Final Research Paper Example | Topics and Well Written Essays - 1500 words - 1

Final - Research Paper Example how a human body was found burned to ashes inside a room without any apparent cause; and how the rest of the objects in the room remained relatively unaffected. Since then, this phenomenon has been introduced as a possibility. Stories on SHC have been enriched and regenerated due to cases of police officers arriving at scenes of fires where they were able to find half burned bodies which often left only the leg or foot unburned. These cases puzzled them, hence the perpetuation of the SHC phenomenon. Spontaneous human combustion is defined as the â€Å"alleged process of a human body catching fire as a result of heat generated by internal chemical or nuclear action† (Carroll â€Å"From Abracadabra to Zombies†). There have so far been no witnesses for this phenomenon but many stories have been generated about it. The earliest explanations for SHC have been based on an apparent visitation by God and this explanation may have a strong connection with Moses and the burning bush. However, more scientific explanations for SHC have now been presented for our consideration (BBC News â€Å"H2G2†). Author Charles Dickens has used SHC in one of his novels as a cause of death and this has further generated interest on its possibility. Dickens further claimed that he has known cases of SHC and he points out two main cases which have happened over a hundred years ago (Carroll â€Å"From Abracadabra to Zombies†). But non-believers claim that Dickens probably got his idea from the stories of Dupont in his book De Incendiis Corporis Humani Spontaneis. This book points out how a drunken German spontaneously ignited because of his intake of copious amounts of brandy. Immediately, faults in this theory were pointed out when non-believers point out that if drinking plenty of liquor would cause SHC, then there would have been many more reported incidents of the phenomenon. The proposal on alcoholic consumption has actually been debunked by scientists when they explained that

