South Africa is ranked 146th out of a total of 148 countries by the World Economic Forum for its education system and last in science and mathematics, and yet the government spends up to a fifth of its budget on education. Only 40% of pupils who start schooling in grade 1 will pass matric (grade 12), with just 12% maintaining high enough marks to qualify for university entrance. Any research to boost learning in South Africa, at any level, should be welcomed. The primary goal of higher education institutions is to provide education to post-school students, but the institutions need to be financially viable. Most higher education institutions in South Africa rely heavily on financial support from the government in the form of subsidies (up to 40% of total income in some cases) for funding to remain financially viable. Therefore, government subsidies represent a significant investment into higher education and student retention needs more research in South Africa. Many of the universities in South Africa, especially those that are financially sound, do not take much notice of student dropouts and those that do pay attention, do so firstly at the postgraduate level. The return on investment for master’s and doctoral students is much higher than that for undergraduate students. Understanding the basic elements of the funding framework for South African universities is vital in the understanding of financial losses from student dropouts. The underlying factors that determine the base of funding for higher education have remained the same since the introduction of the Holloway formula in 1953 to the current New Funding Formula (NFF), implemented in 2004. Large amounts of funds are still invested in higher education and there is a national shortage of high quality students in scarce skills, in particular students with a postgraduate qualification. Dropouts result in fewer graduates and large amounts of funding and human capital are wasted on educating students who will never complete their studies. Postgraduate studies have a potential greater loss and a prediction of the expected and unexpected loss for these students may encourage institutions to examine student retention more closely. The latter is an area for concern and needs to be assessed and addressed as soon as possible. / MCom (Risk Management), North-West University, Potchefstroom Campus, 2014

South Africa is ranked 146th out of a total of 148 countries by the World Economic Forum for its education system and last in science and mathematics, and yet the government spends up to a fifth of its budget on education. Only 40% of pupils who start schooling in grade 1 will pass matric (grade 12), with just 12% maintaining high enough marks to qualify for university entrance. Any research to boost learning in South Africa, at any level, should be welcomed. The primary goal of higher education institutions is to provide education to post-school students, but the institutions need to be financially viable. Most higher education institutions in South Africa rely heavily on financial support from the government in the form of subsidies (up to 40% of total income in some cases) for funding to remain financially viable. Therefore, government subsidies represent a significant investment into higher education and student retention needs more research in South Africa. Many of the universities in South Africa, especially those that are financially sound, do not take much notice of student dropouts and those that do pay attention, do so firstly at the postgraduate level. The return on investment for master’s and doctoral students is much higher than that for undergraduate students. Understanding the basic elements of the funding framework for South African universities is vital in the understanding of financial losses from student dropouts. The underlying factors that determine the base of funding for higher education have remained the same since the introduction of the Holloway formula in 1953 to the current New Funding Formula (NFF), implemented in 2004. Large amounts of funds are still invested in higher education and there is a national shortage of high quality students in scarce skills, in particular students with a postgraduate qualification. Dropouts result in fewer graduates and large amounts of funding and human capital are wasted on educating students who will never complete their studies. Postgraduate studies have a potential greater loss and a prediction of the expected and unexpected loss for these students may encourage institutions to examine student retention more closely. The latter is an area for concern and needs to be assessed and addressed as soon as possible. / MCom (Risk Management), North-West University, Potchefstroom Campus, 2014

Made available in DSpace on 2016-06-02T20:06:09Z (GMT). No. of bitstreams: 1 5715.pdf: 2528313 bytes, checksum: 746d913fa84ee6f5f9d8b191ad1d8cce (MD5) Previous issue date: 2014-01-16 / Financiadora de Estudos e Projetos / In this paper we propose a new method for the calculation of regulatory capital required for operational risk. This method is based on some important assumptions for calculation of this capital, for instance, expert opinion, dependence between loss variables considering the joint probability associated to two loss events. The copula theory is applied to determine this joint probability. Furthermore, we present two more methods, sum method proposed by Basel II Accord (2004) and non-perfect correlation method proposed by Frachot et al. (2004). Finally, we perform a simulation studies in order to compare all the methods presented in this dissertation. / Neste trabalho propomos um novo método para o cálculo do capital regulatório para o risco operacional. O método proposto é utilizado para calcular o capital regulatório para duas classes de risco e é baseado em alguns pressupostos considerados importantes no cálculo deste capital. Entre esses pressupostos se destacam a opinião de especialistas e a captação de dependência entre as variáveis perdas considerando a probabilidade dos eventos de perdas ocorrerem conjuntamente. Essa probabilidade é captada via cópula. Além disso, apresentamos mais dois métodos, o do somatório, proposto pelo Acordo de Basileia II (2004), e o da correlação não-perfeita, proposto por Frachot et al. (2004). Finalmente, realizamos um estudo de simulação com o objetivo de comparar os capitais regulatórios totais calculados em cada método.