Im Bored- What your Child Is Really Telling You Essay Example for Free

Im Bored-What your Child Is Really Telling You Essay In the short exposition, I’m Bored: What Your Child is Really Telling You, by Linda Morgan, youngsters wherever are having issues with saying what they truly mean when they state they are exhausted. Regardless of whether at home or in school, when a kid says those two words, â€Å"I’m bored†, he might be needing parental consideration, redirection of school work, and course in finishing undertakings and exercises. In today’s world, innovation assumes control over a child’s additional time. Rather than going outside to play with companions or having a particular side interest, teenagers end up trapped in a Xbox or PC game. However after they have beaten the game or proceeded onward to something different they despite everything whine that they are â€Å"bored†. Yet, what does that truly mean? As per Dr. Danielle Kassow, when a kid expresses that they are uninterested in whatever they are doing or dealing with, it could imply that they just need their folks, educators, and childcare provider’s consideration. It’s normal for a kid to need the mindfulness of a grown-up. Being a child in the public arena today, bearing is as yet required by the parent; regardless of whether in school or not. Young people need that additional push so as to make up their own psyche about what they need to do straightaway or what they are keen on. So as to enable a youngster to decide, it could assist with asking them inquiries like â€Å"what’s your most loved hobby† or give the kid instructive activities to do. These inquiries and activities will invigorate their psyches and permit them to really focus on something. Dissimilar to an undertaking that is hands on, games on any sort of innovative gadget will permit them the opportunity to put their consideration on something. In the event that a kid gets back home from school and starts their schoolwork, says he is exhausted in the task, it could imply that he needs a redirection of school work. His assignments may not be as trying as they should be for him. He isn't getting occupied with his school work, in this manner he gets exhausted while doing or tuning in to his exercises. Likewise, it could imply that he needs a more clear pathway with respect to what he should begin on or how he should begin the schoolwork. Youngsters need a mentor, regardless of whether it’s the parent or the educator. Assist him with turning out to be inspired and less confounded regarding how or where he should begin. Cause his comprehension to grow a little more clear when pushing him toward the path to where he needs to begin. This â€Å"coach† persona will help to kid get a comprehension about how to format or diagram his ventures or assignments. It won't just give him a head start it will assist him with all the assignments he may experience some difficulty with later on. Now and again, a kid saying they are exhausted could imply that they are free and needs to arrange their own exercises. At the point when youths become involved with the innovative world, they dismiss how to depend on themselves to make their next movement. This makes them need the direction from the parent or instructor. While there are still kids that get themselves free, they may get exhausted in light of the fact that they donà ¢â‚¬â„¢t realize how to engage themselves. Children need to discover exercises that they can do all alone. Things like drawing, basic structure, or going outside to mingle or play with companions. Youngsters need an opportunity to be permitted to choose what they need to do, something that they can do. Giving them this time will help them reconnect with physical exercises and less mental exercises. At the point when children are getting their work done, and they appear to depend on their folks or instructors to an extreme, you could give them a brief period to themselves. So as to get them to think all alone without their parent saying â€Å"you aren’t doing this right† or â€Å"this isn't right do it once more, let them work the task with no interferences and in the end they will comprehend why they didn’t find the correct solution from the outset and how they found the right solution at long last. After they are done the parent or instructor could check their work and afterward mention to them what they got off-base or right. This is significant for the kid so they can have the option to learn all alone without requiring the assistance from the instructor or parent constantly. These little strategies will go to the watchman as a favorable position. Not exclusively is the kid taking part in the action, yet the person is getting a charge out of the procedure. It’s essential to comprehend what a youngster implies when they state they are exhausted so they can benefit from outside intervention. Regardless of whether it’s extreme to make sense of or there is a simple arrangement, at long last there will be an uncommon change in the youngster consideration aptitudes. Weariness is an agreeing scourge in today’s society due to all the innovation we depend on. Children don't should be presented to every one of these points of interest we have at a youthful age. Having the option to depend on themselves is significant in the beginning times of life. Albeit once in a while kids state those words a few guardians hate to hear â€Å"I’m Bored†, it could have a mind boggling importance to it. Kids may require consideration from the parent or instructor, redirection of their school work, and some heading in finishing tasks and assignments. There are numerous approaches to assist youngsters with falling ceaselessly from spending an excess of times playing PC games, or PlayStation games and permitting them to have the obligation of picking their own exercises. Helping them move the correct way in school work, regardless of whether they are not getting the test they need or basically requiring that additional assistance beginning a task will eventually positively affect their advancement. Free youngsters will require an opportunity to make sense of the right answer all alone. The watchman will likewise get a positive come about because of giving them that opportunity to address their issues. Kids are altogether extraordinar y, when they state they are exhausted, it could be something extreme or something exceptionally basic. It’s up to the parent or educator to choose what the following move is for the youngster.

Nuggets of Wisdom :: essays research papers

Chunks of Wisdom      My family and I regularly take get-aways throughout the late spring for unwinding, or to see family, etcetera. On one such excursion, I took in a significant exercise. Guardians were made to show their youngsters little chunks of good judgment, yet it is dependent upon the kids to tune in.      We were visiting the Central American nation of Honduras. It was a splendid, bright, and sweltering summer day. Taking a break from touring, and the warmth, we took shelter in a tropical style eatery for lunch. It was a two-story eatery over the sea. Along the dividers, there were excellent green foliage that stout, beautiful blossoms sprung from. Likewise, all through the café were wooden posts, painted blue, that loungers were held tight.      The server accompanied my family and I to our table on the subsequent floor. My folks sat at the table, yet I picked a close by lounger. The lounger was close to the open side of the eatery. As I lay there, I started to contemplate the sea. I looked down and looked as the waves undulated, broke, and collided with the shore. A salt-water smell penetrated through the eatery. A close by fan swayed to and fro, blowing an invigorating breeze over my face. Every one of these components made me unwind, and gradually I started to influence in the lounger.      Soon after I got in that agreeable position, the server conveyed the supper. My folks had requested fish, and had started snacking. Since I was not ravenous, I just arranged a beverage, which I reclaimed to the lounger to taste on. I started to influence, more vivaciously than previously, and I shut my eyes to appreciate the sounds. My dad gazed upward from his feast and looked as I swung to and fro. He raised an eyebrow, and with a flash of hilarious, astuteness in his eyes my dad stated, â€Å"David, that lounger is free. Rock excessively hard, and you will go flying.† obviously, I gave him no consideration. I was thirteen years of age, and multi year olds know it all.      Acting as a common youngster, I started to swing again in spite of my father’s notice. My mind was in another place, as I watched the waves, and the feathered creatures. How could something turn out badly when everything was so great? I didn't see the squeaking clamor the rope made as its bunch came lose. Nor did I understand what was occurring when my beverage hit the floor making the glass break with a stunning sound.