Health Expenditure Poverty Essay Example for Free

Health Expenditure Poverty Essay Condition where peoples basic needs for food, clothing, and shelter are not being met. According to World Bank: Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity. Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one’s life. According to United Nations: Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to food and clothing a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation. Type of Poverty: Poverty is generally of two types which are as follow. Absolute poverty Absolute poverty is synonymous with destitution and occurs when people cannot obtain adequate resources (measured in terms of calories or nutrition) to support a minimum level of physical health. Absolute poverty means about the same everywhere, and can be eradicated as demonstrated by some countries. Relative poverty Relative poverty occurs when people do not enjoy a certain minimum level of living standards as determined by a government (and enjoyed by the bulk of the population) that vary from country to country, sometimes within the same country. Relative poverty occurs everywhere, is said to be increasing, and may never be eradicated. Psychological Cause of poverty Poverty is regarded as a vicious circle. It is the product of different causes. Some of the thinkers have attributed it to a single cause but as poverty is a multi dimensional problem, multiple factors are responsible for it. According to hennery George, the main cause of poverty is the personal ownership and monopoly of individual on the land. He writes â€Å"in great cities where land is so valuable that it is measured by foot you will find extreme of poverty and of luxury.† Marx said the main causes of poverty are the exploitation laborers by the capitalists. Malthus said, poverty increases because of the fact that, while the food production increases in arithmetical progression, the population increase in geometric progression. These views lay emphasis on a singular cause of poverty but modern social scientists consider that poverty is the result of multiple factors. Personal factors: Personal factors play important role in economic status of a person. In this modern scientific era, one may not believe in the fate but no one can deny the importance of personal capacity and efforts in his life style and life pattern. The important personal factors cause poverty is as follows. i) Sickness: Due to sickness a person is unable to work or his income decreases. A major portion of his income is spent on the cure of the diseases. Sickness increases poverty. Hunter has rightly pointed out that â€Å"Poverty and sickness form a vicious partnership each helping the other to add to the miseries of most unfortunate of mankind.† ii) Mental disease: Mental disease and frustration also increase poverty. Owing to this, a man looses the balance of his mind by which he is incapable of doing anything. So his family becomes poor and it aggravates poverty. iii) Accident: Accident of any kind may make a person incapable of working, as a result of which he becomes a parasite on society or his income decreases. When income decreases poverty increases. iv) Idleness and extravagance: India is a rich country inhabited by poor. Idle and lazy persons do not work although they are able to work. Hence they remain poor. There are also extravagant persons who can waste any amount of money in no time. So the cause of poverty is not the lower income but excess of expenditure over income. Such persons also spent lavishly during festive occasions like marriage ceremony, many social religious festivals etc, and they always remain poor. v) Demoralizations: Due to lower morale some person are addicted to drinking, prostitution, gambling and other social evils. Such persons spent high proportion of their income on these evil habits and finally become pauper. Biological factors: Rapid growth of population is one of the most important causes of poetry. Malthus has pointed out that the geometric progress of population is the root cause of poverty. Due to the development of medical science, reduction of famine, control of epidemics and natural calamities death rate has decreased. At the same time birth rate has not been effectively controlled. If a man has too many children his standard of living is definitely lowered and he becomes relatively poor.† Besides, other factors like the power of fertility of Indian women, early age of marriage are also indirectly responsible for poverty. Global Distribution of Resources Many experts agree that the legacy of colonialism accounts for much of the unequal distribution of resources in the world economy. In many developing countries, the problems of poverty are massive and pervasive. In recent decades most of these countries have tried to develop their economies with industry and technology with varying levels of success. Some nations have become fairly wealthy, including the Republic of Indonesia, Malaysia, Singapore, South Korea, and Thailand. Many developing countries, however, lack essential raw materials and the knowledge and skills gained through formal education and training. They also often lack the infrastructure provided by, for example, transportation systems and power-generating facilities. Because these things are necessary for the development of industry, developing countries generally must rely on trade with developed countries for manufactured goods, but they cannot afford much. Some social scientists argue that wealthier developed countries continue to practice a form of colonialism, known as neocolonialism. The affluence of these countries is based to a large extent on favorable trade with the developing world. Developed countries have been able to get inexpensive natural resources from poorer countries in Asia, Africa, and Latin America, including oil for power, ores and minerals for manufacturing durable goods, and manufactured goods made by low-wage workers in factories operated by multinational corporations. This practice contributes to the dependency of poorer countries while not raising their standards of living. Economical factors: The most fundamental cause of poverty is economics. The important economical factors are as follows. i) Backwardness of agriculture: Indian Agriculture is carried on with primitive techniques. Due to the absence of modern machines, tools, implements, improved seeds, manures, inadequate irrigation facilities, constant fragmentation of land and exploitation by the landlords etc. Agricultural production hampers to a great extent. Besides these our agricultural system is not sufficient to provide adequate number of jobs or better price for agricultural products. This increase poverty among the rural farmers. ii) Slow and defective industrialization: In India industrialization is taking place at a snail’s pace, due to inadequate finance, paucity of skilled and technically trained personnel, irregular supply of power and raw materials etc. Therefore it is not possible in India to provide employment in large scale tot he persons who are willing to work. Further the concentration of industries in urban areas also deprives the rural poor from getting employment in industries. iii) Unequal distribution: Distribution of wealth is unequal in India. Wealth is mostly concentrated in the hands of a few. These people after an optimum of investment keep the wealth in iron chests. On the other hand, the people who would have invested it for productive purpose do not get it. This leaves a majority of population in this state of unemployment. iv) Unwise economic policy: Indian is rich in respect of natural resources, but poor in making proper utilization of it. Till now we are not able to make optimum utilization of resources as a result of which it remains unutilized or misused. Sometimes due to defective policy of the government people remain poor. Psychological effects of poverty Psychological research has demonstrated that living in poverty has a wide range of negative effects on the physical and mental health and wellbeing of our nation’s children. Poverty impacts children within their various contexts at home, in school, and in their neighborhoods and communities. Poverty is linked with negative conditions such as substandard housing, homelessness, inadequate nutrition and food insecurity, inadequate child care, lack of access to health care, unsafe neighborhoods, and under resourced schools which adversely impact our nation’s children. Poorer children and teens are also at greater risk for several negative outcomes such as poor academic achievement, school dropout, abuse and neglect, behavioral and socio emotional problems, physical health problems, and developmental delays. These effects are compounded by the barriers children and their families encounter when trying to access physical and mental health care. Economists estimate that child poverty costs an estimated $500 billion a year to the U.S. economy; reduces productivity and economic output by 1.3 percent of GDP; raises crime and increases health expenditure Poverty and academic achievement Poverty has a particularly adverse effect on the academic outcomes of children, especially during early childhood. Chronic stress associated with living in poverty has been shown to adversely affect children’s concentration and memory which may impact their ability to learn. The National Center for Education Statistics reports that in 2008, the dropout rate of students living in low-income families was about four and one-half times greater than the rate of children from higher-income families (8.7 percent versus 2.0 percent). The academic achievement gap for poorer youth is particularly pronounced for low-income African American and Hispanic children compared with their more affluent White peers. Poverty and psychosocial outcomes Children living in poverty are at greater risk of behavioral and emotional problems. Some behavioral problems may include impulsiveness, difficulty getting along with peers, aggression, attention-deficit/hyperactivity disorder (ADHD) and conduct disorder. ïÆ'ËœSome emotional problems may include feelings of anxiety, depression, and low self-esteem. Poverty and economic hardship is particularly difficult for parents who may experience chronic stress, depression, marital distress and exhibit harsher parenting behaviors. These are all linked to poor social and emotional outcomes for children. Unsafe neighborhoods may expose low-income children to violence which can cause a number of psychosocial difficulties. Violence exposure can also predict future violent behavior in youth which places them at greater risk of injury and mortality and entry into the juvenile justice system. Underresourced schools in poorer communities struggle to meet the learning needs of their students and aid them in fulfilling their potential. Inadequate education contributes to the cycle of poverty by making it more difficult for low-income children to lift themselves and future generations out of poverty. Violence According to experts, many women become victims of trafficking, the most common form of which is prostitution, as a means of survival and economic desperation. Deterioration of living conditions can often compel children to abandon school in order to contribute to the family income, putting them at risk of being exploited, according to ECPAT International, an NGO designed to end the commercial sexual exploitation of children. For example, in Zimbabwe, a number of girls are turning to prostitution for food to survive because of the increasing poverty. In one survey, 67% of children from disadvantaged inner cities said they had witnessed a serious assault, and 33% reported witnessing a homicide. 51% of fifth graders from New Orleans (median income for a household have been found to be victims of violence, compared to 32% in Washington, DC (mean income for a household

