Norway the Kingdom of Norway, is a Nordic country in Northern Europe whose territory comprises the western and northernmost portion of the Scandinavian Peninsula. The Antarctic Peter I Island and the sub-Antarctic Bouvet Island are dependent territories and thus not considered part of the kingdom. Norway lays claim to a section of Antarctica known as Queen Maud Land. Norway has a total area of 385,207 square kilometres and a population of 5,312,300; the country shares a long eastern border with Sweden. Norway is bordered by Finland and Russia to the north-east, the Skagerrak strait to the south, with Denmark on the other side. Norway has an extensive coastline, facing the Barents Sea. Harald V of the House of Glücksburg is the current King of Norway. Erna Solberg has been prime minister since 2013. A unitary sovereign state with a constitutional monarchy, Norway divides state power between the parliament, the cabinet and the supreme court, as determined by the 1814 constitution; the kingdom was established in 872 as a merger of a large number of petty kingdoms and has existed continuously for 1,147 years.
From 1537 to 1814, Norway was a part of the Kingdom of Denmark-Norway, from 1814 to 1905, it was in a personal union with the Kingdom of Sweden. Norway was neutral during the First World War. Norway remained neutral until April 1940 when the country was invaded and occupied by Germany until the end of Second World War. Norway has both administrative and political subdivisions on two levels: counties and municipalities; the Sámi people have a certain amount of self-determination and influence over traditional territories through the Sámi Parliament and the Finnmark Act. Norway maintains close ties with both the United States. Norway is a founding member of the United Nations, NATO, the European Free Trade Association, the Council of Europe, the Antarctic Treaty, the Nordic Council. Norway maintains the Nordic welfare model with universal health care and a comprehensive social security system, its values are rooted in egalitarian ideals; the Norwegian state has large ownership positions in key industrial sectors, having extensive reserves of petroleum, natural gas, lumber and fresh water.
The petroleum industry accounts for around a quarter of the country's gross domestic product. On a per-capita basis, Norway is the world's largest producer of oil and natural gas outside of the Middle East; the country has the fourth-highest per capita income in the world on the World IMF lists. On the CIA's GDP per capita list which includes autonomous territories and regions, Norway ranks as number eleven, it has the world's largest sovereign wealth fund, with a value of US$1 trillion. Norway has had the highest Human Development Index ranking in the world since 2009, a position held between 2001 and 2006, it had the highest inequality-adjusted ranking until 2018 when Iceland moved to the top of the list. Norway ranked first on the World Happiness Report for 2017 and ranks first on the OECD Better Life Index, the Index of Public Integrity, the Democracy Index. Norway has one of the lowest crime rates in the world. Norway has two official names: Norge in Noreg in Nynorsk; the English name Norway comes from the Old English word Norþweg mentioned in 880, meaning "northern way" or "way leading to the north", how the Anglo-Saxons referred to the coastline of Atlantic Norway similar to scientific consensus about the origin of the Norwegian language name.
The Anglo-Saxons of Britain referred to the kingdom of Norway in 880 as Norðmanna land. There is some disagreement about whether the native name of Norway had the same etymology as the English form. According to the traditional dominant view, the first component was norðr, a cognate of English north, so the full name was Norðr vegr, "the way northwards", referring to the sailing route along the Norwegian coast, contrasting with suðrvegar "southern way" for, austrvegr "eastern way" for the Baltic. In the translation of Orosius for Alfred, the name is Norðweg, while in younger Old English sources the ð is gone. In the 10th century many Norsemen settled in Northern France, according to the sagas, in the area, called Normandy from norðmann, although not a Norwegian possession. In France normanni or northmanni referred to people of Sweden or Denmark; until around 1800 inhabitants of Western Norway where referred to as nordmenn while inhabitants of Eastern Norway where referred to as austmenn. According to another theory, the first component was a word nór, meaning "narrow" or "northern", referring to the inner-archipelago sailing route through the land.
