Financial Market Essay Example Pdf - Free Essay Example

Sample details Pages: 18 Words: 5318 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? A commercial bank is a type of financial intermediary and a type of bank. After the Great Depression, the U.S. Congress required banks only engage in banking activities, whereas investment banks were limited to capital market activities. Since the two no longer have to be under separate ownership, some use the term commercial bank to refer to a bank or a division of a bank primarily dealing with deposits and loans from corporations or large businesses. Commercial bank is the term used for a normal bank to distinguish it from an investment bank. This is what people normally call a bank. The term commercial was used to distinguish it from an investment bank. Since the two types of banks no longer have to be separate companies, some have used the term commercial bank to refer to banks which focus mainly on companies. In some English-speaking countries outside North America, the term trading bank was and is used to denote a commercial bank. During the great depr ession and after the stock market crash of 1929, the U.S. Congress passed the Glass-Steagall Act 1930 (Khambata,1996) requiring that commercial banks only engage in banking activities (accepting deposits and making loans, as well as other fee based services), whereas investment banks were limited to capital markets activities. This separation is no longer mandatory. It raises funds by collecting deposits from businesses and consumers via checkable deposits, savings deposits, and time (or term) deposits. It makes loans to businesses and consumers. It also buys corporate bonds and government bonds. Its primary liabilities are deposits and primary assets are loans and bonds. 10 Commercial banking can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to normal individual members of the public (retail banking). Origin: The name bank derives from the Italian word banco desk/bench, used during the Renais sance by Florentine bankers, who used to make their transactions above a desk covered by a green tablecloth (de Albuquerque, Martim, 1855). However, there are traces of banking activity even in ancient times. In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called a bancu, from which the words banco and bank are derived. As a moneychanger, the merchant at the bancu did not so much invest money as merely convert the foreign currency into the only legal tender in Rome- that of the Imperial Mint (Matyszak and Philip, 2007). In the most basic terms, commercial banks take deposits from individual and institutional customers, which they then use to extend credit to other customers. They make money by earning more in interest from borrowers than they pay in interest to those whose deposits they accept. Theyre different from investment banks and brokerage s in that those kinds of institutions focus on underwriting, selling, and trading corporate and municipal securities. The Balance Sheet: A banks balance sheet is different from that of a typical company. You wont find inventory, accounts receivable, or accounts payable. Instead, under assets, youll see mostly loans and investments, and on the liabilities side, youll see deposits and borrowings. Loans represent the majority of a banks assets (Saunders and Cornett, 2005). A bank can typically earn a higher interest rate on loans than on securities, roughly 6%-8%. Loans, however, come with risk. If the bank makes bad loans to consumers or businesses, the bank will take a hit when those loans arent repaid. Because loans are a banks bread and butter, its critical to understand a banks book of loans. Other assets, including property 11 and equipment, represent only a small fraction of assets. A bank can generate large revenues with very few hard assets. Compare this to some other co mpanies, where plant, property, and equipment (PPE) is a major asset. Surprisingly, cash represents only about 2% of assets. Thats because the bank wants to put its money to work earning interest. If the bank simply sticks its cash in a vault and forgets about it, it will have a hard time making a profit. Thus, a bank keeps most of its money tied up in loans and investments, which are called earning assets in bank-speak because they earn interest. Banks dont like putting their assets into fixed-income securities, because the yield isnt that great. However, investment-grade securities are liquid, and they have higher yields than cash, so its always prudent for a bank to keep securities on hand in case they need to free up some liquidity. Assessing Assets: A banks assets are its meal ticket, so its critical for investors to understand how its assets are invested, how much risk they are taking, and how much liquidity the bank has in securities as a shield against unforeseen probl ems. In general, investors should pay attention to asset growth, the composition of assets between cash, securities, and loans, and the composition of the loan book. Also, investors should note a banks asset/equity (equity multiplier) ratio, which measures how many times a dollar of equity is leveraged. The liability side of a banks balance sheet is made up of various types of deposit accounts and other forms of borrowings used to fund their investments. A major difference between banks and other is their high leverage or debt-to-asset ratio. Assets and liability management (ALM) is the management of the structure of a banks balance sheet in such a way that interest related earnings are maximized within the overall risk tolerance of the banks management (J.S.G Wilson, 1988). 2.2-The Bank for International Settlement (BIS) and the Basel Accords: 2.2.1-The Bank for International Settlement (BIS): 12 The Bank for International Settlements (or BIS) is an internation al organization of central banks which exists to foster cooperation among central banks and other agencies in pursuit of monetary and financial stability (Wikipedia online, 2008). It carries out its work through subcommittees, the secretariats it hosts, and through its annual General Meeting of all members. The BIS also provides banking services, but only to central banks, or to international organizations like itself. Based in Basel, Switzerland, the BIS was established by the Hague agreements of 1930. As an organization of central banks, the BIS seeks to make monetary policy more predictable and transparent among its 55 member central banks. While monetary policy is determined by each sovereign nation, it is subject to central and private banking scrutiny and potentially to speculation that affects foreign exchange rates and especially the fate of export economies. Two aspects of monetary policy have proven to be particularly sensitive, and the BIS therefore has two specific go als: to regulate capital adequacy and make reserve requirements transparent. Capital adequacy policy applies to equity and capital assets. These can be overvalued in many circumstances. Accordingly the BIS requires bank capital/asset ratio to be above a prescribed minimum international standard, for the protection of all central banks involved. The BIS main role is in setting capital adequacy requirements. From an international point of view, ensuring capital adequacy is the most important problem between central banks, as speculative lending based on inadequate underlying capital and widely varying liability rules causes economic crises as bad money drives out good (Greshams Law). The BIS sets requirements on two categories of capital, Tier 1 capital and Total capital. Tier 1 capital is the book value of its stock plus retained earnings. Tier 2 capital is loanloss reserves plus subordinated debt. Total capital is the sum of Tier 1 and Tier 2 capital. Tier 1 capital must be at least 4% of total risk-weighted assets. Total capital must be at least 8% of total risk-weighted assets. When a bank creates a deposit to fund a loan, its assets and liabilities increase equally, with no increase in equity. That causes its capital ratio to drop. Thus the capital requirement limits the total amount of credit that a bank 13 may issue. It is important to note that the capital requirement applies to assets while the bank reserve requirement applies to liabilities. 2.2.2-The Basel Accords: The Basel Accord(s) refers to the banking supervision accords (recommendations on banking laws and regulations), Basel I (first published in 1988 and enforced by law in 1992 by the G-10 countries) and Basel II (published in June 2004) issued by the Basel Committee on Banking Supervision (BCBS). They are called the Basel Accords as the BCBS maintains its secretariat at the Bank of International Settlements in Basel, Switzerland and the committee normally meets there. The Basel Committe e consists of representatives from central banks and regulatory authorities of the G10 countries, plus others (specifically Luxembourg and Spain). The committee does not have the authority to enforce recommendations, although most member countries (and others) tend to implement the Committees policies. This means that recommendations are enforced through national (or EU-wide) laws and regulations, rather than as a result of the committees recommendations thus some time may pass between recommendations and implementation as law at the national level. Tier 1 capital is the core measure of a banks financial strength from a regulators point of view. It consists of the types of financial capital considered the most reliable and liquid, primarily Shareholders equity. Examples of Tier 1 capital are common stock, preferred stock that is irredeemable and non-cumulative, and retained earnings. Capital in this sense is related to, but different from, the accounting concept of shareholders equity. Both tier 1 and tier 2 capital were first defined in the Basel I capital accord. The new accord, Basel II, has not changed the definitions in any substantial way. Each countrys banking regulator, however, has some discretion over how differing financial instruments may count in a capital calculation. This is appropriate, as the legal framework varies in different legal systems. 14 Tier 2 capital is a measure of a banks financial strength with regard to the second most reliable form of financial capital, from a regulators point of view. The forms of banking capital were largely standardized in the Basel I accord, issued by the Basel Committee on Banking Supervision and left untouched by the Basel II accord. Tier 1 capital is considered the core capital and more reliable form of capital 2.3- VALUE-AT-RISK 2.3.1-BANK LOANS: A loan is a debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the l ender and the borrower. The borrower initially receives an amount of money from the lender, which he pays back, but sometimes not always in regular installments, to the lender. This service is generally provided at a cost, known as interest on the debt. The lender may subject the borrower to certain restrictions known as loan covenants. One of the principal duties of financial institutions is to provide loans, this is typically the source of income to banks, bank loans and credit also constitute one of the ways of increasing money supply in the economy. 2.3.2-VALUE AT A RISK (VAR): This is a technique used to estimate the probability of portfolio losses based on the statistical analysis of historical price trends and volatilities. Value at risk is commonly used by banks, security firms and companies that are involved in trading energy and other commodities. VAR is able to measure risk while it happens and is an important consideration when firm s make trading or hedging decision (Simon Manganelli and Robert Engle, 2001). Some people have described VAR as the new science of risk management, but you do not need to be a scientist to use VAR. Here, we look at the idea behind VAR and the three basic methods of calculating it. Basically, VAR is represented by; 15 VAR= (dollar value of position)(price sensitivity)(potential adverse move in price/yield). .(1) For financial institutions, risk is about the odds of losing money given out as loans, and VAR is based on that common-sense fact. By assuming financial institutions care about the odds of a really big loss on loans, VAR answers the question, What is my worstcase scenario? or How much could I lose in a really bad month? To be more specific, a VAR statistic has three components: a time period, a confidence level and a loss amount (or loss percentage). Keep these three lets take note of this as we give some examples of variations of the questions that VAR answers: What is the most I can with a 95% or 99% level of confidence expect to lose in default on loan repayment over the next month? What is the maximum percentage I can with 95% or 99% confidence expect to lose over the next year? We can see how the VAR question has three elements: a relatively high level of confidence (typically either 95% or 99%), a time period (a day, a month or a year) and an estimate of lose on loan default (expressed either in dollar or percentage terms) (David Harper, 2008). 2.4- PORTFOLIO THEORY AND TRADITIONAL METHOD TO CREDIT RISK MANAGEMENT 2.4.1- PORTFOLIO APPROACH: Since the 1980s, banks have successfully applied modern portfolio theory (MPT) to market risk. Many banks are now using earnings at risk (EAR) and value at risk (VAR) models to manage their interest rate and market risk exposures. Unfortunately, however, even though credit risk remains the largest risk facing most banks, the practical of MPT to credit risk has lagged (William Margrabe, 2007). 16 Banks recognize how credit concentrations can adversely impact financial performance. As a result, a number of sophisticated institutions are actively pursuing quantitative approaches to credit risk measurement, while data problems remain an obstacle. This industry is also making significant progress toward developing tools that measure credit risk in a portfolio context. They are also using credit derivatives to transfer risk efficiently while preserving customer relationships. The combination of these two developments has precipitated vastly accelerated progress in managing credit risk in a portfolio context over the past several years. 1. Asset-by-asset Approach: Traditionally, banks have taken an asset-by-asset approach to credit risk management. While each banks method varies, in general this approach involves periodically evaluating the credit quality of loans and other credit exposures, applying a credit risk rating, and aggregating the results of this analysis to identify a portfolios expected losses. The foundation of the asst-by-asset approach is a sound loan review and internal credit risk rating system. A loan review and credit risk rating system enable management to identify changes in individual credits, or portfolio trends in a timely manner. Based on the results of its problem loan identification, loan review, and credit risk rating system management can make necessary modifications to portfolio strategies or increase the supervision of credits in a timely manner. 2. Portfolio Approach: While the asset-by-asset approach is a critical component to managing credit risk, it does not provide a complete view of portfolio credit risk, where the term risk refers to the possibility that actual losses exceed expected losses. Therefore to gain greater insight into credit risk, banks increasingly look to complement the asset-by-asset approach with a quantitative portfolio review using a credit model. Banks increasingly attempt to address the inability of the asset-by-asset approach to measure unexpected losses sufficiently by pursuing a portfolio approach. One weakness with the asset-by-asset approach is that it has difficulty identifying and measuring 17 concentration. Concentration risk refers to additional portfolio risk resulting from increased exposure to a borrower, or to a group of correlated borrowers. Table 1 summerises strategies for reducing and coping with portfolio credit risk. Table 1: Strategies for Reducing and Coping with Portfolio Credit Risk Technique Advantages Disadvantages Implication Geographic Diversification External shocks (climate, price, natural disasters, etc.) are not likely to affect the entire portfolio if there is spatial diversification. If the country is small or the Institution is capital constrained, it may not be able to apply this principle. It will become vulnerable to covariate risk, which is high in agriculture. Loan Size Limits (Rationing) Prevents the institution from being vulnerable to nonperformance on a few large loans. Can be carried to the extreme where loan size does not fit the business needs of the client and results in suboptimal use and lower positive impact by client. Client could become dissatisfied Protects asset quality in the shortrun but creates client retention problems in the long run. Inimical to relationship banking. Over Collateralization Assures the institution that enough liquidation value will exist for foreclosed assets. Excludes poor, low-income clients who are the vast majority of the market. Not a recommended technique if goal is to better serve the low- and moderate income clients. Credit Insurance Bank makes clients purchase credit insurance. In event of default, bank collects from insurer. Databases and credit bureaus may not exist to permit insurer to engage in this line of business in cost-effective manner. Portfolio Securitization Lender bundles and sells loans to a third party. Transfers default risk and improves liquidity so that it can continue to lend. Allows lender to develop expertise in analyzing creditworthiness in one sector or niche. Requires well documented loans and long time series of performance data to permit ratings and reliable construction of financial projections. Requires a well developed secondary market, standardized underwriting practices, and existence of rating companies. 