Sovereign wealth funds. International Finance Essay

Sovereign wealth funds. International Finance - Essay Example These funds’ management is separated from official management of foreign currency reserve. The aim of SWFs among others is to manage government wealth so that funds do not remain static thus balancing investment with savings. The SWFs as a government-based investment strategy may involve the buying of shares in profit making organization or the taking over of a foreign based company, foreign direct investment, purchase of stakes in financial firms, long-term government bond amongst others. This process has resulted in a well recognized trend in monetary trade, foreign currency policy, and new international finance strategies. But, much debate subsists on the legitimacy of these policies and their ethical parameters. There are considerable economic and social issues associated to fairness of competition and possible political non-commercial hidden agenda, which come to the surface seriously. Various institutions are starting to feel greatly concerned by the issue of SWFs especi ally because these investments are taking considerable proportions. While many countries are facing important turnabouts and recession in their economy others are continuously sustaining their considerable economic rise. Some major states are facing recurrent financial crises due to external parameters which are out of their control for instance the oil crisis, financial globalization which results in accumulation of wealth in term of foreign currencies and financial asset by some countries. While there was the 800 billion U.S dollars deficit in 1996 in the United State’s current account, export-oriented economies of South East Asian countries were enjoying incessant growth. It is universally recognized thus, that the subsequent rise in SWFs is a result of large global macroeconomic impairment and imbalances. These major discrepancies have resulted in some countries possessing high relative ratio of foreign currency reserve which has boosted considerably the event sovereign wealth

Propaganda and women during Essay Example for Free

Propaganda and women during Essay Propaganda was used in World War One to make sure that people only knew what the Government wanted them to. To make sure everyone thought the same way as the government all information was controlled. Newspapers were expected to print what the government wanted and the newspapers started using emotional headlines, even if they weren’t true. Some examples of these headlines are: -â€Å"Belgium child’s hands cut off by Germans† -â€Å"Germans crucify Canadian officer† Anyone caught spreading the truth would be arrested. Propaganda aimed at Women While the men were fighting it was left to the women to do the men’s jobs and treat injured soldiers. To get the women to do this propaganda was used. The Red Cross used pride in this poster to try and get women to join. Propaganda aimed at Men This poster uses pride to try and get the men to join the army, this poster is showing a man’s children asking him what he did in the war. The government are trying to say that if you fight in the war your family would be proud of you. Untrue stories â€Å"Monks in Antwerp were being forced to ring bells to celebrate the Germans invading the city. The monks refused to do this so were tied to the clappers of the bells and being used as human clappers which killed them.† This was untrue but a brilliant way for the British government to make people hate the Germans even more. German Newspaper headlines -English soldiers put plague germs in German wells. -German prisoners blinded by their Allied Captors. Women during WW1 While the men were fighting someone had to do their jobs so this usually fell to the women. Some of the jobs they were given were; nurses, working in munitions factories (which often turned their hair and skin yellow due to the chemicals), in public transport, as police women, ambulance drivers, fire fighters, in post offices, making weapons and farming. Towards the end of the war some women were being recruited into the army as cooks, clerks and electricians so that all the men could fight. Most women would still have to do the cooking, cleaning and other household chores as well as their day jobs. The women also knitted scarves, hats and gloves to send to the soldiers. This is not often recognised and they didn’t always get there but if they did the soldiers were grateful. The Womens Land Army In WW1 the German navy stopped food being imported to England and this made up 50% of the food eaten in England. In 1917 the harvest failed and there were not many reserves. Rations were put in place and the British made do. There was also a shortage of farm labourers as most men were out fighting. The government set up the land army which allowed women to become farm labourers which would not have been allowed before. By 1918 there were 23,000 Land girls that would milk the cattle, plough the fields and herd the cattle. The Land army stopped in 1919 as the men returned home and food was able to imported again.

How Stock Prices React to Information

How Stock Prices React to Information INTRODUCTION Case studies, introduced back in 1969, produced useful evidence on how stock prices react to information. Many studies focus on returns in the short window (several days) about clean of the event. The advantage of this approach is that, because expected daily returns are close to zero, the model for the expected return does not have a major impact on the findings of abnormal returns. The assumption in studies that focus on short return windows is that there were delays in price response event is short-lived. There is a developing literature that challenges this assumption, arguing instead that stock prices adjust slowly to information, so that one must examine returns over long horizons to show full-size market inefficiency. If someone said to accept its conclusions, many of the recent studies on long-term returns suggest market inefficiency, namely, long-term under reaction or overreaction to information. It is time, however, to ask whether this literature, viewed as a whole, suggests that the efficiency should be rejected. The answer should be a solid, no, for two reasons. First, the efficient market generates categories of events that individually suggest that prices are over-react to information. But in an efficient market, it is obvious: Under-reaction will be around as often as over-reaction. If the anomaly is divided between the accident under-reaction and overreaction, they are consistent with market efficiency. We will see that even clear about the division between overreaction and underreaction is a good description of the menu of existing anomalies. Second, and more importantly, if the long-term return anomalies are so large that it cannot be attributed to the case, then even split between over-and under-reaction is a Pyrrhic victory for market efficiency. We will find, however, that the long-term return anomalies are sensitive to the methodology. They tend to become marginal or disappear when exposed to different models for expected (normal) returns or when different statistical approaches are used to measure them. Thus, even viewed one by one, most long-term return anomalies can reasonably be attributed to chance. The problem in the development of the overall perspective of long-term return studies is that they rarely test specific alternative to market efficiency. Instead, the alternative hypothesis is unclear, the market inefficiency. This is unacceptable. Like all models, market efficiency (the hypothesis that prices fully reflect the available information) is a wrong description of the pricing. Following the standard scientific rule, however, market efficiency could be replaced by a better specific