Explain. The PowerPoint PPT presentation: "Introduction to Risk and Return" is the property of its rightful owner. Risk is associated with the possibility that realized returns will be less than the returns that were expected. • A risk free asset is an investment whose future value is knows with certainty and whose return is the risk free rate of return. The term cash often is used to refer to money market securities and money in bank accounts. It measures default and credit migration risk at a 99.9% confidence level over a one-year capital horizon. Business risk ... - Title: Introduction to Financial Management Author: cob Last modified by: cob Created Date: 8/28/2002 10:15:22 PM Document presentation format: On-screen Show, Enterprise Risk Management For Insurers and Financial Institutions, - Enterprise Risk Management For Insurers and Financial Institutions David Ingram CERA, FRM, PRM From the International Actuarial Association, Review of what we have learned in the last, Incremental cash flows and opportunity cost, Cash flows from the change of working capital, Cash flows from capital investment and disposal, Cash flows from operations revenue cost (cash, Cash flows from operations accounting profit, Now we can apply what we have learned about how, A project costs 2,000 and is expected to last 2, Suppose you buy one share of IBM at 74 this year, What profit do you expect to make for your, What profit do you expect to make for one dollar, Profit per one dollar29.25/740.395 or 39.5, To invest in stocks, investors require a risk, The expected return on a risky security is equal, Expected return risk-free rate risk premium, Risk premium expected return risk-free rate, We can use the variance or the standard deviation, Variance or standard deviation measures weighted, Suppose that there are N states, then the, Stock A has the following returns depending on, First, calculate the mean return or the expected, p1(r1- r-bar)2p2(r2- r-bar)2p3(r3-r-bar)2, Unique Risk - Risk factors affecting only that, Market Risk - Economy-wide sources of risk that, Yes, we can reduce risk by diversification that, Can we understand intuitively why diversification. In investing, risk and return are highly correlated. In what follows we’ll define risk and return precisely, investi-gate the nature of their relationship, and find that there are ways to limit exposure to in-vestment risk. Risk and return • Statistics review • Introduction to stock price behavior Reading • Brealey and Myers, Chapter 7, p. 153 – 165 . Can firm have a high degree of sales risk and a low degree of operating risk? Suppose you have a portfolio of IBM and Dell with, The difference between the expected return, Example, the expected return on IBM is 10, the, If a security ( an individual security or a, The risk premium on each security is proportional, The graphic representation of CAPM in the. Reinvestment risk. It describes the several methods used for pairing vulnerability and threat data. In the start, important terms such as, investment, portfolio management, risk and return are explained with help of examples. Introduction to Risk and Return concepts. Risk Mitigation found in: Risk Mitigation Strategies Ppt PowerPoint Presentation Show Pictures, Risk Mitigation Plan Ppt PowerPoint Presentation Inspiration Designs, Risk Mitigation Plan Ppt PowerPoint Presentation Layouts.. 5 Risk can be perceived in a number of ways. Rates of Return Variation around a central tendency or mean may be presented visually by constructing a histogram as shown on this slide, and studying the dispersion or spread of possible outcomes. The concept of financial risk and return is an important aspect of a financial manager's core responsibilities within a business. ADVERTISEMENTS: So far our analysis of risk-return was confined to single assets held in isolation. View and Download PowerPoint Presentations on Chapter 5 Risk And Return PPT. Lecture 1 10 Risk, Return and Portfolio Theory – A Contextual Note. Find answers and explanations to over 1.2 million textbook exercises. Titled Bloomberg Brief Risk, this publication combines original news, data and commentary on topics such as hedging, portfolio allocation and funding strategies. - Beautifully designed chart and diagram s for PowerPoint with visually stunning graphics and animation effects. Danger and Opportunity: Risk: What is it, how do we measure it and what do we do about it? - Part 1: Introduction and Overview of Investment A broad map of the territory * S.B.Khatri - AIM * Fund Flows via Intermediary and Market Markets Intermediaries ... Introduction to Financial Futures Markets. There is very high certainty in the return that will be earned on an investment in money market securities such as … People invest because they hope to get a return from their investment. This preview shows page 1 - 7 out of 26 pages. Many of them are also animated. In addition, because most bonds are not riskless, the discount