18 Source: Publication of the Inter-American Development Bank, May 2007. 2.4.2-TRADITIONAL APPROACH: It is hard to differentiate between the traditional approach and the new approaches since many of the ideas of traditional models are used in the new models. The traditional approach is comprised of four classes of models 1. Expert Systems In the expert system, the credit decision is left in the hands of the branch lending officer. His expertise, judgment, and weighting of certain factors are the most important determinants in the decision to grant loans. the loan officer can examine as many points as possible but must include the five Cs these are; character, credibility, capital, collateral and cycle (economic conditions) in addition to the 5 Cs, an expert may also take into consideration the interest rate. 2. Artificial Neural Networks: Due to the time consuming nature and error- prone nature of the computerized expertise system, many systems use induction to infer the human experts decision process. The artificial neural networks have been proposed as solutions to the problems of the expert system. This syste m simulates the human learning process. It learns the nature of the relationship between inputs and outputs by repeatedly sampling input/output information. 3. Internal Rating at Banks: Over the years, banks have subdivided the pass/performing rating category, for example at each time, there is always a probability that some pass or performing loans will go into default, and that reserves should be held against such loans. 4. Credit Scoring Systems: 19 A credit score is a number that is based on a statistical analysis of a borrowers credit report, and is used to represent the creditworthiness of that person1. A credit score is primarily based on credit report information. Lenders, such as banks use credit scores to evaluate the potential risk posed by giving loans to consumers and to mitigate losses due to bad debt. Using credit scores, financial institutions determine who are the most qualified for a loan, at what rate of interest, and to what credit limits (Wikipedia, 2008). 2.5-SUPERVISORY AUTHORITY OF BANK CREDIT RISK MANAGEMENT The Bank of International Settlement (BIS) on November 28th 2005 in a press release issued a series of ten principles on Sound Credit Risk Assessment and valuation for Loans: Principle 1: The banks board of directors and senior management are responsible for ensuring that the banks have appropriate credit risk assessment processes and effective internal controls to consistently determine provisions for loan losses in accordance with the banks stated policies and procedures, the applicable accounting framework and supervisory guidance commensurate with the size, nature and complexity of the banks lending operations. Principle 2: Banks should have a system in place to reliably classify loans on the basis of credit risk. Principle 3: A banks policies should appropriately address validation of any internal credit risk assessment models. Principle 4: A bank should adopt and document a sound loan loss methodology, which addresses risk assessment policies, procedures and controls, for assessing credit risk, identifying problem loans and determining loan provisions in a timely manner. Principle 5: A banks aggregate amount of individual and collectively assessed loan provisions should be adequate to absorb estimated credit losses in the loan portfolio. 1 That is, the likelihood that the person will pay his or her debts. 20 Principle 6: A banks use of experienced credit judgment and reasonable estimates are an essential part of the recognition and measurement of loan losses. Principle 7: A banks credit risk assessment process for loans should provide the bank with the necessary tools, procedures and observable data to use for credit risk assessment purposes, account for impairment of loans and the determination of regulatory capital requirements. Principle 8: Banking supervisors should periodica lly evaluate the effectiveness of a banks credit risk policies and practices for assessing loan quality. Principle 9: Banking supervisors should be satisfied that the methods employed by a bank to calculate loan loss provisions produce a reasonable and prudent measurement of estimated credit losses in the loan portfolio that are recognized in a timely manner. Principle 10: Banking supervisors should consider credit risk assessment and valuation practices when assessing a banks capital adequacy. I. Individual Credit Rating: A credit rating assesses the credit worthiness of an individual, corporation, or even a country. Credit ratings are calculated from financial history and current assets and liabilities. Typically, a credit rating tells a lender or investor the probability of the subject being able to pay back a loan. However, in recent years, credit ratings have also been used to adjust insurance premiums, determine employment eligibility, and e stablish the amount of a utility or leasing deposit. II. Corporate credit ratings: The credit rating of a corporation is a financial indicator to potential investors of debt securities such as bonds. These are assigned by credit rating agencies2 such as Standard Poors, Moodys or Fitch Ratings and have letter designations such as AAA, B, CC. The Standard Poors 2 In the United States, the main credit bureaus are Experian, Equifax, and TransUnion. A relatively new credit bureau in the US is Innovis. In the United Kingdom, the main credit reference agencies for individuals are Experian, Equifax, and Callcredit. In Canada, the main credit bureaus for individuals are Equifax, TransUnion and Northern Credit Bureaus/ Experian. The leading credit bureau in Sweden is Upplysningscentralen AB. In India, the main credit bureaus are CRISIL and ICRA. The largest credit rating agencies are Moodys, Standard and Poors and Fitch Ratings. 21 rating scale is as f ollows: AAA, AA, A, BBB, BB, B, CCC, CC, C, D. Anything lower than a BBB rating is considered a speculative or junk bond. The Moodys rating system is similar in concept but the verbage is a little different. It is as follows: AAA, Aa1, Aa2, Aa3, A1, A2, A3, Baa1, Baa2, Baa3, Ba1, Ba2, Ba3, B1, B2, B3, Caa1, Caa2, Caa3, Ca, C. III. A sovereign credit rating is the credit rating of a sovereign entity. The sovereign credit rating indicates the risk level of the investing environment of a country and is used by investors looking to invest abroad. It takes political risk into account. The countries with the least sovereign risk are ranked as follows. Table 2: Country risk rankings (Least risky countries), Score out of 100 Source: Euromoney, Country risk, March 2008. Rank Previous Rank Country Score 1 1 Luxembourg 99.88 2 2 Norway 97.47 3 3 Switzerland 96.21 4 4 Denmark 93.39 5 5 Sweden 92.96 6 6 Ireland 92.36 7 10 Austria 92.25 8 9 Finland 91.95 9 8 Netherlands 91.95 10 7 United States 91.27 According to the results (see table 2), Austrias country rating has improved from 10th to 7th position while the USA has dropped to the10th position from 7th. 2.6-MANAGING CREDIT RISK USING FINANCIAL RATIOS: 22 Ratio analysis (financial and accounting ratios) is a measurement system to analyse the strength, weakness, opportunity and threats (SWOT Analysis) of an FI. The table below depicts some of the frequently used ratios in credit analysis (table 2): Table 3: Frequently Used Ratios in Credit Analysis3 Category Ratio Operating Performance Earnings before interest, taxes, depreciation and amortization(EBITDA)/Sales Net Income/ Sales Net Income/ Net Worth Sales/ Fixed Assets Debt Service Coverage EBITDA/ Interest Payment1.5 Free Cash-flow expenditure/ Interest payments Free Cash-flow expenditures-dividend/Interest Financial Leverage Long-term debt/Capitalization Long-term debt/Tangible net worth Total liabilities/Tangible net worth Current liabilities/Tangible net worth Liquidity Current ratio (current assets/current liabilities) Quick ratio (current assets-inventory/current liabilities) Inventory turnover(inventory/Net sales) Inventory to Net working capital Current debt to Inventory Raw materials,WIP, and finished goods as a percentage of total Inventory Receivables Aging of receivables:30,60,90,90+days 3 These ratios are commonly used in credit analysis but have to be adapted to specific environment of industries and countries. 23 Average collecting period Source: Caoutte, et al., 1998 2.7 Credit Risk Models Over the last decade, a number of the worlds largest banks have developed sophisticated systems in an attempt to model the credit risk arising from important aspects of their business lines. Such models are intended to aid banks in quantifying, aggregating and managing risk across geographical and product lines. The outputs of these models also play increasingly important roles in banks risk management and performance measurement processes, including performance-based compensation, customer profitability analysis, risk-based pricing and, to a lesser (but growing) degree, active portfolio management and capital structure decisions. The Task Force recognizes that credit risk modeling may indeed prove to result in better internal risk management, and may have the potential to be used in the supervisory oversight of banking organizations. However, before a portfolio modeling approach could be used in the formal process of setting regulatory capital requirements for credit risk, regulators would have to be confident not only that models are being used to actively manage risk, but also that they are conceptually sound, empirically validated, and produce capital requirements that are comparable across institutions. At th is time, significant hurdles, principally concerning data availability and model validation, still need to be cleared before these objectives can be met, and the Committee sees difficulties in overcoming these hurdles in the timescale envisaged for amending the Capital Accord (BIS, credit risk modeling, 19th April 1999). Credit scoring models use data on observed borrower characteristics either to calculate the probability of default or to borrowers into different default risk classes (Saunders and Cornett, 2007). Prominent amongst the credit scoring models is the Altmans Z-Score. The Z-score formula for predicting Bankruptcy of Dr. Edward Altman (1968) is a multivariate formula for measurement of the financial health of a company and a powerful diagnostic 24 tool that forecast the probability of a company entering bankruptcy within a two year period with a proven accuracy of 75-80%. The Altmans credit scoring model takes the following form; Z=1.2X1+ 1.4X2 + 3.3X3 + 0.6X4 +1.0X5 (2) Where, X1 = Working capital/ Total assets ratio X2 = Retained earnings/ Total assets ratio X3 = Earnings before interest and taxes/ Total assets ratio X4 = Market value of equity/ Book value of long-term debt ratio X5 = Sales/ Total assets ratio. The higher the value of Z, the lower the borrowers default risk classification. According to Altmans credit scoring model, any firm with a Z-Score less than 1.81 should be considered a high default risk, between 1.81-2.99 an indeterminate default risk, and greater than 2.99 a low default risk. Critics: Use of this model is criticized for discriminating only among three borrower behavior; high, indeterminate, and low default risk. Secondly, that there is no obvious economic reason to expect that the weights in the Z-Score model or, more generally, the weights in any credit-scoring model- will be constant over any but very short periods. Thirdly the problem is that these models ignore important, hard to quantify factors (such as macroeconomic factors) that may play a crucial role in the default or no-default decision. Outstanding also is the KMV credit Monitor Model4. In recent years, following the pioneering work on options by Merton, Black, and Scholes, we now recognize that when a firm raises funds either by issuing bonds or by increasing bank loans, it holds a very valuable default or repayment option ( Black and Scholes, 1973) and (Merton, 1974). The KMV Model is a credit monitor model that helps to solve the lending problems of banks 4 KMV is a trademark of KMV Corporation that was founded in 1989. The KMV model calculates the Expected Default Frequency (EDF) based on the firms capital structure, the volatility of the assets returns and the current asset value. This model best applies to publicly traded companies for which the value of equity is market determined. 25 and further look at the repayment incentive problem (Gilbert, 2004). To try resolving the problems, the KMV Model uses the structural relationship between the volatility of a firms asset and the volatility of the firms equity. The KMV Corporation (purchased by Moodys in 2002) has turned this relatively simple idea into a credit-monitoring model now used by most of the large US banks to determine the Expected Default Frequency (EDF) that is the probability of default of large corporations (KMV Corporation, 1994). The expected default frequency that is calculated reflects the probability that the market value of the firms assets will fall below the promised repayments on debt liabilities in one year. If the value of a firms assets falls below its debt liabilities, it can be viewed as being economically insolvent. Simulations by the KMV have shown that this model outperforms both accounting-based models and SP ratings (Saunders and Cornett, 2007). The relevant net worth of a firm is therefore the market value of the firms assets minus the firms default point. Net worth= (Market Value of Assets) (Default Point) (3) A firm will default when its market net worth reaches zero. (Market Value of Assets)(Asset Volatility) (Market Value of Assets) (Default Point) Distant to Default = (4) (Source: Moodys KMV; Modeling Default Risk, 18th December 2003.) The KMVs empirical EDF is an overall statistics that can be calculated for every possible distance to default (DD) using data either aggregated or segmented by industry or region. To find the EDF for any particular firm at any point in time, one must look at the firms EDF as implied by its calculated DD. As a firms DD fluctuates, so do its EDF. For firms that are actively traded, it would be possible in theory to update the EDF every few minutes (Gilbert, 2004). CRITICS: The KMV EDF Model has been criticized on the basis that they are not true probabilities of d efault. This is reflected in the poor results obtained using KMV empirical EDFs in order to replicate risky bond prices (Kao, Eom et al, 2000). 26 An increasingly popular model used to evaluate the return on a loan to a large customer is the Risk-Adjusted Return on Capital (RAROC) Model. This model, originally pioneered by Bankers Trust (acquired by Deutsche Bank in 1998) is now adopted by virtually all the large banks in Europe and the US, although with some differences among them (Saunders and Cornett, 2007). The essential idea behind RAROC is that rather than evaluating the actual promised annual cash flow on a loan as a percentage of the amount lent or (ROA), the lenders balance the loans expected income against the loans expected risk. The RAROC Model is basically represented by, RAROC = (one year net income on loan)/ (Risk adjusted assets). (5) For denominator of RAROC, duration approach can be used to estimate worst case loss in valu e of the loan: DLn = -DLnx Ln x (DR/ (1+R)) .(6) Where, DR is an estimate of the worst change in credit risk premiums for the loan class over the past year. Ln= Loan DLn= Change in loan class R=Interest Rate According to James Christopher (1996), the immediate purpose of the RAROC riskmeasurement systems is to provide bank managements with a more reliable way to determine the amount of capital necessary to support each of their major activities and, thus, to determine the overall leverage for the bank as a whole. This paper also stipulates that the RAROC system provide a uniform measure of performance and that management can, in turn use this measure to evaluate performance for capital budgeting and as an input to the compensation system used for senior managers. 27 Don’t waste time! Our writers will create an original "Financial Market Essay Example Pdf" essay for you Create order