Competitive Rivalry

Competitive Rivalry INTRODUCTIONThe factor of competitive rivalry has significant impact on the competitive environment a company operates in because the degree of competitiveness has direct impact on the potential for profit that a company can expect. A highly competitive market may end up being detrimental to all companies involved, with lower profit margins and less ability to decide price points.A highly competitive market may act as a barrier to entry for new companies considering joining the fray. Since the profit potential is not high, there may be less incentive to invest in the market. On the other hand, low competition may make the market attractive to potential new entrants.Forms of Industry RivalryThe competitive pressure in an industry may manifest itself through a number of different tactics. These can include competition based on price, advertising wars, new products, etc. The rivalry may gain traction when a company feels pushed by a competitor or identifies an opportunity to grow its sh are of the market. Whatever the reason, the actions of one company will have an impact on competitors. In turn, they will take action to retaliate against these actions. This has the potential of turning into a cycle which may end up harming the industry as a whole.If the competition ends up being based on price, it can become very unstable and affect profit margins. On the other hand, advertising battles may end up raising the demand for a profit across the industry.FACTORS DETERMINING COMPETITIVE RIVALRY The last of Porter’s five forces deals with firms competing within the industry and the extent to which they exert pressure on each other. This pressure leads to limits on the profit potential of these firms. In industries where there is fierce competitive rivalry to contend with, there are efforts to gain the most profit and market share from each other. This battle can end up decreasing the potential for profit for all of the companies. © Entrepreneurial Insights based on the concept of Porters 5 ForcesIn this article we will look at 1) an introduction to competitive rivalry, 2) the factors determining competitive rivalry, 3) analyzing the intensity of rivalry, 4) the consumer benefits of competitive rivalry, 5) the challenges and opportunities for companies in a competitive market, and 6) an example of Canon  Inc.INTRODUCTIONThe factor of competitive rivalry has significant impact on the competitive environment a company operates in because the degree of competitiveness has dire ct impact on the potential for profit that a company can expect. A highly competitive market may end up being detrimental to all companies involved, with lower profit margins and less ability to decide price points.A highly competitive market may act as a barrier to entry for new companies considering joining the fray. Since the profit potential is not high, there may be less incentive to invest in the market. On the other hand, low competition may make the market attractive to potential new entrants.Forms of Industry RivalryThe competitive pressure in an industry may manifest itself through a number of different tactics. These can include competition based on price, advertising wars, new products, etc. The rivalry may gain traction when a company feels pushed by a competitor or identifies an opportunity to grow its share of the market. Whatever the reason, the actions of one company will have an impact on competitors. In turn, they will take action to retaliate against these action s. This has the potential of turning into a cycle which may end up harming the industry as a whole.If the competition ends up being based on price, it can become very unstable and affect profit margins. On the other hand, advertising battles may end up raising the demand for a profit across the industry.FACTORS DETERMINING COMPETITIVE RIVALRY © Entrepreneurial InsightsThe structure and nature of an industry may determine the nature of the competitive rivalry that may exist in it. Some of the factors that may make an industry competitive include:Multiple Equal Competitors: If an industry has numerous competitors who all operate at an equal level of product or service quality, then there is a higher threat of competition. Companies may feel the need to engage in more aggressive activities to gain a higher share of the market If they do not enjoy any sort of clear advantage over competitors.Sluggish Growth within the Industry: If the industry does not enjoy a rapid growth rate, then the only way for a company to increase its market share is to take it away from a competitor. There is also a higher degree of protectiveness towards any existing share in the market, as once lost, it may be hard to regain.Higher Fixed Costs: If fixed costs within an industry are higher, then there may be more pressure to produce at full capacit y in order to achieve economies of scale. In order to ensure that this stock is cleared, companies may guard their market share aggressively and also try to obtain more as well. In addition, to ensure that this stock is cleared, the company may have to sell at lower prices.Undifferentiated Product: If the main product of an industry is generic and there are no grounds to base differentiation on, then the products may be treated as a commodity. This means that consumer choice will be based on price and value for money. This will naturally lead to price based competition.Switching Costs: If there are little or no switching costs for a consumer then the industry may be more competitive. This happens often in undifferentiated industries or ones where the products are very similar in benefits, features and quality.Capacity Increases: If the need for economies of scale warrants an increase in production capacity, then there may be a brief disruption in the demand and supply of the market. This may result in overcapacity of products and price cutting to make sure products do not remain unsold.Diversity of Competition: If the industry is made of different types of companies who differ in their origins and strategies, then there may be diverse ways to do business. These alternate methods may change the nature of competition and the way of doing business.Strategic Focus: Often a company may have high stakes in ensuring that it stays in business over the long term. In this situation, the company may sacrifice short term profitability to ensure its long term presence in the market. These companies will focus foremost on maintaining and growing market share.Barriers to Exit: If there are barriers to exit within the industry, then companies with low profit and growth may also have to remain active. In these cases, there will be competitive pressure to stay relevant and earn profits by any means necessary. Some potential exit barriers may be the result of ownership of specia lized assets, fixed costs of exit and governmental regulations.ANALYZING INTENSITY OF RIVALRYWhile trying to assess whether there are likely to be high competitive pressures within an industry, a company can ask the following questions:Are there numerous competing firms in the industry?Are these competitors generally of an equal size in their operations?Do these competitors have similar shares in the market?Is the industry growing slowly or rapidly?Are fixed costs low or high?Are products differentiated or generic?Are there any switching costs?Is brand loyalty an important factor?Does any company have more brand loyalty than others?Are competitors diverse in their operations and strategies?Is there unused production capacity?Is there over production?Are there any barriers to exit?CONSUMER BENEFITS OF COMPETITIVE RIVALRYThough potentially detrimental to the profit potential of an industry, high levels of competition can benefit the consumer in a number of ways. Competition is often s ought after by regulators and consumers in order to create a strong and effective market. Through healthy competition, consumers can end up getting the best value for their money which they otherwise may not. Competition allows consumers a variety of choices in who provides the product or service that they are interested in.Competition encourages companies to innovate, utilize production capacity, reduce costs and increase efficiency. If done right, competition can help foster a productive economy.Potential Benefits of Competitive MarketsA competitive market offers many potential benefits including lower prices, economic growth, incentive to keep costs of production low, technological improvements and advancements, product variety, innovation, quality improvements, and the availability of more information allowing for more informed choices by consumers. Three  Main Benefits1. Innovation Faced with competitors, companies will seek to innovate in order to differentiate themselves from others and gain more consumers as well as market share. This benefits consumers by providing more choices and better quality of goods and services. In extreme cases, these innovations may lead to changes in society and lifestyles. The invention of cars, cellphones and personal computers are examples of innovations with wide-ranging impact.2. Lower Prices When there are low switching costs and a variety of choices, there is always the chance of a consumer moving to a competitor. To avoid this, companies will make efforts to reduce costs of doing business and offer the best possible prices to the customer. Along with the drop in prices, companies will also make efforts to better understand unmet consumer needs and work towards developing products and features to meet these needs.3. Economic GrowthCompetition also drives economic growth. In the technology industry, advancements in smartphones have led to growth in several world economies.CHALLENGES AND  OPPORTUNITIES FOR COMPANIES IN COMPETITIVE MARKETSOpportunitiesA company can choose to treat competition as a positive factor and use it to build a better and stronger business. If there is more than enough market share available, then there is a chance of a company becoming complacent and take the customer for granted. Customer service, product quality and innovation may also suffer. Here are some ways in which competition can benefit the business.Better Customer Service: When faced with the threat of more competition, it is a good idea to evaluate and appreciate all customers and figure out the best way to serve their needs. With customer loyalty secured, it will be easier to retain customers if a stronger or more aggressive competitor comes around.Innovation: When a market is served by multiple similar companies selling similar products, then it becomes necessary to focus on innovation. Innovation allows a company to stay ahead of trends and continue to serve customers proactively.A Focus on Strengths and Weak nesses: When trying to manage competition, a company’s own strengths and weaknesses are highlighted. This helps focus on the things that are being done well and allows a company to continue to do them better.A Focus on Key Customers: If a competitor is after a company’s share of the market, it becomes necessary for the company to identify and retain those customers that make up a larger chunk of the business. This means that the right people are paid attention and better ways are devised to fulfill their needs.Threat Identification: In dealing with competitors, a company learns to keep a vigilant eye on any plans, strategies, new technology or products that a competitor may introduce to the market and become a possible problem.Business and Market Growth: Competitive rivalry in an industry come up with new and innovative ways to serve customers. There is more inventive solutions and original ideas leading to a more exciting and growing market.Solutions to Industry Wide Problems: With more players in the market, there are also more ideas and more support for common issues and their solutions. Companies can be in a better position to negotiate with common suppliers, or a strong regulatory body.ChallengesAs expected, a highly competitive industry comes with its unique set of challenges. More competition can lead to marker saturation. This means that the supply in the market is either more than the demand or it is the same. A saturated market means both limited profits and limited growth.Higher Costs: The higher the competition, the more money needs to be spent on activities to make a company stand out in the crowd. This means more RD costs, higher quality products, innovation, new products, and consistent relationship building with customers.Low Customer Growth: More competition means that there is no new demand for a product and that all customers are being served by either one company or the other. The revenue being earned remains consistent with little chan ce of increase or access to new business. This limited profit means limited growth potential for the company.High Pressure to Grow: With fewer customers to compete for, a company may need to look outward and find new markets to serve or new products to offer. This means researching potential business ideas and new markets.Product Irrelevance: With more competition there may be less of a demand for a particular product. In order to move this inventory, a company may have to mark down prices to ensure sales. Profit is lost in such cases.EXAMPLE  CANON INC. © Wikimedia commons | Wordmark of CanonCanon is a multinational company that originated in Japan, with headquarters based in Ota, Tokyo. The company specializes primarily in manufacturing of imaging and optical products. This includes cameras, video cameras, photocopy machines, computer printers, and medical equipment.In 1937, Precision Optical Instruments laboratory was created by a group of people in Tokyo. The first cameras produced by the company used Nikkor lenses, produced by the company that later became Nikon. The company has always been focused on innovation. Some of its achievements have included the development of Japan’s first indirect X-ray camera in 1940. In 1958, the company introduced a field zoom lens for television broadcasting. In 1959, it introduced the Reflex Zoom 8 which was the first movie camera with a zoom lens in the world. In 1964, Canon launched the first Japanese made 10 key calculator.In the early 70s, the company launched a high end SLR camera and an FD lens range and the world’s first camera with an embedded micro-computer. In the 80s the company launched an inkjet printer and its Electro-Optical System or the EOS. In the 90s the company introduce the first camera with eye controlled AF and its first digital camera. The company launched its camcorder in the late 90s and an LCD projector in 2004.Digital Camera MarketThe company has manufactured and sold digital cameras since 1984. It launched the RC series and followed these with the PowerShot and Digital IXUS series’. Canon also introduced the EOS series of DSLRs which include both consumer and professional models.With the increasing trend to use cellphone cameras, there has been a fall in compact camera sales. This has been felt by Canon as well, with operating profits in the first quarter of 2013 falling by 34 percent.Competitive Rivalry in the Industry Over the years, there have been significant competition in the camera business. The big three companies that enjoy the most profits are Canon, Nikon and Sony. Other major players have included Pentax, Olympus, Kodak, Samsung, Panasonic and Casio.The market is mature and highly saturated. There is slow growth and high exit barriers. Since it is an industry that requires specialized expertise and assets as well as capital investments, it would not be easy for a company to leave the market. Each new product development is met and matched by competitors so that products by Nikon and Canon have little or no difference in their quality and features. Differentiation is based on brand loyalty alone.The industry structure is such that the few major players are innovators while the others settle to follow and serve a smaller share of the market. Bigger companies have maintained longer term success by the ability to leverage their technology into similar complimentary products and markets. For example, the launch of video cameras, printers and copiers are a good diversification of business.With the remaining m arket for compact cameras, there is little scope for brand loyalty as customers are focused on best value and quality for their money. Differentiation based on brand image is still stronger in the DSLR market as most buyers are professionals who value specific features and benefits.In general, the competition in the market for digital cameras in extremely high, intense and aggressive. There needs to be a constant focus on the environment and competitor moves as well as consistent product development and technological innovation.Image credit:  Wikimedia commons | Wordmark of Canon under public domain.

