Professional Documents
Culture Documents
Due to the riskiness of MBSs, Freddie Mae and Freddie Mac found a financial institution
(Lehman Brothers) to do a credit default swap (CDS) to guarantee that people will pay their
mortgages, and if people do not, then Lehman Brothers will pay. This is a 3rd party guaranteeing
payment.
27. Why did Lehman Brothers go out of business?
Due to Credit default swaps. They did not have long term strategy.
28. What did the Federal Government do?
They stepped in due to systemic risk and started bailing financial institutions out.
29. What is mortgage securitization?
Financial institutions such as Lehman Brothers who guaranteed payment of mortgages.
30. Did strategy cause the crisis?
No, but it did nothing to avert it either. No one checked the qualifications of the people who were
applying for mortgages.
31. What is the sphere of competence?
What is your strategy and what are you going to do in areas that you know?
32. In the 90s, what were internet stocks evaluated on?
Stock values. High = good.
33. What did strategy point to as the only measure of success?
Stock price
34. What did Michael Porter lament about in the 90s?
That companies were sacrificing long-term strategy for more faddish concerns / short term
profits
35. What is the problem with strategy?
Competitive advantage time is shortened, positional volatility of leaders, and need for adaptive
strategy
36. What is an example of the positional volatility of leaders?
o Best Buy is going to be gone due to the internet unless they adapt because they
are selling a commodity that can be price checked.
o GE does a good job at adapting and staying current in order to survive
37. Why do we need an adaptive strategy?
Instead of developing one strategy based on analysis, prediction and deduction, create a set of
optimal conditions for the continuous emergence of superior strategies.
We need a bunch of good strategies that will keep us at the forefront.
38. What four things do we need to incorporate in strategy?
That shareholder-value pressured people to work longer hours and that heightened job insecurity
were making employees more likely to feel unmotivated and disenfranchised.
66. Who were the people who became responsible for strategy?
The people who were in daily contact with customers, competition, and changing market
conditions.
67. Who said that shareholder value is a result, not a strategy?
Jack Welch
68. Few Companies today are concerned about supply chain management
False
69. A major concern of supply chains today is the real tradeoff between efficiency and potential
disruption
True
70. Supply chain disruption cost Toyota the #1 spot for automakers in 2011
True, an earthquake caused a tsunami and knocked them from #1 to #3 because they could not
transport the parts. They lost 50% of production.
71. In supply chain management, what have may companies moved towards?
Just in time delivery, reducing the need to store excessive amounts of stock which can be
costly
72. What is supply chain risk?
Anything that can interrupt the ultimate product delivery (anywhere along that supply chain).
Think about how an organization goes from raw materials to finished products on the market (a
chain of events).
73. In supply chain, what is there a real tradeoff between?
Efficiency and potential disruption
74. Why do we generally win wars?
Based on supply chain
75. In supply chain, who is risk put on?
Risk is put on the supplier, not the manufacturer.
76. What is supply chain?
A system of organizations, people, activities, information, and resources involved in moving a
product or service from supplier to customer.
77. What is the problem with supply chain risk?
How can we predict what is going to happen?
determine how much it would cost us (lost profitability). Finally, plot the results to see our risk
exposure to each supplier.
90. What type of approach is this?
A methodical approach that does not forget about small, low-cost commodity (things that you
can buy from anyone) suppliers which can have a large impact
91. What are the 7 benefits of this strategy?
1. Identifies hidden exposures (you do not skip over anything, you are looking at
every single supplier)
2. Avoids the need for predictions about rare events (dont worry about the why)
3. Reveals supply chain dependencies and bottlenecks (dominos effects)
4. Promotes discussion and learning among senior management
5. Allows for more focused risk management
6. Many key suppliers are properly managed
7. Many small suppliers often overlooked prior to this type analysis
92. What is just in time delivery?
What businesses are primarily focused on in order to be the most efficient. Products are delivered
only when they need it so as not to have too much excess inventory. The problem is the tradeoff
when something goes wrong. There is a longer time to recover.
93. When does supply chain risk become a more of a problem?
When businesses outsource
94. According to "From Superstorms to Factory Fires", the author was surprised to find what
kind of correlation between how much a firm spends annually on procurement at a particular site
and the site's impact on company performance?
Little correlation
95. In "From Superstorms to Factory Fires", what was Ford able to do using the model described
in the article?
A: Using the model, Ford was able to identify the supplier sites that required no special riskmanagement attention
96. In "Strategy, Risk, and the Global Financial Crisis", Walter Keichel argues that a fair-minded
observer would conclude which of the following statements in regards to the financial crisis?
While strategy and its champions may not have been a main cause in bringing on the global
financial crisis, they did not do much to avert it.
97. In "Strategy, Risk, and the Global Financial Crisis", what was a major difficulty encountered
by Boston Consulting Group when the firm canvassed Indian, Japanese, European, and American
firms?
Firms were unwilling to implement a strategy, replying "We don't do strategy".
98. The following statement describes which of the following theories? "_________ is a theory
of management that analyzes and synthesizes workflows. Its main objective is improving
economic efficiency, especially labor productivity."
Taylorism
99. Which of the following is a primary benefit of using the linear optimization model?
The model reveals supply chain dependencies and bottlenecks.