The interpretation as "northern", as reflected in the English and Latin forms of the name, would have been due to folk etymology. This latter view originated with philologist Niels Halvorsen Trønnes in 1847; the form Nore is still used in placenames such as the village of Nore and lake Norefjorden in Buskerud county, still has the same meaning. Among other arguments in favour of the theor
A credit rating is an evaluation of the credit risk of a prospective debtor, predicting their ability to pay back the debt, an implicit forecast of the likelihood of the debtor defaulting. The credit rating represents an evaluation of a credit rating agency of the qualitative and quantitative information for the prospective debtor, including information provided by the prospective debtor and other non-public information obtained by the credit rating agency's analysts. Credit reporting – is a subset of credit rating – it is a numeric evaluation of an individual's credit worthiness, done by a credit bureau or consumer credit reporting agency. A sovereign credit rating is the credit rating such as a national government; the sovereign credit rating indicates the risk level of the investing environment of a country and is used by investors when looking to invest in particular jurisdictions, takes into account political risk. The "country risk rankings" table shows the ten least-risky countries for investment as of January 2018.
Ratings are further broken down into components including economic risk. Euromoney's bi-annual country risk index monitors the political and economic stability of 185 sovereign countries. Results focus foremost on economics sovereign default risk or payment default risk for exporters. A. M. Best defines "country risk" as the risk that country-specific factors could adversely affect an insurer's ability to meet its financial obligations. A rating expresses the likelihood that the rated party will go into default within a given time horizon. In general, a time horizon of one year or under is considered short term, anything above, considered long term. In the past institutional investors preferred to consider long-term ratings. Nowadays, short-term ratings are used. Credit ratings can address a corporation's financial instruments i.e. debt security such as a bond, but the corporations itself. Ratings are assigned by credit rating agencies, the largest of which are Standard & Poor's, Moody's and Fitch Ratings.
They use letter designations such as A, B, C. Higher grades are intended to represent a lower probability of default. Agencies do not attach a hard number of probability of default to each grade, preferring descriptive definitions such as: "the obligor's capacity to meet its financial commitment on the obligation is strong," or "less vulnerable to non-payment than other speculative issues...". However, some studies have estimated the average reward of bonds by rating. One study by Moody's claimed that over a "5-year time horizon" bonds it gave its highest rating to had a "cumulative default rate" of 0.18%, the next highest 0.28%, the next 2.11%, 8.82% for the next, 31.24% for the lowest it studied. Over a longer period, it stated "the order is by and large, but not preserved". Another study in Journal of Finance calculated the additional interest rate or "spread" corporate bonds pay over that of "riskless" US Treasury bonds, according to the bonds' rating. Looking at rated bonds for 1973–89, the authors found a AAA-rated bond paid 43 "basis points" over a US Treasury bond.
A CCC-rated "junk" bond, on the other hand, paid over 7% more than a Treasury bond on average over that period. Different rating agencies may use variations of an alphabetical combination of lowercase and uppercase letters, with either plus or minus signs or numbers added to further fine-tune the rating; the Standard & Poor's rating scale uses pluses and minuses. The Moody's rating system uses numbers and lowercase letters as well as uppercase. While Moody's, S&P and Fitch Ratings control 95% of the credit ratings business, they are not the only rating agencies. DBRS's long-term ratings scale is somewhat similar to Standard & Poor's and Fitch Ratings with the words high and low replacing the + and −, it goes as follows, from excellent to poor: AAA, AA, AA, AA, A, A, A, BBB, BBB, BBB, BB, BB, BB, B, B, B, CCC, CCC, CCC, CC, CC, CC, C, C, C and D. The short-term ratings map to long-term ratings though there is room for exceptions at the high or low side of each equivalent. S&P, Moody's, Fitch and DBRS are the only four ratings agencies that are recognized by the European Central Bank for determining collateral requirements for banks to borrow from the central bank.