model of price formation, itself potentially rejectable by empirical tests. Each alternative model has a difficult task. Please specify the errors in information processing, which have the same investors under-react to certain types of events and over-reaction to others. The alternative must also clarify the observed results better than the simple story of market efficiency, ie the expected value of abnormal returns is zero, but chance generates deviations from zero (anomalies) in both directions. From the literature, the irregularity was not settled on a concrete alternative to market efficiency, to get the ball rolling I assume that reasonable alternatives must choose between over-reaction or response. Using this perspective, we review existing studies, without questioning their applications. Each mechanism of organized marketing assets or financial liabilities is determined on the financial market. It is a market in which financial assets and liabilities are traded (Richard and Bill, 2006). Financial assets in this area includes all forms of securities, ranging from ordinary derivatives. Performance, it is widely used can be seen as the ability to achieve the desired result of the action or not waste energy (Encarta Dictionary, 2009). In other words, it has to do with how resources are used efficiently, the extent to which something is good. Financial market efficiency can be said to include as financial assets and liabilities are exchanged efficiently and productively the funds invested in financial market instruments. However, the exchange of securities in respect of funds can not be made only at the price willingly accepted by both parties, while the price is determined mainly by the value and scope of information available on the market for investors. This document d iscusses the performance of financial markets, however, explore the theories and assumptions, and explaining in detail all the terminology (majorly prices and information) relating to the efficiency of the financial market. LITERATURE REVIEW There have been extensive results on the effectiveness of the financial market. This led to the development of various theories, such as determination of the value of securities, the impact of information on share prices, dividend policy, to name a few. DEFINITION OF FINANCIAL MARKET Financial markets, as per Olowe, 1997, are mechanisms in which the surplus and deficit units can be connected economy by buying and selling financial claims. Furthermore, he argues that the primary function of financial markets is to allow the funds effectively allocated from the surplus units in the economy, the deficit units for productive investments. Richard and Bill, 2006, view of the financial market, like any market mechanism for financial assets and securities. They further explain that there is often no physical market transactions are conducted via telephone or computer. Is any market in which financial assets and liabilities are traded and the mechanism through which corporate financial managers have access to various funding sources and instruments. Capital markets, however, operate in two ways: Primary market providing new capital for enterprises and other activities, usually in the form of issuing shares to new or existing shareholders or loans. It provides the focal points for lenders and borrowers to meet. First of all, new sources of funding is raised in this market. Secondary market trade existing securities, thereby allowing investors to supply the existing holdings at will. Active in the secondary market is a prerequisite for efficient primary market and, as no investor will want to stick with investments that cannot be implemented if desired. Institute of Chartered Accountants of London describes the financial market, with the means provided by the financial system for the creations, care and distribution of financial assets and liabilities. The market according to the institute, has two major segments, money and capital markets. Money market offers the opportunity to raise short-term investments and funds. Tenor, which from day to day varies from about a year or two years. Exchange financial instruments on the market include treasury bills, bills, treasury certificates, securities, etc., the capital market on the other hand are the mechanisms, institutions and structures in which the medium and long term funds are collected and made available for businesses, government and individuals . Capital markets is that the instruments which are already provided are outstanding. OVERREACTION AND UNDERREACTION One of the first papers on long-term return anomalies wrote by DeBondt and Thaler (1985). We find that when stocks are ranked on three to five years past returns, past winners are usually the future losers, and vice versa. Attributed to these long-term return reversals to investor overreaction. In forming expectations, investors give too much weight to past performance of companies and too little to performance instead of the mean return. DeBondt and Thaler seem to argue that the overreaction to past information about the general assessment of behavioral decision theory of Kahneman and Tversky (1982). So could be that the overreaction to the prediction of behavioural finance alternative to market efficiency. In most cases, however, the anomalies literature has not accepted the discipline of an alternative hypothesis. An exception is Lakonishok et al. (1994). They argue that the indicators of stock prices proxy for past performance. Companies in the high proportion of earnings in the financial market instruments. These are securities or financial instruments traded on financial markets and the already mentioned, the two major segments of financial markets money and capital markets, the instruments traded in the money market are as follows: Treasury securities those short-term obligations of the federal government to the holder a specified sum of money after a certain number of days in question. Treasury securities are of two types depending on the denomination and maturities. While Treasury yields are generally low fixed and matures about 91 days of issue of certificate treasury share similar features with it, but a longer duration and higher fixed rate. Certificate of deposit (CDS) these are the revenues of banks deposit liabilities of a specified interest rate for a specified period of time. CDS is an interbank asset and serve as a means of channeling cash surplus of commercial banks, commercial banks, who are the main issuers of these types of devices. When the bank promises to pay the principal and interest at maturity, usually 3-36 months, with the name of the negotiable certificate of deposits. However, if the CD features of the deposit receipt, and are generally held to maturity, while, they are called non-negotiable certificates of deposits. Non-negotiable certificates of deposits is also maturity of up to 3-36 months. Commercial paper this is an unsecured short-term bills issued by the company to interested investors for a cash discount for a specific term. Investors in commercial paper loans are usually worth individuals or institutional investors. This is usually for a duration ranging from 30-270 days. Commercial paper dealer, however, classified documents and the documents placed directly. Securities dealer commercial paper investors placed through the dealer, which can be placed directly under a bank notes, commercial papers directly to the investors of the company issuing the documents, which require the issuer to maintain dress trained personnel who have a good knowledge of financial markets and good relationships in the markets. In all cases, the commercial paper investment of the investors, who borrow in the credit market without security, or even negative pledge. Commercial paper traded only on the primary market. Bankers