Scientific Advancements in Medical Technology

Scientific Advancements in Medical Technology Alice Wyatt Scientific advancements 3D printers are used for many things including medicine to guns and other illegal items. Scientists have created a new 3D printer inspired by terminator 2. This means that it will work 100 times faster than the normal 3D printer and can make items in minutes rather than hours. Many people are happy because technology is being advanced. â€Å"Freaking awesome tech. This will also allow shapes to be designed and built that are impossible with current methods.† Said by Funcrew on the guardian website. This shows that many of the public are having positive thoughts about the new technology that is being produce and how it is shaping the world and how we are using the technology in everyday life, it also shows how this new technology will allow us to do things we couldn’t before. 3D printing is used in many different ways and one is being a part of the dental industry and being used by dentists so that they can poke and prod and them and to show the patients what is going on in their own mouth and explain procedures that they may go through. Many people are not understanding why we need a more expensive models just to show patients procedures. â€Å"Do they need a new, presumably more expensive, model just for the purpose of explaining procedures to patients?† said by Pollik. This shows that although many people have positive thoughts the other half of the public have negative thoughts and don’t understand why the technology is being used and the technology we use now is just as good and is not as expensive as the new technology coming onto the market. These negative attitudes make people jump onto these attitudes and start to criticise the technology and result in the technology not getting brought, however the positive attitudes may make celebrities and other famous people to accept these technologies resulting in a lot of people wanting this new technology and making the sales go very high up. The debate about 3D printers at the moment in who actually buys these as if it is criminals who buys these to make guns and other illegal items, this could mean in the criminals running wild and being able to make many, many items in just a week, this could cause a lot of problems throughout the world. Whether as the 3D printers that are used for medical advancements or in certain business industries are useful and therefore there is no debate on using 3D printers in these terms, it is just when the 3D printers are not used for good things, this then results in the society not looking the new technology when it is being used for bad things. These issues that the public has about the 3D printers are not important enough to stop any development of the 3D printers. This is because the 3D printers are more or less being used for the health and wellbeing of the public in the NHS with medical issues and dentistry issues and also in the different industries of business, and are only ever rarely used by criminals for illegal ideas. 3D printers are used a lot to help people and explain to people things that they can’t see themselves. People’s perception of 3D printers can be improved by the government and businesses taking the 3D printers of the market to the public and just letting businesses or the NHS being able to buy these this would result in criminals not getting a hold of the 3D printers and the public can stop worrying about what they will do with them. People’s perception would also change about 3D printers if they cost a bit less to buy as they k now that the NHS and other businesses will be buying these things for experiments and the public know that buying expensive equipment in the NHS means that they won’t have money to do other things as they don’t have money as it is. Bibliography: What are the pros and cons of MRI scans?  M Billingsley – 15th March 2012  http://doc2doc.bmj.com/forums/open-clinical_radiology_pros-cons-of-mri-scans  [Accessed on: 13/03/15] What is a Heart MRI?  Brain Krans – 26th June 2012  http://www.healthline.com/health/heart-mri#Overview1  [Accessed on: 13/03/15] Medical Applications for 3D printing: Current and projected uses, C Lee Ventola – October 2014  http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4189697/  [Accessed on: 18/03/15] Gartner says uses of 3D printing will ignite major debate on ethics and regulation, Conn Stamford – 29th January 2014  http://www.gartner.com/newsroom/id/2658315  [Accessed on: 19/03/15] What are the ethical issues surrounding gene therapy?  March 16th 2015  http://ghr.nlm.nih.gov/handbook/therapy/ethics  [Accessed on: 19/03/15] Scientists create Terminator 2-inspired 3D printer, Hannah Devlin – Thursday 19th March 2015 – 18:45  http://www.theguardian.com/science/2015/mar/19/scientists-create-terminator-2-inspired-3d-printer  [Accessed on: 19/03/15] Smile! Meet the 3D printer churning out teeth, nerves and gums for dentists, Stuart Dredge – Monday 16th March 2015,  http://www.theguardian.com/technology/2015/mar/16/3d-printer-teeth-nerves-gums-dentists  [Accessed on: 19/03/15]

History as We Leave It :: History Historical Essays

History as We Leave It Literary description always opens onto another scene set, so to speak, "behind" the this-worldly things it purports to depict. --- Michel Beaujour, "Some Paradoxes of Description" When I was very young, my grandmother told me that my great, great grandfather came to northern Minnesota in the 1890s and settled the small town we lived in, Askov. She said that he was a very brave pioneer who tread across unknown territory, and no one had ever lived on that land before. I pictured my ancestors arriving here and finding nothing but animals that they had to fight away — like they were the only people around for miles until other people came to join them. Until they arrived, Minnesota was a land untouched, unconquered and uncivilized. I never heard of Indians, or that they had once inhabited the land — even my teachers hardly mentioned them in elementary school. I thought they were just fictitious characters on Saturday morning cartoons until I eventually learned that they were real and once inhabited the land. As illustrated in the story that my grandma told me, how we tell our stories have an impact on the history we leave; how we talk about the Nativ e Americans (or fail to talk about them) influences history and how we leave it. The most raw accounts of how people tell their stories is in personal letters where they feel free to use their own words and thoughts, thinking that their words have little effect on the ones reading them or the world around them. Consider the excerpt from a letter written by Sophie Bost, a white settler in Minnesota during the Minnesota Uprising in 1862: And then there are these Indians! I would really like to know where they are after all the scare they’ve given us! [. . .] I dreamed night before last that my children were butchered before my eyes [. . .] and I had taken them into my bed and was sleeping with an arm under each one, [as comfortable] as though I had been massacred myself. [italics mine] (Bowen 214) The words â€Å"butchered† and â€Å"massacred† show the fear she carried about Indians and exasperation about how she and her husband were going to protect their children. I do not doubt that living in those times must have been terrifying for anybody. In other words, Indians could just as easily have used the words â€Å"butchered† and â€Å"massacred† to describe white attacks upon them.

