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The study examines the joint effect of sovereign and call risks on the duration of callable sovereign bonds over the period 1996–2011. The results indicate that the sovereign risk-adjusted duration is significantly shorter than its Macaulay counterpart for U.S. dollar-denominated investment-grade callable sovereign bonds. Further, the “shortening” effect of sovereign and call risks on duration is generally stronger among bonds of lower ratings. Similar results are obtained when CDS prices are used as a proxy for changes in sovereign risk. Results from this study emphasize the importance of considering the joint effect of sovereign and call risks in managing the interest rate risk exposure in fixed income investments.

The purpose of this paper is to examine whether superior risk-adjusted returns can be generated using monthly covered call option strategies in large capitalized Australian equity portfolios and across varying market volatility conditions.

The authors construct monthly in-the-money (ITM) and out-of-the-money (OTM) S&P/ASX 20 covered call portfolios from 2010 to 2015 and use standard and alternative performance measures. An assessment of variable levels of market volatility on risk-adjusted return performance is also carried out using the spread between implied and realized volatility indexes.

The results of this paper show that covered call writing produces similar nominal returns at lower risk when compared against the standalone buy-and-hold portfolio. Both standard and alternative performance measures (with the exception of the upside potential ratio) demonstrate that covered call portfolios produce superior risk-adjusted returns, particularly when written deeper OTM. The 36-month rolling regressions also reveal that deeper OTM portfolios deliver greater risk-adjusted returns in the majority of the sub-periods investigated. This paper also establishes that volatility spread variation may be a driver of performance for covered call writing in Australia.

The authors suggest that deeper OTM covered call strategies based on large capitalized portfolios create value for investors/fund managers in the Australian stock market and can be executed in volatile market conditions. Such strategies are particularly useful for those seeking market neutral asset allocation and less risk exposure in volatile market environments.

This study aims to examine the effects of risk disclosure and call to action (i.e. encouraging individuals to consult a health provider before they make any purchase decision) on young adults’ cognitive and behavioral responses to dietary supplement advertising.

A 2 (risk disclosure: absence vs presence) × 2 (call to action: absence vs presence) between-subjects online experiment was conducted with 124 college-attending young adults.

Including risk disclosure in probiotic supplement advertising increased young adults’ perceived message credibility, intentions to ask a medical doctor and sense of confidence in decision-making. The addition of call to action in probiotic supplement advertising improved perceived message credibility, trust in advertised brand, favorable attitude toward brand, intention to ask a medical doctor and purchase intention; however, a significant joint effect was not found between risk disclosure and call to action.

Although risk disclosure and call to action are significant techniques in pharmaceutical and health-care marketing, they have been overlooked by both research and practice of dietary supplement marketing. This study closes this gap by providing empirical evidence to generate a clear idea about the benefits of including risk disclosure and call to action in dietary supplement advertising.

The purpose of this paper is to focus on investor reactions to unanticipated changes in income, and whether those reactions can be mitigated by managerial discussion. The authors investigate how top-management team certainty and optimism during post-earnings announcement conference calls can serve as corrective actions and add back firm value in times of unexpected changes in firm-specific risk.

The research question is tested empirically in the context of large, publicly traded, US firms’ quarterly earnings announcements, and their subsequent post-earnings announcement conference calls. The authors use the advanced content analysis software DICTION to measure the levels of managerial certainty and optimism displayed during post-earnings announcement conference calls, and event-study methodology to measure investors’ reactions.

Results indicate that earnings surprises are negatively associated with firm value, but that this relationship is mitigated positively by displays of managerial certainty and optimism during post-earnings announcement conference calls.

This work uses an innovative research design to study top-management team rhetoric in post-earnings announcement conference calls, and how specific discussions mitigate investors’ negative reactions to increases in firm-specific risk. The study highlights the importance of top-management team certainty and optimism for value creation in times of change in firm-specific risk, and the importance of rhetoric as a tool for corrective action.