Film Analysis Of Vincent Gallos Buffalo 66 - 1083 Words

â€Å"All my life I’ve been a lonely boy.† Vincent Gallo’s Buffalo 66 is a peculiar, surreal film to analyze. As a semi-autobiographical work, Buffalo 66 greatly exaggerates the events in the film and makes the viewers suspend disbelief on more than one occasion. Yet despite this, the main focus of this film is a broken Billy Brown’s emotionally raw journey seeking revenge but instead finding unconditional love through Layla in the end, and the formalist film techniques used here enhance this. Through the deliberate use of photography, staging, and movement, Buffalo 66 works as a formalistic classicism film, a predominantly classicism film with strong elements of formalism, on the style continuum. Gallo’s use of cinematography, even though his†¦show more content†¦The camerawork emphasizes the sense of detachment between the characters, and Billy’s inability with connecting with others. In addition, the film has a contrasty, bleak look to it, like a faded photograph. Gallo shot the movie on reversal film stock to capture that contrast and grain, in attempt to reproduce the same look of football games from the late 1960’s and early 1970’s. Buffalo 66’s staging conveys many themes. One memorable use of staging is the dinner table scene with Billy, Layla, and Billy’s mother and father. To exaggerate the emotional emptiness of the scene, the scene is framed in a medium long shot; however, the viewers see only three sides of the dinner table at any given moment, like a stage. The characters in the scene range from a personal to social distance. A most prominent detail in this scene, aside from the empty space, is the Buffalo memorabilia present in both the background and foreground. All conversations are either three way or two way, with one person constantly disappearing. The viewer has no way to identify with any particular character; thus, the viewers feel alienated from the dysfunctional family much like how Billy feels with his parents. As mentioned previously in the car scene, Billy is a character who has difficulty connecting with others. Towards the end of the second act of the film, there is a scene when Billy and Layla lie on a motel bed, attempting to be more intimate with

