Japans Miracle Economy Free Essay Example, 2250 words

Therefore, the Japanese imports were welcomed on the basis of economics and politics. Thus, the US government focused its postwar policies for at least three decades mainly on the military and strategic facets of bilateral relationship, and almost unconditionally allowed the penetration of Japanese markets to US products3. The US established bilateral ties with every aspect of Japan’s political economy, including security and, thus making it a unique relationship, unlike those multilateral and interwoven relationships that US established with other democracies. The US governmental policies was originally intended to rapidly disintegrate the monopolies perceived to have close connection with the Japanese war machine as well as their undergirding prewar expansionism. The Americans acted in harmony with the pervasive New Deal Sentiments, a punitive policy meant to punish economic hegemonies, and instead seek â€Å"economic democracy† over economic growth. No doubt many Am erican corporations were apathetic to the breakup of many Japanese corporations, including the rapid dismantling of the zaibatsu, such that it was relegated to operating status. Nonetheless, in 1946, the US reversed its policy upon the defeat of the almost all prewar party elites by a new wave of political leaders. We will write a custom essay sample on Japan's Miracle Economy or any topic specifically for you Only $17.96 $11.86/pageorder now Thus, Americans role in empowering the political left led to the dramatic shakeup of the socioeconomic composition of political leadership of Japan4. Studies by Stockwin (cited in Christensen, 2009) examined the main aspects of LDP rule in Japan. These aspects include rates of savings, investment trends, government support, greater workforce productivity, and global environment favorable to free trade. Vogel in 1979 (cited in Christensen, 2009) underpinned Stockwin’s research even though his study was much more comprehensive. Vogel not only attributed Japan’s economic success to economic performance, but also to safety of Japanese cities, good schools, a comparatively egalitarian wealth distribution, and favorable labor relations. According to Johnson (1982, cited in Christensen, 2009), bureaucracy contributed significantly to the Japanese economic miracle. The Ministry of International Trade and Industry (MITI) of Japan employed bureaucratic and egalitarian policies that orchestrated rapid economic growth5. Gao (2009) attributed Japan’s economic dip of the 1990s to lack of coordination, lack of plan, and competition in the Japanese production. Outmoded facilities and equipment may have eroded the capital gains.

The Impact Of Scientific Theory On The Development Of The...

Question One: Theory Part One Research is important in our society since it contributes to the development of the world we live in through the application of theory. Research allows us to investigate, experiment, develop, support and explore previous facts and work of new and existing theories. The research and the investigation of topics should be significant, relevant, and of interest to those working and studying in the field. A systematic approach using a research method that provides accurate, reliable, and selective critical use of data is necessary for conducting a good research. A good research supports or challenges existing theory. In the world of theory, theory in common language differs from scientific theory, and psychological theory. Theory in common language is use to mean a guess, idea or speculation that someone has about something that is not tested. Scientific theory is an explanation for a phenomenon based on previous observations that have been built on a set of facts and principles that will allow us to predict future behaviors and events . Psychology theory describes a behavior and make predictions about future behaviors, emotions, and thoughts of individuals. Nevertheless, knowing the terms and the differences about theories and concepts would allow researchers to have a better understanding on how to use and apply the terms in theory. The researcher must have a clear picture of how to develop a study that includes the adequate informationShow MoreRelatedImpact Of Technology On The Development Of Civilization1407 Words   |  6 Pagestechnology in the development of civilization. The purpose of science is to develop a vast breadth and depth of data and knowledge to enable us to understand why things are the way they are (Oberdan 26). On the other hand, technology is used to improve real problems based on justified beliefs and organizational systems (Oberdan 28). Without the knowledge and understanding of science, innovation would b e lessened and society would not develop as rapidly or thoroughly. Scientific theories and discoveriesRead MoreAbnormal Psychology1154 Words   |  5 Pages Abnormal Psychology: The field of abnormal psychology is a scientific discipline that focuses on examining the causes of mental dysfunction or abnormal behavior. Some of the major areas of study in this field include emotional disturbance, psychopathology, mental illness, and maladjustment. This scientific discipline examines abnormal behavior since such actions are expressed due to psychological dysfunction that contains some features of deviance, potential injury, and distress. As various typesRead MoreDevelopment Of A Child s Social And Emotional Development1377 Words   |  6 Pageschild development there have been many scientific studies which have formed our understanding of children’s social and emotional development, within this essay I am going to look at some of the theses developmental theories and how they have impacted modern day society in understanding the development of a child’s social and emotional development. Development is the pattern of change that begins at concepti on and continues through the lifespan (Santrock, 2008, p.5) Emotional development is theRead MoreThe Contributions of Isaac Newton to The Scientific Revolution1064 Words   |  5 Pages The Scientific Revolution was a period when new scientific ideas where introduced into society. The Scientific Revolution laid down a foundation in which modern science is heavily based on. An influential figure of the Scientific Revolution is Sir Isaac Newton. He made many advancements in the field of science and mathematics, he discovered Gravity, developed the three basic laws of motion, and co-development of Calculus. Isaac Newton did several thing that positively affectedRead MoreScientific Management (850 Words)1208 Words   |  5 PagesIt could be said that Fredrick Winslow Taylor’s scientific management theory is still significantly relevant to management practices the 21st century. By analysing both critics and advocates of Taylor’s theory, we are able to g ain a comprehensive insight into Taylor’s contribution to the improved productivity, higher efficiency and greater consistency in the current business world. In conjunction with this, suggestions have been made that scientific management exercises poor working conditions, dehumanizingRead MoreA Pre Printing Press Increase And Interest1603 Words   |  7 Pagesit appears the introduction of the printing press enabled such an extent of reform which some view as inevitable. The influence of the printing press on the scientific ‘revolution’ can be seen most profoundly as it changed attitudes towards the past. It precipitated a resurgence of the ancients, as evident in the Humanist reversion to theory and ‘sacred books’ from 1490. It introduced a willingness to challenge the dogmatic precepts of the revered father figures of science and philosophy such asRead Morefactors that contributed to the rise and development of sociology1511 Words   |  7 Pagesserves to outline the factors that contributed to the rise of sociology and the latter`s development. In simply terms, sociology is the scientific study of the society and human behavior. The emergence of sociology traces back to the eighteenth century up to present day. Johnson (1998) suggests that in summary, the rise and development of sociology is based on political, economic, demographic, social and scientific changes. Ritzer (2008) asserts that the immediate cause for the beginning of sociologyRead MoreEssay about Human Beings and Nature: The Scientific Revolution1689 Words   |  7 PagesHuman Beings and Nature: The Scientific Revolution The Scientific Revolution, perhaps one of the most significant examples of human beingsà ­ relationship with the natural world, changed the way seventeenth and eighteenth century society operated. The power of human knowledge has enabled intellectual, economical, and social advances seen in the modern world. The Scientific Revolution which included the development of scientific attitudes and skepticism of old views on nature and humanityRead MoreThe Scientific Revolution Was The Development Of Modern Science1041 Words   |  5 PagesAngela Jimenez January 21, 2016 History Paper Pd: 7 The scientific revolution was the development of modern science, when progress in physics, astronomy, biology, chemistry, and mathematics reconstructed views of nature and society. While the scientific revolution focused on the physical world, the enlightenment ventured to explain the purpose of government, and construe the best form of it. Blaise Pascal and Isaac Newton are two enlightened individuals with different views that challenged andRead MoreAnalysis Of Ford And Taylorism Theory973 Words   |  4 Pagesand Taylorism theory has been there for many decades. It has its own advantage and disadvantage. However, we can still absorb from the theory and many of the methods are still practiced in this era. In this activity 1, we are going to summarize the ideas of Ford and Taylorism and discuss if the concept it accepted in many countries. Secondly, in the second activity, we are going to review about globalisation by Thomas Friedman. We will mention about the risk of living in the flat world of globalisation

Advanced Accounting for Journal of Instructional Pedagogies

Question: Discuss about theAdvanced Accounting for Journal of Instructional Pedagogies. Answer: This paper solves the issues that arise from the article. The issues that are being solved are those of the advanced accounting. The first part addresses the accounting issues that are discussed in the article. The second part discusses the various accounting theories that are explained in the article. Accounting issues that have being addressed in the article include: Business risk-this is when the director s of the company make a decision that may affect the company negatively or where the event that occurred threatened the future of the business. a plan of recruiting 5000 CPA was never successful. This may make the business to operate at a loss.2) there is also lack of transparency at the company. The CA ANZ does not show detail about spending and revenue in the company annual report (Scott 2015). The CA ANZ accountant spend higher amount of money on the project contributing to losses and this made the company to initiate program of cost cutting . The CA ANZs tertiary level educations are all at risk due to the losses that the company experiences in the course of business operation. 2) In terms of the issues of accounting being discussed, what I disagree/agree with in the article are the following. In the article, it is true that there is lack of transparency in the company this is because the CA ANZ fails to reveal the detail of the total expenses and revenue (Schaltegger and Burritt 2017). The annual report of the CPA published during the month which acts as the benchmark also enlightened some forms of transparency issues in the company. I agree with the decisions of the executives of engaging in a project that is risky. These projects can make the company to spend higher amount of money but they always have long term benefits to the company. The CA ANZ will yield higher amount of profit from the business that are risky in the long run. Though, sometimes they might make the company to run at a loss in the short run which is obvious because in any business operation there must be a profit or loss. In case of the loss, the company should come up with suitable strategies in order to improve the operation of the business to ensure that the company event that causes the business to make losses are solved (Libby 2017). The decision of the company of reducing the number of the staff, outsourcing of the employees and slashing of the budget are the best idea as they will reduce the CA ANZ expenditure. This may make the company to make profit because the expenses will be lower than the revenue. 3) How the article is linked to theories/theory is well explained in the Unit of Advanced Accounting. Accounting theories- These are sets of methodologies and assumptions used in the application and study of FRP (Financial reporting principles). Going concern- this theory is evident in the articles. It states that when accounting of the business is being managed, the controller must understand the financial viability of the business. The assumption in this theory is that the business is strong enough to survive even in the future. In case the accountant realized that the business will fail in the future then he will state it in the financial statement of the business (Bublitz, Philipich and Blatz 2015). The annual spending of the CA ANZ is being stated in the annual report of the company. The report of the accountant should outline whether the company will operate in the future. Revenue recognition- this is the accounting principle that are in the GAAP that help in finding a particular conditions in which revenue should be accounted for or recognized. The company recognized the revenue after the performance of a specific event or project. From the comparison of the CPA disclosure and CA ANZ, it is clear that the company recognized both the revenue and expenses. The CA ANZ financial statement recognized both the expenses and revenues when they are realizable or realized by the company (Leong 2015). Consistency- this theory state that once the company selects an accounting method, it should be applied continuously over the entire accounting periods. There is a consistency in the financial statements of the CA ANZ. The company uses the same accounting standard where the revenue and expenses are being recognized for each of the financial year (Gaffikin and Aitken 2014). References Bublitz, B., Philipich, K. and Blatz, R., 2015. An example of the use of research methods and findings as an experiential learning exercise in an accounting theory course.Journal of Instructional Pedagogies,16. Gaffikin, M. and Aitken, M. eds., 2014.The Development of Accounting Theory (RLE Accounting): Significant Contributors to Accounting Thought in the 20th Century. Routledge. Leong, R., 2015. Structuring an undergraduate accounting theory course to enhance the learning experience of Australian students: Preliminary findings. Libby, R., 2017. Accounting and human information processing. InThe Routledge Companion to Behavioural Accounting Research(pp. 42-54). Routledge. Schaltegger, S. and Burritt, R., 2017.Contemporary environmental accounting: issues, concepts and practice. Routledge. Scott, W.R., 2015.Financial accounting theory(Vol. 2, No. 0, p. 0). Prentice Hall.