Acceptances also known as the draft bill adopted by the drawee bank determines that a certain amount to be paid after a certain period of time. Adopted by writing the word your means the whole face of the draft with authorized signature. If this is done, the invoice, you should be the beneficiary of a discount rate. This financing through international trade credits. It is also intended to finance trade in goods in bonded warehouses, and in particular the credit created by the bankers acceptance self-liquid short-term loans. The maturity range of 90-180 days, or sometimes 30 to 270 days. Bank deposits this place is the base of the investors / depositors of the bank agreed rate of interest. Bank deposits are divided into call deposits / savings account deposits and fixed deposits. Call made deposits with agreed maturity date, and should be terminated by both parties at any given notice to the other party to an agreement based on the period of notice, the deposit liabilities of deposit and the bank for a specified period a specified rate of interest, which can be fixed or variable. The maturity of deposits vary from a few days a number of years. The deposit must be certified or non-receipt or certificate of deposit. Derivatives they are using, or losing or speculation from hedge against movements in currencies and interest rates. These financial instruments whose value are derived from underlying securities, which allows an investor to gain exposure to the performance of the underlying securities without having to physically. If a profit, there may be a hidden risk in derivative markets. Financial experts term financial weapons of mass destruction, and describes as hell, which is easy, and almost impossible to quit. Examples of derivatives, forward contracts and contract options for the future. CAPITAL MARKET INSTRUMENTS Debt Securities long-term loans are raised by a company or the government, which interest is payable, and a fixed rate. The nominal value of debt instruments, the debt of the issuer of the instrument and the interest is paid at the nominal rate of interest on this amount. In most cases, debt can be exchanged. Preference Shares this is a major source of long-term financing for the company. The holders of traditional shareholders instead of dividends. Preference shares, if they are collectively entitled to the unpaid dividend for the previous periods, carried over from one period to another, until finally paid off, in which case the arrears must be paid before common stock dividends paid. As well as debt securities, preferred shares convertible. Ordinary Shares the holders of these shares owned by the company. These nominal values and the memorandum and articles of association of the companys authorized common shares of the company may issue. The ordinary shareholders of the companys remaining claims, ie, they paid dividends in other fixed obligations have been met. Convertible Securities shares of both of these hybrid securities, the functions of the fixed-income securities and equity. These securities (usually fixed-rate), which is convertible into ordinary shares in the companys choice of the right in the future. Having explained the concept of the financial market, and it is composed, it is necessary to examine whether effective or not. Before this can be done, efficiency, whereas a different connotation in different environments should be clarified in the light of the financial market. EFFICIENCY This word efficiency is all part of the vocabulary of everyone. For most, this means that it can achieve the desired result, without or with minimal wasted energy or effort. The Encarta dictionary, 2009, is the ability to do something well or achieve the desired results will not be wasted energy and effort, that is, to what extent something is done well, or not wasted energy and effort. Overall, this is a situation where growing prosperity of the amount of productive resources and the current state of technical knowledge economy, eliminating wasted effort, and allows for additional output from the available resources to achieve this desired result, avoiding wastage and prevent losses to avoid harm. (David N.H, 2005). However, in order that the various professions that means different things, the economists are talking about allocation of efficiency the extent to which resources are allocated to the most productive use of this society with the greatest need. The engineers talk about the technical efficiency the extent to which a mechanism performs the maximum capacity. Sociologists and political scientists talk about the social efficiency the extent to which complies with the accepted mechanism for social and political values. (Richard and Bill, 2006). 6.1 Financial Market Efficiency The investment guru or financial expert, a slightly better efficiency, this also applies to the pricing and information on the effectiveness, efficiency, instead of sources of financial market instruments. It is necessary to do a quick and convenient tool to convert currency and vice versa, that the price of the securities is determined and how to manage the risks associated with the securities. This, however, with the roles of the financial market is expected to perform in the economy, according to which the Olowe, 2007, divided into three (3); Allocational efficiency the role of financial markets to optimally allocate scarce savings in productive investments in such a way that benefits everyone. The operating efficiency the server as an intermediary, who provide the funds from savers to investors at the least cost, which offered them a fair return for their services. Pricing efficiency the role of the dominant values at which securities will be replaced if the market price of capital allocation signals. The prices of the forces of supply and demand. Fama, 1976 (the Olowe, 1997) considers the effectiveness of pricing efficiency in the processing of information. Based on what said before, we can conclude that the pricing information of the two major determinants of efficient financial markets. Thus, financial market efficiency can be defined as the market in which security prices quickly and fully reflects all available information. The market in which any device that outperforms the market to be unusable. Therefore, the efficient financial markets, the same yield for a given level of risk should be implemented for all investors. Price (E / P), cash flow to price (C / P), and the book-to-market equity (BE / ME) is generally poor past earnings growth, and firms with low E / P, C / P, and BE / ME are generally strong earnings growth in the past. Since the market is over-react to the recent growth, it is surprised when earnings growth mean returns. As a result, a high E / P, C / P, and BE / ME stocks (poor past performers) have high future returns, and low E / P, C / P, and BE / ME stocks (strong past performers) at low future returns. We also considered the poor long-term post-event returns in the stock market (IPO), and experienced their own offerings (SEO) is the overreaction camp. SEO is a strong stock returns in the three years prior to the issue. It seems safe to assume that these strong returns reflect strong earnings. It seems safe to assume that the IPO will have a strong past earnings to appear in public. If the market does not mean that the income growth increasingly means returns, stock prices at the time of the equity issue (IPO or SEO) is too high. If the market only gradually recognizes the mistake, the overreaction to past earnings adjusted for slow growth in the future. Finally, some argue that the long-term negative abnormal stock returns post-list of companies that the new list of the NYSE and Amex because of the overreaction. Companies list their stocks to take advantage of market overreaction to the recent strong performance. As