Heart Of Darkness 3 Essay Research Paper free essay sample

Heart Of Darkness 3 Essay, Research Paper Joseph Conrad # 8217 ; s Heart of Darkness The bordering narration of Heart of Darkness is presented by an nameless, vague talker, who is one of a group of work forces, former crewmans, now professionals, likely middle-aged, on the deck of a yacht at the oral cavity of the Thames River, London England. The clip is likely modern-day with the authorship and publication of the novel, so around the bend of the twentieth century. One among the group, Charlie Marlow, a cryptic figure who is still a crewman, tells the narrative of something that happened to him several old ages earlier, when he drove a steamboat up a river in Africa to turn up an agent for a Belgian company involved in the promising tusk trade. Most of the novel is Marlow # 8217 ; s narrative, although Conrad sometimes brings us back to the yacht and ends the novel at that place. Besides, as in Wuthering Heights, the technique of a framing narrative brings up inquiries of memory: how a narrative is dependable when related by person many old ages after the fact, so reported by person else. The construction of Heart of Darkness is much like that of the Russian nesting dolls, where you open each doll, and there is another doll indoors. Much of the significance in Heart of Darkness is found non in the centre of the book, the bosom of Africa, but on the fringe of the book. There is an outside storyteller stating us a narrative he has heard from Marlow. The narrative which Marlow tells seems to focus on around a adult male named Kurtz. However, most of what Marlow knows about Kurtz, he has learned from other people, many of whom have good ground for non being true to Marlow. Therefore Marlow has to patch together much of Kurtz # 8217 ; s narrative. We easy get to cognize more and more about Kurtz. Part of the significance in Heart of Darkness is that we learn about # 8220 ; world # 8221 ; through other people # 8217 ; s histories of it, many of which are, themselves, twice-told narratives. Marlow is the beginning of our narrative, but he is besides a character within th e narrative we read. Marlow, 32 old ages old, has ever # 8220 ; followed the sea # 8221 ; , as the novel puts it. His ocean trip up the Congo river, nevertheless, is his first experience in fresh water travel. Conrad uses Marlow as a storyteller in order to come in the narrative himself and state it out of his ain philosophical head. When Marlow arrives at the station he is shocked and disgusted by the sight of otiose human life and destroyed supplies. The director # 8217 ; s senseless inhuman treatment and foolishness overwhelm him with choler and disgust. He longs to see Kurtz- a fantastically successful tusk agent and hated by the company director. More and more, Marlow turns off from the white people ( because of their pitiless ferociousness ) and to the dark jungle ( a symbol of world and truth ) . He begins to place more and more with Kurtz- long before he even sees him or negotiations to him. Kurtz, like Marlow, originally came to the Congo with baronial purposes. He thought that each tusk station should stand like a beacon visible radiation, offering a better manner of life to the indigens. Kurtz # 8217 ; s female parent was half-English and his male parent was half-French. He was educated in England and speaks English. The civilization and civilisation of Europe have contributed to the devising of Kurtz ; he is an speechmaker, author, poet, musician, creative person, politician, ivory pimp, and main agent of the tusk company # 8217 ; s Inner Station at Stanley Falls. In short, he is a # 8220 ; cosmopolitan mastermind # 8221 ; ; nevertheless, he besides described as a # 8220 ; hollow adult male, # 8221 ; a adult male without basic unity or any sense of societal duty. Kurtz wins control of work forces through fright and worship. His power over the indigens about destroys Marlow and the party aboard the steamboat. Kurtz is the violent Satan whom Marlow describes at the beginning. Kurtz might neer hold revealed his evil nature if he had non been spotted and tortured by the director. A major subject of Heart of Darkness is civilization versus savageness. The book implies that civilisations are created by the scene of Torahs and codifications that encourage work forces to accomplish higher criterions. It acts as a block to forestall work forces from returning back to their darker inclinations. Civilization, nevertheless, must be learned. While society seems to keep these barbarian inclinations, it does non acquire rid of them. The inclination to return to savagery is seen in Kurtz. When Marlow meets Kurtz, he finds a adult male who has wholly thrown off the bondage of civilisation and has reduced to a crude province where he cheats everybody even himself. Conrad recognized that misrepresentation is the worst when it becomes self-deceit and the single takes earnestly his ain fictions. Kurtz # 8220 ; could acquire himself to believe anything- anything. # 8221 ; His friendly words of his study for the International Society for the Suppression of Savage imposts was meant to be sincere, but a deeper significance of it was instead # 8220 ; Exterminate all the beasts! # 8221 ; Marlow and Kurtz are two opposite illustrations of the human status. Kurtz represents what every adult male will go if left to his ain intrinsic desires without a protective, civilized environment. Marlow represents the civilised psyche that has non been drawn back into savageness by a dark, alienated jungle. The book implies that every adult male has a bosom of darkness that is normally drowned out by the visible radiation of civilisation. However, when removed from civilized society, the natural immorality of within his psyche will be released. The implicit in subject of Heart of Darkness is that civilisation is superficial. Thymine he degree of civilisation is related to the physical and moral environment they are soon in. It is a much less stable or province than society may believe. The wilderness is a really important symbol in Joseph Conrad # 8217 ; s Heart of Darkness. It is non merely the background in which the action of the narrative takes topographic point, but besides a character of the narrative in and of itself. The enormousness and savageness of the wilderness contrast with the folly of the pilgrims, and the wilderness besides shows the greed and ferociousness that fell even behind the noblest ideals. The wilderness is non a individual as such, but instead an almighty force that continually watches the invasion of the white adult male. The activities of the white people are viewed throughout the book as insane and pointless. They spend their clip seeking for tusk or contending against each other for place and position within their ain environment. Marlow remarks: # 8220 ; The word # 8216 ; tusk # 8217 ; rang in the air, was whispered, was sighed. You would believe they were praying to it. . . I # 8217 ; ve neer seen anything so unreal in my life # 8221 ; In contrast, the wilderness appears immoveable, and endangering. During Marlow # 8217 ; s remain at the Central Station, he describes the environing wilderness as a # 8220 ; rioting invasion of silent life, a turn overing moving ridge of workss, piled up, crested, ready to. . . sweep every small adult male of us out of his small being # 8221 ; It is hard to state, nevertheless, what the purposes of the wilderness really ar e. We see the wilderness wholly through Marlow # 8217 ; s eyes, and it remains ever an unfastened inquiry. It is # 8220 ; an implacable force incubation over an cryptic purpose # 8221 ; . The indigens, who are excessively simple to hold false motivations and pretences, live absolutely at peace with the wilderness. At some topographic points in the narrative their voices can be considered the voices of the wilderness. Particularly when they are shouting out in heartache through the impenetrable fog, their voices seem to be coming from the wilderness itself. ( # 8221 ; # 8230 ; to me it seemed as though the mist itself had screamed # 8230 ; # 8221 ; ) The indigens reflect the barbarian but really existent quality of the wilderness. Consider Marlow # 8217 ; s description of the indigens in the canoes on the seashore: # 8220 ; # 8230 ; they had bone, musculus, a wild verve, and intense energy of motion, that was as natural and true as the breaker along their seashore. They wanted no alibi for being there # 8221 ; . The people who are successful in contending the wilderness are those who create their ain structured environments. For illustration, the main comptroll er of the authorities station preserved himself by keeping an faultless visual aspect. Marlow says of him, # 8220 ; # 8230 ; in the great demoralisation of the land he kept up his visual aspect. That # 8217 ; s anchor. His starched neckbands and got-up shirt-fronts were accomplishments of character # 8221 ; . On the whole, the white work forces are successful in contending the influence of the wilderness. They are either excessively avaricious and stupid to recognize that they are under onslaught, such as the pilgrims who are runing for tusk, or they have managed to protected themselves with work, such as the comptroller. There is, nevertheless, one noteworthy exclusion. Kurtz stops defying to the savageness of the wilderness. He gives up his high aspirations, and the wilderness brings out the darkness and ferociousness in his bosom. All the rules of European society are gone off from him, and the passions and greed of his true nature are revealed. He collects loyal indigens who worship him as a God, and they raid environing small towns and collect immense sums of tusk. The heads must utilize ceremonials when nearing Kurtz which Marlow feels disgust of. Marlow says, # 8220 ; # 8230 ; such inside informations would be more unbearable than those caputs drying on the bets under Mr. Kurtz # 8217 ; s windows # 8230 ; . I seemed at one edge to hold been transported into some lightless part of elusive horrors. . . # 8221 ; The debasement of Kurtz has deductions for more than merely himself. It besides remarks on humanity. At his decease, he sees the true province of world. His regard is # 8220 ; piercing plenty to perforate all the Black Marias that beat in the darkness # 8221 ; His concluding statement of # 8220 ; The horror! The horror! # 8221 ; is his judgement on all of life. The wilderness brings Kurtz to the point where he has a full consciousness of himself, and from there he makes his dictum about the world. Heart of Darkness explores something truer, more cardinal than merely a personal narration. It is a dark journey into the unconscious, and confrontation within the ego. Certain fortunes of Marlow # 8217 ; s ocean trip, looked at in these footings, has new importance. Marlow insists on the surreal quality of his narrative. # 8220 ; It seems to me I am seeking to state you a dream # 8211 ; doing a vain effort, because no relation of a dream can convey the dream # 8211 ; sensation. # 8221 ; Even before go forthing Brussels, Marlow felt as though he # 8220 ; was about to put off for centre of the Earth, # 8221 ; non the centre of a continent. The introverted voyager leaves his familiar rational universe, is # 8220 ; cut off from the comprehension # 8221 ; of his milieus, his soft-shell clam labors # 8220 ; along easy on the border of a black and inexplicable frenzy. # 8221 ; As the crisis attacks, the dreamer and his ship moves through a silence that # 8220 ; seemed unnatural , like a province of enchantment ; so come in a deep fog. # 8221 ; In the terminal, there is a symbolic integrity between the two work forces. Marlow and Kurtz are the light and dark egos of a individual individual. Marlow is what Kurtz might hold been, and Kurtz is what Marlow might hold become.

Picasso And Perugino Essays - Art Movements, Modern Art,

Picasso And Perugino The Picasso and the Perugino paintings in the art book are in no way really similar; they are infact very different aside from the fact that the main piece of the painting is a female. The colors used in Picasso's Weeping Woman are a lot of Brights. But the colors in Perugino's The Virgin and Child with Saints uses nice colors, neither bright nor dull but there are many different colors in both of the paintings. I feel as though that there is much more detail in the Perugino then the Picasso using much more texture as well as detail in the people in the painting and the landscape. The Picasso is an up close cubism type of painting and is very distorted but that is the intention of the painter. As for the Perugino there is much detail in the painting showing fine details in the clothing the people the ground it is a very in-depth painting. Comparison Color: The Picasso has yellows, reds, blues, greens, black, purple and white. Picasso uses his colors in a pretty uneven manner he uses 3-4 colors on the face of the Weeping woman in stead of the usual black white colors of the usual person. Personally, I love the naked picture of the woman. The Perugino has more colors then I can really count but he didn't use brights its more or less just regular colors but he uses the colors great to get the details of the painting out and helps you get a better feel for the painting. Some of the colors he uses are lots of blues, whites, greens, and some reds. The colors in both are very well chosen I think that the colors chosen are what really make the paintings what they have come to be "two of the best paintings made by each respective artiest." Lines: In the Perugino there aren't really too many lines in this painting. I feel that this painting is right out front as in he doesn't try to hide any thing some painters put hidden messages in there paintings or what they paint means something different then it really looks it doesn't appear that this is what Perugino was going for. The Picasso on the other hand this was done when he changed his style to cubism this is when people say he "lost it". He uses a lot of lines in this painting because he is going for the look of sorrow and being broken up so he uses a lot of lines to get the broken up and distorted. Look in the painting it looks like he takes the painting after it is painted and just cuts it up and moves pieces around to get what ever effect he feels like he wants in the painting. I think that Picasso love to use all shapes. I like the fact that both of them have triangles they both us them but the Picasso uses them as well as lines squares and many other shapes. The squares make the paintings so much stronger they give it a different feeling a feeling of order and balance. I think this is what draws me to these paintings in one there is so much detail and in the other there is a very good amounts of shapes. The one I like more out of the two has got to be by far is Picasso's Weeping Woman. I like this painting the most out of the who is because he is my favorite painter out of all that I know I like his stuff because like I said it looks like he just paints it, and just cuts it up. I like how it looks abstract I like the odd I guess I could say. I like how he uses shapes that have no name and our out of wacko I guess that's what I've always liked his work. I like his stuff more when he changed his ways and started with cubes and wacky colors as well as the Brights. The things that make Perugino's The Virgin and Child with Saints one of my favorites out of the Art Book are; all the wonderful colors and the triangle that he has using the people at one big triangle pretty much taking up the whole canvas. I also like the texture and the life of the people they look really real like the eyes you can actually see them the cloths they ware