Insurance and Negligence

What is negligence According to insurance policy, negligence is defined as any instance that on the part of the policy holder’s that could be blamed for the incidence that occurred, when there is negligent, then the incident was not merely from an accident, but some reluctance, ignorance or anything or such manner can be proved on the part of the policy holder’s.Advertising We will write a custom essay sample on Insurance and Negligence specifically for you for only $16.05 $11/page Learn More Depending with the insurance contact engaged, the insurer could cover the loss resulting from a negligence of the policyholder to a certain percentage or alternatively refuse to cater for any loss therein. To prove that a policyholder was negligent, there are four main elements to a negligent, they are: Existence of a legal duty to use reasonable care The insurer must prove that the policyholder by the terms and conditions of the contract was under leg al obligation to take good care of the situation or the subject matter to avoid any case of damage. When signing an insurance policy, there are some conditions that are special to a particular case, in the case that they offer some duty of care to the policyholder, then in case of an incidence that occurred from the bleach of the duty of care, then the case can be said to be a case of negligence. Failure to perform that duty An insurance policy has some preset conditions that calls for some actions, certain behavior or certain way of handing situation on the side of the policyholder to enforce the contract. In the case that the policyholder has ignored or not performed the duty, then it can be concluded as a case of negligence and the contact can have issues in enforceability. failure to perform that duty can result to negligence and non-compensation of the policyholder. Damages or injury to the claimant To prove a case of negligence, there must have some damages that have been suff ered because of the negligence, in the case of an insurance policy, the subject matter that had been issued must have been damaged or the peril that was insured against must have occurred. When the damage has occurred, the policyholder will be seeking to enforce the contract and get compensation that is the challenging part of the story; he suffered the damage, but the complainant (the insurance at this level) is claiming that there have been some negligence, thus the damage not enforceable. The insurer assumes that if the policyholder had taken such enough care, then the damage would not have occurred. Proximate cause relationship between the negligent act and the infliction of damages Under this heading, the law assumes that some acts on the side of the policyholder that might have triggered another thing that is responsible for the damage. In this case, there is the inclusion of third parties or other activities to functions that might be blamed for the damage. When proving this point, the insurance body must show the cause of events and the relationship that occurred in the entire situation to have the damage occur.Advertising Looking for essay on common law? Let's see if we can help you! Get your first paper with 15% OFF Learn More The assumption of this element is that a damage can occur but there is not direct influence of the policyholder if the matters of the case are analyzed, then it can be seen that the policy holder was involved in the situation indirectly; the indirect involvement is the prove of negligence. This essay on Insurance and Negligence was written and submitted by user Matsu'o Tsurayaba to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Free Essays on Mac OS X 10.2

Usually, Apple Computer doesn’t dragg about their new baby OS X 10.2 but this time they couldn’t wait to break the silence. The company even started distributing the product A month earlier then it was scheduled. The desire to spread the news is perfectly understandable. The new version of Operating System goes under the name of Jaguar and is loaded with lots of cool and useful stuff to offer to the user. The systems retail price ranges from $129-199 depending on the configuration. Unfortunately, Apple does not offer an upgrade price for existing OS X users. The fact that users of an older OS X were left out in a dark has made them upset and even angry. The OS X compatibility with Windows machines has made it very easy to exchange files. Also, Apple improved the search for files in the Finder and made it virtually painless for the user. It is no longer required a start of a separate program. Very important feature of the system is running faster due to elimination of many daily irritans. Jaguar supports wireless networking called Bluetooth that can connect Palm organizers through the D-Link USB Bluetooth adapter, the pricing of the adapter is about $49. Apple has also taken a very important step towards e-mail improvement. â€Å"Mail has the first trainable junk-mail sorter that supposed to learn as you mark messages as junk or not†. But, not everything is so smooth in OS X. Z. Sherlock 3 interacts with Web services, instead of searching for files. That is the only fault in the system. The OS X is looking good and worth checking out.... Free Essays on Mac OS X 10.2 Free Essays on Mac OS X 10.2 Usually, Apple Computer doesn’t dragg about their new baby OS X 10.2 but this time they couldn’t wait to break the silence. The company even started distributing the product A month earlier then it was scheduled. The desire to spread the news is perfectly understandable. The new version of Operating System goes under the name of Jaguar and is loaded with lots of cool and useful stuff to offer to the user. The systems retail price ranges from $129-199 depending on the configuration. Unfortunately, Apple does not offer an upgrade price for existing OS X users. The fact that users of an older OS X were left out in a dark has made them upset and even angry. The OS X compatibility with Windows machines has made it very easy to exchange files. Also, Apple improved the search for files in the Finder and made it virtually painless for the user. It is no longer required a start of a separate program. Very important feature of the system is running faster due to elimination of many daily irritans. Jaguar supports wireless networking called Bluetooth that can connect Palm organizers through the D-Link USB Bluetooth adapter, the pricing of the adapter is about $49. Apple has also taken a very important step towards e-mail improvement. â€Å"Mail has the first trainable junk-mail sorter that supposed to learn as you mark messages as junk or not†. But, not everything is so smooth in OS X. Z. Sherlock 3 interacts with Web services, instead of searching for files. That is the only fault in the system. The OS X is looking good and worth checking out....