Ours is a complex world. On these five words will be built a foundation for an alternative way of framing our thinking about risk management. Complexity means many things, but a key feature is that outcomes cannot be predicted with certainty. In the best cases, opportunities arise to analyse and develop some understanding of the uncertainty within a complex system, and in the most fortunate of such circumstances it is possible to anticipate specific outcomes with some degree of accuracy. The authors call such circumstances risks – that is, measurable uncertainties. Complexity, however, consists mainly of interconnected uncertainties and unknown/unknowable possible outcomes or effects. And, of course, complex systems can include humans whose (in)ability to perceive and interpret such environments makes things – well – more complex.

This book ultimately will focus on how the authors construct a way to lead and manage in this environment, but first it is critical that the terminology and description of this world be given some precision. Therefore, Chapter One begins with an introduction to the idea of complexity, including some mention of the principles and concepts that inform our understanding of it. In turn, this discussion introduces uncertainty. Risk, as a category of uncertainty is discussed and the implications of its measurability are presented, which leads to a discussion of human perception and behaviour under conditions of uncertainty. Attention is then drawn to the unknown and the unknowable, and to emergent phenomena. Since the focus of this book is on public sector risk management, the chapter concludes with a brief discussion of the idea of public risk.

This paper aims to draw on historical conceptions of true and false prudence within the broader context of virtue ethics ideas, to create a prudence framework for developing risk-and-ethics cultures in organisations.

The authors use a theoretical analytical approach as a means of examining plausible representations of risk as ethical practice.

While the ethical ideal of true prudence is explained primarily with reference to psychological theories of generativity, false prudence is explained as undesirable, primarily with reference to psychological problems of narcissism and the broader dark triad. True and false prudence are represented as centring upon very different motivations for foresight, each of which might set the cultural tone for organisational risk management.

This paper’s main contribution is therefore to call attention to the benefits for organisations of reflecting upon differences between true and false prudence when planning the risk management they want.

Financial institutions have been subject to minimum capital requirements for considerable time while other companies do not face any such regulation. This paper investigates the capital requirements of companies and how it should relate to the assets of a company.

The theoretical approach in this paper integrates aspects of liquidity, asset characteristics and capital requirements into a single setting to address the problem of capital requirements for non‐financial companies.

The paper develops a framework in which the impact losses have on the future performance of the company are used to develop three categories of capital and suggest a measure for each category. The paper then relates these categories to properties of the assets the capital should be invested in, which include aspects of liquidity as well as the source of this capital. It is finally pointed out how cost considerations can be used to obtain the optimal asset and capital structure of a company.

This paper presents the conceptual basis for the determination of capital requirements of companies and future research is needed to formalize the ideas presented here more thoroughly and gain additional insights into the relationship to the asset structure.

The results of this paper can be used by companies as a first guide towards deciding on their capital requirements, taking into account the properties of the assets they invest their capital in and how to optimize their capital structure.

The paper provides a first insight into the relationship between capital requirements, asset structure, and risks for non‐financial companies.

The purpose of this paper is to demonstrate how an organized framework for risk management called Risk Navigator SRM^© can be practically applied to common risk management problems.

The program makes complex risk principles easier to understand and access by linking together disparate and difficult risk management concepts into a single strategic risk management (SRM) framework. The strategic framework is organized into ten steps in order to organize and develop a practical and applied risk management plan. This paper demonstrates the SRM process in a crop insurance example. A simple version of the program, called Risk Navigator Lite^©, is also applied to crop insurance to demonstrate how robust the framework is for adaptation to field settings, where data may be limited or where decision makers might have limited capacity to understand complicated principles necessary for risk management.

This manuscript elaborates upon how the SRM process may be effectively implemented by agricultural producers. The information herein should also help students of risk management better comprehend how to apply what they learn.

The contribution of Risk Navigator is to make underused, sophisticated risk management concepts and tools more available to farm and ranch managers, and others, by putting them into a framework that is both easy to use and comprehensive.