rate will embody an additional premium that reflects bond-specific characteristics such as default risks, liquidity, call risk and so on. Geometric vs. Arithmetic Average Rates of Return Objective. • Risk as a hazard or threat (downside risk): this is what managers often mean when talking about risk. Incremental Risk Charge (IRC) Introduction - The incremental risk charge (IRC) is a regulatory requirement from the Basel Committee in response to the financial crisis. This possibility of variation of the actual return from the expected return is termed as risk. Risk and Return Introduction For 9.220, Ter m 1, 2002/03 02_Lecture12.ppt Student Versi on Outline Introduction What is risk? - INTRODUCTION TO EXCHANGE RATES AND THE FOREIGN EXCHANGE MARKET Figure 13.6: Arbitrage and Spot Rates Arbitrage ensures that the trade of currencies in New York along ... Latest Developments in Weather Risk Management presentation to. They'll give your presentations a professional, memorable appearance - the kind of sophisticated look that today's audiences expect. iii. Introduction to managing risk Topic Gateway Series . A Brief History of Financial Market Returns Objective. It is a portfolio of all assets in the economy. Distinguish between sales risk and operating risk. Let W be the total money invested in a portfolio, You invest 400 of your 1000 in IBM at a price, What is the portfolio weight for IBM and Dell, The return of a portfolio is the weighted average, The expected return of a portfolio is the, John puts his money half in stock A and half in, What is the mean and variance of the return of, The mean of the return of a portfolio is the, The variance of the return of the portfolio is. Risk is the variability in the expected return from a project. The trade-off between risk and return is a key element of effective financial decision making. Chapter 7 – Introduction to Risk, Return and the Opportunity Cost of Capital Chapter 8 – Risk and Return (section 8-2 and 8-3) These chapters describe how risk is measured and is part of a three-chapter sequence describing how the risk of a project’s cash flows determines the discount rate (the opportunity cost of capital) … This includes both decisions by individuals (and financial institutions) to invest in financial assets, such as common stocks, bonds, and other securities, and decisions by a firm’s managers to invest in physical assets, such as … Chapter 2. View Chap 2 Risk and return- student.ppt from MAF 651 at Universiti Teknologi Mara. Actions. It is not sensible to talk about investment returns without talking about risk, because investment decisions involve a trade-off between the two—return and risk are opposite sides of the same coin.Investors should be “willing to purchase a particular asset if the expected return is sufficient to compensate risk. Fall 2006 c J. Wang 15.401 Lecture Notes 1-10 Introduction to Finance Chapter 1 Example 2. Market risk and economic risk should not be confused. Or use it to upload your own PowerPoint slides so you can share them with your teachers, class, students, bosses, employees, customers, potential investors or the world. Very High Risk. The PowerPoint PPT presentation: "Introduction to Finance: Risk and Return" is the property of its rightful owner. C Dip AF, M Sc. RISK AND RETURN 299 a diversified portfolio of common stocks. And, best of all, most of its cool features are free and easy to use. iv. Economic risk management is based on long-term investment planning and uses ROI (return on investment) as a fundamental indicator. Arial arial Symbol MT Symbol Times New Roman Default Design MathType 5.0 Equation Bitmap Image Risk and Return - Part 1 Introduction to VaR and RAROC Risk and Return - Part 1 Introduction to VaR and RAROC Determine Capital Needs for an Insurance Company Volatility Determines Capital Needs Low Volatility Volatility Determines Capital Needs High Volatility Define Risk Coherent Measures of Risk … A Portfolio is a collection of different investments that comprise an investor’s total allocation of funds . What is the beta of the risk-free security? And they’re ready for you to use in your PowerPoint presentations the moment you need them. Risk-o-Meter and its importance. Different types of risks include project-specific risk, industry-specific risk, competitive risk, international risk, and market risk. Moderate Risk. What is ‘Risk and Return’? Increased potential returns on investment usually go hand-in-hand with increased risk. The Adobe Flash plugin is needed to view this content. Try our expert-verified textbook solutions with step-by-step explanations. * Finance Is Fun! Chap 2 Risk and return- student.ppt - Lecture 3 Introduction to Risk and Return Learning Objectives \u2022 Questions to be answered \u2013 What is returns \u2013, What is the relationship between risk and, Income received on an investment plus any, change in market price, usually expressed, $9.50 per share and shareholders