Ben Bernanke and Sub-prime

Considering Ben Bernanke’s statements and economic forecast one year later, the downside has occurred. He mentioned the effect of consumer confidence and attitude about the possibility of inflation. Since that forecast was made attitudes across the board have shown no confidence in an economic upturn, or at least a belief that the economy is less than stable. The federal government has responded with the Economic Stimulus Package designed to increase consumer and business spending. The Stimulus Package will put actual dollars into the hands of consumers hoping to cause a real increase in consumer spending.Bernanke stated that business capital expenditures should at least remain stable. However, an extra push was given in the form of additional tax writeoffs for large capital expenditures. In other words both consumer and business spending were leveling off or decreasing and needed a boost. Gas prices have remained unstable, rising and falling by nearly $1 per gallon in many ar eas. This constant fluctuation makes it difficult to assess the long term affect of gas prices on the economy. However, gas price fluctuations may not be as large of a downside as some other issues in the economy.Consumers can shop long distance without using any gasoline. With the internet people can shop online eliminating to drive across town for a day of shopping. Employment and trade deficits continue to be of concern to economists, however these issues have been overshadowed by continuing developments and downturns in the housing and mortgage industries. The Downside At the time of the 2007 economic forecast, the housing market had already entered a slump. Bernanke stated that the subprime effect may be contained. However, that has not been the case.The subprime debacle has remained in the headlines under many terms including: the housing crisis, the subprime mortgage mess, the foreclosure crisis, and the credit crisis. The housing crisis began after the price and sales boom i n 2005. As housing prices began a rapid decline over one year, it became evident that the problem was due in part (if not in full) to the recent developments in the subprime mortgage market. Many subprime mortgages had adjustable rates which were unaffordable when the rate adjustment increased those monthly mortgage payments.This was compounded by the fact that housing prices had begun a rapid decline. There was no way for homeowners to get out of those rising payments either by selling or refinancing. Homes no longer had the equity or value that they were expected to have. The Spillover and Its Affect The first spillover from the housing price decline was directly to the subprime mortgage market. Two years after the housing market meltdown, it has been discovered that the entire subprime market was the result of the collective genius of Wall Street investment firms.Subprime mortgages had become a complex range of securities including bonds, hedge funds, mortgage-backed securities, collateralized debt obligations (CDOs) and other such terms that we now hear everyday on the news. Many have found that their personal investments – pensions, IRAs, as well as bank and corporate investments were heavily invested in subprime mortgages at least indirectly. What has resulted is a breakdown of the financial markets, both in the United States and internationally.Daily news reports show that international investors and banks have been exposed to or involved in the U. S. subprime markets. Credit ratings on many investments have been lowered to the point of declaring some bank securities worthless. When banks have no collateral to borrow against, they have no funds to lend to their banking customers, even the ones with good credit. When investment houses get lower credit ratings, the value of a shareholder’s’s investments becomes worthless as well. As a result, the U. S.dollar has lost footing against foreign currencies. This caused the government and t he Federal Reserve to step in and literally change the way they put money into the economy. Until very recently, the Federal Reserve, the U. S. Central Bank, did not lend money to Wall Street investment firms. Realizing that the developments in the subprime market and the widespread use of subprime mortgages as investment vehicles, the Federal Reserve has come to understand that the subprime mortgage industry is at the very heart of our economy.Changing key interest rates several times did not help, so the Fed had to put money into the area that is most likely to bring the economy into a recession. In other words, there has been a change in the banking and financial systems. Lending and borrowing fuel buying and selling, and saving and spending in the economy. Commercial deposit banks are no longer the primary source of capital to businesses and consumers, but investment banks are. To support this new source of business the Federal Reserve has begun lending to investment houses by t he same means that it lends to banks – through short term loans.Investment houses have also began offering smaller consumer based deposit and credit products such as money market deposit accounts and credit cards available at many major investment brokerages. Analysis and Conclusion The reason for the subprime spillover into other segments of the economy is because the economy and the way it operates is shifting. The U. S. economy, and the international economy may no longer be bank based. As governments begin to privatize certain operations, the way these organizations seek funding or capital becomes a private matter.For example, when the Unites States government chartered private companies Fannie Mae and Freddie Mac to essentially operate the mortgage market, Fannie and Freddie raised capital on the U. S. financial markets as opposed to borrowing through banks. Right now the U. S. is at the downside of a bank based economy. What the upside will be is the complete shift to a n investment based economy. As the Federal Reserve continues to support the investment houses, those will become our deposit institutions of the future. Once that shift is complete, the economy will stabilize and grow, even though it will be completely different.

