Market risks

On the other hand, the technical and market risk involved in licensing technology, the difficulty in assessing the value of a particular inteUectual property, and the fact that the technology is developed outside the Hcense company often makes licensing less than desirable. Like Hcensing-out,... 

TPUs are handicapped by a lower elasticity than conventional rubbers, the more so the higher the hardness certain risks of creep, relaxation and permanent set, the more so the higher the temperature higher cost than TPOs risks of hydrolysis especially for the polyester types UV exposure yellowing incompatibility between certain polyester and polyether grades aromatic and chlorinated hydrocarbon behaviour limited thermal behaviour density inherent flammability, but FR grades are marketed risks of fume toxicity in the event of fire. 

Draft Guidance for Industry Pre-marketing Risk Assessment (May 2004). 

Guillermo Larrain, Helmut Reisen and Julia von Maltzan Emerging Market Risk and Sovereign Credit Ratings. 1997, OECD s Technical Paper No. 124... 

Market Risk This is the risk that you will not be able to sell your investment for what you paid for it. 

You could put your savings in stocks or a stock mutual fund. These choices have provided substantial growth of both income and capital over long periods of time. But, with wide, unpredictable price swings you would be exposed to market risk if you needed to draw from savings in excess of current dividends. 

Liquidity Mutual fund shares can be sold at any time at their current market value. They are subject to market risk. 

Overall, BASF believes that the risk of missing out on opportunities is far larger than market risks. We are convinced that Greater China will continue to be an important growth engine for BASF in Asia Pacific. It represents a key success factor in ensuring that BASF remains the world s leading chemical company, that BASF remains - The Chemical Company. 

Plans to withdraw allowances from the market risk being seen as penalizing abatement. Indeed such ex-post adjustment runs the risk of undermining the basis of a stable market upon which industry feels confident to invest ... 

Moreover, the market risk is high. Consumer acceptance is Hmited in some areas because of doubts about the long term impact on health and the environment Even where consumer resistance is less, the opportunities for premium pricing against the existing products are often Hmited. 

Marketing risk. Has the new customer signed a letter of intent How sure are we that the customer s use of the new product will continue ... 

Market risk. Lower the volume and the price until the project is no longer profitable. If these numbers are feasible then the risk to the project is high. If they are out of the question, than the project risk is low. 

The market risk premium has declined over the past70 years. If the premium is measured over the post-World War n era, it is 8.3 percent, which would lower the cost of capital to the industry. 

The realized market risk premium (over the risk-free rate) is highly volatile over time, while expected risks are assumed to be stable over long periods. Therefore, the market risk premium is typically estimated over a long period of time (198). Myers and Shyam-Sunder found an arithmetic mean of 8.7 percent for excess market return over the Treasury bill rate for the period 1926-89 (285). The market risk premium declined in the post-war period, however, and the premium for the period 1947-88 was 8.3 percent (285). 

In an unrelated study, Stewart estimated the market risk premium by comparing Standard and Poor s 500 stocks with long-term (20-year) U.S. Treasury bonds from 1925 to 1989 (409). He found that the risk premium was only 5.8 percent over the period. This would imply a risk premium over the Treasury bill rate (adjusted for long-term forecasts) of just 7.0 percent. 

Among the factors that have mainly influenced the product mix choice of the various firms, most of the interviewed operators have indicated the product price as the key element in their choice followed by the production cost. Productive risk, mainly linked with product availability, ranks subsequently, particularly for one of the processing firms and for the larger cattle breeding farm. Marketing risk has been the last factor taken into account, which means that operators expect limited price volatility for their organic meat. 

Wine-growers have gradually increased the production of organic DOC wines as long as it increases consumer perception about quality, and it reduces marketing risk, i.e., the organic wine can be allocated easily within the market. 

The key factor in the success of nuclear power in liberalized markets will be the ability of the power industry to engage with regulatory and safety authorities, plant vendors and consumers to allocate risks to parties that are best able to manage them. By shifting part of the pre-construction, construction, operating, and market risks to other parties (regulators, plant vendors, creditworthy consumers, and so on), electricity producers are in a better position to attract potential investors (lenders, and so on). 

The objective of this chapter is to study how the risks specific to a nuclear power investment in liberalized markets can be mitigated, how they can be allocated to the different stakeholders, and what financial arrangements are consistent with the alternative allocations of the construction, and operating and market risks. 

Former electricity monopolies traditionally assumed nuclear plant construction risks, which represented less of a burden in a regulated industry. But for nuclear build in liberalized markets the difficulty is twofold nuclear technology is at the stage of industrial relearning in a number of countries with new designs to be tested, and the producers have to support construction and market risks on a very large investment. 

Different options are possible for investors and producers to securitize any generation investment in electricity markets by transferring part of the market risk to other parties, such as vertical integration, long-term contracts, or the combination of horizontal integration and vertical arrangement in a consortium. Such arrangements can help to shift the market risks onto players other than the producers, in particular retailers and consumers ... 

Market risks securing the investment by long-term contracts The consortium is likely to benefit from favorable financial terms because of the presence of municipal utilities which will be a proof of predictability of the customer base and stability (TIACT, 2005). They could transfer risks to local consumers via their tariff s. Moreover 75 percent of the NRG s energy share (44 percent) will be sold by long-term contracts with historic suppliers in Texas. Only the production of the remaining 400 MW will be sold in the market in order to seize opportunities to retain benefits from future carbon policies in the medium term. ... 

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