100. Which of the following is NOT an example of PI (performance impact)?
Unemployment rate
101. What are examples of PI (performance impact)?
Lost units of production, profit margin, and revenue
102. Which of the following is not described in "Strategy, Risk, and the Global Financial
Crisis?" as being part of the "constellation" of forces responsible for the blurring of traditional
industry lines?
Interest from investors
103. What are described in "Strategy, Risk, and the Global Financial Crisis?" as being part of the
"constellation" of forces responsible for the blurring of traditional industry lines?
Deregulation, competition from new quarters, and new technologies
104. What is an REI score?
Risk Exposure index that is assigned to nodes in a supply chain
105. What are examples of supply chain responses that will minimize the performance impact of
the disruption at a specific node?
Drawing down inventory, shifting production, expediting transportation, or reallocating resources
106. What are operational performance impact (PI) generated based on?
Optimal response for the node
107. What can PI be measured in?
lost units in production, lost sales, revenue, or profit margin
108. What will be assigned to the node with the largest PI?
An REI of 1.0
109. What will all other nodes be assigned?
An REI score that has been indexed relative to the node with the largest PI.
110. What would a node whose disruption would cause the least impact be assigned?
An REI close to zero
111. What mathematical technique does this model use?
Linear optimization to determine the best response to a nodes being disrupted for the duration of
its TTR
112. What is true about REI scores?
The node with the largest performance impact is assigned an REI of 1.0, REI allows a firm to
identify at a glance the nodes that should get the most attention from risk managers, and a node
whose disruption would cause the least impact receives an REI value close to zero.
1013. What is NOT true about REI scores?
REI scores help determine macroeconomic effects of monetary policy
114. Which of the following provides the clearest description of time to recovery (TTR)?
The time it would take for a particular node to be restored to full functionality after a disruption
115. What is the most important thing that you can do today?
Vote
116. Financial derivatives are extremely risky and should be heavily regulated?
True
117. What are the traditional methods for managing supply chain risk?
Ones that rely on knowing the likelihood of occurrence and the magnitude of impact for every
potential event that could disrupt a firms operations. These methods work well for common
supply chain disruptions such as poor performance, forecast errors, and transportation
breakdowns. These methods use historical data to quantify the level of risk.
118. Why is uncommon supply chain risk hard to quantify using the traditional model?
Historical data is limited and nonexistent for low probability, high impact events.
119. What is a new model created to focus o?
The impact of potential failures at points along the supply chain rather than the cause of the
disruption. The model can be updated quickly and easily. It determines the probability that any
specific risk will occur.
120.
Producers overlook the risks associated with ______?
Low cost, commodity suppliers. This leaves the organization exposed to hidden risk.
121. The model accounts for _____?
Existing and alternative sources of supply, transportation, inventory, work in progress, and
production dependencies.
122.
123.
Module 10A
127. What is a derivative?
A contract between two or more parties whose value is based on an agreed-upon underlying
financial asset, index or security
128. What are common underlying instruments to derivatives?
Bonds, commodities, currencies, interest rates, market indexes, and stocks.
129. What type of risk is a derivative an example of?
Organizational level risk
130. What are the 5 common types of derivatives?
Futures contracts, forward contracts, stock options, swaps, and warrants
131. Why is a futures contract considered a derivative?
Its value is affected by the performance of the underlying contract
132. Why is a stock option considered a derivative?
Its value is derived from that of the underlying stock
133. Describe derivatives used as a hedge.
Derivatives are great for hedging and it allows you to get rid of price risk by setting a price to
sell product in the future. The value of the contract is unknown. This does not create risk.
133.
In the following example, what have I done? I am an airline and I will use 10 million
barrels of aviation fuel this year. I dont know what the price of aviation fuel will be when I
need to buy it. I can enter into a futures contract to purchase the fuel at a specified price at a
specified time.
I have hedged my exposure to fuel price risk. If prices go up, I make money. If prices go down, I
lose money.
134.
Describe derivatives used to speculate.
Derivatives can also be used to speculate about future prices. Sell it now, high, and buy it again
later, low. If prices are predicted to go down, I make money. If prices go up, I lose money. This
creates risk by taking on exposure that I have never had.
135.
What is the problem of the following example? I think that the S&P index is going to go
down, how can I make money on that? I can enter a derivative transaction where I sell the
index at todays prices.
I do not actually own shares of the index to be able to sell
136. What options do I have in the example above?
Well, when the index goes down, I can enter into a different derivative transaction to buy at the
lower price.
If I sell high and I buy low, I make money without ever actually owning any shares of the
index. (or, if the index goes up and I sell low and buy high, then I lose money)
137. What is the risk in the use of derivatives?
Since many trades are unregulated, there is little oversight to see how risky some of the
positions that are being taken by individuals or organizations are. Domino effect and systemic
risk are an issue.
138.
What was the problem with Robert Citron in the Orange County case when they lost
over 1 billion dollars and went bankrupt?
They could no longer pay municipal bonds
139. Why did Barings Bank go bankrupt?
Nick Leeson hid his losings of billions of dollars from speculative transactions in Singapore.
140. Why did Lehman Brothers go bankrupt?
They were exposed to credit default swaps and subprime mortgages and were guaranteeing other
financial institutions money. A 3-4% move in property values and they went bankrupt. Everyone
saw this coming and a domino effect was created. The federal government did not bailout
Lehman Brothers but it did help Bank of America.