No Situational analysis SWOT analysis is the most viable tool for analyzing the situation and developing a marketing plan.Advertising We will write a custom case study sample on No-Goat Smelling X5 specifically for you for only $16.05 $11/page Learn More Strengths The company has a strong financial position and an active research and development department. The strengths of the proposed deodorant include being the first in the market. There is good scope for scalability of the product acceptance, which would enhance the brand image and market share. The product promises freshness for up to five days besides being presented by the reputable Airmount Company. Weaknesses The company has to create a sustainable logistics and distribution channels in order to meet the market demand. The main weakness is the fact that a brand new idea may be not be convincing for the senior segment of society, as they tend to be reluctant to change. Besides, the narrow product line, with limited distribution channels at the beginning, would restrict the customers from accepting the product. Threats The main threats facing the proposed ‘No-Goat Smelling X5’ deodorant is presence of competitors providing similar or nearly similar product at low cost. For instance, the Procter and Gamble Company controls 37.7% of the beauty products market and recorded an annual turnover of $488.5 million at the end of the 2013 financial year.Advertising Looking for case study on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More On the other hand, the Uniliver Company controls 18.6% of the total market share and recorded an annual turnover of $245.8 million at the end of the 2013 financial year. In addition, the Lever Brothers Company controls 11.3% of the market share and recorded an impressive turnover of $149.2 million at the end of the 2013 financial year. In addition, the Airmount Company may n ot be able to change the product features according to changing external environment and needs of the customers, since the US product patent policy may limit it. Opportunities The new ‘No-Goat Smelling X5’ product may facilitate revenue growth for the Airmount Company upon acceptance by the target market.The company may also take advantage of the market demographics to create multiple brands for the male and female customers. Marketing strategy Marketing strategy is essential before actualizing projections of a blue print of a marketing plan. As a matter of fact, this plan functions on the margins of informed decision making based on comprehensive research on viability and sustainability. In the overcrowded cosmetics industry, product positioning is directly linked to the success in the short and long term, especially for a new product such as the ‘No-Goat Smelling X5’ deodorant. Adopting a First-Mover Strategy, the Airmount Company will position this produ ct as the first of its kind in the market. Through a defined delivery channel and strong media marketing, the company will revolve on quality maintenance to support the leading marketer status. In the process, focus will be directed to the most competitive price and what the customers are able and willing to pay.Advertising We will write a custom case study sample on No-Goat Smelling X5 specifically for you for only $16.05 $11/page Learn More Besides, the company may develop multiple brands of the product that targets the adolescents, female, and male market segments (Kotler Keller, 2012, p. 19). Despite the crowded market, the product will be marketed as first of its kind. In order to achieve this aim, demographic differentiation will be based on income supported by strategic packaging and series of relevant marketing campaigns, as the best approach towards commanding a price premium. As a result, the fair pricing mechanism, among other factors, will posi tively skew competitive advantage in favor of the Airmount Company. In addition, the company will have to recruit distribution agencies across the market regions and well trained marketers for this product (Kotler Keller, 2012, p. 29). In order to diversify market operations, the Airmount Company may create multiple brands from the same product with different coloration, scent, sizes, and packaging (Harrison St. John, 2010, p. 43). This will create an environment of own competition and block other competitors from encroaching into the company’s market (Dagnino Rocco, 2009, p. 31). These sub-products will be differentiated by features, prices, and difference in quality. As forecasted in the market research, this strategy will be successful towards dominance as it offers variety of options to consumers, while at the same time maximizing benefits of economies of scale (Harrison St. John, 2010, p. 32). Since cosmetics market has low entry barriers, the ‘No-Goat Smelling X5’ product is likely to reap from the experimenting consumers as the product may appeal to the young generation who are often willing to try new products. The high-end and the low-end varieties will target the high and low income earning consumers.Advertising Looking for case study on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More With the high-end and low-end varieties in the market, little room will be available for competitors to create a third product based on quality (Rossiter Bellman, 2005, p. 45). Thus, when properly implemented, the company will reap major returns on the upper-end and lower-end of the male cosmetics market. The Airmount Company should introduce the aspect of appealing to ideals of the target population by contracting a popular celebrity as company’s products image. Through recommendations of such celebrity or a popular public figure, the target consumers would be persuaded to try out the ideal product recommended by their favorite celebrity. The marketers of the ‘No-Goat Smelling X5’ product should also include catchy advertisement short messages that appeal to male and female sexuality such as ‘vitality in totality’. In the aspect of self-concept, marketing strategies for the ‘No-Goat Smelling X5’ should be based on idolizing the male pe rson as an equal user of its products. Financials Budget for the marketing plan Cost Quantity Total Cost Equipment Cost $5,000 10 $50,000 Advertisement Posters $10 10,000 $100,000 PA System Hiring $1,000 5 $5,000 Personnel Hiring $3,000 20 $60,000 Advertisement Media $10,000 $10,000 Total Cost $225,000 The financial implication of implementing the above marketing strategy includes active advertisement in the traditional media such as television and newspapers. Besides, the Airmount Company will have to embrace social media in promoting the ‘No-Goat Smelling X5’ product. Controls In order to move the ‘No-Goat Smelling X5’ brand forward, it is critical to adopt the localization strategy that directly appeals to different target markets. The Airmount Company should remain the organization that has localized its means of production and marketing to capture different customer bases. The localization strategy will help in triangulation o f the â€Å"how†, â€Å"where†, and â€Å"what† of management strategies, since it focuses on a specific market. It involves the identification of the unmet customer needs, examining and deploying potential enablers in new converging innovative technologies, and identifying capabilities to ensure that the needs are met (Harrison St. John, 2010). The above elements should then be integrated in a marketing communication plan that runs continuously within the stipulated marketing timetable. References Dagnino, G., Rocco, E. (2009). Competition strategy: theory experiments and cases (1st ed.). New York, NY: Routledge. Harrison, J., St. John, C. (2010). Foundations in strategic management. Ohio, Oh: South Western Cengage Learning. Kotler, P., Keller, K. (2012). Marketing management. (14th ed.). New Jersey, NJ: Pearson Prentice Hall. Rossiter, J. R., Bellman, S. (2005). Marketing communications: Theory and applications. New York, NY: Prentice Hall.

German Verbs - wissen - to know - conjugated

German Verbs - wissen - to know - conjugated In the following chart you will find the conjugation of the irregular German verb  wissen  (to know). Although it is not a modal verb, the conjugation of  wissen  follows the same pattern as the modal verbs. Like the modals, and unlike normal German verbs,  wissen  has the same form for  ich  (1st person sing.) and  er, sie, es  (3rd person sing.). German, like many other languages, has two different verbs that can correspond to the single English verb to know. Like Spanish, Italian and French, for example, German makes a distinction between knowing or being familiar with a person or thing (kennen) AND knowing a fact (wissen). The verb  wissen  is a stem-changing verb. That is to say, the infinitives stem vowel  i  changes to  eiin all the singular present tense forms (weiß), and to  u  in the past participle (gewusst). In many ways, as we said above, it behaves like a modal verb. Except for  ihr wisst  (formerly  wißt), spelling reform has not affected  wissen,  so you should note that its singular forms are still spelled with an ess-zett (ß, except in Swiss German), while the plural forms use a double-s (ss). This verb chart uses  the new German spelling  (die neue Rechtschreibung). Wissen Conjugations PRSENS(Present) PRTERITUM(Preterite/Past) PERFEKT(Pres. Perfect) SINGULAR ich weiI know ich wussteI knew ich habe gewusstI knew, have known du weityou know du wusstestyou knew du hast gewusstyou knew, have known er/sie weihe/she knows er/sie wusstehe/she knew er/sie hat gewussthe/she knew, has known PLURAL wir/Sie/sie wissenwe/you/they have to wir/Sie/sie wusstenwe/you/they knew wir/Sie/sie haben gewusstwe/you/they knew, have known ihr wisstyou (pl.) know ihr wusstetyou (pl.) knew ihr habt gewusstyou (pl.) knew, have known Sample Sentences/Idioms Er weiß Bescheid.He knows all about it. (Hes been kept informed.)Weißt du, wann der Bus kommt?Do you know when the bus is coming?Ich habe nicht Bescheid gewusst.I didnt know a thing about it. Related Pages The 20 Most-Used German VerbsRanked by frequency of use. With conjugations and examples. German for BeginnersOur free online German course!

