AIG Case Study Example | Topics and Well Written Essays - 1000 words

AIG - Case Study Example The risk management division at AIG knew very well of the risks they were taking but still they carried on with this unstable, fraudulent yet lucrative opportunity. In the end, the company almost got to the brink of bankruptcy. Greed and negligence led AIG to be a part of the derivative business. The derivatives are risky investments and many wise investors avoid these instruments because of their highly unpredictable nature as well as the loopholes for exploiting them through scams and frauds. This payment comes in the form of collateralized debt obligations (CDOs). Before the crisis began these instruments were in huge demand because they were offering higher returns than other bonds that had the same credit ratings. Therefore, speculators as well as investors heavily purchase these instruments from insurers such as AIG. Before the crisis the US financial market was going through bullish trends and it appeared improbable for bond issuers to go through bankruptcy (Xinzi, 2013). Hence, CDS seemed the most lucrative selling financial tools for collecting premiums. By the end of 2007 the CDS contract grew to about $60 trillion and there was no doubt that when the times were good CDS were generating huge reve nues for AIG (Xinzi, 2013). In addition, many banks and underwriters of CDS covered their short positions in one instrument while staying long in other CDS (Xinzi, 2013). AIG did not play on both sides of the trade (Xinzi, 2013). The unethical side of AIGs derivative business was not to fully cover the insurance it was providing. When the risk management is underwriting the risks they should keep track of the companys resources in case they have to pay the claim. The company was not oblivion about the risky nature of the securities it was insuring. The management only considered the quarterly premium that kept coming in. In other words AIG failed

Starting Up a Business That Involves The Supply of Green And Organic Assignment

Starting Up a Business That Involves The Supply of Green And Organic Groceries - Assignment Example The researcher states that he wants to start his business of natural and organic grocery delivery service which will mainly focus on the supply of fruits and vegetables because of the recent interest in fresh and green farm produce. The society is increasingly becoming aware of the need for environmentally friendly production of food and disposal of food waste. In addition, recent health concerns about junk food and unhealthy eating mean that there will be a special interest in green groceries. The business will fill the need of environmental and health conscious individuals who prefer greengroceries over genetically modified or junk food. In addition, there is a food shortage in some regions, and the never-ending need to eat means that there will always be a constant demand for food. A lesson from Bakers Edge and Shark Tank is that networking is essential in any business. The Shark Tank investors largely focus on networking as integral to the success of any business. A network is a structure that attracts and informs potential customers of the existence of a business. The network involves such things as aggressive marketing and endorsements from celebrity personalities. In addition, it is essential to identify potential investors and their networks. Bakers Edge interview on the Shark Tank show gave them considerable exposure and mileage in the bakery business. Oprah also hosted and endorsed their product.