Monday, November 18, 2019

Investment Risk Management Research Paper Example | Topics and Well Written Essays - 1750 words

Investment Risk Management - Research Paper Example These include the following: an assessment of the factors that contributed to the financial failure of the firm, a discussion and representation of mortgage backed securities and the risks associated with leveraging them to a particularly high degree, in evaluation of management’s role with respect to the collapse of Lehman Brothers, a discussion of the recent debt crisis within the Euro zone and the relevance that Lehman Brothers example provides for this particular scenario, and final evaluation of the role of federal government and seeking to regulate ultimately decrease the incidence of such collapses in the future. Naturally, each of the aforementioned sections will corresponds to a section that provides recommendations and potential solutions that could have otherwise ameliorated the factors involved (Kershaw & Moorhead, 2013). It is the ultimate hope of this particular author that such a level of discussion and analysis will be beneficial to the reader in seeking to gai n a further level of understanding concerning the case of Lehman Brothers and the corresponding importance that this has with respect to other firms in the current market. Firstly, as a function of assessing the factors that contributed to the financial failure of the firm, these are ultimately contingent upon the high exposure of certain types of investments that Lehman Brothers engaged with. Essentially, mortgage backed securities (MBS) were a mainstay of the financial backbone that Lehman Brothers relied upon as a function of funding its continuing operations and providing investment security to its clients (Steele, 2014). However, as a direct result of the fact that these mortgage-backed securities were inherently unstable and essentially directly linked to the solidity of the mortgage market, this represented a lack of diversification and placed investors in an extreme risk of losing sizable parts of

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