Bergner Construction Case Essays

Bergner Construction Case Essays Bergner Construction Case Essay Bergner Construction Case Essay Discuss the Company: * Located in Cleveland, Ohio * Mechanical contracting business, specializing in specialty construction projects in food and beverage manufacturing facilities. * â€Å"Custom-built† contractor, using primary stainless steel to build the vessels and piping necessary for assembly lines in food beverage processing. * They work on a project-by-project basis, for which it provides engineering design and construction expertise to its clients. * Required relatively little, complex specialized production equipment , and most inventory was associated with specific job in progress * Thinly capitalized (equity less than debt) History: * The company was incorporates in 1982 by president John Bergner * He did business with FirstOhio Bank of Cleveland, where his account was handled by Peter Davis and a good relationship was kept between them for five years from 1982 till 1987 * In December 1987, Mr. Davis accepted a new position at Westside National Bank. Located in Cleveland * Therefore, a new loan officer was appointed for the company in January 1988 Present Position: Bergner Construction Company had recorded a small net operating profit of $13,088 (net income of 16502) in 1987 * During the first four months of 1988, the company’s completed jobs slumped, leading to a loss of $53,556 (net loss of 47682) due to problems encountered on one project, for which a former estimator had underestimate a construction cost. (If no single project is excessively dominant, then a loss on one does not imply that the firm’s profit potential would be significantly affected). * The company enjoyed a sales growt h rate of 23 percent over the past 2 years, and projected sales by the end of 1988 were $1. million Management of the company: * The company’s president: John Bergner was 40 years of age. * He had a degree in mechanical engineering from Ohio State University. * Bergner began his career as a foreman for a large construction company that manufactured specialty food and beverage facilities. He formed his own company, which was incorporated in 1982 Operations of the company: * Bergner construction company had limited its operations to the Midwestern market, generally within a 500-mile radius of Cleveland * Mr. Bergner had always been anxious to expand his business, and specially to search for contracts in other part of the country to achieve greater geographical diversification. The case: * Bergner had successfully bid for a renovation project at Pepsi-Cola bottling plant in Boulder, Colorado in April 1988 * Increase line of credit from $100,000 to $250,000 to finance a large construction project that his company had just been awarded to cover his losses. * But the new loan officer of FirstOhion bank refused the request so he wanted to transfer his account to Westside National, where he hoped his business would continue to be handled by Mr. Davis. * Mr. Davis recommended John Bergner’s company at the bank’s loan committee, stressing his honesty and positive business attitude. * He was prepared to approve a loan because of his honesty even if the client’s financial statements might be considered somewhat weak. * So Mr. Davis had a meeting with the Loan Review Committee and requested the following: 1. The sum of $100,000, which would be CD secured, the proceeds of which would be used to pay off Bergner’s outstanding debt at FirstOhio bank. ( he must not take loan to repay another loaN OR a loss) 2. A $250,000 revolving line of credits to be secured by accounts receivable and inventory (replacing an existing line of $100,000 at FirstOhio). The company’s inventory consisted mainly of work in progress and raw materials. (Inventory mostly work in process so it can’t be used as collateral, but with regards to A/R it can be used as collateral due to its large amount BUT if 250000 was used as collateral he would not be able to pay-off his A/P) 3. A total of $128,000 in various equipment loans. These loans were secured by filings on various pieces of equipment, such as trucks, cars, forklifts, air compressors, and other tools. These loans were already approved and funded at FirstOhio. The loans and related security arrangements would also be moved, but this represented no increase in balances outstanding on this equipment. In most cases, the bank financed 100 percent of the original cost of equipment purchased. * By expanding his business, it would represent the largest single construction project that his company had ever undertaken ($400,000), and he projected a 15 percent pretax profit of 60000 as part of his winning bid. Its successful completion would, he hoped, improve prospects for future profitability.

Management Issues Research Paper Example | Topics and Well Written Essays - 250 words

Management Issues - Research Paper Example 3. My superior is never strict on the amount of work, that an individual is required to undertake. All that he needs is for an employee to carry out a considerable amount of work, that he or she has the capability of performing, to the highest standard. 4. There is instance when my superior requires me to complete my work, within a specified period of time. These instances involve when the workload is too much, and the products being processed are needed urgently. 5. My superior normally tries to make me work to my maximum capacity. In as much as he does not emphasize on the workload, he ensures that the work being done, a lot of effort has been placed in it, and it is of high quality. 6. In some instances, I normally perform some inadequate jobs. This involves instances when I am sick. In these circumstances, my supervisor is understanding and allows me some rest. However, the inadequate job that is done, well have to be redone by someone, in case it is urgent. In working out the plans of the goal achievement, my supervisor normally involves every employee under his leadership. This is for purposes of hearing their opinions and using them to develop the goal achievement plan.

Reading Response Essay Example | Topics and Well Written Essays - 250 words - 22

Reading Response - Essay Example In 1964, President Lyndon announced a war against poverty. There were many discussions held that sort to show the manner through which children suffering from cultural deprivation can be helped (Wang, 2011). The discussions were to handle the issue of stigma going around. The issue of head start classrooms came around at about that time. The head start classroom is designed in a manner that the children are offered the opportunity to engage in various activities that show the major differences between the home environment and the academic environment. Another Concept to understand is the issue of linguistic diversity. This is where the various students get to engage in many speech events. These events are effectual in that they ensure the kids spend more time working on their talking skills that are beneficial to them both now and later on. Despite the background or race of kids, it is appropriate to treat them all equally and

Pillsbury Cookie Challenge Case Study Example | Topics and Well Written Essays - 1250 words