Pride and Prejudice Quotes

Pride and Prejudice Quotes The following quotes from Pride and Prejudice by Jane Austen are some of the most recognizable lines in English literature. The novel, which follows the push-and-pull relationship between Elizabeth Bennet and Fitzwilliam Darcy, deals with themes of love, pride, social expectations, and preconceived opinions. In the quotes that follow, well analyze how Austen conveys these themes with her trademark wry wit. Quotes About Pride I could easily forgive his pride, if he had not mortified mine. (Chapter 5) When Elizabeth speaks this quote, she’s fresh off Darcy’s slight of her at the first ball, where she overheard him judging her not â€Å"handsome enough† for him to dance with. In context, where she and her family are discussing the ball with their neighbors, she tosses the line off in a good-natured, quipping sort of way. However, a closer read does suggest some element of truth to it: as the story progresses, it becomes evident that this unpleasant first meeting has colored Elizabeth’s perception of Darcy, making her more susceptible to Wickham’s lies. This quote is also the beginning of a running pattern through the novel: Elizabeth and Darcy are each able to acknowledge that they possess a shared flaw (Elizabeth acknowledges a degree of pride, Darcy admits that his prejudices are formed quickly and irrevocably). The theme of pride often connects to an inability to recognize one’s own flaws, so although the characters still have a ways to go before they’ll reach a happy conclusion, an admission of some flaws indicates that this will be a comedy where that conclusion is possible rather than a tragedy where a tragic flaw will be realized too little, too late. Vanity and pride are different things, though the words are often used synonymously. A person may be proud without being vain. Pride relates more to our opinion of ourselves, vanity to what we would have others think of us. (Chapter 5) Mary Bennet, the middle Bennet sister, is neither frivolous like her younger sisters nor well-adjusted like her older sisters. She’s studious to a fault and is quite fond of philosophizing and moralizing, as she does here, where she inserts herself into a conversation about Mr. Darcy’s behavior at the ball by seizing on their mention of his â€Å"pride† and jumping in with her philosophy. It’s a clear indicator of her lack of social skills and her simultaneous desire to be included in society. Although it’s delivered in Mary’s moralizing, pretentious manner, this quote is not entirely untrue. Pride – and vanity – are central themes to the story, and Mary’s definitions give readers a way to distinguish the social snobbery of Miss Bingley or Lady Catherine and the inflated self-important of Mr. Collins from the pride of Mr. Darcy. Pride and Prejudice explores personal pride as a stumbling block to true understanding and happiness, but it also presents the proudest character – Darcy – as one who does not care much what other people think of him, as evidenced by his cold social behavior. The contrast between care for perceptions and care for internal values is explored throughout the novel. â€Å"But vanity, not love, has been my folly. Pleased with the preference of one, and offended by the neglect of the other, on the very beginning of our acquaintance, I have courted prepossession and ignorance, and driven reason away, where either were concerned. Till this moment I never knew myself.† (Chapter 36) There is a term in classical Greek drama, anagnorisis, that refers to a character’s sudden realization of something heretofore unknown or misunderstood. It often connects somehow to a shift in perception or relationship with an antagonist. The quote above, spoken by Elizabeth to herself, is Elizabeth’s moment of anagnorisis, where she finally learns the truth about Darcy and Wickham’s shared past via Darcy’s letter to her, and subsequently realizes her own flaws and mistakes. Elizabeths moment of self-awareness and character pivot indicates the literary skill at work here. Anagnorisis is something that appears in complex works with classical structures and multifaceted, flawed heroes; its presence is further proof that Pride and Prejudice is a skillful narrative, not simply a comedy of manners. In tragedies, this is the moment where a character comes to a much-needed realization, but learns their lesson too late to stop the tragic events already in motion. Because Austen is writing a comedy, not a tragedy, she allows Elizabeth to gain this needed revelation while there’s still time to reverse course and achieve a happy ending. Quotes About Love â€Å"It is a truth universally acknowledged, that a single man in possession of a good fortune, must be in want of a wife.† (Chapter 1) This is one of the most famous opening lines in literature, up there with â€Å"Call me Ishmael† and â€Å"It was the best of times, it was the worst of times.† Spoken by the omniscient narrator, the line essentially sums up one of the key premises of the novel; the rest of the story operates under the assumption that the reader and the characters alike share this knowledge. Although the themes of Pride and Prejudice are certainly not limited to marriage and money, those do loom large. It is this belief that leads Mrs. Bennet to push her daughters forward at every turn, both towards worthy candidates such as Mr. Bingley and unworthy ones such as Mr. Collins. Any single man with some fortune is a marriage candidate, plain and simple. There is a particular turn of phrase worth noting here as well: the phrase â€Å"in want of.† Although it sounds, at first glance, that it’s stating a rich, single man always wants a wife. While that’s true, there’s another interpretation. The phrase â€Å"in want of† is also used to indicate a state of lacking something. Thus, the other way to read it is that a rich, single man is lacking one crucial thing: a wife. This reading emphasizes the social expectations placed on both men and women, rather than one or the other. â€Å"You are too generous to trifle with me. If your feelings are still what they were last April, tell me so at once. My affections and wishes are unchanged; but one word from you will silence me on this subject for ever.†Ã‚  (Chapter 58) At the romantic climax of the novel, Mr. Darcy delivers this line to Elizabeth. It comes after all has been revealed between the two of them, all misunderstandings cleared up and both in full knowledge of what the other has said and done. After Elizabeth thanks Darcy for his assistance to Lydia’s marriage, he confesses that he did it all for Elizabeth’s sake and in hopes of proving his true nature to her. Because of her positive reception so far, he makes an attempt to propose to her again – but this could not be more different than his first proposal. When Darcy first proposes to Elizabeth, it’s overlaid with a snobbish – though not inaccurate – appraisal of her social status relative to his. He uses language that â€Å"seems† romantic (insisting that his love is so great it overcame all rational obstacles), but comes across as incredibly insulting. Here, however, he not only approaches Elizabeth without pride and with genuine, unrehearsed language, but he also emphasizes his respect for her wishes. Rather than following the classic trope of â€Å"pursue until you win her over,† he calmly states that he will step away gracefully if that’s what she wants. It’s the ultimate expression of his unselfish love, as opposed to his previous self-centered arrogance and hyperawareness of social status. Quotes About Society â€Å"I declare after all there is no enjoyment like reading! How much sooner one tires of any thing than of a book! When I have a house of my own, I shall be miserable if I have not an excellent library.† (Chapter 11) This quote is spoken by Caroline Bingley, while she is passing time at Netherfield along with her brother, sister, brother-in-law, Mr. Darcy, and Elizabeth. The scene is, at least from her perspective, a subtle competition between her and Elizabeth for Darcy’s attention; she is, in fact, mistaken, as Elizabeth has no interest in Darcy at this time and is only at Netherfield to tend to her ill sister Jane. Miss Bingley’s dialogue is a constant stream of attempts to get attention from Darcy. While she’s rhapsodizing about the joys of reading, she’s pretending to read a book that, as the sharp-tongued narrator informs us, she only chose because it was the second volume of the book Darcy had chosen to read. Often taken out of context, this quote is an excellent example of the gently satirical humor Austen often uses to poke fun at the social elite. The idea of taking pleasure in reading is not silly in and of itself, but Austen gives this line to a character who we know to be insincere, and compounds it by exaggerating the statement past any possibility of sincerity and making the speaker sound desperate and foolish. People themselves alter so much, that there is something new to be observed in them for ever. (Chapter 9) Elizabeth’s dialogue is typically witty and laden with dual meanings, and this quote is a definite example. She delivers this line during a conversation with her mother, Mr. Darcy, and Mr. Bingley about the differences between country and city society. She remarks upon her delight in observing people – which she intends as a barb at Mr. Darcy – and doubles down with this quote when he suggests that provincial life must be quite boring for her observations. On a deeper level, this quote actually foreshadows the lesson Elizabeth learns over the course of the novel. She prides herself on her powers of observation, which creates her â€Å"prejudiced† opinions, and she certainly does not believe that Mr. Darcy, of all people, will ever change. As it turns out, though, there is actually much more to be observed than she has at the point when she makes this sarcastic comment, and Elizabeth comes to understand that truth later on.

My personal statement Example | Topics and Well Written Essays - 1000 words - 1

My - Personal Statement Example They have raised their kids with strong perseverance and good management. Like them, I am also very hard working, and intend to train myself in various business skills, like leadership, communication, management, and organization. I have always been a very good student getting positions and certificates. My teachers and professors always considered me a student worthy of reward. I feel that I have enough knowledge and passion to show that I have a craze about going ahead in the business industry and contribute to the financial market. To maintain my interest, I keep myself updated with market requirements. I have always thought about bringing my knowledge into use that I gained during my college. I keep on reading related journals, books and magazines, and attend related seminars held in my vicinity. I feel that I possess those special skills needed to fulfill the requirements for this course. I have always come up fresh, innovative and unique ideas. I have learnt basic computer know ledge and softwares so as to equip myself with the latest technology that may help me in excelling in this course. This enthusiasm is what pulls me to take business as major. Precisely speaking, I have two major goals in mind: One is that I want to expand my family business, which is a steel company, to a higher level, and manage it properly; and, the second is to help the needy and poor people with my money and time. I love humanity, and I want to spend the earned money on people in plight. Now, I will discuss my experiences in the business field. I have been working in many organizations as a webmaster, a secretary, administration, and the President of Permias Pasadena (Indonesian Student Organization). I actively participated in the â€Å"Your Vote Matters, 2012† in the Asian pacific legal center, where I convinced people to vote by making hundreds of phone calls. I have also been an internee in the operation committee of the tournament of roses. I volunteered for the

Risk and resilience Assignment Example | Topics and Well Written Essays - 750 words

Risk and resilience - Assignment Example Childhood resilience is, therefore, the phenomenon of positive adaptation despite significant lifes adversities. The topic of risk and resilience in children is important and should be understood by people of all lifestyles. This is because it is a menace affecting children and adolescents in India, China, United States, Malawi, South Asian Countries, sub-Sahara countries of Africa among others. Most of these risks are unavoidable because they are unpredictable such as death of parents/guardian, forced migration and armed conflicts (Boyden and Mann 3). Although some of them are for a good course, for example, parents migrating with or without their families in search of greener pastures. It behooves such parents to explain in depth their reason for migration, so that their children can understand their parents perspective and so that they can adapt to the situation easily. Additionally, parents and older individuals should try to talk to children about real life in order for them to strike a balance between their imagination, the elders experience and real life situations when they are faced w ith challenges now or even in the future. Children who have had good interactive conversations, relationships and understanding with older people are able to adapt despite lifes adversities. This is because, they have been able to relate to the experiences of others and they are able to hope for a better tomorrow despite their current situations. In some instances, children and adolescents who have grown up in the streets and/or in the settlement schemes/slums, those who have lost their parents and/their guardians and those who have had bitter experiences such as war are able to adapt positively although some might suffer greatly from posttraumatic stress disorder. The disorder might be long term, but others get over it and lead a normal life. Therefore,