it turns out, overreaction was the result of tests of long-term returns, market efficiency would be dead, replaced by the alternative behavioural DeBondt and Thaler. The fact that it was obvious during the reaction around frequently. My grandfather was in the bottom of the reaction to the events of the evidence that stock prices seem to respond to income of about one year after announced. Another impetus to the effect that the high returns of stocks over the past year, yields are typically high, as the next three to six months. Alternatively, if new tests also produce the long-term post-event abnormal returns, which suggest underreaction, indicating a positive post-event abnormal returns of divesting firms and the companies that will sell. Attributed to the result of market underreaction to the enhanced probability that after the spinoff, both the parent and the spinoff is likely to become merger targets, and the recipient of aid. Desai and Jain and Ikenberry et al. Determine that the companies shared experience in human resources, long-term positive abnormal returns before and after the split. Attributed to the post-split returns to the market underreaction to the information indicates a positive split. Lakonishok and Vermaelen find positive long-term post-event abnormal returns when companies apply for stock. Ikenberry et al. observed similar results in the open market share repurchases. The story in both cases is that while the market, responding to a positive sign for the future performance of the share repurchases. Finally, Michaely et al. finds that the basis of stock prices, appears to respond to negative information in dividend omissions, information and positive initiatives. A few of the long-term return anomalies it is not easy to classify. For example, Asquith and Agrawal et al. indicate negative long-term abnormal returns to acquiring firms following mergers. This is also attributable to underreaction of market to a bad investment decision, or overreaction to the typically strong pre-merger performance of acquiring firms, documented, and Mitchell Staford. Ikenberry and Lakonishok find a negative post-event abnormal returns of firms involved in proxy contests. A story, based on the stock exchange, responds to the poor performance of these businesses prior to the proxy of competition, but another is that the price is too responds to the proxy information that something is likely to change. Because of the ambiguities in classifying certain disorders, and given the fact that the above review is certainly not complete, I will not do a number against the overreaction underreaction studies. What is important is that the literature does not lean toward the clean up of behavioral alternative to market efficiency. This will not be lost in the behavioral finance researchers who acknowledge the issue: We hope that future research will help to understand why the market seems to overreact in certain circumstances and underreact in others. (Michaely et al.). The market efficiency hypothesis is a simple answer to this question is a chance. Specifically, the expected value of zero abnormal returns, but chance generates apparent anomalies that split randomly between underreaction and overreaction. The weight of evidence of long-term return anomalies are so overwhelming that market efficiency is not viable even in the absence of an alternative working model that explains both under-and overreaction? The answer to that question is no, for two reasons: First, it is doubtful that the literature is presented in a randomly selected sample of events. Splashy results get more attention, and it encourages you to find. That the dredging of the irregularities of a rewarding profession suggested by the fact that the anomalies literature shows so little sensitivity to the other hypothesis problem. The same authors, visual events are often satisfied with the overreaction or underreaction, and are prepared to conclude that both justify the rejection of market efficiency. Second, some disorders may be evident by means of a reasonable price. Fama and French find that the long-term return reversals and the DeBondt Thaler, and conversely, to return to the Lakonishok et al. captured by a multifactor asset pricing model. In a nutshell, covariation between the returns of long-term losers seems related to the risk premium, which explains why higher future average returns than long-term winners. Fama and French discuss the fights and the multifactorial model, but the results are sufficient to illustrate an important point: Conclusions on market efficiency can be sensitive to the assumed model of expected returns. Last, but most importantly, have more or less split between overreaction and underreaction is not much support for market efficiency in the long-term return anomalies are so great they can not be attributed to chance. But it will still be viewed individually, most of the anomalies are weak. They usually disappear when reasonable alternative approaches to measure them. 6.2 Pricing of Securities Pricing is a major determinant of financial market efficiency security is discussed in relation to pricing of risk and return. Risk, which is created by many factors, such as general economic conditions, economic factors specific to security, competition, technological development, investor preferences, and all other kinds of circumstances, as defined in Van Horne, 1986, the various possible return on investment. Olowe, in 1997, also sees risk to the likelihood of a deviation from the expected return from holding a security back to the actual holding of such securities. The introduction of the risk, the investor may be indifferent as to which to invest in safety, if there is available for investment, similar yields. A conceptual framework for examining the relationship between risk and return, as they affect the pricing of security, discussed the Capital Asset Pricing Model (CAPM) and the discretionary pricing model (APM). 6.3 Capital Asset Pricing Model (CAPM) This model was developed by Sharpe (1964), Linter (1965) and Mossin (1966). It shows the expected return on the relationship between security and the inevitable risks. Provides a framework for the evaluation of the securities and can be used to find the unit cost of equity capital. CAPM, however, was the following assumptions: A time CAPM model assumes that investors are risk averse. The rice adopters and investors in the securities in the uniform requirement. There is a risk-free security, so that investors may borrow or loan an unlimited amount of risk premium rates. The securities are sold, and perfectly divisible. Even more so, to the quantities. The information is freely available to all investors. Investment restrictions cannot be neglected and no investor is large enough to affect the market price of the stock. The above assumptions are briefly assumes that there is a perfect market, and that the financial market is efficient. Thus, as the assumptions, all asset prices fall, that the security market line, while the security market line equation: E(R1) = RF + [E(RM) RF]ÃŽ ²1 Where ÃŽ ²1 = COV(R1RM) ÏÆ'2m E(R1) = expected return on security RF = risk – free rate E(RM) = expected rate on market portfolio ÃŽ ²1 = beta of security i COV(R1RM)= covariance of return on security i with the returns on a market portfolio. ÏÆ'2m = variance of returns on the market portfolio Example; if the expected return on security is 24% and its beta is 1.8. show whether the security is under or overvalued if the risk – free rate is 13% and return on market portfolio is 18%. Solution; E(R1) = RF + [E(RM) RF]ÃŽ ²1 = 0.13 + [0.18 – 0.13]1.8 0.22 i.e. 22%. We conclude that it is undervalued as the expected return is 2% less than the predicted. i.e. 24% > 22%. 