A Child Protection Social Worker Social Work Essays

A Child Protection Social Worker Social Work Essays A Child Protection Social Worker Social Work Essay A Child Protection Social Worker Social Work Essay Upon a societal service section having the initial referral a determination will be made by the director whether to move upon the information received. In the instance of Samantha and her kids the referral offers adequate information to run into the standards for a societal worker to set about an Initial Assessment. Local Authority ( Social Services ) Act ( 1970 ) , places a responsibility on governments to provided societal services. It sets out a legal model for local governments and societal work duties in a statutory function, this being continually updated. In the instance of Samantha and her kids the authorization in which the household reside in have a legal duty to set about an appraisal and a corporate duty to supply services to kids in demand and grownups, if necessary. Powers grant Local Authorities to move in certain ways but there is no duty to make so and there is a grade of discretion of how powers are applied. In relation to the instance survey, the societal worker wo uld hold the power to originate contact with the household and other professionals they felt may supply valuable information to help in the appraisal procedure ( Brammer, 2010 ) . When transporting out the appraisal, the societal worker would mention to statute law which governs what they can make in order to safeguard kids. The Children Act, ( 1989 ) sets out that the public assistance of the kid is overriding, the kid being the primary client ( Brayne A ; Carr, 2010 ) . The Act provides the legal model within which societal work pattern with kids and households is situated and promotes the household as being the best topographic point for the kid to be brought up in, where it is safe and possible to make so. The Act besides includes principals with respects to welfare, kids s rights and introduced the construct of parental duty ( Children Act, 1989, s.3, Brammer, 2010 ) . The Act states that the local authorization is required to supply services for children in demand, their households and others ( Children Act 1989, sec.17 ) and look into if they have sensible cause to surmise a kid is enduring or is likely to endure from important injury ( Children Act 1989, sec.47 ) . It besides gives the authorization the power to use to the tribunal if they believe the kid is enduring or is likely to endure important injury, puting the kid in local authorization attention ( Children Act, 1989, sec 31 ) . The Children Act ( 2004 ) was introduced following an question into the decease of Victoria Climbe by Lord Laming. The Government responded by bring forthing a green paper Every Child Matters and Wales Rights to Action , this led onto base on balls the Children Act 2004. Its chief focal point is to foreground the importance of multi-agency working puting a responsibility on local governments and their spouses including wellness, schools, and the Police to work responsibly and collaboratively to advance the well-being and safety of kids. A common appraisal model was introduced so that societal workers and spouse bureaus could supply better preventive support for households deemed non to make child protection thresholds. The debut of the Common Assessment Framework ( CAF ) considers a holistic position of the kid and their household, integrating the kid s developmental demands, rearing capacity and household and environmental factors ( Brammer, 2010 ) . In relation to the instance sur vey at that place have been concerns sing Callum and Claudia from their school. The Education Act 2002 besides includes a proviso necessitating school regulating organic structures, instruction governments and farther instruction establishments to safeguard and advance the public assistance of kids ( NSPCC, 2012 ) . Using the CAF will besides let the societal worker to research household issues refering the kids s male parent, older siblings and immediate household. The CAF will besides see the households individuality and advance any Welsh linguistic communication demands in conformity with the Welsh Language Act 1993 ( CCW, 2002, 1.6 ) . In response to the Children Act, 2004 the Welsh Assembly Government ( WAG ) produced, Safeguarding Children ; Working Together under the Children Act 2004, supplying local governments with guidelines and descriptions of functions of spouse bureaus and focused on working responsively and proactively ( WAG, 2004 ) . The All Wales Child Protection Pr ocedures, 2008 were besides introduced upon recommendations from Lord Lamings study bespeaking that authoritiess strengthen their kid protection processs ( WAG, 2008 ) . The Human Rights Act 1989 besides plays an of import function in the societal work appraisal. Professionals are required to continue and support the rights of persons whilst seeking to run into their demands. The Act has besides to a great extent influenced the Disability Discriminations Act, 2005 and Equality Act, 2006 A ; 2010 ( Brayne A ; Shoot, 2010 ) . Cymrus have besides implemented their ain presenting The Equality and Human Rights Commission in 2007 ( BASW, 2011 ) . This statute law will be relevant when taking into history the demands of Samantha in relation to her historical mental wellness jobs. The United Nations Convention on the Rights of the Child 1989 ( UNCRC ) , is an international understanding that protects the human rights of kids under the age of 18 and recognises kids as possessing rights on equal terms with grownups. This along with the Human Rights Act 1989 is instrumental in the CAF as it requests that the kid is to be seen and a consideration of their demands and wants recorded. The kids, along with Samantha have the right to hold their wants and feelings known in relation to any appraisal or intercession undertaken ( Children Act, 1989 sec. 22 Human Rights Act, 1989, UNCRC, 1989 article 12 ) . There are besides national organic structures that provide societal attention professionals with common counsel on their pattern. These are the British Association of Social Workers ( BASW ) , the General Social Care Council ( GSCC ) and in relation to Wales the Care Council of Wales ( CCW ) and the National Occupational Standards of Social Work ( NOS ) . The statute law and counsel discussed will help the societal worker in set abouting an initial appraisal of Samantha and her kids. Using the CAF will assist to set up what back up if any the household requires. The appraisal should demo the strengths, troubles and impact of the state of affairs on the household ( Parker A ; Bradley, 2008 ) . The societal worker will necessitate to find from an analyses of the appraisal whether the kids are kids in demand ( Children Act, 1989 sec. 17 ) or kids in demand of protection ( Children Act 1989 sec.47 ) . The worker will be required to work aboard other professionals in a multi-agency attack in peculiar instruction, possible mental wellness bureaus and recognizing that the kids, in peculiar Callum possibly a immature carer ( Children Act, 2004, Disability Discrimination Act, 2005, Equality Act, 2006 A ; 2010, Carers Recognition A ; Services Act 1995 ) . The societal worker would besides be staying by statutory organic structures codificati ons of moralss in recognizing and advancing services users rights, working unfastened and candidly and esteeming their positions and wants ( BASW, 2012 CCW, 2002, CCW, 2003 GSCC, 2002 ) . Section B. Upon reception of this farther information from the Health Visitor, the Local Authority would hold a responsibility under the Children Act 1989 to originate Sec.47 questions. The Children Act 1989 Sec. 1b provinces that, If the local authorization have sensible cause to surmise that a kid who lives or is found in their country is enduring or is likely to endure important injury. The authorization shall do or do to be made such questions as they consider necessary to enable them to make up ones mind whether they should safeguard or advance the kid s public assistance . Following this statute law the societal worker in audience with a senior director would set about a scheme treatment at the earliest chance. Information would be gathered from the referrer and besides the adviser baby doctor and discussed with the constabulary ; this can be done via telephone ( WAG, 2008 ) . Any other relevant information about the household should besides be shared during this clip. Information should be given to the Police sing Samantha s spouse David and checked against the police national database, although this should hold been done as portion of the Core Assessment procedure. Pertinent inquiries should be raised sing the advisers appraisal of the alleged burn Markss ; How did the infirmary visit come about? Why did the adviser non do the referral themselves? Was Claudia sent place after the scrutiny? The scheme treatment should hold the class of action to be taken ; if a medical scrutiny is needed, whether the probe would be a individual or joint bureau respons e ( societal services entirely or in concurrence with the constabulary ) and what information should be shared with the household at this clip. It should besides take into consideration the demands of any other kids who may be affected, in this instance Claudia s brother Callum ( WAG, 2008 ) . As portion of the Sec.47 questions it is a statutory demand for the societal worker to see the kid unless there is adequate grounds and information to continue ( Children Act, 1989 s47.4 ) . It is of import that any treatments with kids are done in a manner that minimises the hurt and maximises the likeliness of them supplying clear and accurate histories ( Brayne A ; Carr, 2010 ) . Due to the earnestness of the information sing Claudia and Callum and the presence of a possible non inadvertent hurt, the determination needs to be made whether exigency action is needed. This may be because entree to the kid is being refused ; parent is declining a medical scrutiny or intentionally detaining questions. Legal advice should besides be available through the local authorization s legal service ( WAG, 2008 ) . Following this there are a scope of options available to the local authorization for procuring the protection of Claudia and Callum. Samantha may hold to David go forthing the family and subscribe a safe-care understanding for him non to hold contact with the kids. Although this may non be possible as there are allegations of a non-accidental hurt with no sensible account to the cause. Claudia and Callum may be cared for be extended household topic to safeguarding cheques ( WAG, 2008 ) . The kids may be looked after by the local authorization with parental understanding ( Children Act, 1989, sec. 20 ) . Social services can besides do an application to tribunal for an Emergency Protection Order, leting them to suit the kids for up to eight yearss without parental consent. The last option is Powers of Police Protection whereby the Police have the power to take the kids ( WAG, 2008, Williams, 2008 ) . Although there must be no hold in safeguarding kids who are at hazard, it is of import to be cognizant of the possible injury and break such proceedings may hold on the kids involved and every attempt must be made to understate this. Section C. Under the Human Rights Act 1998, Claudia has the right to esteem for a household life and privateness and local governments have to warrant any intervention in household life with any engagement being necessary and proportionate ( HRA, 1998 article.8 ) . This is besides supported by the UNCRC 1988. These rights can be compromised when there are concerns sing kid public assistance and kid protection. Local governments exerting their legal responsibilities and maps must make so without go againsting the rights of kids and their parents. In relation to Claudia and the escalating concerns for her public assistance and safety, societal services are lawfully justified in step ining in household life if it is to protect her wellness and well-being ( Laird, 2010 ) . This must merely go on in conformity to the jurisprudence, Children Act 1989 and must non interfere with the convention jurisprudence, beyond what is perfectly indispensable to forestall some sort of injury ( Laird, 2010, p150 ) . The instance survey high spots incidents of intensifying earnestness with respects to Claudia, she has suspected non inadvertent hurts and her brother Callum has alleged that David has slept in her room on occasions, this alongside ongoing issues of disregard. This information would be sufficient to trip mandatory steps by the local authorization under sec.47 Children Act 1989. Section 47 questions and powers of constabulary protection to take kids in an exigency do non necessitate a tribunal order. A tribunal order ensures that there is a forum in which the rights of those who are involved and what is needed in order to safeguard the kid can be considered by a justice, this ensures that in most instances mandatory steps will non usually transgress Article 8 ECHR ( Williams, 2008 ) . In state of affairss of utmost urgency where the kid is at hazard of important injury, associating to the instance survey and the non-accidental hurts to Claudia, the local authorization can use to the tribunal for an exigency protection order ( EPO ) which can be granted by a individual magistrate without the anterior cognition of the parents ( Laird, 2010 ) . Courts must see Claudia s public assistance as paramount and must be satisfied that doing an order is better than doing no order at all. Local governments must look to place household arrangements for the kid before choosing for surrogate attention. Laird ( 2010 ) uses an illustration of X Local Authority V B ( Emergency Protection Orders ) , whereby the local authorization where the kids lived did non take into history the viability of arrangements with drawn-out household members before using for an EPO. This conflicting article 8, as taking the kids from all their relations into surrogate attention is the most utmost intervention in household life. In relation to Claudia, if she was to be removed from the attention of her female parent, into surrogate attention and perchance separated from her brother, without giving anterior consideration to any immediate or extended household may transgress her rights under article 8 or the Human Rights Act 1998 and UNCRC 1989. Working in partnership with professionals during kid protection processs is guided through statute law and bureau functions, powers and responsibilities. The difficultly can be working in partnership with parents particularly when they are non in understanding with the procedure. In kid protection work the relationship between parent and societal worker can be fraught and tightly directed by legal and procedural demands ( Pinkerton A ; Devaney, 2009 ) . If Claudia was to stay in the attention of her female parent, she would be the topic of an Initial Child Protection Conference. WAG ( 2008 ) states that where possible parents and others with parental duty should be invited to go to and helped to the full to take portion. They besides have the option of conveying an advocator or legal representative. Family members and professional should be able to portion information in a safe and non-threatening environment and for household members to talk to the chair in the absence of other rel ations, particularly if there is a hazard of force or bullying ( Brammer, 2007 CCW, 2002, 1.3, 3.1 ) . This could be evident in relation to Samantha if Claudia s male parent holding parental duty besides attended the conference. The societal worker should besides run into with the parents beforehand to portion the study which highlights the concerns conveying them to conference. The chair should besides run into before the conference to guarantee that they understand the process and intent of the event ( Brammer, 2007 ) . At six old ages old, Claudia is able to voice her wants and feelings and this should be done through direct work with the societal worker, non to obtain a revelation about possible maltreatment, but to construct a swearing relationship between worker and kid with the kid being able to experience safe and unafraid whether they remain at place or in arrangement ( Milner A ; OByrne, 2009, CCW, 2002 1.2, 2.1 UNCRC, 1989, article 12 ) . Studies show that kids are capab le of understanding complex state of affairss and are able to build ways of covering with them, so an honorable account of the state of affairs is more productive, nevertheless immature they are. However issues can originate when the kid knows merely excessively good the earnestness of the state of affairs. Claudia may waver and experience unable to speak freely as she may worry how the information discussed will be used. If she is to return place to her female parent, she may be questioned over what she has said ( Milner A ; OByrne, 2009 ) . Although the worker will esteem the confidentially of Claudia, it is non entirely guaranteed and this should be explained to her in an age appropriate mode, guaranting her apprehension ( BASW, 2011, CCW, 2002, 2.3, Children Act 2004 sec. 12 ) . Any revelations from Claudia which could potentially set her or others at hazard will necessitate mandatory action under sec. 47 Children Act 1989. Whilst working with Claudia and her household the societal worker will be guided by statute law and statutory counsel which will on times conflict with human rights and ethical values. The very nature of kid protection work can be oppressive with a distinguishable power instability. The power and position is steadfastly with the worker who is advantaged by being person of the authorization. It is besides likely to be reinforced by the parents and kids being disadvantaged by gender, category, race and age ( Pinkerton A ; Devaney, 2009 ) . Children s rights to protection are clearly laid out in international and domestic jurisprudence ( Human Rights Act, 1998, UNCRC, 1989, Children Act, 1989/2004 ) and promoted in national and international codifications of moralss and pattern counsel ( International Federation of Social Workers, British Association of Social Workers A ; Care Council of Wales ) . In relation to Claudia the Human Rights Act 1989 and UNCRC 1989 article 8, supports her right to stay in the attention of her female parent. In contrast to this article 19 ensures that Claudia is protected from force, maltreatment and disregard by her parents or anyone else who looks after her. Article 9 goes on to back up the remotion of the kid for their ain protection but promotes contact with parents if safe to make so ( UNCRC, 1989 ) . The societal worker would meet ethical quandary during her work with Claudia and have to equilibrate her demands and involvements where they may conflict with those of others, particularly other professionals, and child protection issues in respects to her safety ( CCW, 2002, BASW, 2011 ) . The worker would use the relevant codifications of moralss and pattern about issues of information sharing and confidentiality ( CCW, 2002 2.3, 6.5, 6.7 ) . However in relation to child protection and the jurisprudence, the public assistance of the kid would ever be paramount over any rights of confidentiality ( Children Act, 1989 ) . The societal worker would necessitate to give due consideration sing Claudia s life-skills and cognition and advance her engagement in the procedure that concerns her ( BASW, 2011, 2.1, CCW, 2002, 1.1, 1.2, 3.1 ) . Although consideration of a kid s wants and feelings does non enforce a responsibility to move upon them ( Brayne A ; Preston-Shoot, 2010 ) . Overall this assignment highlights the complex nature of societal work in one of the most demanding countries, kid protection. The demand to follow statute law and statutory counsel and to equilibrate that with the person s human rights, taking into consideration moralss, non-oppressive and anti-discriminatory pattern can, on times be a extremely combative procedure but one that hopefully has the desired result, the kid has been protected and is safe from injury. Children have a right to populate in this universe and be protected from force, maltreatment and disregard and kid protection should be the concern of everyone. There have been incidents when things have gone incorrect and unfortunately kids have died as a consequence, lessons have been learnt and jurisprudence and policy nationally and internationally has been changed to hopefully forestall this in the hereafter.

