We protect our merchants from exchange
rate volatility risk by locking the price of Bitcoin at the moment of the purchase.
Less interest
rate volatility risk than long - term U.S. Treasury bonds Prices of all market - traded fixed - rate bonds are affected by interest rates.
Not exact matches
Factors that will have an impact on credit quality of companies include domestic consumption trends, exports, commodity price
risks, sensitivity to changes in interest
rates, working capital
risk, capital expenditure and sensitivity to foreign exchange
volatility.
The industry got a jolt recently when the California Public Employees Retirement System announced it was lowering its historic 7.5 percent expected
rate of return in an effort to reduce
volatility in its portfolio caused by reaching for
risk.
«Rising U.S. yields will cause
volatility in capital flows into emerging markets, and with the Fed still likely to hike
rates in December, the
risk is for further outflows,» said Khoon Goh, head of Asian research at Australia & New Zealand Banking Group Ltd. in Singapore, referring the Federal Reserve.
Bonds
rated below investment grade may have speculative characteristics and present significant
risks beyond those of other securities, including greater credit
risk and price
volatility in the secondary market.
Although bonds generally present less short - term
risk and
volatility than stocks, bonds do contain interest
rate risk (as interest
rates rise, bond prices usually fall, and vice versa) and the
risk of default, or the
risk that an issuer will be unable to make income or principal payments.
As a result of higher exchange
rate volatility, both during the crisis and subsequently, market participants and policymakers became keenly aware of the need for better exchange
rate risk management.
And with our guaranteed exchange
rate, we protect businesses from any
risk of digital currency price
volatility while delivering on - time bank settlements in local fiat currencies.
Several studies [1][2] have shown that low
volatility portfolios have exposure to rising interest
rate risk.
We see
volatility and dispersion rising to normalized levels as the Fed lifts
rates and markets pay more attention to lurking tail
risks.
The recent burst of
volatility has been unnerving, but it is important to remember that the macro environment of synchronized economic growth and muted macro
risks remains solid, although some are concerned about potential inflation and higher interest
rates.
This very low market
volatility can lead investors to take on more
risk, and in a period of still relatively low interest
rates, to «reach for yield» — that is, buy riskier assets than one would otherwise, in order to achieve a desired profit or savings goal.
Important factors that may affect the Company's business and operations and that may cause actual results to differ materially from those in the forward - looking statements include, but are not limited to, operating in a highly competitive industry; changes in the retail landscape or the loss of key retail customers; the Company's ability to maintain, extend and expand its reputation and brand image; the impacts of the Company's international operations; the Company's ability to leverage its brand value; the Company's ability to predict, identify and interpret changes in consumer preferences and demand; the Company's ability to drive revenue growth in its key product categories, increase its market share, or add products; an impairment of the carrying value of goodwill or other indefinite - lived intangible assets;
volatility in commodity, energy and other input costs; changes in the Company's management team or other key personnel; the Company's ability to realize the anticipated benefits from its cost savings initiatives; changes in relationships with significant customers and suppliers; the execution of the Company's international expansion strategy; tax law changes or interpretations; legal claims or other regulatory enforcement actions; product recalls or product liability claims; unanticipated business disruptions; the Company's ability to complete or realize the benefits from potential and completed acquisitions, alliances, divestitures or joint ventures; economic and political conditions in the United States and in various other nations in which we operate; the
volatility of capital markets; increased pension, labor and people - related expenses;
volatility in the market value of all or a portion of the derivatives we use; exchange
rate fluctuations;
risks associated with information technology and systems, including service interruptions, misappropriation of data or breaches of security; the Company's ability to protect intellectual property rights; impacts of natural events in the locations in which we or the Company's customers, suppliers or regulators operate; the Company's indebtedness and ability to pay such indebtedness; the Company's ownership structure; the impact of future sales of its common stock in the public markets; the Company's ability to continue to pay a regular dividend; changes in laws and regulations; restatements of the Company's consolidated financial statements; and other factors.
Important factors that may affect the Company's business and operations and that may cause actual results to differ materially from those in the forward - looking statements include, but are not limited to, increased competition; the Company's ability to maintain, extend and expand its reputation and brand image; the Company's ability to differentiate its products from other brands; the consolidation of retail customers; the Company's ability to predict, identify and interpret changes in consumer preferences and demand; the Company's ability to drive revenue growth in its key product categories, increase its market share or add products; an impairment of the carrying value of goodwill or other indefinite - lived intangible assets;
volatility in commodity, energy and other input costs; changes in the Company's management team or other key personnel; the Company's inability to realize the anticipated benefits from the Company's cost savings initiatives; changes in relationships with significant customers and suppliers; execution of the Company's international expansion strategy; changes in laws and regulations; legal claims or other regulatory enforcement actions; product recalls or product liability claims; unanticipated business disruptions; failure to successfully integrate the business and operations of the Company in the expected time frame; the Company's ability to complete or realize the benefits from potential and completed acquisitions, alliances, divestitures or joint ventures; economic and political conditions in the nations in which the Company operates; the
volatility of capital markets; increased pension, labor and people - related expenses;
volatility in the market value of all or a portion of the derivatives that the Company uses; exchange
rate fluctuations;
risks associated with information technology and systems, including service interruptions, misappropriation of data or breaches of security; the Company's inability to protect intellectual property rights; impacts of natural events in the locations in which the Company or its customers, suppliers or regulators operate; the Company's indebtedness and ability to pay such indebtedness; tax law changes or interpretations; and other factors.