The ECB uses a first, best rule among the four agencies that have the designated ECAI status, which means that it takes the highest rating among the four agencies – S&P, Moody's, Fitch and DBRS – to determine haircuts and collateral requirements for borrowing. Ratings in Europe have been under close scrutiny the highest ratings given to countries like Spain and Italy, because they affect how much banks can borrow against sovereign debt they hold. A. M. Best rates from excellent to poor in the following manner: A++, A+, A, A−, B++, B+, B, B−, C++, C+, C, C−, D, E, F, S; the CTRISKS rating system is as follows: CT3A, CT2A, CT1A, CT3B, CT2B, CT1B, CT3C, CT2C and CT1C. All these CTRISKS grades are mapped to one-year probability of default. Government budget by country List of countries by credit rating List of countries by tax revenue as p
Market risk is the risk of losses in positions arising from movements in market prices.: Equity risk, the risk that stock or stock indices prices or their implied volatility will change. Interest rate risk, the risk that interest rates or their implied volatility will change. Currency risk, the risk that foreign exchange rates or their implied volatility will change. Commodity risk, the risk that commodity prices or their implied volatility will change. Margining risk results from uncertain future cash outflows due to margin calls covering adverse value changes of a given position. Shape risk Holding period risk Basis risk All businesses take risks based on two factors: the probability an adverse circumstance will come about and the cost of such adverse circumstance. Risk management is the study of how to balance the possibility of gains; as with other forms of risk, the potential loss amount due to market risk may be measured in a number of ways or conventions. Traditionally, one convention is to use value at risk.
The conventions of using VaR are well established and accepted in the short-term risk management practice. However, VaR contains a number of limiting assumptions; the first assumption is that the composition of the portfolio measured remains unchanged over the specified period. Over short time horizons, this limiting assumption is regarded as reasonable. However, over longer time horizons, many of the positions in the portfolio may have been changed; the VaR of the unchanged portfolio is no longer relevant. Other problematic issues with VaR is that it is not sub-additive, therefore not a coherent risk measure; as a result, other suggestions for measuring market risk is Conditional Value-at-Risk, coherent for general loss distributions, including discrete distributions and is sub-additive. The variance covariance and historical simulation approach to calculating VaR assumes that historical correlations are stable and will not change in the future or breakdown under times of market stress; however these assumptions are inappropriate as during periods of high volatility and market turbulence, historical correlations tend to break down.
Intuitively, this is evident during a financial crisis where all industry sectors experience a significant increase in correlations, as opposed to an upwards trending market. This phenomenon is known as asymmetric correlations or asymmetric dependence. Rather than using Historical Simulation, Monte-Carlo simulations with well-specified multivariate models are an excellent alternative. For example, to improve the estimation of the variance covariance matrix, one can generate a forecast of asset distributions via Monte-Carlo simulation based upon the Gaussian copula and well-specified marginals. Allowing the modeling process to allow for empirical characteristics in stock returns such as auto-regression, asymmetric volatility and kurtosis is important. Not accounting for these attributes lead to severe estimation error in the correlation and variance covariance that have negative biases. Estimation of VaR or CVaR for large portfolios of assets using the variance covariance matrix may be inappropriate if the underlying returns distributions exhibit asymmetric dependence.
In such scenarios, vine copulas that allow for asymmetric dependence across portfolios of assets are most appropriate in the calculation of tail risk using VaR or CVaR. In addition, care has to be taken regarding the intervening cash flow, embedded options, changes in floating rate interest rates of the financial positions in the portfolio, they can not be ignored. The Basel Committee did set revised Minimum capital requirements for market risk in January 2016; these revisions will address deficiencies relating to. The company must detail; this is designed to show, for example, an investor who believes he is investing in a normal milk company, that the company is in fact carrying out non-dairy activities such as investing in complex derivatives or foreign exchange futures. Systemic risk Cost risk Demand risk Risk modeling Risk attitude Modern portfolio theory Risk return ratio Dorfman, Mark S.. Introduction to Risk Management and Insurance. Prentice Hall. ISBN 978-0-13-752106-7. Managing market risks by forward pricing Bank Management and Control, Springer - Management for Professionals, 2014 How hedge funds limit exposure to market risk
Switzerland the Swiss Confederation, is a country situated in western and southern Europe. It consists of 26 cantons, the city of Bern is the seat of the federal authorities; the sovereign state is a federal republic bordered by Italy to the south, France to the west, Germany to the north, Austria and Liechtenstein to the east. Switzerland is a landlocked country geographically divided between the Alps, the Swiss Plateau and the Jura, spanning a total area of 41,285 km2. While the Alps occupy the greater part of the territory, the Swiss population of 8.5 million people is concentrated on the plateau, where the largest cities are to be found: among them are the two global cities and economic centres Zürich and Geneva. The establishment of the Old Swiss Confederacy dates to the late medieval period, resulting from a series of military successes against Austria and Burgundy. Swiss independence from the Holy Roman Empire was formally recognized in the Peace of Westphalia in 1648; the country has a history of armed neutrality going back to the Reformation.