A Rose For Emily- Rhetorical Analysis. William Faulkner

A Rose for Emily- Rhetorical Analysis William Faulkner was an American writer from Oxford, Mississippi. He wrote short stories, plays, essays, and screenplays. He is mainly known for his creative imaginary stories that were based on Lafayette County, Mississippi where he spent most of his life. Faulkner is one of the most celebrated writers in American literature and especially Southern literature. He spent majority of his childhood years sitting around listening to his elders and family members telling stories that included war stories of the Civil war and slavery. â€Å"A Rose for Emily was his first story that was published in a major magazine called the Forum.† When the short story was first published, it didn’t do that well in the†¦show more content†¦In her mind she is wanting to find someone who she could spend the rest of her life with but Homer is just wanting a fling and not a commitment. This is something that the citizens of Jefferson will worry about, as they feel that they must look a fter Emily since her father passing. The townspeople are like her parents and feel like it is in their best interest to look after her. This could make the reader show sympathy for Emily, rather than disliking her. The writer also conveyed logos through the story. Faulkner used logos when he reveals Emily’s logic which is twisted in many ways. Emily’s worries that Homer would forsake her and this lead to a development of killing him. This was a reasonable progression. She figured that if she killed him she could keep his body and have him forever and being dead he would be there. Faulkner used a setting and time to show Emily had a hard time accepting change and moving on with her life. They story took place right after the Civil War. Most African Americans were loathed and discriminated but Emily was relived from her father. Money showed a social statement back then and Emily’s father had money. Since her father loaned the town money she had become a well appreciated woman even after his passing. In stated in the story, â€Å"she had chosen not to come out of the house and when the townspeople had saw her they seen a different Emily.† As stated in the bookShow MoreRelatedGoing Beyond The Meaning in A Rose for Emily by William Faulkner1031 Words   |  5 Pagesand justice. If the flag is flown half-staff it represents respect, mourning, or distress. In the story, A Rose for Emily, an elderly woman named Emily was controlled and kept away from finding love by her father her whole life. Since she was a Grierson, the townspeople never saw her as a human being. Although, she was just a person, the people saw her and her family as a tableau. Emily was known to be a stubborn woman in life. Once her father died, she didn’t believe her father was dead untilRead MoreA Rose for Emily by William Faulkner712 Words   |  3 Pagesunity. Symbolism in â€Å"A Rose for Emily† is use in a variety of ways for example Miss Emily she represent the monument and mental illness, mental illness because she killed her own husband.Another character that had symbolism is Homer Barron he represents more than just a simple character, he represents insensitivity because he dint care about another people. An explanation of characters and objects that we have seen in the short story â€Å"A Rose for Emily.† The character Emily herself is a symbol ofRead MoreLogical Reasoning189930 Words   |  760 PagesReasons ................................................................................................ 236 Deceiving with Loaded Language ................................................................................................... 238 Using Rhetorical Devices .................................................................................................................. 240 Review of Major Points .............................................................................................

Global Warming Is The Heating Of The Atmosphere - 870 Words

Global warming is the heating of the atmosphere through the increase or surplus of greenhouse gases. Acting as a blanket trapping heat that would normally escape the Earth. These greenhouse gases are a result of excessive burning of fossil fuels, to fuel our technological dependent lives. This results in an increase in Earth’s average temperature which causes the melting of the polar ice caps, rising sea levels,longer and more damaging wildfire seasons,more frequent and intense heat waves, heavier precipitation and flooding, decline in the Arctic sea ice extent, widespread retreat of Alpine glaciers,reduced snow cover in the Northern Hemisphere, ocean acidification, ocean temperatures rising and the possible deglacification of the Greenland and West Antarctic ice sheets. The IPCC (Intergovernmental Panel on Climate Change) have conducted and collected research on Global warming. Through observed temperature fluctuations from the beginning of the Consumer Revolution when these greenhouse gases were first becoming more used to now. In the beginning of the 20th century we used fossil fuels to power our automobiles and after the Consumer Revolution we used it for every little thing from toasting our bread to fueling our homes. Fossil fuels are so important to our lives as many things require gas or oil extract in order to be produced. Earth’s average temperature keeps increasing as we keep advancing with our technology. We are advancing with our research of green energyShow MoreRelatedEssay on Global Warming; Cause and Effect940 Words   |  4 PagesGlobal Warming Have you ever wondered what it would be like to go a whole winter without even seeing snow? 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Global Warming Is An Increase In The EarthS1026 Words   |  5 PagesGlobal Warming Global warming is an increase in the earth s average atmospheric temperature that causes corresponding changes in climate and that may result from the greenhouse effect.according to dictionary.com http://www.dictionary.com/browse/global-warming There are many different opinions and disputes that arise from this topic. Despite data that supports the thought of global warming enough so that it can be considered proven, many people still disagree with it and claim that there are alternativeRead MoreClimate Change Is An Important Issue That Concerns Humanity999 Words   |  4 Pagesin average global temperatures. Every day, the enhanced greenhouse effect continues to advance, which significantly influences Earth’s long-term climate. In addition, human activity is also contributing to the increase of global warming and is already leading to harmful consequences. 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For example if we consider forRead MoreHumans Are Causing Global Warming Essay1669 Words   |  7 PagesIn recent years, the controversial subject of global warming has been more predominantly brought to our attention. Is the threat of global warming real? Is it man-made or is this just a natural cycle of earth? Does it really affect earth’s inhabitants? Should action be taken against it? If so, what kind and to what extent? It cannot be only a coincidence that the alarmingly rapid climate change coincides perfectly with the increased amount of pollutants that humans release into the environment. TheRead MoreGlobal Warming Is A Threat Essay1533 Words   |  7 PagesGlobal warming has been a controversial issue since the first publication of glo bal warming, â€Å"Worlds in the Making,† by Svante Arrhenius in 1896. This topic is discussed in multiple areas of life, including politics, at the dinner table, and among scientists in a laboratory. The various viewpoints of individuals usually lead to a heated discussion on global warming, and sometimes ignites an intense argument. Through research and discussions with various people, I have come to the belief that global

Linguistic Reading Response Paper on “The Celtic Languages” Free Essays

It is interesting to note that the term ‘Celt’ is a linguistic term first mentioned in the writings of Greek and Roman ethnographers and historians (MacAulay, p. 2). My idea of the concept is that of a particular people with a distinct language who once inhabited Great Britain. We will write a custom essay sample on Linguistic Reading Response Paper on â€Å"The Celtic Languages† or any similar topic only for you Order Now It turns out that this language, generally known as Continental Celtic, has a range of dialects once spread out across the various peoples of Europe such as in Gaul and northern Italy, yet died out on the European continent a few centuries back. Celtic survived however, in the British Isles and in Ireland, which is quite a feat given the dominance of Latin and later English settlements. In terms of linguistic affinities, Celtic is recognized as an Indo-European language though it is of interest to note that experts regard it as having archaic features (MacAulay, p. 3), i.e. its lack of a fully developed infinitive, differentiation of gender in numerals 3 and 4, among others, sometimes attributed to its being a ‘peripheral’ language removed from an innovating center. Variations between the Celtic languages, i.e. Continental and Insular, appear to be a convoluted matter best left to linguists. Ultimately the evolved form of the modern Celtic languages has special typological features which are both archaic (conservative) and innovative. Locative structures used to express location and possession are utilized to express aspectual modes, which in turn cover the range of progressive, prospective and perfective aspects in Scottish Gaelic, Welsh, and optionally in British (MacAulay, p. 6). On the other hand, Breton and Irish have innovated based on their majority contact languages French and English, to develop new perfective constructions, as contact with these languages is a primary accelerating source of innovation in Celtic tongues. Thus, languages continue to evolve as its speakers, in the course of their interaction with those of other cultures, are exposed to foreign influences in the on-going social interface between peoples and nations in an increasingly globalizing world. Linguistic Response Paper on the â€Å"Creole Continuum† The so-called ‘Creole continuum‘ evolve in situations in which a creole coexists with its lexical source language and there is social motivation for creole speakers to acquire the standard so that the speech of individuals takes on features of the latter – or avoids features of the former – to varying degrees (p. 50). Considering that linguists for a long time were unsure on how to classify varieties with both creole and non-creole features, particularly the English-based varieties of the West Indies, it appears significant to consider that among the many Negro slaves in different parts of America, the jargon upon becoming the only language of the subject group, is a creolized language considered inferior to the masters’ speech yet nonetheless subject to constant leveling-out and improvement in the direction of the latter (Bloomfield, 1933, p. 474). Linguists such as DeCamp attempted to work out a theoretical model that could deal with variation in a sufficiently rigorous manner, in reaction to the transformational generative grammar coming to dominate American linguistics. The general usefulness of the continuum model gained wide acceptance by the mid-1970s, yet it is true that it fails to explain why Atlantic creoles in particular share so many structural features not found in their different lexical source languages (p. 58). Thus the shift back into a universalist theory giving primacy to language acquisition. Chomsky (1965) had proposed that children were born with a predisposition to recognize certain universal properties of language that facilitated their acquisition of the language of their particular speech community (p. 58). Yet such an assertion is still open to scholarly debate and argumentation. It would thus appear that the answer to the creole question remains elusive, despite advances in linguistic studies and theory. References MacAulay, Donald. â€Å"The Celtic languages: an overview† How to cite Linguistic Reading Response Paper on â€Å"The Celtic Languages†, Essay examples