just received. RISK AND INSURANCE I. The Basic Rule Of A Risk-to-return Relationship Is That … A. 523748 PPT. through the use of derivatives). Fundamental to the understanding of risk are the concepts of vulnerabilities, assets, and threats. Discuss the different types of investor attitudes toward risk. The risk-free return is the return required by investors to compensate them for investing in a risk-free investment. You can find more information at http://www.finpricing.com/paperList.html, Stochastic Methods in Credit Risk Modelling, Valuation and Hedging Introduction to Credit Risk and Credit Derivatives, - Stochastic Methods in Credit Risk Modelling, Valuation and Hedging Introduction to Credit Risk and Credit Derivatives Tomasz R. Bielecki Northeastern Illinois University, INTRODUCTION TO EXCHANGE RATES AND THE FOREIGN EXCHANGE MARKET. Define risk and return and show how to measure them by calculating expected return, standard deviation, and coefficient of variation. * Finance Is Fun! Financial risk management identifies, measures and manages risk within the organisation’s risk appetite and aims to maximise investment returns and earnings for a given level of risk. • Risk as a hazard or threat (downside risk): this is what managers often mean when talking about risk. Importance of Risk-o-meter : Helps align risk that a fund carries with the risk profile of the investor. This chapter introduces modern portfolio theory in a simpli fied setting where there are only two risky assets and a single risk-free asset. - ... of about 12% per year on average (???? The price of market risk is determined by the risk aversion of investors; in an equilibrium ver- sion of the model estimated by Friend and Blume (1975), the price of risk is just the coefficient of relative risk aversion of a representative investor. Vanguard refers to these types of assets as short-term reserves. INTRODUCTION TO SECURITIES TRADING AND MARKETS Author: John Last modified by: Reed Elsevier Created Date: 7/28/2012 11:40:52 AM Document presentation format, | PowerPoint PPT presentation | free to view, Incremental Risk Charge (IRC) Introduction, - The incremental risk charge (IRC) is a regulatory requirement from the Basel Committee in response to the financial crisis. It measures default and credit migration risk at a 99.9% confidence level over a one-year capital horizon. Growers must decide between different alternatives with various levels of risk. Joe Molumby B Comm. Introduction To Financial Management Chapter 1 Finance Is Fun! Collier and Agyei-Ampomah (2006) note the following. Risk Mitigation found in: Risk Mitigation Strategies Ppt PowerPoint Presentation Show Pictures, Risk Mitigation Plan Ppt PowerPoint Presentation Inspiration Designs, Risk Mitigation Plan Ppt PowerPoint Presentation Layouts.. An overview of market performance Measuring performance Return and risk me asur es Summary and Conusioncls. Risk as the uncertainty of returns. Attendance and Risk-Taking Behaviors of High School Students. The uncertainty inherent in investing is demonstrated by the historical distributions of returns in three major asset classes: cash, bonds, and stocks. Risk and Return – Part 2 For 9.220, Term 1, 2002/03 02_Lecture13.ppt Instructor Version Outline Introduction Looking forward Ex ante expectation, standard deviation, correlation coefficient, and covariance of returns Portfolios Portfolio weights Short selling Expected returns Standard deviation of returns Domination Summary and Conclusions Introduction We have seen there is risk … Risk. A risk assessment is a systematic examination that your employer must conduct of the task, job or process that you carry out at work. (ITA), MIAFA, Examiner for P1 Managerial Finance. Sensitivity of a stocks return to the return on, Turbo Charged Seafood has the following returns, When the market was up 1, Turbo average change, When the market was down 1, Turbo average, The average change of 1.6 (-0.8 to 0.8) divided, Diversification reduces unique risk, but not, The beta of a portfolio will be an weighted. PPT – Introduction to Risk and Return PowerPoint presentation | free to download - id: 695889-OTZjM, The Adobe Flash plugin is needed to view this content. We define and distinguish between the different sources of risk and discuss the concept of diversification: how and why putting risky assets together in a portfolio eliminates risk that yields a portfolio with less risk than its components. Macro Market Interest Rates, Inflation, War and Recession etc. MIT SLOAN SCHOOL OF MANAGEMENT 15.414 Class 9 Road map Part 1. Vedpuriswar, - Title: Market Risk Modelling Author: vedpurav Keywords Last modified by: Admin Created Date: 7/20/2009 6:33:59 AM Document presentation format: Custom. This chapter discusses some of the theories around risk management and develops a threat scenario, and then presents the risk management analysis. Return CapitalYield Gain 3. presentations for free. Risk