6.4 Characteristics of CAPM The fact that not all risk-return safety concern that risk averse investors, asset should be priced to the risk-adjusted return is exactly the security market line. So the only risk is that investors pay a premium to avoid the risk of market share so that the total risk of each security in a systematic and systemic risk. A general and systematic risk affects the entire market, and irregular and the characteristic factors unique to a particular person. Effective diversification, however, reduces the overall risk of the portfolio to the point where only the regular risk remains. Measured by the weighted average portfolio beta of the beta of individual securities in the portfolio. Proportion of portfolio funds allocated to represent the weights of individual securities in the portfolio, and it represents mathematically: n ÃŽ ²P = ∑ wi ÃŽ ²i i=1 where ÃŽ ²p = beta of portfolio p ÃŽ ²i = beta of security Wi = proportion of security in portfolio p Conclusion: CAPM has been derived under some simplifying assumptions, most of which do not correspond to reality. For this reason, it has been criticized on the grounds that it assumes the market portfolio of all assets stocks, bonds, property and human capital. The real-life situations, empirical tests of the CAPM tend to use proxies, such as stock market indices as the market portfolio. 6.5 The Arbitrage Pricing Model It has proposed by Rose (1976), because the dissatisfaction of the CAPM on the theoretical and empirical grounds. This is a multi-factor model (multiple-beta model), compared to the CAPM, a single factor model. The safety factor for the actual return for a state grant: n Ri = E(Ri) + ∑ bijFj + ej J=1 This can be restated as Ri = E(Ri) + bi1F1+bi2F2 + †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. + binFn + ei Ri = actual return on security E(Ri) = expected return on security i Fj = the (uncertain) value of factor j bij = sensitivity to factor j ei = the error term. It is also the security-specific return. Similar to the CAPM, we diversify the unsystematic risk, but in addition, we arrive at the market equilibrium, as individuals eliminate arbitrage profits across multiple factors. The model does not explicitly indicate what factors or economic factors or behavioral significance. However, the market return as in the case of CAPM can be one factor. The APM, therefore, suggests that the linear relationship between security returns and a few factors. The steady-state under this model, the expected return on security i E (Ri) issued by: E(Ri) = Rf +Ɔº1 bi1 + Ɔº2 bi2 + †¦Ã¢â‚¬ ¦..+ Ɔºn bn Where Rf = risk – free rate Ɔºn = risk premium for the types of risk associated with particular factors. Its equation can be rewritten as: Ɔºn = En – Rf where En is the expected return of a portfolio which has unit response to other factors. Example: The return of stock company is related to two factors as follows. E(Ri) = Rf +0.7Ɔº1 + 1.6 Ɔº2 + 1.3 Ɔº3 Where 0.7,1.6 and 1.3 are sensitivity coefficients associated with each factor. If the risk – free rate is 12%, Ɔº1 is 7%, Ɔº2 is 4% and Ɔº3 is 6%. Calculate the expected return on the company’s stock. Solution: E(Ri) = 0.12 + 0.7(0.07) + 1.6(0.04)+1.3(0.06) = 0.311 i.e. 31.1% In summary, it seems more than the CAPM, the APM allows the CAPM risk averse investors to focus more attention to the systematic risk of securities pricing and diversify the systematic risk. According to APM on the other hand, individuals across a number of factors arbitrage, arbitrage opportunities disappear when the market is in balance. However, there is consensus on these factors, the APM, and testable. Thus, CAPM can still be used in security prices. INFORMATION ON SECURITIES Information can be classified as historic, current, or expected. Only the current or previous information from some of its effect on prices. The more information is available, the better the situation means that an informed decision is more likely correct. Security prices are characterized by a random and unpredictable movements. The movement in security prices may be interpreted to mean that investors in the market, a quick note to all security-related information on prices and prices adjust quickly to such information. Thus, the effectiveness of the security prices depend on the speed of price adjustment to all available information. The more efficient than the speed of adjustment of prices. The market efficiency of the available information, however, the efficient market hypothesis reflects (EMW), the three basic forms: Weak form Semi a strong form; Strong form. 1) The weak form EMH states that current stock prices fully reflect all of the information included in the recent price movements, which makes it impossible for investors to predict future security prices and the analysis of historical prices, achieved better results than the stock market as well. Therefore, the market may be effective in this form, there is no significant correlation term average prices of securities. Even more so, if an investors trading strategy can not beat the market based on information available to him, we conclude that the market is weak form efficient. Olowe 1997, places that most

The Tragedy of Human Nature in Shakespeares Othello :: GCSE English Literature Coursework

The Tragedy of Human Nature in Othello   Ã‚  Ã‚  Ã‚   In the tragedy Othello, Shakespeare creates a mood that challenges the way a person sees his or her self and the world. Subjects like racism, sexism, love, hate, jealously, pride, and trickery are thoroughly developed in the play of Othello to enable the audience to view the characters and also themselves. The Shakespearean tragedy of Othello was written in a time of great racial tensions in England. According to Eldred Jones, in 1600 just three years before Othello was written, Queen Elizabeth proclaimed an Edict for the Transportation of all "negars and blackmoores" out of the country ("Othello- An Interpretation" Critical Essays 39). It is in this atmosphere that Shakespeare began the masterpiece of Othello, a drama about a noble black Arab general, Othello, who falls in love with and marries, Desdemona, a young white daughter of a senator. From the above knowledge one may conclude that Shakespeare wrote Othello to express that all people, of all ethnicity, are ba sically the same in human nature. Shakespeare borrowed the idea of Othello from an Italian love story by Giraldi Cinthio. However, Shakespeare focuses more on the differences in color and age between Othello and Desdemona than Cinthio. Shakespeare does this to escalate Othello’s isolation from the rest of Venetian society and to display Othello’s vulnerability due to his color. In the tragedy not only is Othello susceptible to weaknesses but so is every major character . The tragedy reminds humans that even one’s good nature can be taken advantage of for the worse. The drama Othello expresses, through relationships and emotional attitudes, a theme that all humans are vulnerable to destruction even if they are in positions of power and glory. All the relationships in the play are used to demonstrate the vulnerability of people when involved personally with other people. Each of the relationships in Othello portrays insecurities in each person, except Iago. In fact, all of the relationships with one character, Iago, are focused around him and his devilish plot for the demise of Othello. However, most of the relationships in Othello bring about unintentional frustrations and vulnerabilities. The marriages in Othello are the most important relationships in conferring vulnerability because they bring out the best hopes and attitudes, and the worst fears and emotions in each character. Shakespeare, in designing Othello’s marriage to Desdemona, shows that although one can truly love a person, the need for human control can destroy any relationship causing heartbreak and turmoil.