Legallization Of Marijuana (Anti) Essays - Cannabis, Herbalism

Legallization Of Marijuana (Anti) Drug use is becoming more common today than in recent years. Almost anywhere we look, we can find some relation to drugs or drug paraphernalia. In fact, 63% of you stated in my survey that you had smoked marijuana in the past. That number is scary, since 81% of you are under 25 years of age and have your whole lives ahead of you. Some of you may be thinking So What Bill Clinton has admitted smoking marijuana, and he is President. Well, that surely is not a good attitude to have considering the damage that marijuana may cause to your body. Sure, many of you may not change your lifestyle after today, but I hope to make you think of what you may be getting yourself in to. This afternoon I will give you both sides of the issue. I will try to persuade you to stay away from marijuana in turning you against this dangerous drug. Many supporters of marijuana claim that hemp can be a very resourceful plant. Hemp is considered to contain less than one percent tetrahydrocannabinols (THC) (Pluff 1). THC is the psychoactive chemical found in marijuana. Hemp can be confused with marijuana and considered the same, but do not let this fool you. Marijuana comes from the flowers or buds of the hemp plant. These buds are what contains the THC and gives the user the high effect (Pluff 1). Other nations such as Europe have registered varieties of hemp seeds that contain less than .03 percent of THC including the buds (Pluff 1). Now that you know what hemp is, lets look at its uses. Hemp fiber can be turned in to rope, canvas, and paper, and this is only a few of the uses. The rope that is made with hemp is said to be resistant to both fresh water and salt water. It is also considered better than most conventional rope by its strength and holding power. Another product that can be made from hemp is canvas. This canvas is very useful in making tents, sails, and even the covers on early settlers' wagons. Like the rope, the canvas also stands up well against water, and ninety percent of ship's sails were made of hemp canvas before the nineteenth century. The last product I am going to talk about is hemp paper. This paper is much softer than conventional paper, and it is stated that, one acre of hemp can replace four acres of forest (Pluff 2). This paper also does not yellow or crumble with age, a common complaint with conventional paper (Pluff 1). You may be wondering why such a useful plant is illegal, well let me tell you the other side of the story. Marijuana is said to be useful in the medical field as a cure for some disease. It is also an argument that smoking marijuana does not cause any side affects. I will prove this to be untrue, and a myth of society. The first claim by the supporters of marijuana is for medical reasons. Through much research doctors have found that marijuana may be a treatment for such illnesses as glaucoma, cancer, and acquired immune deficiency syndrome (AIDS). In fact, Proposition 215 just passed in California and Arizona giving citizens the right to smoke marijuana for medical reasons (Medical 1). One thing that is overlooked with this is that marijuana is not a cure, but a relief from the pain suffered by these citizens. If it is a relief from pain the sufferer is looking for, there are many other options to consider before choosing something as dangerous as marijuana. It only takes a little common sense to figure that something that is considered illegal by the Federal Government could not be used as a cure for any illness. Wisconsin lists marijuana under Schedule I of the Uniformed Controlled Substance Act. This means that any drugs under Schedule I, including marijuana, are not useful in curing any known illness. Schedule I is also where all the most serious drugs are listed. This puts marijuana in the same class with heroin and cocaine. Another problem with marijuana is the affects on the male and female body. One way

