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This paper examines the zero‐cost risk reversal as a tool for increasing returns to excess yen while limiting risk. With domestic interest rates near zero, firms holding Japanese yen face little opportunity to deposit cash for meaningful gain unless excess funds are invested in an other currency. The conversion strategy is profitable as long as the value of the yen appreciates less than the interest rate differential between the currencies, taking advantage of an apparent empirical regularity frequently referred to as ‘forward exchange bias.’ A problem arises, however, because dollar‐yen exchange rate fluctuation adds variability to returns stated in yen. This increased risk counters prudent cash management principles such as stability of returns and liquidity. We consider the possi bility that effective use of a zero‐cost currency options collar can substantially limit exchange‐rate risk and improve returns to yen holders. Data from July 1997 through June 2002 show that a one‐year strategy of reinvesting collared monthly Eurodollar returns produced a median annual yen return of 1.76 per cent, more than 8 times the median 0.21 per cent Euroyen return; risk also increases but approximately 98 per cent of returns resulting from this strategy fell between ‐6.05 per cent and +12.58 per cent.

Manufacturing companies worldwide have been replacing traditional mass-production practices by lean initiatives. This translation process is progressive and may vary depending on several factors. Hence, it could be expected that the degree of adoption of the lean practices could vary significantly among industries, regions and even countries. The purpose of this paper is to explore the implementation performance of lean principles in Brazil, the paper developed a survey in the Sao Paulo Metropolitan Area, which considered 51 industries of different sizes, from several industrial segments, nationals and multinationals.

The proposed survey was developed using as a normative framework the SAE J4000 standard – identification and measurement of the best practice in implementation of lean operation and the SAE J4001 – implementation of lean operation user manual. To measure the implementation degree of the lean practices in the researched industries, the paper proposed the utilization of two concepts: the degree of leanness (DOL) of an element of J4000 and DOL of a company. Also three hypotheses were tested, trying to establish the relationship among the DOL and firm ownership, their size and respective industrial sector.

The results obtained in the survey demonstrated that the performance of lean initiative implementation is not uniform among the companies located in the researched area. Outcomes also showed that the degree of implementation of the lean practices by multinational companies was higher than that for the national firms. However, it was not possible to establish a relationship between the DOL and the size of the firms. Neither a clear and definite association between DOL and industrial sector was possible to be identified.

For the practitioners and managers dealing with the lean implementation, this paper gives a relevant contribution because it shows how they can effectively use an existing tool to measure the implementation of the lean practices in their respective firms. Furthermore, the DOL calculation for each individual element of the J4000 standard could also be used by practitioners and managers to identify specific problems and opportunity areas where practical actions could be identified to improve the lean implementation.

This paper contributes to the lean manufacturing theory because it proposes a theoretical way to measure the degree of implementation of the lean initiatives in the manufacturing companies. Also the survey results generate additional research material that could be used by other researchers to further explore the subject in the area.

The purpose of this paper is to analyze recent regulations and proposed regulations issued by the US Department of Labor (DOL) that relate to the reporting of compensation paid to service providers to employee benefit plans.

The paper reviews the statutory provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA), applicable DOL regulations as available in the Federal Register and certain public comments and a DOL FAQs document regarding the applicable regulations available on the DOL's web site. The paper also relies on observations of common market practice based on actual experience.

Recent DOL regulations – in particular those related to Form 5500 reporting and the “Necessary Services Exemption” – may significantly affect the reporting obligations of certain private investment fund sponsors with respect to their employee benefit plan investors. It shows that, although the scope of these regulations is understandable in the context of participant‐directed defined contribution plans, they may be less so in the context of defined benefit plans, which invest more frequently in private investment funds. There are some potential exceptions, on which private investment fund sponsors may be able to rely. Achieving compliance with the rules as drafted, however, may be time‐consuming and costly.

Private investment fund sponsors may wish to begin looking at their compensation and service provider arrangements in light of these regulations and consider how best to respond.

The paper contains two experienced ERISA practitioners' analysis of recent regulations on which relatively few stakeholders have seemed to focus to date.

Explains the US Department of Labor’s newly proposed “Conflicts of Interest” rule and provides a critical analysis of its impact should it be adopted as proposed.

Explains the DOL’s proposed Conflict of Interest rule and discusses how it changes the current fiduciary standards of care under ERISA. The article then probes more deeply into the practical matters involved in implementing the rule, and into the realities of how it would impact fiduciary standards generally, investors, the financial services industry and securities arbitrations. Reactions to the proposed rule are then explained against the backdrop of the practical implications thereof.

This article concludes that the DOL’s proposed Conflict of Interest rule, albeit well-intended, is not reasonably designed to achieve its stated goal and would instead likely harm those whom it purports to help. Ironically, it also potentially waters down the existing high standards of current fiduciaries. The article supports the DOL’s goal of greater responsibility for financial service professionals and proffers an alternative solution that could achieve the desired result more effectively.

This article offers valuable insight on the realities of the proposed law and practical guidance on its implications to the investing public, the financial services industry and securities attorneys.

As a healthcare professional caring for people who lack capacity, the author has noted a wide variation in knowledge and awareness by staff of the Deprivation of Liberty Safeguards (DoLS). The purpose of this paper is to examine the DoLS and the background to their coming into being, describes their operation and qualifying requirements, and the continuing problems with their application nationwide.

Utilising a literature search of government papers, official reports of statutory bodies, and critical studies, it examines the central criticisms of DoLS, particularly the lack of a clear statutory definition of deprivation of liberty, and reports on the wide variation in knowledge of the legislation by staff in health and social care, and uneven application of the safeguards nationwide.