Muscular Dystrophy Essay -- essays research papers

Muscular dystrophy refers to, not one, but a group of muscle diseases. These diseases have three features in common: they are hereditary; they are progressive; and each causes a characteristic and selective pattern of weakness. Duchenne muscular dystrophy (DMD) is the most prevalent and severe childhood form of this group of diseases. Each form of muscular dystrophy is caused by a defect in a specific gene. In 1986, scientists discovered exactly which piece of genetic material is missing in Duchenne muscular dystrophy patients. They named it for Guillaume Benjamin Amand Duchenne(1806-1875), a French neurologist who was one of the first doctors to discover and study the disease. When functioning properly, the Duchenne gene carries instructions for assembling a muscle protein known as dystrophin. At about 2,500,000 nucleotides, dystrophin is one of the largest genes known. Dystrophin is largely responsible for reinforcing and stabilizing the sarcolemma. Dystrophin associates with the muscle fiber sarcolemma by interacting with the actin microfilaments and with a transmembrane protein complex linked to the extracellular matrix. This latter dystrophin-associated glycoprotein complex (DAGC) includes the extracellular proteoglycan, [Alpha]-dystroglycan, which binds to merosin in muscle fiber basal laminae, as well as a number of other integral and cytoplasmic membrane proteins: [Alpha]-dystroglycan; [Alpha]-, [Beta]- and [Gamma]- sarcoglycans (see Figure 1). The DAGC provides a physical link and, potentially, a signaling pathway between the extracellular matrix and the internal scaffolding of the muscle cells. Mutations in the Duchenne gene result in dystrophin deficiency, which constitutes the pathogenic basis of DMD. Dystrophin is either absent or severely deficient in a person with DMD. When dystrophin is lost through gene mutation, the muscle falls apart under the tension generated when it contracts. Without dystrophin, the muscle fibers also lose their ability to regenerate and are eventually replaced with adipose tissue and fibrous connective tissue (see Fig. 2 and Fig. 3). The Duchenne gene has been located on the short arm of the X chromosome. This means that Duchenne muscular dystrophy is inherited as an X-linked recessive disease. Females have two X chromosomes, while males have one X chromosome and one Y chromosome. Therefore, in females, a normal X... ...re out how get only one gene in the right cell, how to keep the gene from impairing any other functions and how to get the gene to produce the right amount of protein. Some researchers are trying a different approach; that of myoblast transfer therapy. This school of thought attempts to fuse healthy, immature muscle cells with dystrophic cells to make hybrid muscles that function normally. Unfortunately, initial tests have not fared very well because the injected myoblasts do not seem to travel very far from the injection site. The last type of research deals with a protein called utrophin. It is hoped that this protein could functionally take over for dystrophin. Scientists are trying to discover a chemical that will upregulate utrophin production without disrupting anything else in the body.   Ã‚  Ã‚  Ã‚  Ã‚  Until a cure is found 1 in approximately every 3,500 boys will inherit Duchenne muscular dystrophy and eventually die from it. The current treatments only place a temporary obstacle in front of the disease. It is hoped that advancements in the fields of science and medicine will help to speed along the discovery of a cure for this debilitating muscular disease.

Benjamin Franklin’s Autobiography Virtues Essay

In his late 20’s, President Benjamin Franklin listed 13 virtues that he felt were an important guide for living. The following virtues can be divided in personal and social behavior: Temperance, Silence, Order, Resolution, Frugality, Industry, Sincerity, Justice, Moderation, Cleanliness, Tranquility, Chastity and Humility. Despite the fact that he tried to follow these guides in his life and went away, consider this being worthwhile in your own life. Temperance, eat not to dullness. Franklin states some associate temperance with eating and drinking, but wasn’t his intentions. My reasoning for why I feel this is one of the most important virtues is because one should always keep cool no matter what situation. Conquering your primal urges for food and drink, you’ll have the confidence to start making improvements in other areas of your life. As being taught in different ways in today’s time, order is another important virtue. Let all your things have their places. A man must fight against these natural laws if he wishes to do well in the world. I feel that it’s most important because being organized and properly creates a well rounded individual. Cleanliness, Sincerity, Fragility and Resolution is what influence the children’s childhood. Having the confidence to allow your actions speak for themselves, Franklin considered humility to be something worth acquiring and I agree with him. Men have pride in themselves showing the sign of strength and courage to mark a true person. They think of their abilities than they really are and honesty. The majority of the list of virtues is also valuable. Benjamin Franklins issues weren’t important but society has changed and that’s mainly are cause in the 20th century. Learning about Franklin’s experience, I find him as an intelligent man who has influenced the immature process of children before and today.