Essay Sample on Banking and Finance Interest Rate Risk

Essay Sample on Banking and Finance Interest Rate Risk INTEREST RATE RISK IN THE BANKING BOOK: EMBEDDED OPTIONS IN RESIDENTIAL MORTGAGES Interest rate risk is associated with the fluctuations in the interest rates. Interest rate risk therefore can be defined as the change in the portfolio value that a bank obtains as a result of the unexpected changes in the interest rates. The interest rate risk can also be termed as one of the ways that an individual or the bank can make profits and the value of the shareholder can gain therefore banks accept interest rate risk as a normal part of their banking business. However, for banks taking an excessive interest rate risk could threaten banks earnings and capital base. This is because the fluctuations in the rate of interest normally alter with the earnings of the bank. This means that it changes its net interest income, the level of other incomes that are associated with the interest rate and operating expenses. This will in overall alters the value of the assets as well as liabilities. Often change when interest rates changes. Furthermore interest rate risk affects a bank ea rnings directly as, there may be changes on active and passive interest rates plus changes on market values of assets and liabilities as well as indirectly, due to changes on business volumes. Thus, to effectively manage the risks is very much essential in order to ensure that the earnings and the value of the bank is maintained in its expected position or increases as required. Therefore, banks typically split interest rate risk into two components: traded interest rate risk and non-traded interest rate risk. The non-traded interest rate risk is often referred to as interest rate risk on the balance sheet or in the banking book and therefore includes all commercial banking activities in the banking sector. Both refer to the potential impact of adverse movements in interest rates but they follow different accounting rules. The underlying principle for separating these portfolios is that while the banking portfolio follows traditional accounting rules of accrued interest income and accrued interest costs, trading on the other hand relies on market values (market-to-market) of transactions. In short the banking book is generally associated to instruments included in a banks commercial portfolio, where exposures are assumed to be non-tradable and held to maturity. All assets and liabilities generate accrued revenues and costs, of which a conspicuous amount is interest rate driven. Accordingly, there are maturity mismatches between assets and liabilities that can lead to excesses or deficits of funds as well as mismatches between interest rate positions, fixed or variable. Banks manage such mismatches through financial transactions (on the capital markets) either by investing excess funds or assuming long-term debt by other banks. There are many studies on interest rate risk on banking accounts including that of Brighouse Hontoir (2008) which on his study of interest rate risk on banking accounts, determines the banking book excluding investment securities such as bonds and stocks and focusing mainly on loans on the assets side and deposits, financial debentures on the l iabilities side. The focus of this work is mainly on the major source of market risk for commercial banks which is the risk associated with the interest rate in the banking books. Therefore it includes the measurement of the interest rates risks, leaving out the trading book, overcomes the problem of double counting arising from the presence of a market risk requirement for interest rate sensitive positions held in the trading book. Nonetheless, the interest rate risk exposure of the trading book may compensate partially the exposure of the banking book. Most importantly, the banking book generates liquidity and interest rate risks, on which Assets and Liability Management (ALM) focuses. Interest Rate Risk Components There are a number of angles from where interest rate risk exposure can be identified. The primary components the risks that the banks can face are in many categories. These components will therefore include the yield curve risk, the optionality that is the main topic of discussion here, the re-pricing risk and finally the basis risk. The optionality, which will be the object of our study, represents that type of risk that will be faced by the banks from the options that are embedded in the bank’s assets. In our case we will mainly focus on the residential mortgages. Re-pricing risk: A banks income may vary due to different re-pricing periods that will results to assets that are yield sensitive. Considered to be the more often discussed, this risk also is due to the difference in the timings of the maturity that relates to the fixed rate positions. Accordingly, unanticipated fluctuations on banks income and economic value can occur in relation to the variation in the interest rates. As a result, the pricing mismatch between the assets and liabilities are the main reason for the interest rate risk. This is because the changes in the yield curve will impact more quickly on interest paid on liabilities than the interest that is usually earned on the assets. This is as a result of banks long term lending and short term borrowing. Yield curve risk: Another source of interest rate risk is the slope of the yield curve, which could have differential effects on banks assets and liabilities (Covello Hazelgren, 2005). The financing of short and long-term assets with medium-term liabilities exposes the bank to a possible increase curvature of the yield curve. The basis risk: Furthermore, the interest rate risk exposure can be magnified when imperfect correlation in the adjustment across different interest rate markets of the yields earned and paid, is thus introduced. Hence, even in the relation that is there among the assets, the liabilities that accrue and the off-balance-sheet instruments of similar maturities or re-pricing frequencies, income may fluctuate due to a lack of co-movement of rates. For instance, a financial institution can decide to fund a loan whose payments are based on the US Treasury bill rate, with a deposit that re-prices based on Libor rates, exposing itself to the risk that can result henceforth in the changes that are not expected between two index rates. Optionality: Banks are subject to interest rate risk through the use of instruments incorporating embedded options which can drive to loan refinancing or early deposit withdrawal. This may cause an unexpected change in cash flows and asset values for the financial institution. Embedded option risk or optionality is the risk that is caused by the options that are normally embedded in many banks assets and liabilities and also the off-balance-sheet portfolios. An illustration is a mortgage loan in addition to other security instruments such as the bonds that may either have the call option or the put option or both. Therefore proper management is required to avoid the risks that are associated with it . Therefore optionality is considered to be an increasingly important source of interest rate risk. The Basel Committee on Banking Supervision strongly recommends that a bank engaging in residential fixed rate mortgage lending, should be aware of the optionality features of the risk embedded in many mortgage products that allow the borrower to prepay the loan at any time with little, if any, penalty (Hussain, 2000). Interest Rate Risk Assessing Models The interest rate risk is a very significant risk in the banking books in that the interest rate risk will merit the support for capital Although credit risk is likely to remain the dominant risk to banks, the emergence of new financial products when considered in the context of growing competition in financial services has led to a significant increase of interest rate risk in commercial banking. For this purpose, ALM is the unit in charge of managing the interest rate risk as well as the liquidity of the bank, focusing essentially on the commercial banking pole. ALM policies use two target variables in order to assess interest rate risk exposure: the interest income determined through the earnings perspective and the net present value of assets minus liabilities through the economic value perspective. The Earnings Perspective In the earnings approach, it is concerned with the changes that will affect the earnings generally. It therefore deals with the impact analysis of changes in the interest rates that will affect the earnings of the bank in overall. Thus, the earnings perspective explains the sensitivity of earnings in the short-term to interest rate movements, which in the banking book is captured by accrual accounting and measures such as Earnings at Risk (EaR). In other words, the focus is on a traditional banking book where exposures are not market-to-market and interest rate risk arises due to volatility in the banks net interest income, over a given time horizon. Although banks usually adopt this perspective due to the immediate impact interest rate movements have on reported earnings through this variable and also due to the threat, volatility of earnings can pose to capital adequacy, this approach does not completely capture the impact of interest rate shocks on the market value of long term positions. Consequently some banks have moved towards an economic value orientation. THE ECONOMIC VALUE PERSPECTIVE Fluctuations in market interest rates can also impact on the bank’s economic valued assets, the liabilities therein and also the off-balance-sheet positions. Therefore, the sensitivity of the banks interest rate movements is a particularly important consideration for shareholders, management and supervisors alike. This approach examines the economic value of the bank as the value of the banks expected net cash flow today that is its present value. This is in short the expected cash flows plus the expected net of the cash flows on the off-balance-sheet position and finally minus the expected payments that relate to the liabilities. Although the economic value perspective is more challenging to conduct due to assumptions concerning the behaviour of long-term instruments such as those with embedded options, it provides a more complete outlook of the potential long-term effects of interest rate volatility than is offered by the earnings perspective. The latter examines changes in near term earnings, hence may not provide an accurate sensitivity measure of a banks overall positions to interest rate movements. In the banking books, the risk in interest rates is captured by accrual accounting and measures such as earnings at risk (EaR), the approach banks are lately attracted to, due to its simple implementation. Since EaR relies on existing data, as income that are always available, it provides a quick and easy overview of risks. However the EaR does not measure the economic value effects resulting from interest rate fluctuations but only looks at the impact of the shocks on the cash flows generated by the portfolio (i.e. a banks net interest income). Moreover, the major drawback of this simple approach is that does not relate the adverse deviation of earnings to the underlying risks because aggregates the effects of all risks. The choice of techniques used in assessing interest rate risk depends on the banks orientation towards either economic value or earnings and also of the type of business model pursued by the bank. For instance, commercial lending or residential mortgage lending, are managed by a present value approach (economic value). Nonetheless the economic value of a bank should be equivalent to the discounted sum of all future earnings in a risk neutral world therefore these two approaches are consistent and both can be useful. Therefore, a focus on cash flows may suggest impending liquidity problems as cash flows drop and alternatively, a sharp decline in economic value may imply that the bank is insolvent, even if operations continue to produce cash flows in the near term (Joseph, 2006). In the financial field, the value of any asset today is denoted as the present value of the asset and it the value of the cash flows today that are to be obtained in future. Therefore in calculating the present value, there is a discount rate to be used and the cash flows expected in future have to be estimated. Therefore the most challenging issue is to determine the appropriate discount rate to be used and the prediction of the expected cash flows in future which are usually complicated by factors such as the options embedded in the assets and liabilities. The liabilities include the deposits in the banks which are assets to the client, the assets includes loans that are liabilities to those taking up the loans. Therefore deposits and loans are some of the assets and liabilities that contain the embedded options. An embedded option is one of the components of securities such as the financial bond security, the mortgage security where one of the party or in particular the issuer has the well defined right to take any action against the counter party. Therefore this will complicate the estimation of the cash flows and the interest rates. In fact, there are a number of options that can be embedded into the bonds such as; the puttable bond where there is the put option that is a contract that allows the owner the right but not the obligation to sell a specified amount of the security, callable bond where there is the call option that is a contract that gives the investor the ultimate right to buy a stock, bond or any other security however the investor does not have the obligation to buy the stock, bond or any other security, the convertible bond that can convert into common stocks and others. For example, a five-year fixed-rate deposit with a financial institution containing an American put option is a bond that the investor has the right to put back to the institution at any time. Similarly, prepayment privileges on loans and mortgages are call options on bonds. A loan commitment made by a bank or another financial institution is a put option on a bond, giving the borrower the right to sell (put) the bond back for its face value any time within the life of the mortgage (Levinson, 2009). In practice, banks will generally have a mix of all these types of interest rate risks, with the effects potentially offsetting or reinforcing one another. It is the complexity of the resulting combination of factors that makes interest rate risk difficult to manage, asserts English (2002) in his study. However he concludes that is improbable that interest rate movements can threaten the stability of a banking system. EVALUATION PROCESS The valuations of the securities are done using different approaches such as the Black Scholes model for bonds and other approaches where other securities that are embedded are priced similarly. Therefore to properly value debts with embedded options, one has to create a model that will take into account the probability that any of the options can be exercised also with the behaviour of the borrowers to determine when they will exercise the options. This can easily be illustrated using the options in the residential mortgages by implementing a straight forward valuation model. In addition, the mortgage interest has also decreased encouraging the use of mortgages. When the current mortgage rates are lower on an outstanding mortgage, the benefits of refinancing are thereby enhanced. Mortgage loan are usually payable monthly and the instalments therein are usually due on the first, seventh, fourteenth or twenty-first calendar day of each month. In addition, each mortgage loan has a repayment schedule which is characterized by the instalments consisting of the