Sample Solution
Research on the history of Apple Inc. and Apple products
Apple Inc., formerly Apple Computer Inc., is a multinational corporation that creates consumer electronics, personal computers, servers, and computer software, and is a digital distributor of media content. The company also has a chain of retail stores known as Apple Store. Apple`s core product line are the iPhone smartphone, iPad tablet computer, and Macintosh computer line. Founders Steve Jobs and Steve Wozniak created Apple Computer on April 1, 1976, and incorporated the company on January 3, 1977, in Cupertino, California. Apple Inc. has pioneered its way through the computer industry, not once, but multiple times throughout its existence. It believes in pushing the limits of creativity in order to produce interesting and valuable products for society. After more than 30 years, it is undeniable that Apple has had a profound impact on technology, innovating and influencing not only how we use computers but the activities for which what we use them.
Hempel and Simonson (1999), state that the risk is greater if banks hold more medium quality loans, but this also fetches a higher return. If banks start considering loans that have a lower element of risk attached to them this would have a finest effect with returns, hence banks should diversify and have a large portfolio of loans which ranges and has different degree of risk and return attached to them.
Liquidity Risk
The risk that an asset owner faces when he is unable to recover the full value of the asset when he decides to sell the desired asset is known as Liquidity Risk.
An alternative definition would be the risk of being unable to satisfy a claim without impairment of financial capital can be termed as liquidity Risk.
For banks Liquidity Risk arises when the amount withdraws exceeds deposits unexpectedly and they have no other alternative but to borrow funds at a higher rate of interest.
Liquidity Risk threatens any financial institution and can lead to bankruptcy. These situations can be avoided by banks by maintaining a high reserve but this strategy can have an impact on the banks return.
Capital Risk
Hempel and Simonson(1999),states capital Risk is an indicator of the amount of asset that can decline before the creditor and depositors position can be endangered. Capital Risk can be referred to as leverage risk. From the investors point of view he takes on Capital Risk every time he invests in any other than exception of a risk free Capital Risk to limited to the amount of one has invested.