These
risks and uncertainties include food safety and food - borne illness concerns; litigation; unfavorable publicity; federal, state and local regulation of our business including health care reform, labor and insurance costs; technology failures; failure to execute a business continuity plan following a disaster; health concerns including virus outbreaks; the intensely competitive nature of the restaurant industry; factors impacting our ability to drive sales growth; the impact of indebtedness we incurred in the RARE acquisition; our plans to expand our newer brands like Bahama Breeze and Seasons 52; our ability to successfully integrate Eddie V's restaurant operations; a lack of suitable new restaurant locations; higher - than - anticipated costs to open, close or remodel restaurants; increased advertising and marketing costs; a failure to develop and recruit effective leaders; the price and availability of key food products and utilities; shortages or interruptions in the delivery of food and other products;
volatility in the market value of derivatives; general macroeconomic factors, including unemployment and interest
rates; disruptions in the financial markets;
risk of doing business with franchisees and vendors in foreign markets; failure to protect our service marks or other intellectual property; a possible impairment in the carrying value of our goodwill or other intangible assets; a failure of our internal controls over financial reporting or changes in accounting standards; and other factors and uncertainties discussed from time to time in reports filed by Darden with the Securities and Exchange Commission.
The MOVE index suggested that US Treasury
volatility was expected to be very low, while the flat swaption skew for the 10 - year Treasury note denoted a low demand to hedge higher interest
rate risks, even on the eve of the inception of the Fed's balance sheet normalization (Graph 9, right - hand panel).
While shortening duration can help mitigate interest
rate risk, another approach to consider is one that balances exposure to the very front end of the curve with exposure to intermediate maturities for additional yield potential and lower
volatility, given that
rates are likely to rise slowly and stay historically low for the foreseeable future.
Interest
rate risk is worth considering since
volatility is heightened at lower yield levels.
Although it makes sense to me to use bonds to try to reduce
risks and
volatility, what about the possible downward slide of bond values as interest
rates rise over the next few years?
Stronger - than - expected earnings growth of 18 % for the S&P 500 have helped stocks move higher, but potential causes of
volatility, including additional tariff proposals and rising interest
rates, continue to be headline
risks.
If stock prices fell while
volatility declined — which would admittedly be a unusual turn of events — it might actually decrease the perceived
risks of raising
rates.
High yield bonds (bonds
rated below investment grade) may have speculative characteristics and present significant
risks beyond those of other securities, including greater credit
risk, price
volatility, and limited liquidity in the secondary market.
Investments in high - yield («junk») bonds involve greater
risk of price
volatility, illiquidity, and default than higher -
rated debt securities.
Given term premium suppression (via QE) reduced
volatility and induced investors to buy risky assets to boost returns, a sustained rise in long - term interest
rates would give investors more options to achieve yield targets, thus making
risk assets appear less attractive and ultimately erode demands for yield and tighten financial conditions.
Rising
rates have been a key driver in the recent repricing of
risk assets and bouts of
volatility, but there are other factors at play.
We see higher
volatility ahead, given the
risk of a British exit from the European Union, elevated U.S. valuations and the potential for a Federal Reserve
rate increase in 2016.
We've quoted previously from Artemis» October report, «
Volatility and the Alchemy of Risk» (WILTW October 26, 2017): «A dangerous feedback loop now exists between ultra-low interest rates, debt expansion, asset volatility, and financial engineering that allocates risk based on that volatili
Volatility and the Alchemy of
Risk» (WILTW October 26, 2017): «A dangerous feedback loop now exists between ultra-low interest rates, debt expansion, asset volatility, and financial engineering that allocates risk based on that volatility.&ra
Risk» (WILTW October 26, 2017): «A dangerous feedback loop now exists between ultra-low interest
rates, debt expansion, asset
volatility, and financial engineering that allocates risk based on that volatili
volatility, and financial engineering that allocates
risk based on that volatility.&ra
risk based on that
volatilityvolatility.»
We quote Bloomberg Businessweek on the
risk posed by the rules - based strategies pegged to low
volatility in default
rates:
Volatility: Portfolio exposed to a higher level of market
risk in the pursuit of potentially better
rates of return.
There are many types of
risks and here are few examples: Credit
Risk, Interest
Rate Risk,
Volatility Risk, Settlement
Risk, Market
Risk, Liquidity
Risk, Country
Risk, Operational
Risk, Model
Risk, Currency
Risk, Legal
Risk, Systematic
Risk and many other
risks.