Poetry Writing Courses for International Students

Poetry Writing Courses for International Students Poetry Writing Courses for International Students People usually write poems because they want to capture a moment or certain emotion they have experienced. Poetry employs a different approach to communication with the reader. This genre of literature has its own devices and techniques to convey your experience to the audience. Practice makes perfect, but if you write poems, or at least tried to, you know that prior knowledge of these techniques is extremely helpful. Here is a list of courses that will help you start the journey into poetry, improve your skills as a writer and publish your work. Some of the courses are free and some of them are paid, but all of them are online, and thus, suitable for international students. â€Å"What is poetry?† from OpenLearn is a free course, a popular platform for online studies. It is great for beginners as it covers the basics, teaches how to use writing techniques and literary devices. This course is designed for people who wish to start writing poems, but for some reason keep postponing. It can help you realize what stops you from writing, and free your imagination. â€Å"Poetry writing† form Gotham Writers is useful for those who cant find their way with words. The course teaches how to make the most powerful impact on the reader, but also addresses the forms of poetry and writing techniques. This course is also held in New York, so you can take it in person if you live near this location, or if you are going to visit the city in time of their workshop. â€Å"Writing poetry† from University of Oxford focuses on writing devices and how to use them. If you trust university education more than private courses, than this course might be better for you. After completing it, you will feel more confident in your writing skills, learn different types of verse forms and poetic structures. â€Å"Poetry writing course† from London School of Journalism consists of 8 lessons. It is a complete course that walks you through from the basics to getting published. If you want to find your personal style this one is definitely for you. â€Å"ENGL 310: Modern Poetry† is one of the introductory courses from Yale University. It consists of 25 free lectures and an exam. The course is useful for people who would like to get acquainted with authors of modern poetry and find inspiration in their writing. â€Å"Writing and reading poetry†, interestingly enough, is yet another poetry writing course from Massachusetts Institute of Technology. It has an emphasis on practice of making poetry and analyzing 20th century poetry. This course is more useful for students, who already know everything in theory and want to start practicing. If you want to start writing poems or you do, but feel like something is missing from your work, or you just cant get published for some reason, take up an online course. Fill the gaps in your knowledge or skills. On another note, in an auditorium, you will have to share your progress with a bunch of other students. If you are a beginner and feel intimidated with taking a creative group course, an online programme is a good place to start. Visit our trustworthy writing service to buy student essays online if you need help with writing your academic papers.

Strangers on a Train Flim Essay Example | Topics and Well Written Essays - 1000 words

Strangers on a Train Flim - Essay Example He uses double crossing at various point. Firstly, the lighter of Guy Haines plays an important role in the movie and has a crosses tennis racket set. Secondly, in the beginning of the film, Hitchcock shows Bruno ordering for two drinks, no the train. This again, is an attempt to accentuate the criss-crossing theme. Thirdly, the initial part of the film shows a murder being committed and this is captured as double reflection on the glasses of the victim. Thus, Hitchcock makes use of this motif to create a greater impact on the audiences. 3) Hitchcock sets most of the story in the world of Washington, D.C. (not the setting in the novel on which the film is based). Name three places in D.C shown in the film, and explain briefly how this world (physical and cultural) contributes to the meaning of the story. Washington D.C is the main setting of ‘Strangers on the Train’ and Hitchcock shows us few scenes placed in the capital. Firstly, the scene where in the two strangers get down form their cabs and board the train is a great way to establish the capital city, in the movie. Secondly, the scene before Miriam is murdered shows her with her two boyfriends, at an amusement park. This again is set in Washington D.C. Thirdly, the scene wherein Guy Haines, the tennis pro is shown at a tennis club is again set in Washington D.C. The very fact that Guy’s girlfriend, Ann Morton’s father is a Senator strengths the Washington D.C setting further more. The physical world at Washington D.C is rather rich and sophisticated, with shiny cabs, amusement parks, tennis clubs, etc. This establishes the

The Business Organization Of McDonalds Essay Example | Topics and Well Written Essays - 3000 words

The Business Organization Of McDonalds - Essay Example The gradual transition that saw the move from the previous industrial age an into the information age has been seen to bring management and leadership changes within various organizations. It has been argued that the machine view of organizations is essentially a closed system and is not able to satisfactorily accommodate the required in the rapidly changing information age environment. It is imperative that all organizations ensure that they progressively become more flexible in nature so as to remain competitive in addition to being able to adequately respond to the growing number of various economic pressures, the extremely rapid pace of change, the expanding globalization, as well as the seemingly increasing influx of both technology and information. The constant need for organizations to be flexible has been seen to precipitate organizational structures that are seen to be inherently leaner, flatter as well as more cooperative. As opposed to mechanistic organizations where chang e is invariably seen to be mostly controlled at the task or action level, the metaphor of viewing organizations as the human brain is seen to involve a process of double-loop learning. A double-loop learning system is seen to look at the various variable that is seen to govern actions, this essentially means attempting to understand the deeper assumptions that happen to normally be taken-for-granted underneath the usual operational norms. People are encouraged to attempt and critically examine their own behavior.... This innovative move on the part of McDonald’s is seen as being responsible for helping the company maintain both its franchisee and manager loyalty despite the harsh and often highly competitive market (Mceachern, 2006). It was during the 1960s that the company went on to develop the face of Ronald McDonald as the company brand’s main face. The company also released the Big Mac Burger during the sixties and the big Mac Burger went on to quickly becoming McDonald’s most popular burger product. It was during the 1970s that the McDonald’s corporation started giving back to the society via its Ronald McDonald House Charity (Shenron, 2009). In an aggressive growth strategy, McDonald’s spread its branches to Japan by 1971 and then on to both China and Russia in 1990. The company also worked on expanding to areas outside the United States and by the year 1995, it was estimated that more than half of all the company’s restaurants were actually locat ed in areas that were outside the United States. By the year, 2000, McDonald’s had grown to serving an estimated over 50 million individuals worldwide on a daily basis (Duiker and Spielvogel, 2013). McDonald’s Corporation is currently perceived as being the worlds’ largest store chain composed of hamburger fast food restaurants. According to McDonald’s website the company is the global leading fastfood service retailer and has an estimated over 34,000 local restaurant outlets in about 119 different countries globally.These restaurants help the company serve over 69 million people each day (aboutMcDonalds’s, 2013). The company employs a franchisees and suppliers business system that are attributed to the success of the McDonald’s