It cites evidence from studies showing that even professionals with high levels of expertise in the field find the legislation confusing, and presents testimony from legal experts that case law has failed to clarify the issues for professionals.

Finally, it argues that the legislation is now too complex to successfully amend, and tentatively suggests that, pending a government review to make the process more understandable, health care professionals make ‘precautionary’ applications for DoLS. The author argues that, notwithstanding its faults, the process is a worthwhile exercise in care planning and ensuring that people's care is in their best interests and the least restrictive available.

The purpose of this paper is to investigate the relationship between CEOs' inside debt holdings (pension benefits and deferred compensation) and the operating leverage of the firms they manage, with the aim to examine whether CEO incentives play a role in corporate risk-taking.

The authors investigate the relation between CEO inside debt holdings (CIDH) (pension benefits and deferred compensation) and the operating leverage (DOL) of the firms they manage. Using a sample of 11,145 US firm-year observations over the period 2006–2017, the authors find a strong negative association between CIDH and DOL. Additional analyses reveal that the relationship between CIDH and DOL is more pronounced in firms with heightened agency issues, powerful CEOs and for CEOs with stronger professional networks. The results are robust to various sensitivity and endogeneity tests.

The authors find strong evidence confirming the expected negative association between CEO inside debt and DOL suggesting that firms with higher inside debt tend to maintain lower levels of operating leverage. These findings continue to hold with the alternative measure for the inside debt and operating leverage, and across a range of tests designed to rule out the possibility that the primary findings are in any way driven by potential endogeneity. In addition, the findings demonstrate that the presence of manager-shareholder agency conflicts can strengthen the inside debt–DOL relationship suggesting the strong role of inside debt in reducing firm risk.

Findings in this paper have implications for design of compensation structures so that corporate boards can establish incentives as a tool for risk management. A limitation of this study is that it is focused on one market, i.e. US listed companies, so the findings may not be applicable on a global scale.

To the best of the authors’ knowledge, this is the first study that links firm-level management of operating leverage through design of CEO inside debt incentives (two obvious choices for risk-reduction at the CEOs’ disposal include reducing financial risk through reduction of firm leverage and reducing operating risk through reduction of operating leverage). While use of firm leverage as an instrument of choice has been explored in the past, use of operating leverage to achieve risk reduction when CEO possess high inside holding, has received very little attention.

Strategic cost structure choices determine how firms divide operating costs between fixed and variable components, and therefore have important implications for financial performance. The purpose of this paper is to examine the effect of operating leverage on equity Betas when managers have discretion over firms' cost structures.

Using panel data for publicly listed trucking firms over years 1994‐2006, market model Betas are regressed on controls and alternatively measured proxies for operating leverage: degree of operating leverage, assets in place and percentage of company employed drivers.

Results of this study generally show positively significant coefficients on all three operating leverage variables.

Operating characteristics of many industries require that firms make substantial investments in long‐lived assets that result in high fixed costs (e.g. depreciation), and for these firms cost structure is exogenously or technologically constrained leaving managers with little discretion. In contrast to these types of firms, the authors examine the effect of operating leverage (OL) on Betas when managers have discretion over firms' cost structures. Trucking firms are a particularly interesting industry group for analyzing the impact of operating OL choices on Beta because distinct strategic cost structure choices are available to the management of trucking firms that result in various degrees of OL throughout the industry.

The following is an overview of how the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), applies to securities professionals such as registered investment advisers (“RIAs”) and registered broker‐dealers who advise, manage, or trade for investment portfolios of employee benefit plans subject to ERISA. The principal focus of this outline is on securities registered under the Securities Act of 1933 (the “1933 Act”) and the Securities Exchange Act of 1934 (the “1934 Act”), and securities of investment companies registered under the Investment Company Act of 1940. Many of these principles also will apply directly to unregistered securities, as well as to other investments offered by banks, insurance companies, commodity trading advisers and real estate advisers, though there may be some variation.

The purpose of this paper is to provide a literature review of elasticity-based techniques for the estimation of the degree of operating leverage (DOL) and the degree of financial leverage (DFL) in empirical corporate finance research.

This paper describes the specific details of the estimation of DOL and DFL coefficients under both of the primary estimation techniques and documents the econometric properties of the estimates derived from each techniques.

There are tradeoffs between the two techniques, as each technique has both appealing and limiting features.

This paper indicates how each of the two techniques possesses limitations and suggests that future research should attempt to develop estimation techniques that overcome those limitations.

This paper seeks to use an analytical approach to examine the relation of systematic risk and accounting variables.

The paper theoretically integrates the capital asset pricing model, Cobb‐Douglas function and clean surplus relation to derive the relation.

The analytical results suggest that determinants of systematic risk include earnings, sales growth, book value, dividend, degree of operating leverage (DOL), degree of financial leverage (DFL), market return, and risk‐free return. Three general conclusions are: For a firm with positive prior‐year earnings and current‐year sales growth, if the combined effect of its current book value, dividend and earnings on stock price is positive (negative), then its degree of total leverage has a positive (negative) effect on systematic risk; When the effect of book value and earnings on stock price each is positive and the effect of dividend on stock price is positive (negative), then the dividend has a positive (negative) effect on systematic risk; For a firm with positive (negative) sales growth, its DOL is positively (negatively) related with its DFL for a given level of systematic risk.

The findings have significant implications for the risk management literature and practice.