stripped mortgage that are split into principal-only strips and interest-only strips, which based in cash flow that derives exclusively from interest payments or principal payments on the underlying mortgages (De Rossi, 2010).
and selling of the same security or obligation (e.g. Fixed-for-floating rate swap).
The opposite of plain vanilla options are exotic options, which are more complex
Structured Notes are hybrid combine of debt instruments and derivative elements that include several financial products, which not necessarily reflect the risk of the issuer. "The combination allows parties to identify, isolate, transfer, and otherwise manipulate risk in clearly defined ways"(Telpner, 2004).
Structured notes are beware of Wall Streets latest 'safe' investment( Revell, 2011).
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A hedge fund is a private investment vehicle target very wealthy investors, that promise great rewards. Whoever it may also use leverage, which present great risk and the huge potential rewards. "Hedge funds employ instruments such as derivatives to gamble with their clients (Whalen, 2007). In 2010, Allen stated Hedge Funds Accused of Gambling with Lives of the Poorest as Food Prices Soar.
The Financial derivatives turned into a source of gambling or risk taking, and expansion to very large volume. According to the bank for international settlements (BIS)the volume of these derivatives increased by more than three times in the past few years(2011).
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the financial company pushed the prudence and ethics aside as greed overcame good judgment among mortgage lenders nationwide.
The lack of a qualified ethical analysis is the major reasons of financial management mistakes (Heinemann, 2011).
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Russell, K., Dortch, M., Gordon, R., & Conrad, C. (2012). Ethical
Dilemmas in the Financial Industry. Case Studies in Organizational Communication: Ethical Perspectives and Practices, 35. The author discussed the financial derivatives and responsibility, and how to deal ethically with financial risk. In addition, the study tries determined who is responsible for the risks generated on financial markets, and which aggregate level of financial risk does the society have to carry. The study assumed the lack of a qualified ethical analysis is the major reasons of financial management mistakes.
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Carrigan, M., & De Pelsmacker, P. (2009). Will ethical consumers sustain their values in the global credit crunch?. International Marketing Review, 26(6),
674-687.
The study explores the impact the global recession had upon customers and marketers, and recognizes the evidence envelope concerns that the demand for
ethical outputs will decline across global markets as the recession deepens.
In addition, the author offers a balanced perspective on the importance of ethical consumers to global marketers. The study highlights a number of threats and opportunities that exist in the modern global recession, and the discussion illustrated with different examples of successful marketing ethics in action.
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number and size of CSR projects, and why they failed to balance
the expectations of relevant parties. Therefore, the author explored the reasons make the organizations choose not to engage in CSR projects. the study examined 100 randomly-sampled global companies. The study result found that there is a significant decline in numbers and extent of CSR projects in times of the global financial crisis..
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Lewis, V., Kay, K. D., Kelso, C., & Larson, J. (2010). Was the 2008 financial crisis caused by a lack of corporate ethics?. Global Journal of Business Research, 4(2), 77-84.
The purpose study to answer the specific question that: was the 2008 Financial
Crisis Caused by a Lack of Corporate Ethics?. the study discussed the unethical lending practices by major lending institutions, which destroyed the U.S financial markets, and eventually all major world markets. The author discussed how the financial company pushed the prudence and ethics aside as greed overcame good judgment among mortgage lenders nationwide, and how this company sold the
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Akif, M. (2011). Global Financial Crisis from an Ethical Perspective. Research Journal of Internatonal Studes-Issue, 82. Allen, K. (2010). Hedge funds accused of gambling with lives of the poorest as food prices soar. The Guardian, 19. BIS, (2012). Semiannual OTC derivatives statistics at end June 2011. Bank for international settlements. Retrieved from: http://www.bis.org/statistics/derstats.htm Borak, S., Hrdle, W. K., & Lpez-Cabrera, B. (2013). Exotic Options. InStatistics of Financial Markets (pp. 101-118). Springer Berlin Heidelberg.
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Revell, J. ( 2011, August 30). Structured notes: Beware Wall Street's latest investment. Retrieved from http://money.cnn.com/2011/08/29/pf/structured_notes_beware.fortune/ind ex.htm Russell, K., Dortch, M., Gordon, R., & Conrad, C. (2012). Ethical Dilemmas in the Financial Industry. Case Studies in Organizational Communication: Ethical Perspectives and Practices, 35. Telpner, J. S. (2004). A survey of structured notes. The Journal of Structured
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THE END
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