Hematology Report Essay Example for Free

Hematology Report Essay The term comes from a Greek word â€Å"glukus† which means sweet. It is an organic compound, a simple sugar (monosaccharide) with a chemical formula C6H12O6, which occurs widely in most tissues of plants and animals. A major source of energy in the body, glucose is the principal circulating sugar. It is also knows as D-glucose, D-glucopyranose, grape sugar, corn sugar, dextrose, and cerelose. Glucose, whether in free or combined form, is the most common of the sugars and the most abundant organic compound in nature. Grapes, figs, and other sweet fruits and honey had been found to have considerably high concentration content. It is also found, although in lesser concentrations, in animal body fluids such as in the blood and lymph. Urine of diabetic patients usually contains 3-5 %. Absorbed into the bloodstream through the small intestine, it is carried through the portal vein to the liver wherein it is stored as glycogen. The rest reenters to the circulatory system. Glycogen is also stored in the muscle tissue (See â€Å"Glucose†) †¢ Catalyst for: a major contributor in metabolism. †¢ Disorders/Diseases: 1. High Levels: diabetes mellitus ? It is characterized by high levels of blood sugar (glucose), caused from defects in insulin secretion or action, or even both. In normal conditions, blood glucose levels are highly controlled by insulin, a hormone produced by the pancreas. Insulin helps lower the glucose level in the blood. In diabetic patients, the absence or insufficient production of insulin causes hyperglycemia. Although diabetes can be controlled, it is a chronic medical condition, which lasts a lifetime (See â€Å"What is diabetes? †) 2. Low Levels: hypoglycemia ? This disorder occurs when glucose levels falls too low resulting in the malfunction of cells. Symptoms develop such as cool skin, nervousness, headache, confusion, convulsion or even coma. Control of its level and metabolism is greatly important. 2. ) Urea Nitrogen (BUN) †¢ Definition: Urea is formed in the liver. It is a nitrogen-containing substance, which is normally cleared into the urine from the blood by the kidney. This was the first organic chemical compound that was synthesized. Friedrich Wohler, a German chemist, who accidentally made urea while in the process of attempting to make ammonium cyanate from silver cyanide and ammonium chloride (See â€Å"Definition of Urea†). It is a small organic molecule composed of carbon, nitrogen, oxygen and hydrogen and is formed from ammonia in the kidney and liver (See â€Å"What is Urea†). †¢ BUN: stands for Blood Urea Nitrogen This is a test that is used to measure the levels of urea in the blood. When diseases occur in the kidney, which comprises its function will frequently lead to increased level in the blood. The BUN level in the blood can also rise among patients who are dehydrated. Urea nitrogen is a waste product of protein metabolism in the blood. This is a test that measures how much urea nitrogen remains in the blood that can be used as a test of renal function. Nevertheless, there are many factors aside from renal disease that can cause BUN alterations, including protein breakdown, hydration status and liver failure. Reference values of BUN: Adult: 7-20 mg/100 ml (men may have slightly higher values than women) Newborn: values slightly lower than adult ranges Elderly: value slightly increase due to lack of renal concentration Pregnancy: values decrease about 25% *Values differ slightly from laboratory to laboratory for all tests †¢ Catalyst for: the breakdown of protein during tissue metabolism †¢ Disorders/Diseases: Diseases or malfunction concerning the kidney often lead to increased blood levels of urea. 1. High Levels: azotemia ? Possible causes: o Dehydration o Impaired renal function o Stress o Shock o Congestive heart failure as a result of poor renal perfusion o Excessive protein intake o Hemorrhage into the gastrointestinal tract 2. Low Levels: A low BUN may have little significance but can cause liver problems. A decreased BUN may be caused by over hydration. A person with â€Å"syndrome of inappropriate anti-diuretic secretion (SIADH), an anti-diuretic hormone responsible for stimulating the kidney to conserve water causes high level of water retention in the bloodstream rather than excreted into the urine. SIADH can raise the BUN level, while important substances decrease because of the significant increase of fluid in the bloodstream. A decrease BUN level may be seen in: malnutrition, liver failure, over hydration, impaired nutrient absorption, anabolic steroid use (See â€Å"Blood Urea Nitrogen BUN†). Urea itself is non-toxic. 3). Creatinine †¢ Definition: A creatine anhydride with chemical formula of C4H7N3O, is formed by the metabolism of creatine. Creatine is found in muscle tissue and blood; it is excreted as a metabolic waste in the urine (See â€Å"Creatinine†). A small amount is actively secreted and mainly filtered by the kidney. There is tubular reabsorption of creatinine but compensated by almost the same degree of tubular secretion. Creatinine is a chemical waste molecule, generated from muscle metabolism. About 2% of the body’s creatine is converted to creatinine every day. It is transported through the bloodstream to the kidneys. It is produced at a steady rate. Diet or normal physical activities have little effect on creatinine level. A malfunction of the kidney can decrease its level in the urine while raising its level in the blood (See â€Å"Creatinine and Creatinine Clearance†). †¢ Catalyst for: despite of being a waste, creatinine is vital for diagnostic function It is a reliable indicator of kidney function. †¢ Disorder/Diseases: 1. High Levels: This indicates a possible malfunction or failure of the kidneys. As the kidneys become impaired, creatinine level will rise. A high level suggests the following conditions of the kidney: -damage or swelling of the blood vessels in the kidneys known as glomerulonephritis. Prostate disease, kidney stone or urinary tract obstruction Reduced blood flow to the kidney 2. Low Levels: It is a rare occurrence that low level of creatinine would appear, and are not usually a cause for concern. Low levels of creatinine can be seen with conditions that results in decreased muscle mass (See â€Å"Creatinine: The Test†). Low creatinine is seen in some severe liver diseases as it is also seen in debilitation (See â€Å"Low Protein Diet Information for People with Kidney Diseases†) Normal level for: Adult males: approximately 0. 6 to 1. 2 milligrams (mg) per deciliter (dl) Adult females: 0. 5 to 1. 1 milligrams per deciliter Elderly: may have less creatinine in their blood than the norm Infants: 0. 2 or more depending on their muscle development Person w/ one kidney: 1. 8 or 1. 9 Creatinine levels that reach 2. 0 or more in babies and 10. 0 or more in adults may need to use a dialysis machine in order to remove wastes from the blood (See â€Å"Definition of Creatinine†). References: 1. â€Å"Glucose†. http://www. answers. com/topic/glucose 2. â€Å"What is diabetes? †. http://www. medicinenet. com/diabetes_mellitus/article. htm 3. â€Å"Definition of Urea†. http://www. medterms. com/script/main/art. asp? articlekey=5905 4. â€Å"What is Urea†. http://cahpwww. vet. upenn. edu/mun/mun_info. html 5. â€Å"Blood Urea Nitrogen (BUN). http://www. rnceus. com/renal/renalbun. html 6. â€Å"Creatinine†. American Heritage dictionaries. http://www. answers. com/topic/creatinine 7. â€Å"Creatinine and Creatinine Clearance†. http://www. webmd. com/hw/lab_tests/hw4322. asp 8. â€Å"Creatinine: The Test†. http://www. labtestsonline. org/understanding/analytes/creatinine/test. html 9. â€Å"Low Protein Diet Information for People with Kidney Diseases†. http://www. geocities. com/HotSprings/Spa/3265/lowp. html 10. See â€Å"Definition of Creatinine†. http://www. medterms. com/script/main/art. asp? articlekey=12550 4. ) BUN/Creatinin ratio: †¢ Definition: BUN-to-creatinine ratio= 10:1-201 (over 12 months of age) =Up to 30:1 (infants less than 12 months of age) (See â€Å"Blood Urea Nitrogen†) http://www. bchealthguide. org/kbase/topic/medtest/aa36271/results. htm †¢ Disorder/Diseases: High Level: High ratios occur with acute kidney failure, which could be caused by conditions such as shock or severe dehydration Low Level: Can be associated with a diet low in protein, and severe muscle injury called rhabdomyolysis, pregnancy, cirrhosis, inadequate antidiuretic hormone secretion. (See â€Å"BUN/Creatinine ratio) http://www. thedoctorslounge. net/nephrology/forums/backup/topic-6481. html 5. ) Sodium: †¢ Definition: Sodium is deposited largely in the blood and in the fluid in the space surrounding the cells in our body. It is important in maintaining a normal fluid balance by all cells. †¢ Catalyst for: plays a key role in normal nerve and muscle function. †¢ Disorder/Disease: Healthy kidneys must have a consistent amount of sodium in the body. Excess amount is excreted in the urine. When the amount of sodium intake and loss are not in balance, the amount of water in the blood is affected.