payments of interest calculated on the outstanding loan balance and the repayment of the mortgage loan that is the principal portion of the amortization of the mortgage loan (McDowell, 2010). The higher the interest payments, the lower the principal portion repaid and the lower the interest, the higher the principal loan repayment since the instalments amount are fixed. Mortgagors always have the option to either fully finance the loan before the maturity date or to partially repay the loans before the maturity dates. For the mortgagors, this will depend on their views about the possible opportunities that are there of refinancing the loan. This is because when the mortgagors have acquired the loan and the rates of interest are lower on the outstanding mortgage, the benefits of refinancing the loan are much higher. Normally, the benefits to the borrower who is holding a long-term fixed rate loan is the pay-off of the option under various interest rate levels which is determined as the time profile of the differential annuities savings after and before exercising of the option. Also the benefits to the borrower can be seen as the present value of these cash savings at the date of renegotiation that is when repaying the loan and contracting a new loan at a lower rate, with the same bank (Anderson Kerr, 2001). Therefore, these loans are usually unexpe ctedly re-priced. The uncertainty of the borrowers time of payment of the loan by the lender such as prepayment of the loan by the borrower is quite a big issue to the lender in order to ensure that the proceedings go as expected. The lender therefore introduces the cash flow and the asset value uncertainty because to them the benefits that are there to a borrower are what make up the cost to them (Bragg, 2006). It is clear that the banks are there to make profits rather than losses and therefore this can be enhanced by ensuring the income they get for example from the loan interest far exceeds the expenses they will have to incur in lending out there money. If the mortgage rates decline, the individuals will refinance their high fixed-rate or the variable-rate loans to lower fixed-rates loans, the results being margin deterioration for banks. Even though there will be increase in the cash inflow from the accelerated loan run-off and the refinancing fees that will be charged by the banks, in the long term view the cash flows from the loan run-off will decrease since the replacing of the mortgage will carry a lower rate than the original mortgage. Theoretically however, the losses can be limited by making the customers pay for the option that they can exercise which is in short determining the value that the customers should pay to compensate the additional cost of options that the banks will have to bear. To the borrower, even though the prepayments usually generates a cost to them which is the penalty on the outstanding balance imposed to them, this cost does not at any point offset the benefits that arises by the borrower opting to borrow at a lower interest rates. This is because in the long term view, the lower borrowing interest rates will be advantageous to the borrower compared to the cost there will have to bare for exercising the option and the for refinancing. In addition, embedded option risk is expected to be particularly important for regional and possibly super-regional banks rather than money-centre banks due to the difference in asset-liability composition and alternative hedging opportunities. Money-centre banks participate in mortgage securitization to a greater extent than regional and super-regional banks in addition to having lower levels of mortgage loans. Thus they are expected to have a lower level of embedded option risk (Brighouse Hontoir, 2008). However, if prepayments penalty of the borrower are eliminated or the closing stocks are reduced, the likelihood that the mortgage will be refinanced increases since the overall cost associated with the refinancing will have been reduced. The other way can also be to hedge the option risk using caps and floors and instead pay the cost of hedging the risk which is lower in the overall overview. The risk of the decreasing interest rates can be hedged by use of the floor that ensures there is a minimum fixed return even though the rate of the new loan is lower or by using caps where it is one of the methods of hedging risks that are guaranteed on the insurance contracts where there is a maximum value on the rate guaranteed to the customers in case of a rise in interest rates. Therefore, hedging is one of the risk management tools that are used in controlling the loss associated with the risks in the fluctuations of the prices of the banks interest rates (Dickson, 2006). It is basically the transfer of risks and not necessarily buying the insurance policies. Therefore because of the option that is available in a fixed-rate home mortgage, it is known as a callable bond where the payments are normally made by the borrower to a bank or another financial institution. A callable bond is that type of a bond that gives the issuer of the bond the privileges of redeeming the bond at some point before the maturity of the bond. Therefore the issuer always has a right although not the obligation to buy back the bonds issued on the call date at a defined call price at that time. The call price is usually higher than the par value of the bond and the issue price and usually, there is a substantial call premium. McDowell (2010) presents a mortgage pricing model that fully specifies all borrowers options with respect to default, since mortgage pricing models recognize two explicit options embedded in mortgage contracts, the right to default and the right to prepay. Regarding the latter, they evaluate a model containing two sources of uncertainty, interest rates and house prices. The sensitivity analysis conducted assuming a mortgage term of 30 years, revealed an increase in the probability of prepayment while increasing interest rate volatility, holding all else constant. This is pretty straightforward, as higher interest rate volatility creates greater opportunities for interest rate declines to result in refinancing opportunities. If there is a decline in the market rate of interest by the time of the call date, the issuer will therefore opt to refinance the debt at a cheaper level since the issuer pays the option in form of a higher coupon rate. The mortgages are a good example of callable bonds. The mortgages are usually fixed rate form of bonds. If the rates go down, a lot of home owners will refinance the mortgages. This will become a loss to the bank and advantageous to the house owners. Therefore, in general, the mortgage is usually embedded with the call option. In practise therefore, the mortgagors is treated as formal call option, exercisable at any time and also at par. With the high change in the mortgage rates and the market based interest rate, the borrower can thereby determine the value of the refinancing option in advance and the comparisons are made to the attainable savings. Therefore the bonds such as the mortgage should be refunded only if the savings from the option exercise made represent close to 100% of the option value occurring when the rates are sufficiently low (McGrath, 2006). However, at 100% efficiency, the expected cost of waiting for further interest rate declines exceeds the cost of the new mortgage; the financially sophisticated borrowers will trigger refinancing as soon as the efficiency reaches 100% (McGrath, 2006). VALUING A CALLABLE BOND According to McDowell (2010), a callable bond is the same as a fixed rate home mortgage and the payments that are made by the borrower go to the bank and other financial institutions until the borrower decides to call the bond. A call option can be exercised as soon as the market value of the bond is higher than the value of the original bond as a result of the bond interest rates declining. The price known as the exercise price is also termed as the value of the original loan that the borrower could decide at any time to stop making the payments by paying it off is denoted as. The interest rates and the bond value are correlated, whereby a decrease in the interest rates will cause an increase in the bond value and an increase in the interest rate will decrease the bond value. If the interest rates decrease, the bond value will increase and there will be more money in the call option whereby the price will be denoted as at time t. to calculate the price, , Where: The market value of the remaining payments at date The mortgage at date The option price (not-exercised) at date Assuming the mortgage was a one factor model, the there is a correlation between the zero coupon bonds, interest rates and the prices. In addition, the zero coupon bond will increase in their price as the interest rates decreases and the zero coupon bonds will decrease as the interest rates increases. This means that the coupon bonds and the interest rates have a negative relationship. Exercising an American call option is not advisable especially before the expiration of a dividend paying asset; however there are exceptions to these. The exceptions are when the dividends or monthly payments to the credit institution and it will be appropriate to exercise the option at a time that is immediately before the final ex dividend rate. For example, assuming the ?t is 0.25 years and the market prices for three months is USD 98.48 and USD 96.96, while the implied volatility which has an expiry of 6 months is 15%, we would first solve for r10 : 98.48 = 100 = 100 1+ r10 ?t 1+0.25 r10 Therefore the three month yield becomes 0.0617 For the six months Treasury bill, the average discounted value for the six months all over the path would therefore include a second step: 96.96 = 1 * Â « 1 + 1 *100 1+ r10 ?t 1+ r20 ?t 1+ r21 ?t The right hand side is the discount factor for period one, while the second factor is the average discount factor. The evaluation of a callable bond is a process. First and foremost one has to determine the monthly payments and the outstanding mortgage payments. That is the payments that are yet to be made between the day of the analysis and the date of the expiration of the mortgage loan. This is the same as coming up with the payment schedule of the loan outstanding. Using the BDT approach, an interest rate tree is build taking into consideration the mortgage per yield curve and the volatility of the curve. At each node in the tree, the values are compared with each other whereby the value of the existing mortgage is compared against that of a newly financed mortgage. The newly financed mortgage is calculated as the par plus the refinancing costs of the callable bond. If the new mortgage has a lower value, then the value of the existing mortgage is replaced at the node otherwise, no replacements are made. Comparison of the intrinsic and the time value of the option is done by working backwards whereby we will start with the final payments of the residential loan and the time value of the prepayment call option at each node (Dickson, 2006). Assessment is done at each node of the tree, the option pay off. The value of the American call option at a specific date is calculated by working backwards through the lattice. Finally, the market value of the callable bond is measured as the difference between the values discounted. However, we would need to consider if the date that corresponds to a node is the call date. If it is, then the bond price in the future of the node is more than the call price. We would therefore have to reset the price to a call price. This option available to the borrowers has motivated them into obtaining a mortgage. This is because if the mortgages were repayable at their market value instead, the borrowers would instead have no motive to refinance the loan and therefore they will perceive the mortgages to be an unfair deal to them. When considering a fixed rate mortgage, the refinancing ideas are more or less the same. In short, with the decrease in the interest rates, the borrower will always have the right to benefit permanently and in the same cases have the rights to be protected from increase in the interest rates. In this case however, the refinancing would not involve the costly process of re-qualifying the borrower, reappraising the property and paying a variety of loan fees and taxes. THE EVALUATION OF THE PREPAYMENT OPTION Home mortgage refinancing activity has grown at very high levels during the last several years since 1990 and is an important economic activity that has cropped up. Therefore, the ability to forecast when refinancing occurs, it is of interest to managers of lending institutions and the borrowers themselves. We assume following (2006) that mortgage holders minimize the market value of their mortgage liabilities. They own a call option that gives them the right to receive an amount equal to each of the remaining mortgage payments in exchange for payment of the remaining principal plus any applicable transaction costs. The mortgage holder has a transaction cost Xi associated with prepayment, representing the fraction of the remaining principal balance that the mortgage holder must pay if he or she decides to prepay. The following steps would be applicable for measuring the impact that the gradient of the interest rate term curve; the volatility of the natural logarithm of the short interest rate; the credit spread width and the transaction costs level has on the callable bond. Inputting: this would require one to collect information for input. The two main sources are the provider Reutersand the interest rate term structure in terms of the short rate volatility. The information collected should be relevant and ensures timeliness that is the information should be up to date. In addition there is the developing of a binomial lattice tree by generating the algorithm using the BDT approach; from here we can compose the algorithm so as to know the lattice structure. The parameters are then estimated so as to know of the short rate dynamics. This is where the use of retours comes in so as to estimate the input parameters for the BDT lattice structure. From these we can describe the dynamics in the stochastic of the interest rates. Using the American call option, with a three year fixed mortgage then the amount of debt would equal to 1,000,000 Euros with payments made in every quarter. The payment schedule is important since it identifies the sequence of each payment between the date of analysis and the mortgage contract. The transaction costs level help to identify the strike prices of the call option. The final step involves getting the short term interest rates by going back to the previous steps, two and three. To get the dynamics of obtaining the cash flow’s present value, a structure known as the lattice structure has to be constructed with the cash flow series of the mortgage and credit spread. To identify the price of the prepayment option, we would use the cash flows and the strike prices. The market value of the loan (bond) and the prepayment option are both used at the date of analysis. The market value of the mortgage is the price of the bond less the prepayment option. In conclusion, when the short term structure is independent an increase in the volatility would cause an increase in the call option which would result to a decrease in the mortgage market value. If the positive gradient decreases, the negative gradient would result to a price increase. Therefore the prepayment option prices signify volatility changes with respect to the mortgage market value. The credit spread is related to the prepayment option price since it is a decreasing function. With high volatility levels, then the price sensitivity is high as well (Bragg, 2006). The