Communication Failure

â€Å"Communication is not an easy process. It involves verbal and non-verbal attempts to assist the other person to understand what we are trying to communicate. Yet it often fails. † The communication occurring between two people as discussed in the statement above is known by academics as ‘interpersonal communication’. Interpersonal communication can be defined as a two-way, transactional process in which two people, occupying a shared space, continue to send information to each other and receive information from each simultaneously. DeVito, 2008; Firth, Berry & Irvine, 2010; Hartley, 1999). The above statement refers to the process of interpersonal communication. Three clear assertions regarding the process of interpersonal communication are put forth in the statement above. Firstly, it is declared that the process of interpersonal communication is not simple. Secondly, it is declared that both verbal and non-verbal means are employed to foster the process of interpersonal communication. Lastly, it is declared that the process of interpersonal communication often is unsuccessful.This essay will discuss and analyse the above statement and the three assertions it puts forth in regards to the process of interpersonal communication. The interpersonal communication process is said to be comprised of five basic elements, which are: the sender of the information; the receiver of the information; the encoding of the information by the sender; the decoding of the information by the receiver; and the shared means or channel through which the information is sent (Shannon & Weaver, 1949, as cited Firth et al. , 2010).DeVito (2008) states there are additional elements which also have some part to play in the interpersonal communication process, these being: feedback from the receiver; feedforward by the sender; noise or interference impacting the interpersonal communication process; and the context or setting in which the communication process takes place. The statement above states that the process of interpersonal communication is often unsuccessful. DeVito (2008) suggests that such unsuccessful communication would be attributed to some of the elements of interpersonal communication either being present, absent or employed ineffectively by ender or receiver. Due to the process of interpersonal communication comprising of a number different elements, it can be concluded that the interpersonal communication process does have a certain degree of complexity as declared in the statement above. The statement being discussed also declares that for the process of interpersonal communication to be successful, verbal and non-verbal forms of information are broadcast by both the sender to facilitate understanding.DeVito (2008) states that verbal forms of information are essentially the actual words used by the sender and are chosen to: convey facts and inferences; express the connotation a word is being used in; and express sincerity or criticism. Hartley (1999) adds that the words a sender chooses to employ can communicate assertiveness and social standing. Though verbal communication is important in the interpersonal communication process, non-verbal communication conveys a far greater amount of information to the receiver (DeVito, 2008; Firth et al. , 2010; Hartley, 1999).DeVito (2008) states non-verbal means of information transfer between sender and receiver include: body movements and gestures such as pointing with a finger; facial expressions and gestures such as smiles and frowns; the amount of and nature of eye contact present such as pupil dilatation and breaking or initiating gaze; the actual physical space between sender and receiver where closer space often indicates a greater level of intimacy between sender and receiver; the presence or absence of touch such as shaking hands or embracing; the use of paralanguage which involves the rate, tone and volume at which the sender speaks or the use of uttera nces; the sender’s view of the importance of time; artifactual communication which involves how one’s physical appearance, clothing, makeup, and material possessions are made known to the sender; and smell such as the presence of perfumes, deodorants, body odour, mouthwashes. Therefore a great amount of information is sent though verbal and non-verbal communication, which is also made up of many elements. As indicated before, a greater number of elements often results to a greater level of complexity, which is declared in the statement discussed. Though many forms of verbal and non-verbal information sent intentionally to the receiver, sometimes additional verbal nd non-verbal information sent to a receiver is sent unknowingly and unintentionally (DeVito, 2008; Firth et al. , 2010). Most intentional information sent to a receiver is sent verbally and most unintentional information broadcast by a sender is unwittingly sent through non-verbal means (Firth et al. , 2010). Information that is unintentionally expressed by the sender impacts the message decoded and comprehended by the receiver, often leading to ineffective, unwanted or failed communication (DeVito, 2008; Firth et al. , 2010; Hartley, 1999). Therefore, if the amount of unintentional information sent during the process of communication is reduced, the high chance of communication failure, suggested in the statement above, will be lessened to a degree.While encoding and conveying information in the interpersonal communication process, the sender employs a language they deem to be recognisable easily decoded by the receiver in an attempt to foster successful communication (Firth et al. , 2010). A language can be defined as any verbal or non-verbal manner or means employed to transmit information and understanding between groups of people (Firth et al. , 2010). Verbal and non-verbal messages expressed by should ideally have congruency, meaning they complement each other (DeVito, 2008; Firth et al. , 2010). Incongruent verbal and non-verbal messages often lead to confusion in the receiver, hindering successful reception and comprehension of the information being communicated and therefore resulting in a failure in the communication process (Devito, 2008; Firth et al. , 2010).Hence, congruent verbal and non-verbal messages encoded and communicated by sender will also aid in reducing the likeliness of communication failure. It has been suggested that a failure or breakdown in the interpersonal communication process can be further reduced if both the sender and receiver possess satisfactory levels of what is termed ‘emotional intelligence’ (Goleman, 1998; Lynn, 2002). Emotional intelligence may be defined as a person’s ability to recognise, control and evaluate their own feelings and emotions as well as the feelings and emotions of others (Goleman, 1998). Goleman (1998) states that emotional Intelligence is made up of five lements, these being: self-aw areness, self-regulation, self-motivation, empathy, and the possession of social skills. Self-awareness comprises of: the ability to recognise one’s emotions; awareness of one’s strengths, weaknesses and potential; and one’s ability to maintain a satisfactory sense of self-worth and confidence (Goleman, 1998). Self-regulation involves: one’s desire to maintain honestly; one’s ability to keep distracting emotions at bay; one’s ability to ensure a high level of performance in tasks; and the ability to manage and adapt suit to change (Goleman, 1998). Self-motivation requires