EXECUTIVE SUMMARY

The Risk Analysis and Management System (RAMSŪ) is a sophisticated, yet user friendly, financial decision making tool. It is modular, interactive, dynamic and globally oriented. The modular or building block structure allows for expeditious enhancements, deletions or additions of Trading Desks or Operating Lines (OLs), instruments, currencies, and evaluative models. These modules are internally consistent for each Desk or OL as well as across all Desks or OLs. The analytic starting points are industry standard models and practices.

The modules are interactive with each other, internal databases and key external data feeds. This interaction promotes real-time pricing, position analysis and risk profiling. The openness, equivalency, and consistency permit both standardized and proprietary pricing and analytic methods.

As position files and prices are updated throughout the trading day, Risk Management Files are also updated. The system views each trader's and desk's files as the traders and desks view them as well as on a firm wide composite basis.

The global orientation insures similar values throughout the firm, the branch network and across international boundaries. By using sound quantitative methods, RAMSŪ effectively compares and evaluates positions which may possess currency or option characteristics. The purpose of this flexible process is to generate superior organizational performance. Proactively, the system in the hands of an experienced Risk Manager can allow for noninvasive hedging of many organizational risks. The noninvasive feature permits the traders to conduct business as usual and maintain their individual P/L situations. The authorized Risk Manager/Administrator can implement trades to offset the organization's residual risks.

The RAMSŪ system can use existing databases (provided these databases are in acceptable form) to import information into the system without any substantive disruptions to the existing trading and trade entry systems. This allows for a flexible system that is able to bring many different trading platforms into a unified system. At the least and as the initial condition, Risk Management can view the positions as the traders and the operations area personnel do.

The RAMSŪ system currently uses two different computer systems -- one PC based and the other is Sun based. RAMSŪ is able to combine information from similarly structured trading and database delivery systems in order to provide a unified Risk Management System.

The product lines supported include, but are not limited to, Treasuries, Adjustable Rate Mortgages (ARMs), CMOs, Floaters, Mortgage Backed Securities, over-the-counter treasury and mortgage backed options, zero coupon/strips, corporate bonds, high yield bonds, convertible securities, equities, International Fixed Income bonds, currencies, futures, and options.

The RAMSŪ system permits historic, current, and forward looking approaches. The system can assimilate this data for position recognition, scenario analysis, and stress testing.

The RAMSŪ system is relatively ease to use, navigate, input and generate tables and graphs because the as-is product is Windows/Excel oriented. Future versions are expected to be comparable in terms of user friendliness.

The RAMSŪ system was designed to be more than a basic risk management program. In its current form, it is a risk, portfolio, trading, and regulatory capital management package. Its features include, but are not limited to, synthetic position evaluations, valuation of derivatives, portfolio management, and active trading management. If the administrator is authorized to implement transactions, then the administrator becomes a proactive risk manager. As such, decisions to hedge organizational risks can be based on quantitative criteria.

Regulatory Capital Requirements

Another benefit of RAMSŪ is the ancillary Regulatory Capital Calculator. It provides an immediate indication, when buttoned, of Regulatory Capital Consumption from a brokerage perspective.

The copyrighted RAMSŪ system has been in actual use for years by various financial institutions.

As-Is Product and Upgrade

RAMSŪ and BESTŪ Pricing are evolutionary and under continuous development. The existing licenses are for Windows based/Excel spreadsheet applications. Therefore the graphic, computational and other features of these popular Microsoft products are accessible by the RAMSŪ and BESTŪ Pricing systems. The essential products and the diverse underlying modules have been in actual trading, risk management or portfolio use for years.

Enhancements and planned conversions are underway. Additional pricing models as well as new features are targeted. To take more advantage of recent hardware advancements, which accelerate the computational and graphical speed of the underlying work, a program conversion has been planned. User resource constraints may limit the application power of the product.

Consultation

Rapid changes and major trends in global financial markets require vigilance. New models and systems are the results of pioneering efforts to develop improved solutions for economics, finance and information technology.

Consultation is available which is separate from the servicing of the software package. It includes, but is not limited, as to which are better models for specific applications, how to optimize model inclusions, and how many models to run in parallel and issues.

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