Peer Pressure Essay Example for Free

Peer Pressure Essay Introduction Peer pressure is a social influence exerted on an individual by others in order to get that person to act or believe in a similar way. It is used by a social group, often with the implication that everybodys doing it. This influence can be negative or positive, with a successful result being a change in a persons behavior. Nearly all children experience some form of peer pressure, whether at school, at church or at home among siblings. As a kind of social pressure, it dominates preteen life. Many teens become absorbed into different cliques and groups, spending less time with their families. Much of the personality of a teen can be shaped by a peer group. Negative peer pressure can be a dangerous tool against children, especially younger or insecure children. They may be persuaded to take actions they might otherwise not have considered, such as smoking cigarettes, drinking alcohol or taking drugs. Peer pressure is a problem for adults, who may be coerced, for example, into buying a house or car they cant afford in an effort to keep up with the Joneses. Peer pressure is not always negative, however. A student whose friends excel in academics may be compelled to study hard and get good grades. Influence can also be exerted to get a friend off drugs or to help an adult take up a good habit or drop a bad one. Study groups, class projects and athletic groups are examples of positive peer groups. Why I chose the topic – I decided to chose this topic because in the Indian Education System children experience a sudden thrust of freedom and responsibility to shape their future at the same time. In such cases, they can either be well-guided or mis-guided. Peer pressure may also lead to stress and anxiety. Teens have a multitude of issues that can cause them anxiety. The two major settings for this peer pressure teen stress are in their home lives and in the college setting. The stressors are many and diverse. Their feelings can be affected by some of the issues listed below: * The feelings that others and also inside themselves tell them they should do and how they should perform. * Peer pressure teen stress is also caused by the way they feel they are viewed by adults in the college setting. * The peer pressure teen stress to perform in the grades and work they do. * Problems with socializing with other teens. Problems at home with family members. * Having a low self worth. * Always having verbal conflicts with their friends and family. * Low income living conditions for the family. * Peer pressure teen stress is sometimes caused by a major event causing grief or trauma within the family. This could be death, an illness, or parents splitting up. * A split in the relationship with a boyfriend or girlfriend. * The neighborhood in which they live is not a good place. * Having to move to a new home is yet a cause of the peer pressure teen stress. Having to adapt to a new school/college environment. Objectives of the project: The main objective of the project is to discuss the issue of peer pressure under â€Å"no pressure†. The students must be made to understand how they can grasp the good and leave the bad. The project tries to distinguish between Good Peer Pressure and Bad Peer Pressure. It analyses various aspects that cause such a pressure and gives a solution to the same. The project also gives a remedy for overcoming bad peer pressure. The project also makes suggestions as to how can peer-pressure-struck children can be helped. The project also tries to examine the reasons that make children give-in to peer pressure. Here are some other reasons why people give in to peer pressure, that are less known but equally as responsible. †¢ The lack of self-confidence to go ones own way. It is easier to follow the footsteps of another than to make your own. There is also a certain level of safety that comes with following another. Taking the road less traveled by making your own choices takes self-confidence and self-assurance. †¢ The desire to avoid embarrassment. Many people fear embarrassment more than death. Knowing this, it is easy to see how important effective communication can be in responding to peer pressure. For example, if a bunch of peers surround a teenager and asked him if he wants to smoke a cigarette like the rest of them have, and all the teenager can think of is, but my mom said I should just say no. then he is in trouble. It is best to prepare yourself and your children with witty, yet clear and firm responses to known peer pressures. For example, in the above situation the teenager could say, Hmmm, spend my life wasting money, offending people, having bad breath, and killing myself. o thanks.    A good response cannot only save one from embarrassment, but give others the confidence to not give in to the peer pressure as well. Those who lead are often well respected by those who follow. †¢ The lack of using ones own mind. Again it is reacting, rather than responding that causes one to get in trouble. Think about the consequences of your actions, both present and f uture. Dont give in and sacrifice your long-term goals for short-term gratification. †¢ The lack of unbiased information. When someone feels pressure from peers, they are often presented with biased information. Again it is preparation that can help one to avoid peer pressure by knowing all the facts. Anticipate peer pressure in life and get the facts from a reliable source. Educate yourself and your children dont count on the school system to do it. Some of the more common peer pressures experienced in youth that can be prepared for today are smoking, alcohol, drugs, sex, cutting class and committing crimes. The biggest peer pressure in adulthood is being expected to behave, act, and perform like your peers rather than becoming the person you are capable of becoming. Know the reasons for and against these pressures. Resources referred: ? Bullying Prevention Program http://www. clemson. edu/olweus/ ? Take Action Against Bullying www. bullybeware. org ? Steps to Respect: A Bully Prevention Program www. cfchildren. org/str. html ? Breaking the Cycle of Violence: Intervention for Bullying and Victimization (1996) By Richard J. Hazler ? How to Say No and Keep your Friends: Peer Pressure Reversal for ? Teens and Pre-Teens (1997). By Sharon Scott ? CAFS Teacher Talk Volume 1(3) 1996 http://education. indiana. du/cas/tt/v3i3/peerpress. html Preventing Classroom Bullying: What Teachers Can Do (2003). By Jim Wright http://jimwrightsonline. com/pdfdocs/bully/bullyBooklet. pdf ? Resource for parents: http://sitemaker. umich. edu/356. darnell/advice_for_parents Conclusions: Growing up, everyone will experience some form of peer pressure. Peer pressure is the control and influence people of our age may have on us. Peer pressure can occur in many kinds of relat ionships. The way we respond to peer pressure can have a great impact on the decisions we make and, in turn, our total health. There are many different types of peer pressure. There is positive, negative, and manipulation. Positive peer pressure is not limited to following or setting good examples of what to do. It can also provide examples of what not to do. A teen whose friends do not use alcohol or other drugs may be positively influenced to follow their example. Being a good role model is also a great way to demonstrate positive peer pressure. Influencing peers to take part in a positive act or worthwhile cause is a healthful way of influencing others. It can be contagious. We are primarily social beings with a strong need to belong. Throughout our life, we search for the balance between independence and connectedness. How much of ourselves do we give up/compromise in order to belong? The teenage years (and pre-teen) are a time of shifting focus of belonging from family to peers as while also developing a personal identity. Because kids dont yet have the maturity to grasp or to understand the potential consequences of being influenced by their friends, it is difficult for them to see the pitfalls of poor relationships and negative peer pressure. This project is designed to walk us through the inquiry and clarification of the need to feel connected and belong, as well as to be true to ones self while assessing the harmful affects of peer pressure. In addition to the inquiry looking at the costs/benefits belonging, it will identify strategies to deal with negative peer pressure and ways to turn it around, creating positive peer pressure, building leadership and personal power.

Paradise by Toni Morrison Essay examples -- Papers Paradise Toni Morri

Paradise by Toni Morrison Throughout many of Toni Morrison?s novels, the plot is built around some conflict for her characters to overcome. Paradise, in particular, uses the relationships between women as a means of reaching this desired end. Paradise, a novel centered around the destruction of a convent and the women in it, supports this idea by showing how this building serves as a haven for dejected women (Smith). The bulk of the novel takes place during and after WWII and focuses on an all black town in Oklahoma. It is through the course of the novel that we see Morrison weave the bonds of women into the text as a means of healing the scars inflicted upon her characters in their respective societies. Paradise deals with the lives of dejected women and the support group the women form for each other. Morrison draws attention to this key issue by removing the element of race from the novel, a heavy contrast to her earlier works, by not allowing the reader to know the races of the women. Thus the relationships present throughout the work can be seen strictly through the contrast between the abusive and damaging relationships found outside of the convent to the supportive and loving ones in the convent. This removal of race also allows us to see the bigger picture, which is not dictated by race (Smith). By examining the relationships in the novel, we see two distinct arenas dealing with identity and the women, which is the world outside of the convent, and the convent. Before reaching the convent, identity for the women is a broken notion in which the men they associate with dictate. The first woman we are introduced to is Mavis. Her relationship with her husband is an example of the type of subservience c... ...998 Nelson, Bredin. Women?s Friendships. http://hss.fullerton.edu/womens/bredin/spring99/fr Online. 16. November. 1999. Radicalesbians. ?The Woman Identified Woman.? http://scriptorium.lib.duke.edu/wlm/womid/ Online. 16. November. 1999. Shorter-Gooden, Kamea & Washington, N. Shenell. ?Young Black and Female: The Challenge of weaving an identity.? Journal of Adolescents July 1995 19. 466. Smith, Dinitia. ?Not Categorizing Characters by Race? http://englishlit.about.com/arts/englishlit/gi/dynamic/offsite.htm?site=http://www.nytimes.com/books/98/01/11/home/morrison.html Online. 16. November. 1999. Toni Morrison Chat http://www.pathfinder.com/time/community/transcripts/chattr012198.html Online. 16. November. 1999. Traustadottir, Rannveig. Gender patterns in friendships. http://web.syr.edu/~thechp/genpat.htm Online. 16. November. 1999.

Frank Lloyd Wright

She has written several other books on American architecture Including On Architecture: Collected Reflections on a Century of Change and The unreal America: Architecture and Illusion. Her biography on Frank Lloyd Wright is both informative and entertaining; she not only reveals the long and harrowing Journey and the victories and defeats of the rebellious and egotistical architect, but also gives a clear view at the times in which he was most active and the ways in which the country and the world were reacting to his architecture while adapting with everything from changing architectural tastes and styles to economic depressions and the WorldWars. Beginning with his birth and childhood in Wisconsin all the way to his latter days of work and death in Arizona, Hustle details the journey and evolution of his legacy and the tragedies that failed to hinder his art in coherent chronological fashion. Hustle begins the first chapters of the biography with the birth of Frank Lloyd Wright and his beginnings as a child in Wisconsin. Hustle also Introduces the fact that Wright manipulated some details of his personal information throughout life to suit his ego and create his own elegantly presented persona, beginning with his birthday.Born truly in 1867, Wright later changed his birth date to 1869 which â€Å"made a case for a precocious talent with an impressively youthful, early success in Chicago in the 1 sass,† and more Importantly to Wright it â€Å"kept him shy of the dreaded 90-mark during his brilliant late work in the asses† (Hustle 1). In these acts of self- benefit, Hustle revealed the aesthetically egotistical side of Wright that I most certainly never realized was an active force in his life. From his birth, Wright was pampered and directed by his mother, Anna, who believed him to be destined for greatness. On conception, she decided that Frank would be a great architect one day and she was going to do everything in her power to help and guide hi m in that path, not only for his own benefit but for hers as well. She thought particular crib all to influence the newly born Wright towards a path of architectural nirvana. â€Å"He would deliver her from the despair and hardship of her life, make up for her thwarted ambitions; they would have a golden future together† (Hustle 7).Hustle describes Wright's childhood as a bittersweet mixture of hard labor on his uncles farm and alienation from his father mixed with glorious Sunday mornings at he Lloyd Jones family Unitarian chapel followed up by emotionally restorative nights spent singing songs while his father played piano. She illuminates how even though he was a small and weakly child, he learned to â€Å"pile tired on tired† (Hustle 14) working on his uncle's farm and how that strength and stamina of mind and body stayed with Wright even up to the final days of his career which was alive and well until his death.Hustle then begins to describe the evolution of Wrig ht's Journey to becoming an apprentice architect. He was given his first opportunity at a youthful age to assist in he design and construction of a family chapel and even added a windmill of his own design later which stood the test of time and physical stress against the disbelief of some in his family. Through his early life in the rolling hills of the scenic Helena Valley, Wisconsin, Wright planted the seeds of his ideas and passion for â€Å"organic architecture† (Hustle 27) which would be the basis of his unique art in his future works.Organic architecture makes the lay of land, its environmental atmosphere, and the nature of the construction materials the combined generators of the design f the building. His 1935 masterpiece, Billingsgate, built for Edgar Kaufmann over a waterfall is a perfect example of the mix between nature and architecture that makes it uniquely organic and uniquely Wright. Hustle does an amazing Job at keeping all of Wright's advancements in chrono logical order and in a way that is easy to understand how he built his way up to the famous architect that he is.Through his confidence given to him by his mother, Wright began to understand that he was destined for more than an ordinary mortal life because he had â€Å"God-given creativity' (Hustle 33). When Wright was twenty years of age, he moved to the booming cultural epicenter that was Chicago of the asses. He applied to many different architectural firms but only to the prestigious ones which he believed worthy of his gifts and unique abilities; ultimately reputation and image would be the factors Wright would take into account when choosing a firm to work for.He began with Joseph Lyman Sessile, moved on to Beers, Clay, and Dutton, went back to Sessile, and then found his first nest egg of architectural growth and education with Louis Sullivan and Dammar Adler of the Adler and Sullivan firm. Hustle describes Wright as being able to absorb and retain every bit of useful infor mation. He would act as a sponge to Louis Sullivan, soaking up every ounce of the architectural knowledge he found interesting or worthy and committing it to memory. Although you would think that Wright would credit Sullivan for his influence, Hustle defines Wright as notoriously self-centered and arrogant.He would never admit that his ideas or passions for architecture had been influenced by any other human or any culture. His ego made him believe that his forms of architecture were completely ewe and unheard of; it was truly Just a concoction of every bit of influence he had every received through both education and observation Just mixed and manifested biography, Hustle tells how Wright went from sponge-like apprentice to fully accredited and renowned architectural celebrity. As his experience and popularity grew, Wright was approached by clients seeking his work apart from Sullivan influence and he began â€Å"moonlighting† (Hustle 70).With a newly wedded wife and childre n on the way, Wright needed more money to support them and his notorious self-indulgence into Japanese prints and fine clothing. Moonlight work, which is working on secret drafts without company permission and reaping all the profit, was forbidden in his contract with Adler and Sullivan and he was eventually found out and immediately fired. The blow to Sullivan was disastrous and the master and apprentice lost touch for years. When he had established himself well enough in the Chicago architectural scene, Wright began taking on employees as draftsman in his home-studio in the Oak Park suburb of Chicago.His Prairie House design and the Larking Administration Building were two of his greatest creations during this period. Wright was Just setting himself up with a good starting out career when Hustle delivers arguably the most controversial and disliked decision that Wright ever made: with children disturbing his concentration and the stresses of marriage and bills weighed together, Wr ight went through a mental breakdown and â€Å"in the fall of 1909, he left, abruptly cutting all ties.He abandoned a wife and six children and closed his practice, leaving debts and unfinished projects behind† (Hustle 106). Hustle describes how the newspapers and tabloids had a field day with reproving Wright's deplorable actions. He embarked on a two year Journey to Europe with his mistress Amah Cheney. While she worked as a translator in Germany, Wright worked in Florence with his son Lloyd and draftsman Taylor Woolly observing the Italian and Germanic architecture.Upon moving back to the United States, his mother Anna purchased the land in Wisconsin that would soon be the birthplace of his completely tailored and architecturally unique home, Totalities. â€Å"Wright would survive tragedy and disasters there, the murder of a lover and her children, desperate financial crises, and three destructive fires, rebuilding each time† (Hustle 34) from the ashes f the previou s. Shortly after the first Totalities was built, Amah and her children from her previous marriage were brutally murdered and Totalities was burnt to the ground.Accounts given by survivors of the disaster, gardeners and other Totalities workman, explained that the cook had some dispute with Amah and went ballistic. It took Wright several years, a new and blessedly time-consuming project, a new female companion, and Totalities II to bring him back out from a depressed slump. Wright gained instant international success upon the completion of the Imperial Hotel in Tokyo, Japan. In 1923, the hotel was completed and was one of the only structures that survived the great Kant Earthquake that struck Japan that same year.