Pillsbury Cookie Challenge - Case Study Example The paper tells that Ivan Guillen in his role as the marketing manager of RBG faced significant challenges. Primarily he faced the challenges of developing a strategy that would lead to the ultimate improvement in the business performance of his category. The key challenges further included the poor performance of RBG over the past few years. Correspondingly, the volume growth rate of the company has dramatically fallen and at the same time household penetration has also dropped to five year low. It is crucial for Ivan to understand these challenges carefully and find out a possible solution for profitable growth of the business. Moreover, it would be vital for Ivan to conduct marketing research for ascertaining the likely variables affecting the overall performance of the business. The identification of variables affecting the business performance will facilitate Ivan to address the areas that would be requiring more concentrated effort. The key consumer’s insights available to the marketing team postulate that consumers were familiar with Pillsbury brands and products but did not understand how they were relevant in the present busy and hectic life. Consumers were changing their buying behavior due to the economic conditions as well as due to the growing craze related to health. Moreover, it has been ascertained that consumers were becoming more sensitive and were spending less money on their purchase.... The key finding was that the consumers were reluctant to use convenience products rather they were more inclined towards baking from scratch. Business can be benefitted from the customers’ insights by prudently analyzing results obtained from the research and aligning these results with the marketing strategies with consumer needs. It has also been observed that mothers in Canada liked the RBG products for its price, its convenience and the happiness it succeeded to deliver through its fun experience when baked at home (Johnson and Mauro, â€Å"Pillsbury Cookie Challenge† ; Simona, 726-731). 3. THE KEY LEARNINGS FROM THE USAGE AND ATTITUDE STUDY ON P. 6 OF THE CASE, AND KEY IMPLICATIONS ALONG WITH ACTIONS THAT SHOULD BE TAKEM BY MARKETING TEAM The research offered significant understanding regarding Pillsbury’ brand users as well as lapsed users behaviors towards cookies baking experience. The key learning from the usages and attitude study was that scratch bakin g is the dominant method off cooking in Canada. It also provided a vital understanding regarding the market differences between the two market of USA and Canada. It was observed that customers of scratch users in Canada were far bigger than in USA. The research also demonstrated that the major purchase drivers were convenience and the entertaining feature of baking with kids. It is essential for the team to gather more precise understanding of consumer’s beliefs, perceptions, preferences and feelings towards Pillsbury RBG. Moreover, it is essential that data obtained from the research are used determining the future course of action (Johnson and Mauro, â€Å"Pillsbury Cookie Challenge†). 4. REASONS BEHIND IVAN GUILLEN AND HIS TEAM CONDUCTING THE IN-HOME

Hitler's Multiaxial Psychological Profile Research Paper

Hitler's Multiaxial Psychological Profile - Research Paper Example In view of this diagnosis, it has been concluded that continued medication combined with psychotherapy for a prolonged period is the only way possible to bring such a person at least partially to premorbid conditions. Hitler's Multiaxial Psychological Profile †¢ Introduction of the person Hitler is a person who needs only the mention of his name to be identified worldwide, but needs more than what is available in our academic knowledge to be understood as an individual. Hitler’s character has been an intriguing phenomenon for psychologists who have studied the complexities of his behavior that prompted the genocide of Jews and the Second World War. It can be generally stated that Hitler was a cruel man, a dictator, still a crowd puller at least in Germany of his period. He might also be considered as a social evil, if examined from the criteria of humanism and human rights. First person accounts of personal encounters with this man have depicted him as â€Å"unremarkable and unlovely† (Welch, 1998, p.2). It has also been said that while â€Å"the pathology (of Hitler) alarmed some Germans (in the period of his making), for most, it added to his appeal† (Victor, 2000, p.6). ... After his mother’s death (with whom he had a very strong bonding) and after failing to get admission to an art school, Hitler had totally avoided contact with his family members and friends (Victor, 2000, p.6-7). The time was also getting ripe for the rise of a figure like Hitler as Germany was going through a stage of â€Å"political instability†, economic crisis, sudden changes in the society (fading aristocracy and an impoverished middle class), â€Å"fear of communism†, and also disillusionment with the leadership (Victor, 2000, p.6). Hitler infused a sense of nostalgia for the past legacies and a romantic kind of nationalism in the minds of the people by manipulating this social context (Victor, 2000, p.6-7). Though Hitler has been judged as a man of â€Å"insecurity and personal weakness† by historians like John Lukacs, contrasting these psychological readings, he rose to the pedestal of a national hero, moreover a dictator (qtd. in Victor, 2000, p.7 ). Becoming the ruler of Germany, Hitler carried out extermination programs of Jews who he thought were evil and responsible for all failures of Germany, thereby killing millions of Jews in concentration camps and gas chambers. And this is the context in which it has to be found out what was the mental profile of this man that prompted him to commit such inhumane acts. †¢ Data collection methods (testing, interviews, observation, etc.) As no direct interviewing can be carried out while examining the psychological profiles of historical figures, what a researcher has to depend on for data collection in this kind of research are previously done studies and also interviews with the authors of such

Harrod-Domar Growth Model Essay Example | Topics and Well Written Essays - 1500 words

Harrod-Domar Growth Model - Essay Example According to the research findings, it can, therefore, be said that in the closed economy, saving equals to investment, and saving is some proportion of income as well. Thus we find that saving equals to saving rate times income equal to investment (St=sYt=It). The last one is that we can write the capital-accumulation in the form of Kt+1=(1-d)*Kt+It, where K is capital stock and d is the rate of capital depreciation. Based on all assumptions and according to the mathematics, in order to simplify all equations and use Log method, we can get the growth rate of GDP is gY=s*A-d, where d is the depreciation rate of capital. This is the main idea of the H-D model. Based on the result, the growth rate of an economy, therefore, depends on the saving rate. It means that saving rate will promote economic growth. However, it must be satisfying the assumptions, otherwise, the result will be different. Here is an example to prove it. The data source from Gapminder World; as indicated in the grap h below proves that there is no relationship between investment and GDP/capita growth in 1970 and 2010. In summary, the H-D model cannot completely explain the fact that the rate of saving can prove economic growth. The model has to satisfy all the assumptions otherwise the results obtained will be different. This paper also illustrates why developing countries are developing faster than western countries. There are two sets data from World Bank. The first one is about Canada which is developed the country and the second one is about China, which is developing the country. According to the table, one can see that China’s GDP is much great than Canada’s, and all the percentage value larger than Canada. This is, therefore, an indication that China growths faster than Canada. Solow model can play a significant role in explaining this phenomenon. One assumption of the model is the constant return on the scale. This means that all input is increased by the same amount the o utput. The assumption, therefore, yields the aggregate production as follows; Y=F(K, L).