It pursues an active foreign policy and is involved in peace-building processes around the world. In addition to being the birthplace of the Red Cross, Switzerland is home to numerous international organisations, including the second largest UN office. On the European level, it is a founding member of the European Free Trade Association, but notably not part of the European Union, the European Economic Area or the Eurozone. However, it participates in the Schengen Area and the European Single Market through bilateral treaties. Spanning the intersection of Germanic and Romance Europe, Switzerland comprises four main linguistic and cultural regions: German, French and Romansh. Although the majority of the population are German-speaking, Swiss national identity is rooted in a common historical background, shared values such as federalism and direct democracy, Alpine symbolism. Due to its linguistic diversity, Switzerland is known by a variety of native names: Schweiz. On coins and stamps, the Latin name – shortened to "Helvetia" – is used instead of the four national languages.
Switzerland is one of the most developed countries in the world, with the highest nominal wealth per adult and the eighth-highest per capita gross domestic product according to the IMF. Switzerland ranks at or near the top globally in several metrics of national performance, including government transparency, civil liberties, quality of life, economic competitiveness and human development. Zürich and Basel have all three been ranked among the top ten cities in the world in terms of quality of life, with the first ranked second globally, according to Mercer in 2018; the English name Switzerland is a compound containing Switzer, an obsolete term for the Swiss, in use during the 16th to 19th centuries. The English adjective Swiss is a loan from French Suisse in use since the 16th century; the name Switzer is from the Alemannic Schwiizer, in origin an inhabitant of Schwyz and its associated territory, one of the Waldstätten cantons which formed the nucleus of the Old Swiss Confederacy. The Swiss began to adopt the name for themselves after the Swabian War of 1499, used alongside the term for "Confederates", used since the 14th century.
The data code for Switzerland, CH, is derived from Latin Confoederatio Helvetica. The toponym Schwyz itself was first attested in 972, as Old High German Suittes perhaps related to swedan ‘to burn’, referring to the area of forest, burned and cleared to build; the name was extended to the area dominated by the canton, after the Swabian War of 1499 came to be used for the entire Confederation. The Swiss German name of the country, Schwiiz, is homophonous to that of the canton and the settlement, but distinguished by the use of the definite article; the Latin name Confoederatio Helvetica was neologized and introduced after the formation of the federal state in 1848, harking back to the Napoleonic Helvetic Republic, appearing on coins from 1879, inscribed on the Federal Palace in 1902 and after 1948 used in the official seal.. Helvetica is derived from the Helvetii, a Gaulish tribe living on the Swiss plateau before the Roman era. Helvetia appears as a national personification of the Swiss confederacy in the 17th century with a 1672 play by Johann Caspar Weissenbach.
Switzerland has existed as a state in its present form since the adoption of the Swiss Federal Constitution in 1848. The precursors of Switzerland established a protective alliance at the end of the 13th century, forming a loose confederation of states which persisted for centuries; the oldest traces of hominid existence in Switzerland date back about 150,000 years. The oldest known farming settlements in Switzerland, which were found at Gächlingen, have been dated to around 5300 BC; the earliest known cultural tribes of the area were members of the Hallstatt and La Tène cultures, named after the archaeological site of La Tène on the north side of Lake Neuchâtel. La Tène culture developed and flourished during the late Iron Age from around 450 BC under some influence from the Gree