A Study on Futures and Potions

A STUDY ON FUTURES AND POTIONS Project submitted in partial fulfillment for the award of the degree of MASTER OF BUSINESS ADMINISTRATION DECLARATION I hereby declare that this Project Report titled, â€Å"A STUDY ON THE DERIVATIVES† submitted by me to the Department OF BUSINESS ADMINISTRATION, XXXX and is a bonafide work under taken by me and it is not submitted to any other University or Institution for the award of any degree diploma / certificate or published any time before. Name and Address of the StudentSignature of the student Date : ACKNOWLEDGEMENTI wish to express my sincere deep sense of gratitude and also thank my guide XXX, Faculty of Finance for his significant suggestions and help in every aspect to accomplish the project work. His persisting encouragement, everlasting patience and keen interest in discussions have benefited me to the extent that cannot be spanned by words. I take my pleasure to acknowledge XXXX for the facilities provided and constant encouragem ent. Finally I express bows to everyone who are involved with this project. CONTENTS INTRODUCTION METHODOLOGY 1 FUTURES 2 OPTIONS ANALYSIS OF THE STUDYSUMMARY AND CONCLUSIONS BIBLIOGRAPHY INTRODUCTION Nature of the problem: The turnover of the stock exchanges has been tremendously increasing from last 10 years. The number of trades and the number of investors, who are participating, have increased. The investors are willing to reduce their risk, so they are seeking for the risk management tools. Prior to SEBI abolishing the BADLA system, the investors had this system as a source of reducing the risk, as it has many problems like no strong margining system, unclear expiration date and generating counter party risk.In view of this problem SEBI abolished the BADLA system. After the abolition of the BADLA system, the investors are seeking for a hedging system, which could reduce their portfolio risk. SEBI thought the introduction of the derivatives trading, as a first step it has set up a 24 member committee under the chairmanship of Dr. L. C. Gupta to develop the appropriate regulatory framework for derivative trading in India, SEBI accepted the recommendations of the committee on May 11, 1998 and approved the phased introduction of the derivatives trading beginning with stock index futures.There are many investors who are willing to trade in the derivative segment, because of its advantages like limited loss and unlimited profit by paying the small premiums. IMPORTANCE OF THE STUDY: To evaluate the profit/loss position of option holder and option writer. OBJECTIVES OF THE STUDY: ? To analyze the derivatives market in India. ? To analyze the operations of futures and options. ? To find out the profit/loss position of the option writer and option holder. ? To study about risk management with the help of derivatives. SCOPE OF THE STUDY:The study is limited to â€Å"Derivatives† with special reference to futures and options in the Indian context and the Hyder abad stock exchange has been taken as a representative sample for the study. The study can’t be said as totally perfect. Any alteration may come. The study has only made a humble attempt at evaluating derivatives market only in Indian context. The study is not based on the international perspective of derivatives markets, which exists in NASDAQ, NYSE etc. LIMITATIONS OF THE STUDY: The following are the limitations of this study. The scrip chosen for analysis is STATE BANK OF INDIA and the contract taken is March 2005 ending one-month contract. ? The data collected is completely restricted to the STATE BANK OF INDIA of March 2005; hence this analysis cannot be taken as universal. METHODOLOGY The emergence of the market for derivative products, most notably forwards, futures and options, can be traced back to the willingness of risk-averse economic agents to guard themselves against uncertainties arising out of fluctuations in asset prices.By their very nature, the financial ma rkets are marked by a very high degree of volatility. Through the use of derivative products, it is possible to partially or fully transfer price risks by locking–in asset prices. As instruments of risk management, these generally do not influence the fluctuations in the underlying asset prices. However, by locking-in asset prices, derivative products minimize the impact of fluctuations in asset prices on the profitability and cash flow situation of risk-averse investors. Derivatives are risk management instruments, which derive their value from an underlying asset.The underlying asset can be bullion, index, share, bonds, currency, interest etc. Banks, securities firms, companies and investors to hedge risks, to gain access to cheaper money and to make profit, use derivatives. Derivatives are likely to grow even at a faster rate in future. DEFINITION: Derivative is a product whose value is derived from the value of an underlying asset in a contractual manner. The underlying a sset can be equity, forex, commodity or any other asset. Securities Contracts (Regulation) Act, 1956 (SC(R) A) defines â€Å"derivative† to include – 1.A security derived from a debt instrument, share, loan whether secured or unsecured, risk instrument or contract for differences or any other form of security. 2. A contract which derives its value from the prices, or index of prices, of underlying securities. PARTICIPANTS: The following three broad categories of participants in the derivatives market. HEDGERS: Hedgers face risk associated with the price of an asset. They use futures or options markets to reduce or eliminate this risk. SPECULATORS: Speculators wish to bet on future movements in the price of an asset.Futures and options contracts can give them an extra leverage; that is, they can increase both the potential gains and potential losses in a speculative venture. ARBITRAGEURS: Arbitrageurs are in business to take advantage of a discrepancy between prices in two different markets. If, for example, they see the futures price of an asset getting out of line with the cash price, they will take offsetting positions in the two markets to lock in a profit. FUNCTIONS OF DERIVATIVES MARKET: The following are the various functions that are performed by the derivatives markets.They are: ? Prices in an organized derivatives market reflect the perception of market participants about the future and lead the prices of underlying to the perceived future level. ? Derivatives market helps to transfer risks from those who have them but may not like them to those who have an appetite for them. ? Derivative trading acts as a catalyst for new entrepreneurial activity. ? Derivatives markets help increase savings and investment in the long run. Types of derivatives: the following are the various types of derivatives. They are: Forwards:A forward contract is a customized contract between two entities, where settlement takes place on a specific date in the futu re at today’s pre-agreed price. Futures: A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Options: Options are of two types – calls and puts. Calls give the buyer the right but not the obligation to buy a given quantity of the underlying asset, at a given price on or before a given future date. Puts give the buyer the right, but not the obligation to sell a given quantity of the underlying asset at a given price on or before a given date.Warrants: Options generally have lives of upto one year; the majority of options traded on options exchanges having a maximum maturity of nine months. Longer-dated options are called warrants and are generally traded over-the-counter. LEAPS: The acronym LEAPS means Long-Term Equity Anticipation Securities. These are options having a maturity of upto three years. Baskets: Basket options are options on portfolios of underlying assets. The underlying asset i s usually a moving average of a basket of assets. Equity index options are a form of basket options. Swaps:Swaps are private agreements between two parties to exchange cash flows in the future according to a prearranged formula. They can be regarded as portfolios of forward contracts. The two commonly used swaps are: Interest rate swaps: These entail swapping only the interest related cash flows between the parties in the same currency. _ Currency swaps: These entail swapping both principal and interest between the parties, with the cash flows in one direction being in a different currency than those in the opposite Direction. Swaptions: Swaptions are options to buy or sell a swap that will become operative at the expiry of the options.Thus a swaption is an option on a forward swap. RATIONALE BEHIND THE DEVELOPMENT OF DERIVATIVES: Holding portfolio of securities is associated with the risk of the possibility that the investor may realize his returns, which would be much lesser than what he expected to get. There are various factors, which affect the returns: 1. Price or dividend (interest). 2. Some are internal to the firm like – ? Industrial policy ? Management capabilities ? Consumer’s preference ? Labor strike, etc. These forces are to a large extent controllable and are termed as non Systematic risks.An investor can easily manage such non-systematic by having a well – diversified portfolio spread across the companies, industries and groups so that a loss in one may easily be compensated with a gain in other. There are yet other types of influences which are external to the firm, cannot be controlled and affect large number of securities. They are termed as systematic risk. They are: 1. Economic 2. Political 3. Sociological changes are sources of systematic risk. For instance, inflation, interest rate, etc. their effect is to cause prices of nearly all individual stocks to move together in the same manner.We therefore quite often find s tock prices falling from time to time in spite of company’s earnings rising and vice versa. Rationale behind the development of derivatives market is to manage this systematic risk, liquidity and liquidity in the sense of being able to buy and sell relatively large amounts quickly without substantial price concessions. In debt market, a large position of the total risk of securities is systematic. Debt instruments are also finite life securities with limited marketability due to their small size relative to many common stocks.Those factors favour for the purpose of both portfolio hedging and speculation, the introduction of a derivative security that is on some broader market rather than an individual security. India has vibrant securities market with strong retail participation that has rolled over the years. It was until recently basically cash market with a