141. What is ironic about Warren Buffet from Berkshire Hathaway?
In 2002, The Oracle o Omaha (aka Warren Buffet) said, derivatives are financial weapons of
mass destruction. 6 years later (2009) he lost 67 billion dollars in derivatives transactions and
stripped Berkshire Hathaway of its triple A debt rating thus causing them to go bankrupt. He then
said, auditors cant audit these contracts, and regulators cant regulate them.
142.
True or false: derivatives are financial instruments based on other products, both physical
and financial.
True
150. Are derivatives powerful investment devices?
Yes, especially in hedge funds. 70% of hedge funds trade derivatives
151. According to Yong Chen, are derivatives associated with heavy risk taking?
No. Little is known about their effects on fund risk and performance.
152. What does hedge mean?
To insure against
153. According to Yong Chen, what did the high risk reputation of derivatives spur from?
Financial failures which used derivative trading
154.
How do derivatives derive their value?
From other assets and are derivatives are financial instruments that allow investors to speculate
on the future price of an asset.
155.
Module 10B
158. What are examples of our needs?
We need food, water, shelter, and clothing.
159. What are examples of our insatiable wants?
We want entertainment, communication, variety, and brownies.
160. What do our wants and desires spur?
Economic activity
161. True or False: Our wants are unlimited
True
162. Why are our means limited?
Resources, labor, capital and technology are scarce
163. True or False: It is difficult to determine the right mix of production, i.e. how much of each
product
True
164. True or False: The resources available to produce to fulfill our wants and needs are limited
and usually cannot be increased greatly at any given time.
True
165. What is technology usually subject to?
Limited degrees of improvement.
166. What does technology refer to?
The known means and methods available for combining resources to produce goods and
services.
167. What is labor?
The efforts of mind and muscle that can be used in production process
168. What is capital?
All of the nonhuman ingredients that go into production
180.
True
True or False: Marginal cost is increasing and therefore the curve is convex.
181.
Is it possible to answer the following questions: What is optimal? What is the right level
of production?
No, it is impossible too tell.
182.
True
True or False: When you are near capacity, the cost moves a lot.
183.
188. What do governments look at to answer the following question: Are we producing more?
Real GDP make adjustments for inflation/price changes
189.
What do governments look at to answer the following question: Are we using more
(labor) resources?
Per capita real GDP how much we can produce per person in our economy
190.
No
Chile, China, Columbia, Egypt, El Salvador, Ethiopia, India, Indonesia, Kenya, Mexico, Nigeria,
Peru, Philippines, South Africa, Thailand, Venezuela, and Zambia
195. What is characteristic of Less Developed Countries?
These usually have higher population, higher rate of population increase, lower life expectancy,
lower per capita real GDP, and higher GDP growth rate
196.
202.
1/5
204.
True
205.
True
True or False: Resources are always scarce relative to the sum of total of human wants.
1.
2.
3.
4.
5.
False
230. Corporations have an obligation to help poorer nations.
False
231. Countries can increase their GDP by:
Increase in capital, increase in labor, and improvement in technology
232. The US is the only country with an income inequity problem
False
I
II
III
I and II
I and III
II and III
I, II, and III
According to the reading, wants are _________ and ________ due to variety.
Unlimited, insatiable
Limited, insatiable
Unlimited, satiable
Limited, satiable
235.
Which word best describes the following definition: all of the efforts of mind and
muscle that can be used in production processes?
(a) Capital resources
(b) Labor resources
(c) Technology
(d) All Resources
236.
(a)
(b)
(c)
(d)
237.
(a)
(b)
(c)
(d)
The total market value of all final goods and services produced
The total market value of all finished and unfinished goods produced
The total market value of all services offered
The total market value of all resources
I
II
III
I and II
I and III
II and III
I, II, and III
239.
What word best describes the following definition: a graphical representation of the
maximum quantities of the two goods that an economy can produce when its resources are
used in the most efficient way possible?
(a) Economic frontier
(b) Production possibilities curve
(c) Opportunity cost curve
(d) Average GDP curve
240.
(a)
(b)
(c)
(d)
241.
What term best describes the following definition: GDP in current dollars corrected for
inflation
(a) Per capita real GDP
(b) Per capita GDP
(c) Real GDP
(d) GDP
242. Which of the following is NOT a cause of poverty and requisites of economic growth?
I.
Quality of labor force
II.
Stock of capital and capital accumulation
III.
Technology
IV.
Efficiency
V.
Population
(a)
(b)
(c)
(d)
(e)
(f)
(g)
I
II
III
IV
V
All of the above ARE causes
None of the above ARE causes
Module 11
243.
True
244. How many experts does the annual Global Risk Survey?
More than 700 experts
245. What is the objective of the survey (Global Risks 2014 report)?
To explore nature of systemic risks, map out 31 global risks, and focus on how the 3
constellations have systemic impact
246. What are the 3 constellations?
Youth, cyberspace, and geopolitics
247. What can global risks only be addressed by?
Long term thinking and collaboration among businesses, governments and civil society.
248.
How are the 31 risks mapped out?
According to the level of concern they arouse, their likelihood and potential impact, as well as
the strength of the interconnections between them
249. What are the 4 Underlying Themes in the Report?
1. Trust (in other countries to do what they say)
2. Long-Term Thinking (problem: most risks are not immediate, but rather future risks)
3. Collaborative Multi-stakeholder Action (these problems cannot be solved solo)
4. Global Governance
250. What is Global Risk?
The occurrence that causes significant negative impact for several countries and industries over a
time frame of up to 10 years.