one to have: a desire to excel; initiative to grasp given opportunities; and the desire to continue pursing goals whilst barriers are met (Goleman, 1998).Empathy involves one’s ability to: perceive other’s feelings; understand others points of view; and nurture others in developing their abilities (Goleman, 1998). A person with a high level of social skills wi ll be able to: listen openly and effectively send messages; negotiate well with others in times of conflict; inspire, guide others or successfully persuade others; collaborate well with others; bring about change; and effectively deal with change (Goleman, 1998). Therefore, possessing a high level of emotional intelligence involves possessing numerous skills. Lynn (2002) states that possessing emotional intelligence enables one to be aware of their own emotions and abilities, and allows one to hold confidence themselves, enabling the person to communicate confidently and effectively.It can be concluded that someone who possesses emotional intelligence is able to manage how they send, receive, encode and decode information. Elements which are of great importance in the interpersonal communication process (DeVito, 2008). Emotional intelligence in the sender and receiver will also impact the remaining elements of the interpersonal communication process. Feedforward is an element of the interpersonal communication process which enables the sender to attract the attention of the receiver before conveying their full message (DeVito, 2008). Feedforward can indicate to the receiver the nature or the importance of the information which is about to be provided to them by the sender (DeVito 2008).DeVito (2008) states that in the interpersonal communication process, feedforward can: open communication channels; provide a sample of what is about to be conveyed; disclaim the message; and altercast which lets the sender and receiver to assume specific roles during the interpersonal communication process. Feedforward therefore, is a good tactic the sender can employ to gain the attention of the receiver before important messages conveyed, heightening the chance of successful information reception. After conveying their message, the sender can make note of feedback given to them by the receiver (DeVito, 2008). Feedback is an element of interpersonal communication that relates to the information which is continually broadcast either immediately or after short delay by the receiver during the course of the interpersonal communication process (Devito, 2008).Feedback can come in the form of: body language such as hand gestures; eye contact such as breaking or initiating gaze; facial expressions such as smiles; silence which may indicate the receiver is disinterested in the interpersonal communication process; and the variation of distance the which may indicate how involved the receiver wants to be with the sender (DeVito, 2008; Firth et al. , 2010). Feedback may be intentional or unintentional just like other forms of information broadcast during the interpersonal communication process (DeVito, 2008; Firth et al. , 2010). By making note of of feedback, the sender can gain and understanding of how the receiver perceives the message (DeVito, 2008). The context associated with communication also affects how messages are encoded and decoded by the sender and re ceiver in the interpersonal communication process (DeVito, 2008; Firth et al. , 2010).DeVito (2008) makes note of four dimensions communication takes place in: the physical dimension, which is the environment the sender and receiver communicate within and whether or not the environment promotes successful communication; the social-psychological dimension, which deals with the status, class or relationship between sender and receiver and how formal the communication should be; the temporal or time dimension, which deals with whether it is the appropriate time for a sender to convey a message; and the cultural dimension, which refers to beliefs, values, traditions and expectations that exist in the cultures of the sender and receiver whether certain forms of communication are appropriate. The channel or medium through which the information between sender and receiver is relayed has much influence upon successful encoding, decoding and comprehension (DeVito, 2008; Firth et al. , 2010; Hartley, 1999). DeVito (2008) states some channels used in the interpersonal communication process are: verbal; non-verbal; auditory, which relates to sound; olfactory, which relates to smell; and tactile, which relates to touch.Different mediums include: letters; emails; phone calls; mobile phone text messaging; radio; television; the Internet; and print media such as newspapers and magazines (DeVito, 2008; Firth et al. , 2010; Hartley, 1999). Proper use of the communication channels ensures that information travels between sender and receiver in a manner that facilitates accurate encoding and decoding (DeVito, 2008; Firth et al. , 2010; Hartley, 1999). Therefore, it can be concluded that successful use and management of communication channels would further lessen the significant chance of communication failure that is alleged to exist in the interpersonal communication process by the statement being analysed.Failure in the interpersonal communication process can also be attributed to differing types of noise or interference that work against or and act as a barrier to successful communication (DeVito, 2008; Firth et al. , 2010). DeVito (2008) mentions four categories of noise: physical noise, which includes the noise occurring in the environment around the sender and receiver, along with apparel such as sunglasses which would interfere with eye contact; physiological noise, which includes physical disabilities the sender or receiver may have such as poor eyesight, hearing and tiredness; psychological noise, such as preconceived notions and other mental distractions; and semantic noise, which is where the receiver does not understand the language employed by the sender.It has been shown that the interpersonal communication process comprises of various complex elements which either facilitate or hinder successful communication. Successful communication requires information to be properly encoded by a sender, transferred with all attached meaning through a chan nel to a receiver who must successfully decode and comprehend the information sent to them as intended by the sender. Though there are barriers that obstruct successful communication, the possession of emotional intelligence, communicating effectively and maintaining congruency between non-verbal and verbal messages have been argued to reduce the great likelihood of communication failure, as declared in the statement being discussed.The success of interpersonal communication is decided heavily by the skills possessed by other the sender and receiver. References DeVito, J. A. (2008). The interpersonal communication book (12th ed. ). Boston, MA: Pearson Education. Firth, G. , Berry, R. , & Irvine, C. (2010). Understanding intensive interaction: Context and concepts for professionals and families. London, UK: Jessica Kingsley Publishers. Goleman, D. (1998). Working with emotional intelligence. London, UK: Bloomsbury Publishing. Hartley, P. (1999). Interpersonal communication (2nd ed. ) . New York, NY: Routledge. Lynn, A. B. (2002). The emotional intelligence activity book: 50 activities for developing eq at work. New York, NY: American Management Assosication.