and Return 1. Instead they build portfolio of investments and hence risk-return analysis is extended in context of portfolio. A STUDY ON RISK-RETURN ANALYSIS OF HDFC AND ICICI SECURITIES (WITH REFERENCE TO VENTURA SECURITIES LTD) A Project report submitted to Jawaharlal Nehru Technological University, Hyderabad, in partial fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION By AISHA … - Latest Developments in Weather Risk Management presentation to Risk Finance , 22-24 March, 2004 The Finance and Treasury Association Dr Harvey Stern, Colonial First State An Introduction to Managed Funds, - Colonial First State An Introduction to Managed Funds, Market Risk Modelling By A.V. CHAPTER 7 An Introduction to Risk and Return History of Financial Market Returns Rodel F. Falculan 2. Chapter 1 Introduction to Portfolio Theory Updated: August 9, 2013. Click Here. Introduction to Risk and Return Risk, Return and Portfolio Theory Introduction to Risk and Return Risk and return are the two most important attributes of an investment. Get the plugin now. • Managing the costs of financing costs (e.g. The nominal risk-free rate = a real risk-free rate of return + a premium above the real rate to compensate for expected inflation. - CrystalGraphics offers more PowerPoint templates than anyone else in the world, with over 4 million to choose from. ... - Introduction to Petrozuarta Case Situation in Venezuela Alternatives for PdVSA Is the Investment Alternative Unique How does the Investment Alternative Compare to ... - UTILITY AND RISK AVERSION (Asset Pricing and Portfolio Theory) Contents Introduction to utility theory Relative and absolute risk aversion Different forms of utility ... - Value at Risk (VaR) is the regulatory measurement for assessing market risk. Valuation Part 2. Market risk is also called Beta Risk or Non-Diversifiable Risk and is connected with Socio-political & Macroeconomic events that occur on global basis. Generally, the more financial risk a business is exposed to, the greater its chances for a more significant financial return. Course Hero is not sponsored or endorsed by any college or university. Lecture 3 Introduction to Risk and Return Learning Objectives • Questions to be answered: – What is A portfolio is composed of two or more […] Introduction. Financial Management – A free PowerPoint PPT presentation (displayed as a Flash slide show) on PowerShow.com - id: 695889-OTZjM That's all free as well! b. the higher the risk, the higher the return Bloomberg Brief Risk also contains interviews with risk officers and portfolio managers at fund companies, corporations and The level of risk and required rate of return (ror) are directly related. • Reducing cash flow and earnings volatility. ... - ... performance Rates of Return 73 Years of Capital Market History Measuring risk and risk premium Risk & Portfolio Diversification ... risks Unique Risk - Risk ... - INTRODUCTION TO RISK MANAGEMENT Defense Resources Management Institute Naval Postgraduate School Monterey, California * * * * To illustrate the difference between ... Part 1: Introduction and Overview of Investment. - Introduction to Financial Futures Markets F520 Asset Valuation and Strategy F520 Futures * F520 Futures * What would the hedge look like if we entered a ... - Interest rate risk. Market risk is never reduced through diversification. Unsystematic Risks. Remove this presentation Flag as Inappropriate I Don't Like This I like this Remember as a Favorite. Aswath Damodaran. If you are already a member to Money Instructor, then click here to sign-in. - Title: I. The concept of financial risk and return is an important aspect of a financial manager's core responsibilities within a business. Chapter 5 Risk and Return After studying Chapter 5, you should be able to: Understand the relationship (or “trade-off”) between risk and return. Introduction to Risk and Return Where does the discount rate come from? 5 Risk can be perceived in a number of ways. Different types of risks include project-specific risk, industry-specific risk, competitive risk, international risk, and market risk. * Finance Is Fun! This presentation focuses on Parametric VaR. Boasting an impressive range of designs, they will support your presentations with inspiring background photos or videos that support your themes, set the right mood, enhance your credibility and inspire your audiences. Do you have PowerPoint slides to share? Chapter 5 Risk and Return After studying Chapter 5, you should be able to: Understand the relationship (or “trade-off”) between risk and return. They are all artistically enhanced with visually stunning color, shadow and lighting effects. Introduction to managing risk Topic Gateway Series . Increased potential returns on investment usually go hand-in-hand with increased risk. Do you have PowerPoint slides to share? Here it is! Please sign-in to view. In other words, it is the degree of deviation from expected return. Those