251. What is Systemic Risk?
The breakdowns in an entire system, as opposed to breakdowns in individual parts or
components
252. What are Systemic Risks characterized by?
Large failure:
253. What 5 categories are the 31 global risks are divided into?
1. Economic
2. Environmental
3. Geopolitical
4. Societal
5. Technological
254. What is included in the economic category?
Risks in the economic category include fiscal and liquidity crises, failure of a major
financial mechanism or institution, oil-price shocks, chronic unemployment and failure of
physical infrastructure on which economic activity depends.
255.
256.
257.
258.
259. What are the 3 parameters that the global risks are analyzed along?
1. Highest Concern (qualitative)
2. Likelihood and impact (quantitative)
3. Interdependencies (systemic)
260. What are the Top 10 highest concern systemic risks?
1. Fiscal Crisis in Key Economies
2. Structurally High Unemployment/Underemployment
3. Water Crises
4. Severe Income Disparity
True or False: The water crisis is not just a third world concern and can lead to
geopolitical problems
True
276. What is the #5 high concern systemic risk?
Climate Change
277. Is there a trade off between Economic Growth and Climate Change?
Yes, what can we do? Should we stop production and economic growth in order to stop
pollution?
278. What is Vulnerability in relation to climate change?
Who can adapt the best. Failure to adapt effects the most vulnerable.
279. What is the cost of adaptation to climate change in developing countries?
$70 -$100B per year up until 2050
280.
How much time will it take for the poorest countries to adapt as well as we can today?
100 years
281. What do developing countries tend to lack?
The infrastructure and capacity to deal with extreme droughts, floods, reduced crop yields,
increased stressed on energy and water supply.
282. What are some other risks not emphasized in the reading?
Urbanization and existential threats
283. Where is urbanization a problem?
It is not a big US problem, but is a problem in poorer countries (pandemics, safety, etc.)
More than half of the worlds population lives in cities Poorer countries have limited capacity to
manage the risks created by urbanization (ecological disruptions, pollution, climate change, and
environmental disasters). Communicable diseases spread more quickly in densely populated
areas which in turn, increases the risk of global pandemics.
b. The development and production of unconventional oil and natural gas resources,
such as oil sands and shales, which require processes and technologies (e.g. fracking)
that differ considerably from those used for conventional resources in terms of energy
input, cost and environmental impact. Their impact and sustainability are being
increasingly questioned.
293. What is the significance of plastic waste pollution?
It could degrade marine ecosystems and spoil shorelines, posing a credible threat to ecosystems
and human health.
294. What is the significance of endocrine disruptors in the environment?
They have been linked to human health problems through interference with hormonal systems.
295. What are the risks associated with Science & Technology?
Several emerging risks are associated with the use of new technology, such as the potential
toxicity of nanomaterials, the future evolution and impact of 3-D printing, and uncertainty about
the potential impact of widespread use of autonomous vehicles, which are capable of sensing
their environment and navigating on their own. The potential for abuse, or an accident involving
synthetic biology, could even pose an existential risk.
296. What is Economic risk related to?
Monetary policy
297.
As a consequence of the 2008 financial crisis, central banks in many countries have been
pursuing ______?
An ultra-loose monetary policy. Although theoretical fears of high inflation and unintended asset
bubbles have so far mainly been contained, central banks are expected to tighten monetary
policy. The resulting higher interest rates could see volatility in asset prices, capital flows and
exchange rates, and rising government debt due to higher interest costs.
298.
The rise of the bitcoin and the possibility of other new modes of payment could create
new ______?
Economic risks as well as opportunities. Risks relate to the facilitation of money laundering,
corruption, illicit financial flows as well as volatility and susceptibility to security threats and
market manipulation. China is among the governments that have already begun to restrict the use
of virtual currencies.
299. What are Social & Political risks?
The costs of living longer was raised as an X-factor risk to watch in the 2013 edition of this
report, and risks related to longevity remain significant as medical advances increase life
expectancy, posing funding challenges in retirement financing, long-term care and healthcare.
Along the same lines, the prevalence of overweight and obesity is increasing and could result in
significant economic cost.
300. What are the three Specific Risk Focus?
1. Geopolitical Risk
2. Youth
3. Digital Disintegration
301.
302.
303.
True
True or False: in Spain and Greece there is over 50% youth unemployment?
What is the Strategy for Managing Global Risks (Risk Management Process)?
Identify Risk
Prioritize Top Risks
Undertake Risk Assessment
Identify Risk Management Options
Design Risk Management Strategy
Design Crisis Management Strategy new step
Implement
Monitor
307.
What are the issues with the Strategy for Managing Global Risks?
319. The risks identified in the global risks report analyzed along 3 parameters:
Qualitative (highest concern), quantitative (likelihood and impact), and systemic
(interdependencies)
320. How does the global risks report determine which risks to include in the report?
Survey of risk experts
321. According to figure 1.1, the global risks landscape, which risk is the worst based on
likelihood and impact?
