Mutual Fund Tournaments: Evidence From Global And International Funds

For a sample of global and international equity mutual funds, we test the proposition that managers likely to end up as losers manipulate fund risk differently from interim winners. In contrast with Brown, Harlow, and Starks (1996) who found robust support for the tournament model, we found no evidence of tournament like behavior for international and global mutual funds. A possible explanation of this behavior is that investors in these funds are primarily seeking diversification and therefore are less sensitive to relative performance

Executive Compensation and Risk Taking

This paper studies the connection between risk taking and executive compensation in financial institutions. A theoretical model of shareholders, debtholders, depositors, and an executive suggests that 1) in principle, excessive risk taking (in the form of risk shifting) may be addressed by basing compensation on both stock price and the price of debt (proxied by the credit default swap spread), but 2) shareholders may be unable to commit to designing compensation contracts in this way and indeed may not want to because of distortions introduced by either deposit insurance or naive debtholders. The paper then provides an empirical analysis that suggests that debt-like compensation for executives is believed by the market to reduce risk for financial institutions

THE BIRD STRIKE HAZARD (BASH) PROGRAM

The hazards birds pose to aircraft has been of concern to the Air Force for more than 20 years. After losing several aircraft due to bird strikes in the early 1960\u27s, the Air Force formed a team to evaluate bird hazards to Air Force aircraft. The team, from the Air Force Weapons Laboratory (AFWL) at Kirtland AFB NM, handed over this mission to the Bird Aircraft Strike Hazard (BASH) Team at HQ Air Force Engineering and Services Center (AFESC) at Tyndall AFB in 1975. In 1986 (October) the BASH team moved to Boiling AFB, Washington DC. The Air Force sustains significant losses each year to bird strikes. Since 1964 we have had 25 bird strikes that resulted in aircraft losses. In the last 12 months alone we have lost an F-16, two F-4\u27s, a B-l, and six crewmen to birds on low level missions. All aircraft are susceptible to bird strikes in every flight profile. Smaller, high-speed aircraft are the most likely victims, but even large planes can be knocked down by bird strikes. Birds are not entirely unpredictable, however, and strikes are more likely to occur at particular times of year or times of day and around bird concentration areas. We can reduce losses by controlling or avoiding the predictable bird hazard