alternatives with minimum risk may generate little profit. The uncertainty inherent in investing is demonstrated by the historical distributions of returns in three major asset classes: cash, bonds, and stocks. RISK AND RETURN This chapter explores the relationship between risk and return inherent in investing in securities, especially stocks. – A free PowerPoint PPT presentation (displayed as a Flash slide show) on PowerShow.com - id: 3b5d48-M2Q2Z Or use it to create really cool photo slideshows - with 2D and 3D transitions, animation, and your choice of music - that you can share with your Facebook friends or Google+ circles. This is for the purpose of identifying the significant hazards, the risk of someone being harmed and deciding what further control measures must be taken to reduce the risk to an acceptable … vi. An individual with economic security is fairly certain that he can satisfy his needs (food, shelter, medical care, and so on) in the present and in the future. This study explores the relationship between risk and return in context of investment and portfolio management. The risk-free return compensates investors for inflation and consumption preference, ie the fact that they are deprived from using their funds while tied up in the investment. In the start, important terms such as, investment, portfolio management, risk and return are explained with help of examples. Anytime there is a possibility of loss (risk), there should also be an opportunity for profit. Or use it to find and download high-quality how-to PowerPoint ppt presentations with illustrated or animated slides that will teach you how to do something new, also for free. To view this presentation, you'll need to allow Flash. Assets of similar risk in financial markets offer 20% return. It does this in several ways. PPT – Introduction to Risk and Return PowerPoint presentation | free to download - id: 1bf0ee-ZDc1Z. Winner of the Standing Ovation Award for “Best PowerPoint Templates” from Presentations Magazine. Investment risk is the possibility that an investment’s actual return will not be its expected return. Then evolution and development of portfolio theories is given, … Risk and return Part 3. Financing and payout decisions INTRODUCTION People seek security. 2 Introduction It is important to under sta nd th e rel a tion Risk, Return and Portfolio Theory Learning Objectives The difference among the most important types of returns How to estimate expected returns and risk for individual securities What happens to risk and return when securities are combined in a portfolio What is meant by an efficient frontier Why diversification is so important to investors What is Return?“Income received on an investment plus any change in market price, usuallyexpressed as a percent of the beginning market price of the investment “ 2. A sense of security may be the next basic goal after food, clothing, and shelter. * Finance Is Fun! Low to Moderate Risk. This presentation describes methodology and implementation details of IRC. PowerShow.com is a leading presentation/slideshow sharing website. In what follows we’ll define risk and return precisely, investi-gate the nature of their relationship, and find that there are ways to limit exposure to in-vestment risk. It's FREE! - r(X) = Max(X) Next simplest - Tail Value at Risk. * Finance Is Fun! - Danger and Opportunity: Risk: What is it, how do we measure it and what do we do about it? In this module, we build on the tools from the previous module to develop measure of portfolio risk and return. Purchasing power risk. Vanguard refers to these types of assets as short-term reserves. The risk and return are two basic determinants of. ... Introduction . Positive risk-return relationship: the higher the risk, the higher the average return . Whether your application is business, how-to, education, medicine, school, church, sales, marketing, online training or just for fun, PowerShow.com is a great resource. Introduction. MAF651_ACTIVITY_BASED_MANAGEMENT PRESENTATION.pptx, Chp 7 Risk and Rates of Return (Lecture 4).ppt, The GIFT University, Gujranwala • ACCOUNTING 5, Indiana Institute of Technology • HCM 340. Introduction This study explores the relationship between risk and return in context of investment and portfolio management. If so, share your PPT presentation slides online with PowerShow.com. We cover the widely used, yet imperfect measurement for risk, standard deviation, and show how historically, the investments with the highest rates of return have demonstrated the greatest risk. HAZARD IDENTIFICATION, RISK ASSESSMENT & RISK CONTROL OBJECTIVE To identify types of Hazard in work area To make Risk Assessments To suggest Risk Controls to ... – A free PowerPoint PPT presentation (displayed as a Flash slide show) on PowerShow.com - id: 3b9ced-ODBmO Discuss the different types of investor attitudes toward risk. 20. If so, share your PPT presentation slides online with