Climate Change
Module 12
322. True or False: There is no precision in the ability to classify something as a Natural
Disasters
True
323. What is a natural disaster?
It is a combination of the following factors and can happen anywhere:
Fatalities
Damage
Economic effects
324. True or False: only a couple of disasters overlap on the Deadliest Natural Disasters chart
and the Costliest Natural Disasters (insured losses) chart
True, meaning cost and fatalities do not go together.
325. What is the difference between a natural disaster and a great natural disaster?
Death toll
Damage
Effect on economy
326. True or False: It is hard to bring precision to natural events
True
327. The dense population in Asia leads to disasters such as _____?
Fatalities
328. Economically developed countries (US, Europe, Japan) leads to disasters such as ______?
Economic losses
329. How are recent Natural Disasters determined?
It is all up to perception of time. There are human vs. geological timeframes.
330.
10K
331.
How many damage did the Earthquake/Tsunami in Japan in 2011 cause?
19K+ killed, 330K buildings destroyed, nuclear meltdown, Insured losses $35B, Economic
losses $200B
332. What was the problem with the tsunami disaster in Japan?
The lack of warning. Everyone had 20 minutes to move 6 miles inland before the ocean water
destroyed everything
333. What was the damage of the Earthquake in Haiti?
230K killed from a population total of 10M, 2.3% of population killed
334. What was the damage of the 1918 Flu?
8M dead in WWI, 3% of worlds population died (50M)
335.
True or False: according to a study conducted by Gregory Van Der Vink, 80% of deaths
from disasters in 15 countries (Leading countries: China, Bangladesh, Indonesia). Of these
15 countries, 87% below democracy index, 73% below median GDP
True
336.
Disasters are not only based on location, economic development, and population, but
also based on _____?
Government. Dictatorships and poorer countries are more related to disaster.
337.
Identify who said the following quote; Deaths from natural disasters can no longer be
dismissed as random acts of nature. The are direct and inevitable consequences of high-risk
land use and failures of government to adapt or respond to such known risks
Gregory Van Der Vink
338. If people expect other people to be altruistic in times of emergency, what is the result?
People wont prepare properly because they know that someone will help them afterwards if they
loose something
339. What does human response to disaster create?
Incentives in non-emergency times
340. Can we step up to the plate when necessary?
Yes, because people tend to be altruistic in times of emergency
341. What number of Economic Losses are insured losses?
Anywhere from 25-50% in developed nations
Much smaller in developing nations
In 2011, $110 of $370B in losses were insured
342.
True or False: Hurricane exposure in Florida is extremely high. Hence why home owners
insurance is so high in South Florida.
True
349. Is there randomness to disasters?
There is no randomness, just things we cant predict yet
350.
No
What is Resilience?
Can you bounce back after the event? How long (time, energy, money) will it take you to
bounce back after an event
354. What is Mitigation?
Can we do something ahead of time to reduce our exposure?
a. Actions to eliminate or reduce future deaths, losses, etc. from natural hazards
b. Engineering, physical, social, political
c. Three little pigs what type of house to build to reduce exposure (protect lives, not
prevent accident). How to build things that will withstand the losses?
355. What is geological time?
Hundreds of years rather than days, weeks, and months)
356. True or False: risk and exposure has been changing
True. We may make progress (become less vulnerable) however, exposure (population, economic
development) is growing. Net result: we may or may not be making progress
357. Why is exponential growth of human population a problem?
There are more people, and therefore if a natural hazard or disaster occurs it is more likely to
effect someone
357.
True or False: We may have better science and technology, but that does not mean we
know the unknown unknowns or are better prepared for it
True
365. What is carrying capacity and why is it a huge factor?
It is how much we can manipulate the environment
a. The ability of the environment to support a population
b. Population size is limited/regulated by resources available in environment
366. What is the Irish Potato Famine an example of?
Example of Carrying Capacity; a significant portion of population left Ireland for new world
367. What are the opportunities? Where can reward be earned?
Mitigation
Resilience
Engineering
Science
Climate change
367.
True or False: According to the Hyogo Framework for Action: 2005-2015: Building the
Resilience of Nations and Communities in Disasters, nothing points to specific
communities and determines why they are resilient. There is no formula.
True
368.
Concentrated
369. What percent of disasters caused what percent of deaths?
.26% of disasters caused 78.2% of deaths
370. What percent of disasters caused what percent of economic losses?
.28% of disasters caused 40% of the economic losses
371.
380.
Declining ecosystems is characterized by?
The production of enough food, water, energy, uses ecosystem maybe too much
381. Why are poor nations worse off?
Less resilient
No insurance/social coverage no enabling to rebuild once a disaster has occurred
Lead to income & consumption shortfalls (which they cant afford)
Negatively affect welfare and human development (where they are already behind)
382. What besides Natural Disasters should we be worried about?
Human activities
383. Most global catastrophes will occur from _____?
Human activities, industrial civilization and advanced technologies
384. What human activity is the biggest worry?
Infectious pandemic diseases
385. What are some examples of human activity?
Nuclear war, biotechnology, nuclear terrorism
386. What does the Hyogo Framework do?
1. Ensure that disaster risk reduction is a national and local priority with a strong
institutional basis for implementation
2. Identify, assess, and monitor disaster risks and enhance early warning major
undertaking of coastal areas give people opportunity to evacuate works well for
things that we can see coming
3. Use knowledge, innovation and education to build a culture of safety and resilience at all
levels
4. Reduce underlying risk factors
5. Strengthen disaster preparedness for effective response at all levels
387.