facility to carry forward positions in actively traded ‘A’ group scrips from one settlement to another b y paying the required margins and borrowing some money and securities in a separate carry forward session held for this purpose.However, a need was felt to introduce financial products like in other financial markets world over which are characterized with high degree of derivative products in India. Derivative products allow the user to transfer this price risk by looking in the asset price there by minimizing the impact of fluctuations in the asset price on his balance sheet and have assured cash flows. Derivatives are risk management instruments, which derive their value from an underlying asset. The underlying asset can be bullion, index, shares, bonds, currency etc.DERIVATIVE SEGMENT AT NATIONAL STOCK EXCHANGE: The derivatives segment on the exchange commenced with S&P CNX Nifty Index futures on June 12, 20007. The F&O segment of NSE provides trading facilities for the following derivative segment: 1. Index Based Futures 2. Index Based Options 3. Individual Stock Options 4. Ind ividual Stock Futures |COMPANY NAME |CODE |LOT SIZE | |ABB Ltd. ABB |200 | |Associated Cement Co. Ltd. |ACC |750 | |Allahabad Bank |ALBK |2450 | |Andhra Bank |ANDHRABANK |2300 | |Arvind Mills Ltd. ARVINDMILL |2150 | |Ashok Leyland Ltd |ASHOKLEY |9550 | |Bajaj Auto Ltd. |BAJAJAUTO |200 | |Bank of Baroda |BANKBARODA |1400 | |Bank of India |BANKINDIA |1900 | |Bharat Electronics Ltd. BEL |550 | |Bharat Forge Co Ltd |BHARATFORG |200 | |Bharti Tele-Ventures Ltd |BHARTI |1000 | |Bharat Heavy Electricals Ltd. |BHEL |300 | |Bharat Petroleum Corporation Ltd. |BPCL |550 | |Cadila Healthcare Limited |CADILAHC 500 | |Canara Bank |CANBK |1600 | |Century Textiles Ltd |CENTURYTEX |850 | |Chennai Petroleum Corp Ltd. |CHENNPETRO |950 | |Cipla Ltd. |CIPLA |1000 | |Kochi Refineries Ltd |COCHINREFN |1300 | |Colgate Palmolive (I) Ltd. COLGATE |1050 | |Dabur India Ltd. |DABUR |1800 | |GAIL (India) Ltd. |GAIL |1500 | |Great Eastern Shipping Co. Ltd. |GESHIPPING |1350 | |Glaxosmithkline Pharma Ltd. |GLAXO |300 | |Grasim Industries Ltd. |GRASIM |175 | |Gujarat Ambuja Cement Ltd. GUJAMBCEM |550 | |HCL Technologies Ltd. |HCLTECH |650 | |Housing Development Finance Corporation Ltd. |HDFC |300 | |HDFC Bank Ltd. |HDFCBANK |400 | |Hero Honda Motors Ltd. |HEROHONDA |400 | |Hindalco Industries Ltd. |HINDALC0 |150 | |Hindustan Lever Ltd. HINDLEVER |2000 | |Hindustan Petroleum Corporation Ltd. |HINDPETRO |650 | |ICICI Bank Ltd. |ICICIBANK |700 | |Industrial development bank of India Ltd. |IDBI |2400 | |Indian Hotels Co. Ltd. |INDHOTEL |350 | |Indian Rayon And Industries Ltd | INDRAYON |500 | |Infosys Technologies Ltd. INFOSYSTCH |100 | |Indian Overseas Bank |IOB |2950 | |Indian Oil Corporation Ltd. |IOC |600 | |ITC Ltd. |ITC |150 | |Jet Airways (India) Ltd. |JETAIRWAYS |200 | |Jindal Steel & Power Ltd |JINDALSTEL |250 | |Jaiprakash Hydro-Power Ltd. JPHYDRO |6250 | |Cummins India Ltd |KIRLOSKCUM |1900 | |LIC Housing Finance Ltd |LICHSGFIN |850 | |Mahindra & Mahindra Ltd. |M&M |625 | |Matrix La boratories Ltd. |MATRIXLABS |1250 | |Mangalore Refinery and Petrochemicals Ltd. MRPL |4450 | |Mahanagar Telephone Nigam Ltd. |MTNL |1600 | |National Aluminium Co. Ltd. |NATIONALUM |1150 | |Neyveli Lignite Corporation Ltd. |NEYVELILIG |2950 | |Nicolas Piramal India Ltd |NICOLASPIR |950 | |National Thermal Power Corporation Ltd. NTPC |3250 | |Oil & Natural Gas Corp. Ltd. |ONGC |300 | |Oriental Bank of Commerce |ORIENTBANK |600 | |Patni Computer System Ltd |PATNI |650 | |Punjab National Bank |PNB |600 | |Ranbaxy Laboratories Ltd. RANBAXY |200 | |Reliance Energy Ltd. |REL |550 | |Reliance Capital Ltd |RELCAPITAL |1100 | |Reliance Industries Ltd. |RELIANCE |600 | |Satyam Computer Services Ltd. SATYAMCOMP |600 | |State Bank of India |SBIN |500 | |Shipping Corporation of India Ltd. |SCI |1600 | |Siemens Ltd |SIEMENS |150 | |Sterlite Industries (I) Ltd |STER |350 | |Sun Pharmaceuticals India Ltd. SUNPHARMA |450 | |Syndicate Bank |SYNDIBANK |3800 | |Tata Chemicals Ltd |TATACHEM |1350 | |Tata Consultancy Services Ltd |TCS |250 | |Tata Power Co.Ltd. |TATAPOWER |800 | |Tata Tea Ltd. |TATATEA |550 | |Tata Motors Ltd. |TATAMOTORS |825 | |Tata Iron and Steel Co. Ltd. |TISCO |675 | |Union Bank of India |UNIONBANK |2100 | |UTI Bank Ltd. UTIBANK |900 | |Vijaya Bank |VIJAYABANK |3450 | |Videsh Sanchar Nigam Ltd |VSNL |1050 | |Wipro Ltd. |WIPRO |300 | |Wockhardt Ltd. |WOCKPHARMA |600 | REGULATORY FRAMEWORK:The trading of derivatives is governed by the provisions contained in the SC ( R ) A, the SEBI Act, the and the regulations framed there under the rules and byelaws of stock exchanges. Regulation for Derivative Trading: SEBI set up a 24 member committed under Chairmanship of Dr. L. C. Gupta develop the appropriate regulatory framework for derivative trading in India. The committee submitted its report in March 1998. On May 11, 1998 SEBI accepted the recommendations of the committee and approved the phased introduction of Derivatives trading in India beginning with Stock Index F utures.SEBI also approved he â€Å"Suggestive bye-laws† recommended by the committee for regulation and control of trading and settlement of Derivatives contracts. The provisions in the SC (R) A govern the trading in the securities. The amendment of the SC (R) A to include â€Å"DERIVATIVES† within the ambit of ‘Securities’ in the SC (R ) A made trading in Derivatives possible within the framework of the Act. 1. Any exchange fulfilling the eligibility criteria as prescribed in the L. C. Gupta committee report may apply to SEBI for grant of recognition under Section 4 of the SC (R) A, 1956 to start Derivatives Trading.The derivatives exchange/segment should have a separate governing council and representation of trading / clearing members shall be limited to maximum of 40% of the total members of the governing council. The exchange shall regulate the sales practices of its members and will obtain approval of SEBI before start of Trading in any derivative co ntract. 2. The exchange shall have minimum 50 members. 3. The members of an existing segment of the exchange will not automatically become the members of the derivative segment. The members of the derivative segment need to fulfill the eligibility conditions as lay down by the L.C. Gupta Committee. 4. The clearing and settlement of derivates trades shall be through a SEBI approved Clearing Corporation / Clearing house. Clearing Corporation / Clearing House complying with the eligibility conditions as lay down By the committee have to apply to SEBI for grant of approval. 5. Derivatives broker/dealers and Clearing members are required to seek registration from SEBI. 6. The Minimum contract value shall not be less than Rs. 2 Lakh. Exchanges should also submit details of the futures contract they purpose to introduce. 7.The trading members are required to have qualified approved user and sales person who have passed a certification programme approved by SEBI. FUTURES DEFINITION: A Futur es contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. To facilitate liquidity in the futures contract, the exchange specifies certain standard features of the contract. The standardized items on a futures contract are: ? Quantity of the underlying ? Quality of the underlying ? The date and the month of delivery ? The units of price quotations and minimum price change ? Locations of settlementTYPES OF FUTURES: On the basis of the underlying asset they derive, the futures are divided into two types: ? Stock futures: The stock futures are the futures that have the underlying asset as the individual securities. The settlement of the stock futures is of cash settlement and the settlement price of the future is the closing price of the underlying security. ? Index futures: Index futures are the futures, which have the underlying asset as an Index. The Index futures are also cash settled. The settlement price of the Inde x futures shall be the closing value of the underlying index on the expiry date of the contract.Parties in the Futures Contract: There are two parties in a future contract, the Buyer and the Seller. The buyer of the futures contract is one who is LONG on the futures contract and the seller of the futures contract is one who is SHORT on the futures contract. The pay off for the buyer and the seller of the futures contract are as follows. PAYOFF FOR A BUYER OF FUTURES: [pic] CASE 1: The buyer bought the future contract at (F); if the futures price goes to E1 then the buyer gets the profit of (FP). CASE 2: The buyer gets loss when the future price goes less than (F), if the futures price goes to E2 then the buyer gets the loss of (FL).PAYOFF FOR A SELLER OF FUTURES: [pic] F – FUTURES PRICE E1, E2 – SETTLEMENT PRICE. CASE 1: The Seller sold the future contract at (f); if the futures price goes to E1 then the Seller gets the profit of (FP). CASE 2: The Seller gets loss when the future price goes greater than (F), if the futures price goes to E2 then the Seller gets the loss of (FL). MARGINS: Margins are the deposits, which reduce counter party risk, arise in a futures contract. These margins are collected in order to eliminate the counter party risk. There are three types of margins: Initial Margin:Whenever a futures contract is signed, both buyer and seller are required to post initial margin. Both buyer and seller are required to make security deposits that are intended to guarantee that they will infact be able to fulfill their obligation. These deposits are Initial margins and they are often referred as performance margins. The amount of margin is roughly 5% to 15% of total purchase price of futures contract. Marking to Market Margin: The process of adjusting the equity in an investor’s account in order to reflect the change in the settlement price of futures contract is known as MTM Margin.Maintenance margin: The investor must keep the fut ures account equity equal to or greater than certain percentage of the amount deposited as Initial Margin. If the equity goes less than that percentage of Initial margin, then the investor receives a call for an additional deposit of cash known as Maintenance Margin to bring the equity up to the Initial margin. Role of Margins: The role of margins in the futures contract is explained in the following example. S sold a Satyam February futures contract to B at Rs. 300; the following table shows the effect of margins on the contract.The contract size of Satyam is 1200. The initial margin amount is say Rs. 20000, the maintenance margin is 65% of Initial margin. |DAY |PRICE OF SATYAM |EFFECT ON BUYER (B) |EFFECT ON SELLER (S) |REMARKS | | | |MTM |MTM | | | | |P/L |P/L | | | | |Bal. in Margin |Bal. n Margin | | | | | | | | |1 | | | | | | | | | |Contract is entered and| | |300. 