Dietrich Bonhoeffer :: Essays Papers

Dietrich Bonhoeffer Dietrich Bonhoeffer was born on February 4th 1906, as a son of a professor of psychiatry and neurology at the University of Berlin. Throughout his early life he was an outstanding student, and when he finally reached the age of 25 he became a lecturer in systematic theology at the University Berlin. Something that is very striking is that when Hitler came to power in 1933, Bonhoeffer became a leading spokesman for the Confessing Church, the center of Protestant resistance to the Nazis. He organized and for a shot amount of time he led the underground seminary of the Confessing Church. His book Life Together describes the life of the Christian community in that seminary, and his book The Cost Of Discipleship attacks what he calls "cheap grace," meaning that grace used as an excuse for moral laxity. Bonhoeffer had been taught not to "resist the powers that be," but he came to a conclusion to believe that to do so was sometimes the right choice. In 1939 his brother-in-law introduced him to a group planning the overthrow of Hitler, and he made significant contributions to their work. (Bonhoeffer at this time was an employee of the Military Intelligence Department.) He was later arrested in April of 1943 and imprisoned in Berlin. After the failure of the attempt on Hitler's life in April of 1944, he was first sent to Buchenwald and then to Schoenberg Prison. Bonhoeffer was almost killed, but was lucky as his life was spared, because he had a relative who stood high in the government; but then this relative was himself implicated in anti-Nazi plots. On Sunday 8 Dietrich Bonhoeffer :: Essays Papers Dietrich Bonhoeffer Dietrich Bonhoeffer was born on February 4th 1906, as a son of a professor of psychiatry and neurology at the University of Berlin. Throughout his early life he was an outstanding student, and when he finally reached the age of 25 he became a lecturer in systematic theology at the University Berlin. Something that is very striking is that when Hitler came to power in 1933, Bonhoeffer became a leading spokesman for the Confessing Church, the center of Protestant resistance to the Nazis. He organized and for a shot amount of time he led the underground seminary of the Confessing Church. His book Life Together describes the life of the Christian community in that seminary, and his book The Cost Of Discipleship attacks what he calls "cheap grace," meaning that grace used as an excuse for moral laxity. Bonhoeffer had been taught not to "resist the powers that be," but he came to a conclusion to believe that to do so was sometimes the right choice. In 1939 his brother-in-law introduced him to a group planning the overthrow of Hitler, and he made significant contributions to their work. (Bonhoeffer at this time was an employee of the Military Intelligence Department.) He was later arrested in April of 1943 and imprisoned in Berlin. After the failure of the attempt on Hitler's life in April of 1944, he was first sent to Buchenwald and then to Schoenberg Prison. Bonhoeffer was almost killed, but was lucky as his life was spared, because he had a relative who stood high in the government; but then this relative was himself implicated in anti-Nazi plots. On Sunday 8

Principles of Modern Finance Sample Midterm

Principles of Modern Finance Spring 2013 Sample Midterm February 22, 2012 Instructions †¢ You have 1 hour and 40 minutes. †¢ The exam is out of 25 points. †¢ There are 22 multiple-choice questions. 19 questions are worth one point, 3 questions are worth two points and are marked as such. †¢ If you get stuck, move on and come back later. 1 1. A stock is expected to pay a dividend of $10 next year, and this dividend is expected to grow by 5% each year thereafter. What should the price of the stock be if instruments of similar risk are paying 12%? (a) $83. 33 (b) $142. 86 (c) $150 (d) $200 2. A project has the following cash? ows: Year 0 1 2 Cash? w +12000 ? 7080 ? 6654 The IRR of these cash? ows is 9%. Assets of similar risk pay 5%. Should you accept this project? (a) Yes (b) No 3. I am considering buying a Greek government bond that promises to pay $1210 in two years’ time. However, there is a possibility that the Greek government will default between now an d the promised payment. If the government does default, the bond will only pay $500. The probability of default is 0. 5. What should the price of the bond be if instruments of similar risk are paying 10%? (a) $1000 (b) $706. 62 (c) $413. 22 (d) $303. 68 4. I am enrolled in a 2-year MBA program, and have just started classes.To pay the tuition and living expenses, I borrow $50,000 per year (paid at the start of the year). The interest rate on the loan is 5%. I am certain to get a job at the end of the two years of study. That job will be guaranteed for ten years (from the date I start work), at a constant salary which will be paid at the end of each year of work. There are no taxes. I estimate that I will be able to save 1/4 of my income, whatever my income is. What is the minimum salary the job must have to allow me to pay o? my loans within ten years? (2pts) 2 (a) $43,050 (b) $50,000 (c) $55,752 (d) $61,339 5. A credit card company o? rs me a card with 20% APR, compounded daily. I make purchases of $3,000 on the card, and allow interest to accrue on those purchases for a year. Assuming each year has 365 days, the amount I will have to pay back is: (a) $3,315 (b) $3,600 (c) $3,664 (d) $3,901. 30 Answer the next two questions with reference to this information: Analysts argue that two things can happen over the next year: the economy can continue as it is or it can go into recession. The returns of two stocks: General Electric (GE) and Cisco (CSCO) in each possible state are given below: State Return on GE Continue as-is 15 Recession ? 5 Return on CSCO 5 -1 The analysts estimate the probability of continuing as-is to be 0. 8 , and the probability of a recession to be 0. 2. 6. What is the expected return on a portfolio which is 120% in GE and ? 20% in CSCO? (a) 10. 04% (b) 8% (c) 2. 55% (d) 0% 7. What is the variance of CSCO? (a) 1. 96%2 (b) 5. 76%2 (c) 13%2 (d) 23. 04%2 3 8. Alice can get a one-year loan at 5% at her bank, while no bank is willing to give Brad a one-year loan for less than 10%. Brad has just had surgery, and must pay the hospital $10,000 immediately, but he has no money today, though he will have money in one year. So Alice o? rs Brad a proposal: she will borrow $10,000 from her bank for one year on her own account, and Brad will repay this loan. In addition, he will pay Alice a sum of money today. What is the maximum amount that Brad should be willing to pay Alice up-front under this arrangement? Alice is not willing to consider borrowing more than $10,000. (2pts) (a) $454. 54 (b) $377. 18 (c) $476. 19 (d) $500 9. The risk-free interest rate today is 7%. One year ago, you bought an asset which is risk-free and would pay $100 two years from the date of purchase. The risk-free interest rate on the date of purchase was 10%. You sell the asset today.What is the rate of return (HPR) that you made? (a) 13% (b) 10% (c) 7% (d) 15% 10. The correlation between Alcoa (AA) and American Express (AXP) is 0. 3. You want to form a portf olio, investing 50% in each stock. What is the variance of your portfolio’s return? You have the following information: AA AXP 10 12 8 16 Expected return Standard deviation of return (a) 85. 76%2 (b) 99. 2%2 (c) 121%2 (d) 144%2 11. If you can get an 8% return (annual e? ective) on a ten year CD from your local bank, would it be wise to invest in a 10 year bond which promises to make a single payment of $1000 at the end of its life? Assume both are equally risky). This bond costs $475 now and will pay $1000 in ten years. 4 (a) Yes, the bond is better. (b) No, the bond is worse. (c) Can’t tell from information given 12. You are given the following information about portfolios of two risky assets, A and B: Weight in A Weight in B Std. dev. of portfolio 0 1 12 0. 5 0. 5 14 1 0 16 What is the covariance between A and B? (a) 192%2 (b) 168%2 (c) 224%2 (d) Cannot be determined 13. A ? rm in a well-functioning capital market has the following projects available. The risk-free r ate is 10%. Which should it invest in? NPV IRR X 10 15% Y 0. 3% Z -5 22% OCC 22% 5% 6% (a) X only (b) Z only (c) X and Y (d) X and Z (e) All three 5 14. You are considering investing in a bond. This bond costs $300 now and pays $550 in ten years. What is the IRR of this investment? (a) 1. 06% (b) 6. 25% (c) 8. 33% (d) 9. 01% Answer the next two questions using the following information: A project has the following expected cash ? ows. Year 0 1 2 Expected cash? ow ? 370 814 ? 447. 7 The IRR of these cash ? ows is 10%. 15. Which of the NPV functions on the following page best describes this project? (2pts) (a) Graph A (b) Graph B (c) Graph C (d) Graph D 16.Given your answer to the previous question, what is the range of discount rates for which you should accept this project? (a) 10% only (b) Greater than 10% (c) Less than 10% (d) Always accept, except at 10% (e) Always reject 6 NPV NPV 10% Discount rate 10% Discount rate Graph A Graph B NPV NPV 10% Discount rate 10% Discount rate Gra ph C Graph D 7 Answer the next six questions using the following information: Boeing is a very pro? table aeroplane manufacturer. It is considering building a facility to manufacture 747s on 10,000 acres in the Nevada desert. It is not considering any other sites.To encourage Boeing to set up the facility, the local chamber of commerce has bought the land and has o? ered to rent it to Boeing at a rent of zero dollars per year. Assume that this â€Å"gift† has no tax implications for Boeing. If Boeing were to try to rent the land in the open market, the rent would be $1,500 per acre per year, payable at the end of each year. Building the factory will cost Boeing $800M (800 million dollars), of which $200M is payable today and $600M will be need to be paid as soon as the factory begins production. It will take one year to build the factory and start production.The IRS says that the $800M cost can be depreciated (straight-line to zero) over the ? rst twenty years in which the fa ctory produces aeroplanes. However, Boeing expects that the demand for the 747 will eventually dry up, and so they plan to scrap the plant after the ? rst ten years of production. They expect the scrap will be sold for $100M. Boeing expects the facility to produce and sell three Boeing 747 aeroplanes a year, with the ? rst batch ready by the end of year 2. Raw materials cost $100M per plane, and labour costs will be $120M a year. Labour costs will be paid at the end of the year in which they are incurred.Raw material will be paid for one year late (i. e. , raw material costs incurred in year 2 will be paid at the end of year 3). Sales will be paid for two years late. Inventory is always 0. The price Boeing will receive for each plane is uncertain. It might be as high as $500M, or as low as $200M. Most likely, the price will be $400M. On average, the price they expect to receive is $350M. Boeing’s corporate o? ce is located in Chicago. Currently the CEO and his sta? make 120 ? ights a year in the corporate jet. Each ? ight costs $200,000. If the Nevada facility is built, the CEO will have to make ten more ? ghts a year, starting in the ? rst year of production, with the cost per ? ight being the same. The cost of the ? ights is incurred at the end of year in which the ? ights are made. The salary of the CEO will remain ? xed at $12m per year. However, the corporate o? ce has decided to allocate $1m per year of this cost to the Nevada project, should it be built, starting at the end of year 2. This allocation has no tax implications. Boeing has another project which they wanted to start today. This project has a single after-tax cash in? ow of $20 million one year after it is started (and no other in? ws or out? ows). Building the factory in Nevada will occupy executive time, and mean that Boeing will have to delay starting this project until the Nevada factory begins production. Taxes are expected to be 30%. The discount rate is 8%. 8 17. When calculatin g cash ? ows for NPV, the revenue in the income statement at the end of each year of production will be (a) $600M (b) $1050M (c) $1200M (d) $1500M 18. The expected cash ? ow the ? rm obtains from scrapping the plant after ten years of production is (a) $70M (b) $90M (c) $100M (d) $190M (e) $280M 19.The cost that you will show in the income statement for each year of production will be: (a) $420M (b) $422M (c) $423M (d) $438M 20. What is the working capital at the end of the second year of production? (a) ? $300M (b) $750M (c) $1050M (d) $1800M 21. What is your net cash ? ow two years after the plant has stopped producing, that is, at the end of year 13? (a) $0 (b) $735M (c) $750M (d) $1050M (e) $1800M 9 22. The PV today of the opportunity cost from delaying the other project is: (a) $20M (b) $18. 52M (c) $17. 15M (d) $1. 37M 10