Yes.
3.
4.
5.
6.
7.
8.
9.
True or False: Great natural disasters overwhelm regions and international assistance is
needed to rescue and care for people, clean up the destruction, and begin the process of
reconstruction.
True
393. As the global population of human increase _____?
The number of deaths by natural disasters is expected to rise, but the relationship has
complexities.
_____ are not random phenomena, and rather the consequences per calamity continue to
magnify because of human action.
Natural disasters
403. Where is global disaster risk highly concentrated?
in poorer countries with weaker governance. Particularly in low and low-middle income
countries with rapid economic growth, the exposure of people and assets to natural hazards is
growing at a faster rate than risk-reducing capacities are being strengthened, leading to
increasing disaster risk.
404.
Countries with small and vulnerable economies, such as many small- island developing
states (SIDS) and land-locked developing countries (LLDCs), have the highest economic
vulnerability to ____________
Natural hazards. Many also have extreme trade limitations.
405.
406. Disaster impacts lead to _____ and _______ shortfalls and ______ affect welfare and
human development, often over the long term.
Income, consumption, negatively
407.
408.
409.
410.
According to the reading, progress has been made in addressing disaster risk in the
following areas:
1. The Hyogo Framework for Action
2. Climate Change Adaptation
3. Poverty Reduction
410. We have more natural disasters today than we did 50 years ago
False
411. What makes a hurricane a natural disaster?
A combination of the number of fatalities, dollars of damage, and the long tem economic effects
412. Which event caused the most deaths?
Earthquake in Haiti (2010), 230k deaths
414. To calculate the rate of growth a population is displaying, you must measure the ___ rate
and subtract the ____ rate.
Fertility (birth), mortality
415. What might make a country less resilient and less strong?
High risk location and low wealth
Q: People tend to step up to the plate (are altruistic) in times of emergency
A: True
416. No two countries have the exact same rate of population growth. Which of the following is
true of population growth:
Less developed countries have higher population growth because of higher birth rates and
steady/lower death rates
417. Which of the following states would not be included in the NEW tornado alley?
California
418. Which of the following states are included in NEW tornado alley?
Alabama, Florida, Mississippi, and Texas
419. Which of the following best describes the demographic transition in that has low death rates
and low birth rates?
Post-transition
420. Because risk isnt evenly distributed, which types of countries have the largest exposure (as
a percentage of GDP) to natural disasters?
SIDS (small island developing states) and LLDC (land-locked developing countries)
421. In the process of ____, we make plans to take actions to eliminate or reduce the threat of
future death and destruction when natural hazards suddenly become great threats.
Mitigation
422. Which of the following is not a reason that poorer nations are worse off with regard to
natural disasters?
Military inefficiency
423. Which are reasons that poorer nations are worse off in regard to natural disasters?
Not resilient, lack of insurance, income and consumption shortfalls
424. What can turn a natural hazard into a natural disaster?
Fatalities, Damage, and Economic Weakness
425. We are making progress in assessing natural disasters
True
426. We are ready for natural disasters
False
Module 13
427. The number of people over 80 and over will:
Double in the next couple of decades
428. Global aging is going to have the biggest impact on:
Worker productivity/economic growth, health care costs, and social programs, and poverty
(underreported)
429. What is the bigger problem facing worker productivity/economic growth?
Brain Drain (knowledge leaving workforce) and RAD (retired at desk)
430. How many people in the US workforce per retiree (receiving Social Security in 2010)
2.9
431. How many people in the US workforce per retiree (receiving Social Security in 2030)
1.9
432. What percentage of GDP was spent on healthcare in 2011?
17%
433. What percentage of GDP will be spent on health care in 2035?
30%
434. What do we do about social programs going forward?
Cut benefits, increase taxes, or take funds from other programs (currently, 6.4% of income goes
to Social Security and Medicare)
435. By 2020, how much will the working population be contracting in Europe and Japan?
0.5-1.5%
436. The US can expect to become more influential because of the aging population
True
437. In Is Global Aging a Major Problem?, Howe and Jackson posit that China could be
The first country to grow old before it grows rich
438. Which of the following is not one of the major challenges of an aging population?
Older people making poor decision
439. Which of the following is a major challenges of an aging population?
Challenge of enabling and supporting environment, health and well being issues, and economic
development issues
440. The number of people 80+ will double in 12 years (by 2025)
False. 30 years
441. Which of the following is a challenge with the aging population?
Poverty, health, generational equity, and labor inefficiency
442. What type of relationship is typical between worker productivity and age?
Inverse
443. With human input declining, what needs to be done to GDP growth?
Improved efficiency
443. What problem will China be facing in the future?
The 4-2-1 Problem
445. The biggest Aging Population problem is
Health Care and retirement savings
446. What is the appropriate retirement age (opinion)
65 years old
447. Which country is the riskiest? (I dont know right answer)
Venezuela
448. Political risk will?
Grow in the future
449. Which question will represent Political analysis?
Will ___ pay its debt?
450. With regard to international affairs and political risk, the US is:
Dont really know
451. Corporations are better prepared for political risk today than 10 years ago?
True
452. Looking forward 1 decade, what will happen to the global population?
The global population aging and decline (unless we have a pandemic). We are aging and
population growth is starting to slow down.
453. What questions should we ask going forward?
How the aging population will affect economic growth, living standards, fiscal policy, etc.