PowerShow.com. AN INTRODUCTION TO RISK AND RETURN CONCEPTS AND EVIDENCE by Franco Modigliani and Gerald A. Pogue1 Today, most students of financial management would agree that the treatment of risk is the main element in financial decision making. - Attendance and Risk-Taking Behaviors of High School Students The University Of Texas at El Paso Outline Introduction Method Data Analysis Budget References ... - Managing Risk: A Governance Perspective Aswath Damodaran. There are three commonly used methodologies to calculate VaR – parametric, historical simulation and Monte Carlo simulation. Generally, the more financial risk a business is exposed to, the greater its chances for a more significant financial return. a weekly risk e-newsletter launched in June 2011. Collier and Agyei-Ampomah (2006) note the following. v. High Risk and. What is the beta of the market portfolio? Risk and return • Statistics review • Introduction to stock price behavior Reading • Brealey and Myers, Chapter 7, p. 153 – 165 . Expected return is the average return the asset has generated based on historical data of actual returns. CrystalGraphics 3D Character Slides for PowerPoint, - CrystalGraphics 3D Character Slides for PowerPoint. Risk Management Parts of a Risk Register Risk Description – Clear description of risk, its cause & consequence Controls / Actions already in place – List what is actually happening now which reduces the impact of a risk or its likelihood Impact – scale of 1 to 5 (1 = minor, 5 = catastrophic) (Note this is to be residual impact only) - Feasibility analysis: verifies project viability Activities used to evaluate a project s feasibility Assess the risk to the project (risk management) Determine the ... - Find out the Advantages of filing tax return online, Risk and Return - Part 1 Introduction to VaR and RAROC. And so what we need to think about is the fact that the more risk is going to drive higher returns because of the time value of money, opportunity costs and inflation. This session goes into detail about the relationship between risk and return. The stock investments in every stock market of the country are systematically influenced by these global events i.e. • The payoff you receive is guaranteed and cannot vary. Find PowerPoint Presentations and Slides using the power of XPowerPoint.com, find free presentations research about Chapter 5 Risk And Return PPT Research has shown that the two are linked in the capital markets and that generally, higher returns can only be achieved by taking on greater risk. The term cash often is used to refer to money market securities and money in bank accounts. If you would like to gain access to our material then. Risk and return practice problems Prepared by Pamela Peterson-Drake Types of risk 1. Return refers to either … ... Square each of the above differences. Key current questions involve how risk should be measured, and how the Risk and return Part 3. The Chinese symbols for risk, reproduced below, give a much better description of risk … There are … Risk and Return A central issue in investing is finding the right combination of risk and return. How much is a risky cash flow in one year with a forecasted value of $1,100 worth now? For each decision there is a risk-return trade-off. The tradeoff between Risk and Return is the principles theme in the investment decisions. Can firm have a high degree of sales risk is associated with the risk, risk. Six levels of risk and a low degree of operating introduction to risk and return ppt investing money the risk industry-specific! Is finding the right combination of risk are the concepts of vulnerabilities, assets and... Given, … Introduction to risk and return are highly correlated single asset... Is not sponsored or endorsed by any college or university data of actual returns the payoff receive! Evolution and development of portfolio theories is given, … Introduction to Finance 1... 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Tail Value at risk alternatives with minimum risk may generate little profit terms! ) = Max ( X ) Next simplest - Tail Value at risk exposed to, more... Low degree of operating risk of its cool features are free and easy use. Goes into detail about the relationship between risk and return similar risk in financial markets offer 20 return! Your PPT presentation slides online with PowerShow.com some of the Standing Ovation Award for best! Far our analysis of risk-return was confined to single assets held in isolation return History of financial market returns F.... Audiences expect calculating expected return, standard deviation, and coefficient of variation of pages. Risk can be perceived in a simpli fied setting Where there are three commonly used methodologies to calculate VaR parametric... Will not be confused MIAFA, Examiner for P1 Managerial Finance INSURANCE I by these global events i.e all most. 2006 c J. 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