transaction cost and the prepayment option price is negatively related. Considering that transaction costs exist, if the volatility increases the mortgage market value will decrease as well. EVALUATING THE OPTION ADJUSTED SPREAD: The binomial tree and the option adjusted spread can be used to evaluate the adjusted spread. The option adjusted spread is the same as the binomial tree only that there is a constant amount that is added to or subtracted at each rate so that the end value is the actual market price. The amount that is constantly added is known as the option adjusted spread value. The two options may conflict when it comes to the credit risk of the issuers, the liquidity risk that is exhibited by the markets and the different tax status payments. A callable security always yields more than a non callable issue. The differences in the nominal yields are eliminated by the OAS option. It is useful and increasingly popular to quantify the spread between two rate structures. One structure is the binomial tree, appropriately calibrated to give a theoretical price. The other structure is the same tree but with a constant amount added to (subtracted from) each rate, such that the resulting value of the bond is the actual market price. The constant amount added (subtracted) is termed the option adjusted spread (OAS). The on any two financial instruments may differ due to differences in: credit risk of the issuers’ liquidity risk exhibited by the markets in which the instruments are traded differential tax status of payments made on the issues and optionality. For instance, the yield on a BB-rated straight corporate bond will exceed that on a straight treasury issue due to credit risk, whereas the yield on a straight municipal bond will be less than that n a similarly rated straight industrial bond due to tax differences. The yield on a callable security will exceed that on another wise identical non callable issue. The OAS removes such differences from the nominal yields of two financial instruments, hence the term, option-adjusted. Thus the OAS reflects differences only in credit risk, taxability and liquidity risk. The authors illustrate this by supposing that the benchmark interest tree is for an on the run treasury issue, and calculate the theoretical price of a BB-rated, callable corporate issue using this structure. Not surprisingly, they find that the market price is substantially below the theoretical value, thus the rates that would deliver a price equal to market value would be greater than the benchmark, say by 210 basis points. Assuming we have priced the callable corporate issue taking the call feature carefully into account at each node, then the 210 basis point spread is option adjusted. In this case the spread represents differences in credit risk between the corporate issuer and the Treasury Department, and possibly differences in liquidity between the corporate and government bond markets. In conclusion therefore, in order to evaluate the callable bond, we will need to adopt one of the commonly used steps in order to be successful in the process. Generally, in order to find the price of any bond we must determine the cash flows and discount them at an appropriate rate. Once weve grown and calibrated our BDT interest-rate tree, we may then price these securities by inserting cash flows at various nodes reflecting option payoffs. By then averaging and discounting, we can price a security with all of its option features taken into account. First and foremost for each payment date, we will determine the payment schedule of the residential loan that is the mortgage that one is working on. The payment schedule is revised from the date of payment to the day that the mortgage contract comes to expiration. Secondly, we will build an interest rate tree from the BDT model as seen earlier. The model should be build considering a bullet mortgage par yield curve and the volatility that is calibrated to the data. The third step is to compute the value of the mortgage at each node. This is done using the back induction starting from the final scheduled payments. At each node, the value of the existing mortgage is compared with the value of a newly refinanced mortgage. The newly refinanced mortgage is assumed to be par value plus the refinancing costs. Therefore the value of the existing mortgage will be replaced at the node only if the mortgage has a lower value than the initial value. Next, we determine, starting with the final scheduled payments of the residential loan, the time value of the prepayments call option at each node and then we work backwards. At this point, we will compare the intrinsic and the time value of the option. In the final step, we will access the option pay off at each node of the tree. We will continue working backwards through the lattice while determining the value of the American call option at the date of analysis that is the first node of the lattice. In fact, using numerical procedures, Chen et al. (2009) demonstrate how risk factors, such as interest rate volatility, house value return volatility, the loan to value ratio, and prepayment penalties, impact the value of a fixed-rate mortgage. In their numerical approximation, they consider a callable and default fixed-rate mortgage, including prepayment penalties. They employ an option-based approach which is derived from the contingent claims analysis of Cox, Ingersoll and Ross (1985), which models derivative securities based on a partial differential equation. The results show that the mortgage value is lower to the lender and greater to the borrower than the value of an equivalent option free mortgage, even at origination Of course actual mortgagors prepay for a variety of reasons, not just because they want to refinance the same principal when interest rates drop. For example, some might choose to keep the principal amount unchanged while taking advantage of lower mortgage rates by paying the same monthly coupon amount as before, thereby paying off the loan more quickly than before. Others might choose to take advantage of increased property values by withdrawing equity and increasing the size of the loan. And many others prepay because, they sell their property. Maturity Gap Analysis The simplest measure of interest income exposure to interest rate risk is the GAP concept which has a central place in Asset-Liability Management. There are different types of interest rate gaps that can be broadly be classified into two as The variable interest rate gap. The variable interest rate gap is basically a difference of the assets and the liabilities that are interest sensitive. Therefore this is the defined difference between the interest sensitive assets and the interest sensitive liabilities. The fixed interest rate gap. This is usually for a certain time period and is also a difference between interest rate assets and liabilities but this time the interest rate is fixed. In short it is the difference between fixed rate assets and fixed rate liabilities. When the variable rate gap is positive, the base of assets that are rate-sensitive is larger than the base of liabilities that are rate sensitive. If the index is common to both assets and liabilities the interest income increases mechanically with interest rate. The opposite happens when the variable rate gap is negative. When the interest rate gap is zero, the interest income is not sensitive to changes in interest rates. This approach is called gap analysis. How large the gap is that is its size for a specified time bucket, which is assets minus liabilities that re-price or mature within that time bucket, indicates the banks re-pricing risk exposure. Although straightforward, gap analysis provides only a rough approximation of the actual change in net interest income because it does not take account of the changes that occur within a specified time while it ignores the results of change in the market rate which always cause a difference in spread between the interest rates (Bragg, 2006). The gap analysis also fails to relate the income and option related positions that are it does. Duration Gap Analysis In order to conclude about the effects of fluctuations in interest rates on the economic value, sensitivity weights can be applied to each time bucket. This approach is based on the duration as such that the percentage change in economic value will be obtained and related to the percentage change in the level of interest given a certain fixed duration of time. To add onto that such weights use the estimates that relate to assets and liabilities that fall within a specified time bucket. A combination of maturity/re-pricing schedule with sensitivity weights can be used to provide a rough measure of the volatility in the economic value of a bank that would result in case of interest rate movements.. Simulation Techniques Institutions with complex interest rate risk profiles primarily use simulations to assess the impact of changing rates on earnings. However, these simulation models typically entail detailed assessments of the potential impact of interest rate volatility on the earnings of the firm and also the economic value that bit gains by trying to simulate the interest rate that will be in the future and the effects that it will be imposed on the cash flows. In reality, this simulation models can handle the more the interest rates that change and varies a lot in the interest rate environment. This varied and refined change in the interest environment includes the changes in the slope and the shape of the yield curve to other interest rates as derived from the famous Monte’s simulation. For example in the statistic, a simulation is dealt with current exposures and a constant balance sheet with no new growth is assumed. In order to know how much the earnings are exposed, the simulations co nducted on one or more interest rate scenarios, over a specific period. Dynamic simulations are considered to rely on detailed assumptions regarding changes on existing business lines, new businesses and changes in management and customer behaviour. Such simulations can be useful in order to estimate the cash flows that are expected in the future (project the cash flows) and also any expected earnings and the economic value outcomes. Even though, dynamic simulation is highly dependent on key variables and assumptions that are extremely difficult to project with accuracy over an extended period. CHAPTER 4 It is further apparent that the mortgage loans give the borrowers of the loan the option to prepay the loan at book value and the refinancing option. If mortgages were repayable at their market value instead, borrowers would in this case have no financial motive to refinance, even though they might perceive market-value prepayment to be unfair. The same result can be obtained considering a fixed rate mortgage that would refinance itself. In other words, the borrower would always have the right to benefit permanently from reductions in interest rates while being protected against interest rate increases. In this case, the refinancing would not involve the costly process of re-qualifying the borrower, reappraising the property and paying a variety of loan fees and taxes. In the market today, refunding efficiency is used as a tool by many corporate and municipal bond issuers in their refunding decisions Refunding Efficiency = Present Value of Cash-flow Savings / Value of Call Option It is therefore practical that the mortgagors right to refinance is now treated as a formal call option. The call option is exercisable at any time at par. Given the prevailing mortgage rates and market based interest rate volatility, the borrower can therefore determine the value of the refinancing option and compare it to the attainable savings. The figure bellow illustrates how mortgagors can approach the refinancing decision using the notion of refunding efficiency. The new mortgage is assumed to be option-less and matching the amortization schedule of the outstanding one, for the remaining 25 years. (In reality the matching does not occur, however, as long as the new mortgage is fairly priced, its precise amortizing structure is irrelevant). The two options may conflict when it comes to the credit risk of the issuers, the liquidity risk that is exhibited by the markets and the different tax status payments. A callable security always yields more than a non callable issue. The authors illustrate this by supposing that the benchmark interest tree is for an on the run treasury issue, and calculate the theoretical price of a BB-rated, callable corporate issue using this structure. Not surprisingly, they find that the market price is substantially below the theoretical value, thus the rates that would deliver a price equal to market value would be greater than the benchmark, say by 210 basis points. Although straightforward, gap analysis provides only a rough approximation of the actual change in net interest income because it does not take account of the changes that occur within a specified time while it ignores the results of change in the market rate which always cause a difference in spread between the interest rates (Br agg, 2006). Dynamic simulations are considered to rely on detailed assumptions regarding changes on existing business lines, new businesses and changes in management and customer behaviour. CONCLUSION In conclusion, seeking the optimal refinancing strategy, mortgagors might be too hasty to refinance accounting only for their monthly coupon payments while ignoring the expected present value of the new mortgage. As a result, the mortgagor might force an equilibrium solution that has a higher expected present value (Bragg, 2006). Conversely, employing the notion of refunding efficiency (Bragg, 2006) the borrower calculates the savings as the difference between the present values of the existing mortgage and the new one. From above, it is clear that banks typically split interest rate risk into two components: traded interest rate risk and non-traded interest rate risk. The non-traded interest rate risk is often referred to as interest rate risk on the balance sheet or in the banking book and therefore includes all commercial banking activities in the banking sector. Both refer to the potential impact of adverse movements in interest rates but they follow different accounting rules. Indeed, when the short term structure is independent an increase in the volatility would cause an increase in the call option which would result to a decrease in the mortgage market value. If the positive gradient decreases, the negative gradient would result to a price increase. Therefore, the prepayment option prices signify volatility changes with respect to the mortgage market value. The credit spread is related to the prepayment option price since it is a decreasing function. With high volatility levels, then the price sensitivity is high as well (Bragg, 2006). Therefore, in order to evaluate the callable bond, we will need to adopt one of the commonly used steps in order to be successful in the process. Generally, in order to find the price of any bond we must determine the cash flows and discount them at an appropriate rate. Once weve grown and calibrated our BDT interest-rate tree, we may then price these securities by inserting cash flows at various nodes reflecting option p ayoffs. Fig. 1. Refinancing decision for 25-year mortgages The authors note that efficiency depends not only on the refinancing rate but also on the factors that affect the yield curve and thus the shape of the yield curve. Also the interest rate volatility affects the efficiency which we have assumed to be 16%. At a higher volatility the option value would increase and therefore the 100% efficiency level would require a lower rate (Anderson Kerr, 2001).