454. Are there uniform effects of the aging population?
No, it will not effect the entire globe the same. Different countries will have different effects.
455. Why is the US better off than some other countries?
We are in bad shape, but it is all relative. We have higher birth rates, higher mortality rates, more
immigration.
456. True or False: There are more services for the elderly (aging population).
True, the question is who will provide these services?
457. What is the problem with this?
There are fewer in workforce to provide these services
458. What is the bucket of capabilities?
An economics perspective what are we as a generation going to do to provide these services?
459. What is the basis of workforce?
A combination of the body and the mind
460. What is Manual Labor?
The body part of the workforce.
Aging population does not help, as people age, they do not preform as well
Not many people are going to be in this industry as time progresses
461. What is the Knowledge based workforce?
The mind part of the workforce
Older workforce has experience/knowledge that is valuable.
More people are in service-based industries.
This is good for the aging population.
Older people have experience and knowledge that is still beneficial to society.
462.
There is opportunity for current workers to tap retired workers as resource learning information
technology and training
463. What do many people fear?
That aging costs are going to outweigh benefits. What is the true cost to society of an aging
population?
464. What are the 5 Aging Trends?
1. Aging population
2. Life expectancy is increasing (lifespan?)
3. The number of people 80+ will double in 30 years
4. Median age of Western Europe & Japan
1980 34 and 33
2030 47 and 52
5. Italy, Spain, & Japan
More than half of all adults will be older than official retirement age
That is a 1:1 ratio (not good)
More people in their 70s than 20s
465. Within 50 years, the median age __________ by almost 20. It changed drastically.
Increased
466.
True
471. What are these specific challenges within the 3 main categories?
1. Slower economic growth
2. Poverty among elderly real problem
3. Generational equity how much are you going to have to sacrifice to support older
generations
4. Inadequate investment in physical and human capital - are we spending too much on
older generations and not enough on younger?
5. Inefficiency in labor markets are we producing the right products and services?
Could we see declining GDP even with more effective use of capital?
474.
Age.
True
484. US population growth comes from _________?
Immigration
485. What 2 questions are associated with immigration?
1. Where will next wave of workforce be?
2. Where will retirees be?
486. Who said The Floridazation of the developed world?
Peter Peterson
487. What are Half backs?
Older people who moved to Florida to retire but didnt like it so moved back up to the North East
but only made it halfway. Many retirees are in North Carolina.
488. How has society found a way to use gray skills to alleviate burden on younger
generations?
By using the experience of age
489. What country is relatively better off than rest of developed world?
The US
490. How much are we projected to drop in global GDP?
The US will drop from 34% to 24% of global GDP. US didnt drop as much as other developed
countries.
491. How much will Canada, France, Germany, Italy, Japan, UK combined drop in global GDP?
Combined they will drop from 38% to 16%
492. What are the costs to maintain the current social programs for retirees?
An additional 7% of GDP needs to go to government budgets to support these programs
493. What type of payment system are these programs?
Pay as you go system current workers support current retirees
494. Which is easier to fix: Social Security or Medicare?
Social Security is easier to fix than Medicare
495. What percent of medical care is consumed is the last 4 years of your life?
90%
496. What are the 3 options to fix the problems caused by these programs?
We need to cut benefits, raise taxes, or take money out of GDP
497. Why will we most likely go for the first two options of tax hikes and benefit cuts?
Remember that the elderly vote and there will end up being an overburden of taxes destroying
growth
498. Where does the third option of taking it from GDP suggest we do?
Take it from everywhere else (ex. defense, education, humanitarian, etc.)
499. Do old people get as upset as young people?
Apparently not
500. According to the social / political upheaval category, what is the current problem?
Countries are aging, and since older people dont get as upset, they are less likely to cause
problems in future. This suggests that demographics will win war on terror.
501. What is the new problem with the suggestion that demographics will win the war on
terror?
New countries can emerge
502. What type of countries are the ones to go through the full demographic transition?
Todays developed nations
503. What was events occurred during the USs transition in 1700-1900s?
Revolutions, civil wars, WWI, WWII, Korea, Vietnam, etc. It is not a smooth transition.
504. What are the shorter focuses of developed countries?
Reduce will to fight along with reducing financial capabilities. As countries develop and people
get older, they are less likely to fight in wars because they are more focused on internal
problems.
505. What is the implication of the fact that older people tend to become more conservative?
It changes the politics, and more
506. Is Rate of Change a Problem?
Yes
507.
What country will be the first country to go through transition without becoming
wealthy first?
China
509. How long did it take France to go through the transition?
True or False: France and US became wealthy and then went through the transition?
520.
Yes
531. What do declining birth and death rates mean in terms of services?
More services will be needed while fewer individuals will be in the workforce and be able to
provide it.
532. What will be the key to expanding economies and increased abilities to provide public
services rather than expanding the work force?
Expanding minds not bodies
533. What is The Floridization of the developed world?
Where retirees continue to flock in unprecedented numbers to a certain part of the country.
534. What are the major challenges of aging population?
1. Economic development issues
2. Health and well being issues
3. The challenge of enabling and supportive environments
535. The percentage of those older than 60 years is _____ while the labor force percentage is
______?
Increasing, decreasing.
536. True or False: The costs of global aging will outweigh the benefits, and the capacity of the
developed world to pay for these costs is questionable.