00 | | |initial margin is | | | | | |deposited. |2 | | | | | | | | | | | | | |+13,200 | | | | | | |-13,200 |B got profit and S got | | |311(price increased) | |+13,200 |loss, S deposited | |3 | | | |maintenance margin. | | | | | | | | | | | |B got loss and | | | | | |deposited maintenance | |4 | |-28,800 | |margin. | | |+15,400 |+28,800 | | | | | | | | | |287 | | |B got profit, S got | | | | | |loss. Contract settled| | | | | |at 305, totally B got | | | |+21,600 | |profit and S got loss. | | | |-21,600 | | | | | | | | | |305 | | | | Pricing the Futures: The fair value of the futures contract is derived from a model known as the Cost of Carry model. This model gives the fair value of the futures contract. Cost of Carry Model: F=S (1+r-q) t Where F – Futures Price S – Spot price of the Underlying r – Cost of Financing q – Expected Dividend Yield T – Holding Period. FUTURES TERMINOLOGY: Spot price: The price at which an asset trades in the spot market. Futures price: The price at which the futures contract trades in the futures market.Contract cycle: The period over which a contract trades. The index futures contracts on the NSE have one-month, two-months and three-month expiry cycles which expire on the last Thursday of the month. Thus a January expiration contract expires on the last Thursday of January and a February expiration contract ceases trading on the last Thursday of February. On the Friday following the last Thursday, a new contract having a three-month expiry is introduced for trading. Expiry date: It is the date specified in the futures contract. This is the last day on which the contract will be traded, at the end of which it will cease to exist. Contract size:The amount of asset that has to be delivered under one contract. For instance, the contract size on NSE’s futures market is 200 Nifties. Basis: In the context of financial futures, basis can be defined as the futures price minus the spot price. There will be a different basis for each delivery month for each contract. In a normal market, basis will be positive. This reflects that futures prices normally exceed spot prices. Cost of carry: The relationship between futures prices and spot prices can be summarized in terms of what is known as the cost of carry. This measures the storage cost plus the interest that is paid to finance the asset less the income earned on the asset. Open Interest:Total outstanding long or short positions in the market at any specific time. As total long positions for market would be equal to short positions, for calculation of open interest, only one side of the contract is counted. OPTIONS DEFINITION: Option is a type of contract between two persons where one grants the other the right to buy a specific asset at a specific price within a specified time period. Alternatively the contract may grant the other person the right to sell a specific asset at a specific price within a specific time period. In order to have this right, the option buyer has to pay the seller of the option premium. The assets on which optio ns can be derived are stocks, commodities, indexes etc.If the underlying asset is the financial asset, then the options are financial options like stock options, currency options, index options etc, and if the underlying asset is the non-financial asset the options are non-financial options like commodity options. PROPERTIES OF OPTIONS: Options have several unique properties that set them apart from other securities. The following are the properties of options: ? Limited Loss ? High Leverage Potential ? Limited Life PARTIES IN AN OPTION CONTRACT: 1. Buyer of the Option: The buyer of an option is one who by paying option premium buys the right but not the obligation to exercise his option on seller/writer. . Writer/Seller of the Option: The writer of a call/put options is the one who receives the option premium and is there by obligated to sell/buy the asset if the buyer exercises the option on him. . TYPES OF OPTIONS: The options are classified into various types on the basis of var ious variables. The following are the various types of options: I) On the basis of the Underlying asset: On the basis of the underlying asset the options are divided into two types: ? INDEX OPTIONS: The Index options have the underlying asset as the index. ? STOCK OPTIONS: A stock option gives the buyer of the option the right to buy/sell stock at a specified price.Stock options are options on the individual stocks, there are currently more than 50 stocks are trading in this segment. II. On the basis of the market movement: On the basis of the market movement the options are divided into two types. They are: ? CALL OPTION: A call options is bought by an investor when he seems that the stock price moves upwards. A call option gives the holder of the option the right but not the obligation to buy an asset by a certain date for a certain price. ? PUT OPTION: A put option is bought by an investor when he seems that the stock price moves downwards. A put option gives the holder of the op tion right but not the obligation to sell an asset by a certain date for a certain price. III. On the basis of exercise of Option:On the basis of the exercising of the option, the options are classified into two categories. ? AMERICAN OPTION: American options are options that can be exercised at any time up to the expiration date, most exchange-traded options are American. ? EUROPEAN OPTION: European options are options that can be exercised only on the expiration date itself. European options are easier to analyze than American options. PAY-OFF PROFILE FOR BUYER OF A CALL OPTION: The pay-off of a buyer options depends on the spot price of the underlying asset. The following graph shows the pay-off of buyer of a call option: S-Strike priceOTM – Out of the Money SP -Premium/LossATM – At the MoneyE1 – Spot price 1 ITM – In The Money E2 – Spot price 2 SR – profit at spot price E1 CASE 1: (Spot price > Strike Price) As the spot price (E1) of the underlying asset is more than strike price (S). The buyer gets the profit of (SR), if price increases more than E1 than profit also increase more than SR. CASE 2: (Sport price < Strike Price) As the spot price (E2) of the underlying asset is less than strike price (s). The buyer gets loss of (SP), if price goes down less than E2 than also his loss is limited to his premium (SP). PAY – OFF PROFILE FOR SELLER OF A CALL OPTION:The pay-off of seller of the call option depends on the spot price of the underlying asset. The following graph shows the pay-off of seller of a call option: [pic] S-Strike priceITM – In the Money SP – Premium/profitATM – At the Money E1-Spot price 1OTM – Out of The Money E2 -Spot price 2 SR-profit at spot price E1 CASE 1: (Spot price < Strike price) As the spot price (E1) of the underlying asset is less than strike price (S). The seller gets the profit of (SP), if the price decreases less than E1 than also profit of the seller does not exceed (SP). CASE 2: (Spot price > Strike price) As the spot price (E2) of the underlying asset is more than strike price (S).The seller gets loss of (SR), if price goes more less than E2 than the loss of the seller also increase more than (SR). PAY-OFF PROFILE FOR BUYER OF A PUT OPTION: The payoff of buyer of the option depends on the spot price of the underlying asset. The following graph shows the pay off of the buyer of a call option: [pic] S-Strike priceITM-In The Money SP-Premium/profitOTM-Out of The Money E1-Spot price 1ATM-At The Money E2-Spot price 2 SR-profit at spot price E1 CASE 1: (Spot price < Strike price) As the spot price (E1) of the underlying asset is less than strike price (S). The buyer gets the profit of (SR), if price decreases less than E1 than the profit also increases more than (SR). CASE 2: (Spot price > Strike price)As the spot price (E2) of the underlying asset is more than strike price (s), the buyer gets loss of (SP), if price goes more than E2 than the loss of the buyer is limited to his premium (SP). PAY-OFF PROFILE FOR SELLER OF A PUT OPTION: The pay off of seller of the option depends on the spot price of the underlying asset. The following graph shows the pay-off of seller of a put option: [pic] S-Strike priceITM-In The Money SP-Premium/profitATM-At The Money E1-Spot price 1OTM-Out of The Money E2-Spot price 2 SR-profit at spot price E1 CASE 1: (Spot price < Strike price) As the spot price (E1) of the underlying asset is less than strike price (S), the seller gets the loss of (SR), if price decreases less than E1 than the loss also increases more than (SR). CASE 2: (Spot price > Strike price)As the spot price (E2) of the underlying asset is more than strike price (S), the seller gets profit of (SP), if price goes more than E2 than the profit of the seller is limited to his premium (SP). FACTORS AFFECTING THE PRICE OF AN OPTION: The following are the various factors that affect the price of an option. They are: Stoc k price: The pay-off from a call option is the amount by which the stock price exceeds the strike price. Call options therefore become more valuable as the stock price increases and vice versa. The pay-off from a put option is the amount; by which the strike price exceeds the stock price. Put options therefore become more valuable as the stock price increases and vice versa. Strike price:In the case of a call, as the strike price increases, the stock price has to make a larger upward move for the option to go in-the –money. Therefore, for a call, as the strike price increases, options become less valuable and as strike price decreases, options become more valuable. Time to expiration: Both Put and Call American options become more valuable as the time to expiration increases. Volatility: The volatility of n a stock price is a measure of uncertain about future stock price movements. As volatility increases, the chance that the stock will do very well or very poor increases. Th e value of both Calls and Puts therefore increase as volatility increase.Risk-free interest rate: The put option prices decline as the risk – free rate increases where as the prices of calls always increase as the risk – free interest rate increases. Dividends: Dividends have the effect of reducing the stock price on the ex dividend date. This has a negative effect on the value of call options and a positive affect on the value of put options. PRICING OPTIONS The Black Scholes formulas for the prices of European Calls and puts on a non-dividend paying stock are: CALL OPTION: C = SN (D1)-Xe-rtN(D2) PUT OPTION: P = Xe-rtN(-D2)-SN (-D2) C – VALUE OF CALL OPTION S – SPOT PRICE OF STOCK X – STRIKE PRICE r – ANNUAL RISK FREE RETURN – CONTRACT CYCLE D1 – (ln(s/x) +(r+ )/2) t)/ D2 – D1- Options Terminology: Strike Price: The price specified in the options contract is known as the Strike price or Exercise price. Option Premium: O ption premium is the price paid by the option buyer to the option seller. Expiration Date: The date specified in the options contract is known as the expiration date. In-The-Money Option: An in the money option is an option that would lead to a positive cash inflow to the holder if it is exercised immediately. At-The-Money Option: An at the money option is an option that would lead to zero cash flow if it is exercised immediately. Out-Of-The-Money Option:An out of the money option is an option that would lead to a negative cash flow if it is exercised immediately. Intrinsic Value of an Option: The intrinsic value of an option is ITM, if option is ITM. If the option is OTM, its intrinsic value is ZERO. Time Value of an Option: The time value of an option is the difference between its premium and its intrinsic value. DESCRIPTION OF THE METHOD: The following are the steps involved in the study. 