Profile of Death Row Inmate Brenda Andrew

Profile of Death Row Inmate Brenda Andrew Brenda Evers Andrew is on death row in Oklahoma for the murder of her husband, Robert Andrew. Brenda Andrew and her lover killed her husband to collect on his life insurance policy after she had tired of the marriage and had several affairs. The Childhood Years Brenda Evers, born on Dec. 16, 1963, grew up in a quiet home in Enid, Oklahoma. The Evers family were devout Christians who enjoyed gathering for family meals, holding group prayers,  and living a quiet life. Brenda was a good student, always earning above-average grades. As she got older, friends remembered her as shy and quiet, spending much of her spare time at church and helping others. In junior high school, Brenda took up baton twirling and attended local football games, but unlike her friends, when the games ended she skipped all the parties and went home. Rob and Brenda Meet Rob Andrew was at Oklahoma State University when he met Brenda, then a high school senior, through his younger brother. They began seeing each other and almost immediately started dating exclusively. After graduating from high school, Brenda attended college in Winfield, Kansas, but left a year later and moved to OSU in Stillwater so that she and Rob could be closer. They married on June 2, 1984. They lived in Oklahoma City until Rob accepted a position in Texas and they relocated. After a few years, Rob wanted to return to Oklahoma, but Brenda was happy with their life in Texas. She had a job that she liked and had formed solid friendships. Their marriage became strained when Rob informed her that he had accepted a job with an Oklahoma City ad agency. Rob returned to Oklahoma City, but Brenda decided to stay in Texas. They remained separated for a few months before Brenda decided to move to Oklahoma. Stay-at-Home Mom On Dec. 23, 1990, the Andrews had their first child, Tricity, and Brenda became a stay-at-home mom, leaving her job and work pals behind. Four years later, their second child, Parker, was born, but by then Rob and Brendas marriage was in trouble. Rob began confiding to his friends and pastor about his failing marriage. Friends later testified that Brenda was verbally abusive to Rob, often telling him that she hated him and that their marriage was a mistake. By 1994, Brenda seemed to have gone through a transformation. The once shy, conservative woman had stopped wearing her shirts buttoned to the neck in exchange for a more provocative look that was usually tight, short, and revealing. A Friend's Husband In October 1997, Brenda began an affair with Rick Nunley, the husband of a friend she had worked with at an Oklahoma bank. According to Nunley, the affair lasted until the following spring, although they continued to stay in contact by phone. The Guy at the Grocery Store In 1999, James Higgins, married and working at a grocery store, met Brenda. He later testified that Brenda showed up at the store in low-cut tops and short skirts and they flirted with each other. One day, she handed Higgins a key to a hotel room and told him to meet her there. The affair continued until May 2001, when she told him, it wasnt fun anymore. They remained friends, and Higgins was hired to do house renovations for the Andrews. The Sunday School Affair The Andrews and James Pavatt met while attending the North Pointe Baptist Church, where Brenda and Pavatt taught Sunday school classes. Pavatt became friends with Rob and spent time with the Andrews and their children at their home. He was a life insurance agent, and in mid-2001 he helped Rob set up a life insurance policy worth $800,000, naming Brenda as the sole beneficiary. Around the same time, Brenda and Pavatt began having an affair. They did little to hide it, even while at church, and were told that they were no longer needed as Sunday school teachers. By the following summer, Pavatt had divorced his wife, Suk Hui. In October Brenda filed for divorce from Rob, who had already moved out of their home. Who Cut the Brake Lines? Once the divorce papers were filed, Brenda became more vocal about her disdain for her estranged husband. She told friends that she hated Rob and wished that he was dead. On Oct. 26, 2001, someone severed the brake lines on Robs car. The next morning, Pavatt and Brenda concocted a false emergency, apparently in hopes that Rob would have a traffic accident. According to Janna Larson, Pavatts daughter, Pavatt persuaded her to call Rob Andrew from an untraceable phone and claim that Brenda was in a hospital in Norman, Oklahoma, and needed him immediately. An unknown male called Rob that morning with the same news. The plan failed. Rob had discovered that his brake lines had been cut before receiving the calls. He met with the police and told them that he suspected that his wife and Pavatt were trying to kill him for the insurance money. The Insurance Policy After the incident with his brake lines, Rob decided to make his brother the beneficiary of his insurance policy instead of Brenda. Pavatt found out and told Rob that he couldnt change the policy because Brenda owned it. Rob then called Pavatts supervisor, who assured him that he was the owner of the policy. Rob told the supervisor that he thought Pavatt and his wife were trying to kill him. When Pavatt found out that Rob had spoken to his boss, he went into a rage and warned Rob not to try to get him fired from his job. It was later discovered that Brenda and Pavatt had attempted to transfer ownership of the insurance policy to Brenda without Robs knowledge by forging his signature and backdating it to March 2001. Thanksgiving Holiday On Nov. 20, 2001, Rob went to pick up his children for the Thanksgiving holiday. It was his turn to be with the kids. According to Brenda, she met Rob in the driveway and asked if he would come in and light the pilot on the furnace. Prosecutors believe that when Rob bent down to light the furnace, Pavatt shot him once, then handed Brenda the 16-gauge shotgun. She took the second shot, ending 39-year-old Rob Andrews life. Pavatt then shot Brenda in the arm with a .22-caliber handgun to help cover up the crime. Two Masked Men Brenda told police that two armed, masked men dressed in black had attacked Rob in the garage and shot him, then shot her in her arm as she ran away. The Andrews children were found in a bedroom watching television with the volume turned up very high. They had no idea what had happened. Investigators also noted that it didnt appear they were packed and ready to spend the weekend with their father. Brenda was taken to a hospital and treated for what was described as a superficial wound. The Investigation Investigators were told that Rob owned a 16-gauge shotgun but that Brenda had refused to let him have it when he moved out. They searched the Andrews home but didnt find the shotgun. A search of the Andrews next-door neighbors home revealed that someone had entered the attic through an opening in a bedroom closet. A spent 16-gauge shotgun shell was found on the bedroom floor, and several .22-caliber bullets were found in the attic. There were no signs of forced entry. The neighbors were out of town when the murder took place  but left Brenda a key to their house. The shotgun shell found in the neighbors home was the same brand and gauge as the shell found in the Andrews garage. On the day of the murder, Pavatts daughter Janna had lent her car to her father after he offered to have it serviced. When he returned it the morning after the murder, the car hadnt been serviced, and his daughter found a .22-caliber bullet on the floorboard. Pavatt told her to throw it away. The .22-caliber round found in Jannas car was the same brand as the three .22-caliber rounds found in the neighbors attic. Investigators also learned that Pavatt had purchased a handgun the week before the murder. On the Run Instead of attending Robs funeral, Brenda, her two children, and Pavatt took off to Mexico. Pavatt called his daughter repeatedly from Mexico, asking her to send them money, unaware that she was cooperating with the FBIs investigation into the murder. In late February 2002, having run out of money, Pavatt and Brenda re-entered the United States and were arrested in Hidalgo, Texas. The following month they were extradited to Oklahoma City. Trials and Sentencing James Pavatt and Brenda Andrew were charged with first-degree murder and conspiracy to commit first-degree murder. In separate trials, they were found guilty and received death sentences. Brenda never showed remorse for her part in murdering her husband and has claimed that she is innocent. On the day that she was formally sentenced, she looked directly at Oklahoma County District Judge Susan Bragg and said that the verdict and sentence were an egregious miscarriage of justice, and she was going to fight until she was vindicated. On June 21, 2007, Brendas appeal was denied by the Oklahoma Court of Criminal Appeals on a 4-1 vote.  Judge Charles Chapel agreed with Andrews arguments that some of the testimony shouldnt have been allowed during her trial.   On April 15, 2008, the  U.S. Supreme Court rejected without comment on Andrews appeal of the appeals courts decision upholding her conviction and sentence. As of November 2018, she was in the  Mabel  Bassett  Correctional  Center  in  McLoud, Oklahoma.