True
537. What are the effects of aging on populations?
1. Slower economic growth
2. Poverty among the elderly
3. Generational equity
4. Inadequate investment in physical and human capital
5. Inefficiency in labor markets
6. Suboptimal consumption profiles
7. Unsustainable public transfer systems
538. Both the _____ and the ____ of less developed countries will decline as a percentage of
global totals, thus leading to a loss of influence.
Population, GDP
539. What will rise leading to increased influence?
The US share will rise and thus they will have more influence
540. The threat of ethnic and religious conflict will continue as a ______throughout the world.
Security challenge
541. The 2020s will be a decade of _________?
Maximum political danger.
Module 14
551. Which of the following describes political risk analysis?
It is more subjective than economic risk analysis
552. All of the following are examples of external shocks except:
Transfer of power; Obama Care
553. What are examples of external shocks?
Refugee influx, tsunami, and terror campaign
554. Which of these is considered to be economic analysis?
Can a particular country pay its debt?
555. Which of the following is not a component of the economy category of DESIX?
Level of globalization
556. Which of the following is a component of the economy category of DESIX?
Growth, Investment, and External Sector
557. Level of globalization, geostrategic conditions, and disaster response/emergency are all
examples of which category in the DESIX?
Security
558. Which of the following tells corporate leaders whether a particular country WILL pay its
debt?
Political Risk Analysis
559. Which countries are the most stable with regard to political risk?
Ones that can avoid creating shocks and ones that ride out those that do occur
560. What is the measure for political risk?
Stability
570. Which of the following is the third party principal reason listed by Bremmer in his
assessment of political risk analysis?
The offshoring trend is growing and should be monitored
571. Which is broadly defined as the effect of politics on markets?
Political risk
572. What does economic analysis of potential international expansion take into account?
Political risk
573. What is understanding the political context vital to?
Success
574. When developed countries are looking to expand, the growth possibilities are fairly
_______for corporations due to aging population.
Small; therefore they may need to look at developing countries for chances to grow.
575. What is political risk?
The impact of politics on markets and activities /any factors that can stabilize or destabilize a
market
576. What are examples of activities regarding political risk?
Passage of laws
Foibles of leaders
Rise of popular movements
What are examples of companies that you can hire to preform External political risk
analysis?
Consultants such as AO measures exchange transfer risk, political violence risk, sovereign nonpayment risk, political interference, legal and regulatory risks, supply chain, banking
sectors, business risks
583. What type of countries have fairly low risk ratings?
Developed countries
584. Political Risk Analysis is a ________ approach of looking at risk.
Qualitative
585. Why do we need political risk analysis?
International Markets more interconnected than ever before
585. What is the difference between economic and political analysis?
The types of questions being asked
586. What types of questions does economic analysis ask?
Can a particular country pay its debt?
586.
What type of questions does political analysis ask?
Will a particular country pay its debt?
587. How is Political Risk measure?
Measured by Stability
588. What two factors effect stability?
600. What does the government section of the DESIX stand for?
a. Current government strength
b. Rule of law
c. Level of corruption
601. What does the society section of the DESIX stand for?
a. Social tension
b. Youth dissatisfaction
c. Health, education, etc.
602.
603.
604.
True
True or False: Most developed countries are the most stable but have the least growth
opportunities
True
614. What do companies fear?
Companies fear unpredictable change even as they seek profit from the opportunities that change
creates.
615. To help outweigh dangers against opportunities, corporations mulling foreign ventures
routinely consult __________ analysts.
Economic risk
616.
Basing decisions on economic data without understanding the political context is good or
bad?
Bad
617. What is the bread and butter of economic risk analysis?
Per capita income, growth, and inflation
618. What is political risk (the impact of politics on markets) influenced by?
The passage of laws, the foibles of leaders, and the rise of popular movements. All of the factors
that might politically stabilize or destabilize a country.
619. What does the significance of a risk depend upon?
The context if the investment decision.
620. What does any company with exposure in foreign markets need?
Early and accurate information on political developments.
621. What are the four reasons for early and accurate information on political developments?
1. International markets are more interconnected than ever before
2. The US is making the world a more volatile place and that has changed risk calculations
everywhere
3. The offshoring trending is growing. Businesses shift operations to where labor is cheap.
4. The world is increasingly dependent for energy on states troubled by considerable
political risk such as Saudi Arabia, Iran, Nigeria, Russia, and Venezuela.
626. What type of variables are more difficult to measure? Political or economic?
Political risk variables are more difficult to measure than economic variables. Politics is
influenced by human behavior and the sudden confluence of events for which no direct
calibrations exist.
627. True or False: The US is making the world a more volatile place?
Yes, especially in the Bush Era
628. What trend is growing?
Offshoring trend is growing
629. Whom is the US becoming increasingly reliant on and for what?
Energy from political risk states Saudi Arabia, Iran, Nigeria, Russia, Venezuela
630.
How did the Bush Era change the dynamics of the USs relationship in international
affairs and foreign policy?
Prior to September 11, 2001, whenever there was a problem, we formed a coalition and
partnerships in order to support peace processes. Afterwards, Bush stood up and said to Allies
and said that we will do what we need to do to take care of ourselves (this made enemies)
631. What three elections had results that were challenged and ultimately decided by court
rulings?
2000: US
2003 Taiwan
2004 Ukraine