They understand how to potentially mitigate the impact of market
volatility brought on by interest
rate risk.
decade - long low level and
volatility of government bond yields led financial institution to take massive notional amounts of interest
rate risk
«A dangerous feedback loop now exists between ultra-low interest
rates, debt expansion, asset
volatility, and financial engineering that allocates
risk based on that
volatility.
This
risk is higher when investing in high yield bonds, also known as junk bonds, which have lower
ratings and are subject to greater
volatility.
Examples of these
risks, uncertainties and other factors include, but are not limited to the impact of: adverse general economic and related factors, such as fluctuating or increasing levels of unemployment, underemployment and the
volatility of fuel prices, declines in the securities and real estate markets, and perceptions of these conditions that decrease the level of disposable income of consumers or consumer confidence; adverse events impacting the security of travel, such as terrorist acts, armed conflict and threats thereof, acts of piracy, and other international events; the
risks and increased costs associated with operating internationally; our expansion into and investments in new markets; breaches in data security or other disturbances to our information technology and other networks; the spread of epidemics and viral outbreaks; adverse incidents involving cruise ships; changes in fuel prices and / or other cruise operating costs; any impairment of our tradenames or goodwill; our hedging strategies; our inability to obtain adequate insurance coverage; our substantial indebtedness, including the ability to raise additional capital to fund our operations, and to generate the necessary amount of cash to service our existing debt; restrictions in the agreements governing our indebtedness that limit our flexibility in operating our business; the significant portion of our assets pledged as collateral under our existing debt agreements and the ability of our creditors to accelerate the repayment of our indebtedness;
volatility and disruptions in the global credit and financial markets, which may adversely affect our ability to borrow and could increase our counterparty credit
risks, including those under our credit facilities, derivatives, contingent obligations, insurance contracts and new ship progress payment guarantees; fluctuations in foreign currency exchange
rates; overcapacity in key markets or globally; our inability to recruit or retain qualified personnel or the loss of key personnel; future changes relating to how external distribution channels sell and market our cruises; our reliance on third parties to provide hotel management services to certain ships and certain other services; delays in our shipbuilding program and ship repairs, maintenance and refurbishments; future increases in the price of, or major changes or reduction in, commercial airline services; seasonal variations in passenger fare
rates and occupancy levels at different times of the year; our ability to keep pace with developments in technology; amendments to our collective bargaining agreements for crew members and other employee relation issues; the continued availability of attractive port destinations; pending or threatened litigation, investigations and enforcement actions; changes involving the tax and environmental regulatory regimes in which we operate; and other factors set forth under «
Risk Factors» in our most recently filed Annual Report on Form 10 - K and subsequent filings by the Company with the Securities and Exchange Commission.
The new pension plan would have progressive contribution
rates between 4 percent and 6 percent with shared
risk / reward for employees and employers to account for market
volatility.
Many of the fixed income investors I talk to feel that they are caught between a rock and a hard place — trying to hedge their bets amid
volatility, but punished on the yield side and incurring increasing interest
rate risk when they play it safe.
Fund screeners, especially fee - based ones, often let you select from additional categories such as analyst
ratings,
risk /
volatility, stewardship of shareholder interest, insider investing, tax efficiency, comparison to indexes, and more.
The unconstrained strategy can be thought of in two ways: always trying to earn a positive return with high probability (T - bills are the benchmark, if any), or being willing to accept equity - like
volatility while the bond manager sources obscure bonds, or takes large interest
rate or credit
risks.
Learn about the major
risks for the bond market in 2016; interest
rate increases, high - yield bond
volatility and a flatter yield curve may be issues.
High - yield («junk») bonds involve greater
risk of price
volatility, illiquidity, and default than higher -
rated debt securities.
Currency - related carry trading execution primarily relies on correctly timing interest
rate cycles and having the backdrop of a low
volatility, «
risk - on» environment
Risk assets (equities / credit) will have to come to terms with potentially higher
volatility, steeper yield curves and higher
rates.
Alternatively, you could believe that the
risk - free
rates were correct and that the higher returns you expect on risky assets are appropriate given the
volatility you are taking on.
If persistent zero interest
rates and quantitative easing that were intended to lead investors to take more
risk in pursuit of higher yielding assets led to dampened
volatility, we should expect greater financial market
volatility in 2015 as the Fed pulls back from its zero
rate policy.
Investments in foreign securities may involve
risks such as social and political instability, market illiquidity, exchange -
rate fluctuations, a high level of
volatility and limited regulation.
Their earnings
volatility through the financial crisis, and steady
rate of increases in book value are also testament to their focus on
risk.
While shortening duration can help mitigate interest
rate risk, another approach to consider is one that balances exposure to the very front end of the curve with exposure to intermediate maturities for additional yield potential and lower
volatility, given that
rates are likely to rise slowly and stay historically low for the foreseeable future.
Kathrin Forrest, AVP at Sun Life Global Investments (SLGI), said interest
rate risk is arguably more attractive compared to other investment opportunities, while bonds can act as an effective buffer through
volatility as they did in February.