1. Selection of the scrip: The scrip selection is done on a random basis and the scrip selec ted is RELIANCE COMMUNICATIONS. The lot size of the scrip is 500. Profitability position of the option holder and option writer is studied. 2. Data collection:The data of the RELIANCE COMMUNICATIONS has been collected from the â€Å"The Economic Times† and the internet. The data consists of the March contract and the period of data collection is from 30th December 2008 to 31st January 2008. 3. Analysis: The analysis consists of the tabulation of the data assessing the profitability positions of the option holder and the option writer, representing the data with graphs and making the interpretations using the data. ANALYSIS ANALYSIS The objective of this analysis is to evaluate the profit/loss position of option holder and option writer. This analysis is based on the sample data, taken RELIANCE COMMUNICATIONS scrip. This analysis considered the March ending contract of the SBI.The lot size of SBI is 500. The time period in which this analysis is done is from 30/12/2007 To 31/0 1/2008 Price of SBI in the Cash Market. |DATE |MARKET PRICE | | | | |30-Dec-07 |685. 1 | |31-Dec-07 |714. 65 | |1-Jan-08 |695. 6 | |2-Jan-08 |706. 4 | |3-Jan-08 |717. 1 | |4-Jan-08 |713. 45 | |7-Jan-08 |726. 6 | |8-Jan-08 |724. 05 | |9-Jan-08 |720. 85 | |10-Jan-08 |742. 1 | |11-Jan-08 |736. | |14-jan-08 |734. 1 | |15-Jan-08 |731. 75 | |16-Jan-08 |728 | |17-Jan-08 |726. 2 | |18-Jan-08 | | | |727. 8 | | | | |21-Jan-08 |722. 7 | |22-Jan-08 |693. 25 | |23-Jan-08 |657. 7 | |24-Jan-08 |664. 4 | |28-Mar-08 |665. 6 | |29-Jan-08 |641. 7 | |30-Jan-08 |661. 05 | |31-Jan-08 |654. 8 | pic] The closing price of SBI at the end of the contract period is 654. 80 and this is considered as settlement price. The following table explains the amount of transaction between option holder and option writer. ? The first column explains the trading date. ? The second column explains the market price in cash segment on that date. ? The call column explains the call/put options which are considered. Every call/ put has three sub columns. ? The first column consists of the premium value per share of the contracts, second column consists of the volume of the contract, and the third column consists of total premium value paid by the buyer. ?NET PAYOFF FOR CALL OPTION HOLDERS AND WRITERS |MARKET PRICE |CALLS |VOLUME (‘000) |PREMIUM (‘000) |PROFIT TO HOLDER|NET PROFIT TO |NET PROFIT TO | | | | | |(‘000) |HOLDER (‘000) |BUYER (‘000) | | | | | | | | | |654. 8 |640 |199. 5 |3634. 15 |2952. 6 |-681. 55 |681. 55 | |654. 8 |660 |1463 |21600. 35 |0 |-21600. 35 |21600. 35 | |654. |680 |2008 |51831. 53 |0 |-51831. 525 |51831. 525 | |654. 8 |700 |3297 |85603. 45 |0 |-85603. 45 |85603. 45 | |654. 8 |720 |3796. 5 |74881. 93 |0 |-74881. 925 |74881. 925 | |654. 8 |740 |2309. 5 |30208. 4 |0 |-30208. 4 |30208. 4 | OBSERVATIONS AND FINDINGS: ? Six call options are considered with six different strike prices. ? The current market price on the expiry date is Rs. 654. 80 and this is c onsidered as final settlement price. The premium paid by the option holders whose strike price is far and greater than the current market price have paid high amounts of premium than those who are near to the current market price. ? The call option holders whose strike price is less than the current market price are said to be In-The-Money. The calls with strike price 640 are said to be In-The-Money, since, if they exercise they will get profits. ? The call option holders whose strike price is less than the current market price are said to be Out-Of-The-Money. The calls with strike price of 660, 680,700,720,740 are said to be Out-Of-The-Money, since, if they exercise, they will get losses. [pic] FINDINGS:The premium of the options with strike price of 700 and 720 is high, since most of the period of the contract the cash market is moving around 700 mark. [pic] FINDINGS: ? The contracts with strike price 660, 680, 700, 720, 740 get no profit, since their strike price is more than the settlement price. ? The contract with strike price 640 gets the profit. NET PAY OFF OF PUT OPTION HOLDERS AND WRITERS. |MARKET PRICE |PUTS |VOLUME (‘000) |PREMIUM (‘000) |PROFIT TO HOLDER |NET PROFIT TO HOLDER |NET PROFIT TO WRITER| | | | | |(‘000) |(‘000) |(‘000) | | | | | | | | | |654. |600 |25 |47. 625 |0 |-47. 625 |47. 625 | |654. 8 |640 |323. 5 |993. 5 |0 |-993. 5 |993. 5 | |654. 8 |660 |1239. 5 |9506. 575 |6445. 4 |-3061. 175 |3061. 175 | |654. 8 |680 |1399. 5 |21894 |35267. 4 |13373. 4 |-13373. 4 | |654. 8 |700 |1858 |30871. 28 |83981. 6 |53110. 325 |-53110. 325 | |654. |720 |1468. 5 |23727. 83 |95746. 2 |72018. 375 |-72018. 375 | | | | | | | | | OBSERVATIONS AND FINDINGS: ? Six put options are considered with six different strike prices. ? The current market price on the expiry date is Rs. 654. 80 and this is considered as the final settlement price. ? The premium paid by the option holders whose strike price is far and greater than the current market price have paid high amount of premium than those who are near to the current market price. The put option holders whose strike price is more than the current market price are said to be In-The-Money. The puts with strike price 660,680,700,720 are said to be In-The-Money, since, if they exercise they will get profits. ? The put option holders whose strike price is less than the current market price are said to be Out-Of-The-Money. The puts with strike price of 600,640 are said to be Out-Of-The-Money, since, if they exercise their puts, they will get losses. [pic] FINDINGS: ? The premium of the option with strike price 700 is higher when compared to other strike prices. This is because of the movement of the cash market price of the SBI between 640 and 720. [pic] FINDINGS: The put option holders whose strike price is more than the settlement price are In-The-Money. ? The put options whose strike price is less than the settlement price are Out-Of-The-Money. DATA OF SBI THE FUT URES OF THE JANUARY MONTH |DATE |FUTURES CLOSING PRICE (Rs. ) |CASH CLOSING PRICE (Rs. ) | | | | | |30-Dec-07 |689. 6 |685. 1 | |31-Dec-07 |720. 65 |714. 65 | |1-Jan-08 |700. 5 |695. 6 | |2-Jan-08 |710. 9 |706. 4 | |3-Jan-08 |720. 85 |717. 1 | |4-Jan-08 |716. 85 |713. 45 | |7-Jan-08 |729. 2 |726. 6 | |8-Jan-08 |728. 25 |724. 05 | |9-Jan-08 |723. 35 |720. 5 | |10-Jan-08 |745. 3 |742. 1 | |11-Jan-08 |741. 35 |736. 9 | |14-Jan-08 |738. 95 |734. 1 | |15-Jan-08 |735. 7 |731. 75 | |16-Jan-08 |733. 15 |728 | |17-Jan-08 |730. 75 |726. 2 | |18-Jan-08 |732. |727. 8 | |21-Jan-08 |725. 25 |722. 7 | |22-Jan-08 |695 |693. 25 | |23-Jan-08 |660. 1 |657. 7 | |24-Jan-08 |666. 7 |664. 4 | |28-Jan-08 |667. 75 |665. 6 | |29-Jan-08 |642. 7 |641. 7 | |30-Jan-08 |662. 5 |661. 05 | |31-Jan-08 |655. 95 |654. 8 | [pic] OBSERVATIONS AND FINDINGS: The cash market price of the SBI is moving along with the futures price. ? If the buy price of the futures is less than the settlement price, then the buyer of the f utures get profit. ? If the selling price of the futures is less than the settlement price, then the seller incur losses. SUMMARY, CONCLUSIONS AND RECOMMENDATINONS SUMMARY ? Derivatives market is an innovation to cash market. Approximately its daily turnover reaches to the equal stage of cash market. Presently the available scrips in futures are 89 and in options segment are 62. ? In cash market the profit/loss of the investor depends on the market price of the underlying asset. The investor may incur huge profits or he may incur huge losses. But in derivatives segment the investor enjoys huge profits with limited downside. ? In cash market the investor has to pay the total money, but in derivatives the investor has to pay premiums or margins, which are some percentage of total money. ? Derivatives are mostly used for hedging purpose. ? In derivative segment the profit/loss of the option holder/option writer is purely depended on the fluctuations of the underlying asset. CONCLUSIONS In bullish market the call option writer incurs more losses so the investor is suggested to go for a call option to hold, where as the put option holder suffers in a bullish market, so he is suggested to write a put option. ? In bearish market the call option holder will incur more losses so the investor is suggested to go for a call option to write, where as the put option writer will get more losses, so he is suggested to hold a put option. ? In the above analysis the market price of State Bank of India is having low volatility, so the call option writers enjoy more profits to holders. RECOMMENDATIONS ? The derivative market is newly started in India and it is not known by every investor, so SEBI has to take steps to create awareness among the investors about the derivative segment. In order to increase the derivatives market in India, SEBI should revise some of their regulations like contract size, participation of FII in the derivatives market. ? Contract size should be minimiz ed because small investors cannot afford this much of huge premiums. ? SEBI has to take further steps in the risk management mechanism. ? SEBI has to take measures to use effectively the derivatives segment as a tool of hedging. BIBLIOGRAPHY BIBLIOGRAPHY BOOKS: FUTURES AND OPTIONS – N. D. VOHRA, B. R. BAGRI DERIVATIVES CORE MODULE WORKBOOK – NCFM MATERIAL FUTURES AND OPTIONS – R. MAHAJAN WEBSITES: www. nseindia. com www. equitymaster. com www. peninsularonline. com NEWS EDITIONS: THE ECONOMIC TIMES BUSINESS LINE