Medical Malpractice Research Paper Example | Topics and Well Written Essays - 1500 words

Medical Malpractice - Research Paper Example An understanding of the causes/dimensions, effects and liabilities of medical malpractice can help one to avoid such professional negligence and malpractice lawsuits. Medical malpractice and its characteristics Current trends and statistics relating to medical malpractice Within the past six centuries, medical malpractice has increased drastically. According to statistics, there were a total of 2696 serious cases of malpractice in the United States in 1999 alone (Medical Malpractice par 1). The Institute of Medicine of the National Academy of Sciences states that about 98000 patients risk losing their lives in various hospitals in the US due to medical malpractices (Medical Malpractice par 1). In today’s society, a doctor’s responsibility is to provide affordable care, talent and reasonable judgment in the course of duty. Whenever patients are given wrongly diagnosed, mal-treated or die due to what is perceived to be medical malpractice, the doctors normally are subject ed to a lot of suffering without appreciating their efforts or whatever good they may have done before to save lives. This situation also makes fellow doctor fear performing certain risky procedures for fear of going through similar or worse experiences. Potential doctors are also discouraged from joining the medical profession when they witness such situations. Characteristics of Negligence Malpractice is negligence. Cases of negligence fall under the description of torts. A tort may be a common offence, thus malpractice could be a common offence. In the simplest terms, there are four essential elements of malpractice which include duty, breach, damage and (direct) causal affiliation. Each healthcare supplier assumes a duty when beginning diagnosis, consultations, or treatment of a patient. The duty or responsibility emanates from an implied or expressed contract. Another important element of medical malpractice is breach. If one fails to create an accurate diagnosis once he or she has assumed the duty to try and do so, one might commit a breach of responsibility. Thirdly, causal affiliation which states that damage is caused by a failure to properly diagnose the breach responsibility. Damage is the outcome of a failure to diagnose properly. Medical malpractice occurs when a patient sustains injuries or complications that may or may not be of a permanent and continuing nature due to negligence (Pozgar 558). Negligence is among the most typical civil suit filed against doctors. Legal responsibility for negligence cannot be found unless the following subsequent elements are present: One, the defendant should owe an obligation to the plaintiff to practice care. Two, the defendant should breach the quality of care stipulated by law for his/her behavior. Thirdly, the plaintiff should suffer loss or damage as a result of this breach. Lastly, the behavior of the defendant should be the near cause of the plaintiff’s injury or damage ((Pozgar 65). Cases related to medical malpractice In the case of Adderly v. Bremner it was noted that the defendant medical doctor was careless in not altering the syringes to vaccinate thirty eight patients and as an alternative used one needle for more than one patient (Pozgar 76). As a result, the plaintiff experienced blood poisoning. The doctor in this case did not provide the specified correct care. Any sensible doctor would have actually

Hitler's Multiaxial Psychological Profile Research Paper

Hitler's Multiaxial Psychological Profile - Research Paper Example In view of this diagnosis, it has been concluded that continued medication combined with psychotherapy for a prolonged period is the only way possible to bring such a person at least partially to premorbid conditions. Hitler's Multiaxial Psychological Profile †¢ Introduction of the person Hitler is a person who needs only the mention of his name to be identified worldwide, but needs more than what is available in our academic knowledge to be understood as an individual. Hitler’s character has been an intriguing phenomenon for psychologists who have studied the complexities of his behavior that prompted the genocide of Jews and the Second World War. It can be generally stated that Hitler was a cruel man, a dictator, still a crowd puller at least in Germany of his period. He might also be considered as a social evil, if examined from the criteria of humanism and human rights. First person accounts of personal encounters with this man have depicted him as â€Å"unremarkable and unlovely† (Welch, 1998, p.2). It has also been said that while â€Å"the pathology (of Hitler) alarmed some Germans (in the period of his making), for most, it added to his appeal† (Victor, 2000, p.6). ... After his mother’s death (with whom he had a very strong bonding) and after failing to get admission to an art school, Hitler had totally avoided contact with his family members and friends (Victor, 2000, p.6-7). The time was also getting ripe for the rise of a figure like Hitler as Germany was going through a stage of â€Å"political instability†, economic crisis, sudden changes in the society (fading aristocracy and an impoverished middle class), â€Å"fear of communism†, and also disillusionment with the leadership (Victor, 2000, p.6). Hitler infused a sense of nostalgia for the past legacies and a romantic kind of nationalism in the minds of the people by manipulating this social context (Victor, 2000, p.6-7). Though Hitler has been judged as a man of â€Å"insecurity and personal weakness† by historians like John Lukacs, contrasting these psychological readings, he rose to the pedestal of a national hero, moreover a dictator (qtd. in Victor, 2000, p.7 ). Becoming the ruler of Germany, Hitler carried out extermination programs of Jews who he thought were evil and responsible for all failures of Germany, thereby killing millions of Jews in concentration camps and gas chambers. And this is the context in which it has to be found out what was the mental profile of this man that prompted him to commit such inhumane acts. †¢ Data collection methods (testing, interviews, observation, etc.) As no direct interviewing can be carried out while examining the psychological profiles of historical figures, what a researcher has to depend on for data collection in this kind of research are previously done studies and also interviews with the authors of such

Medical Malpractice Research Paper Example | Topics and Well Written Essays - 1500 words

Medical Malpractice - Research Paper Example An understanding of the causes/dimensions, effects and liabilities of medical malpractice can help one to avoid such professional negligence and malpractice lawsuits. Medical malpractice and its characteristics Current trends and statistics relating to medical malpractice Within the past six centuries, medical malpractice has increased drastically. According to statistics, there were a total of 2696 serious cases of malpractice in the United States in 1999 alone (Medical Malpractice par 1). The Institute of Medicine of the National Academy of Sciences states that about 98000 patients risk losing their lives in various hospitals in the US due to medical malpractices (Medical Malpractice par 1). In today’s society, a doctor’s responsibility is to provide affordable care, talent and reasonable judgment in the course of duty. Whenever patients are given wrongly diagnosed, mal-treated or die due to what is perceived to be medical malpractice, the doctors normally are subject ed to a lot of suffering without appreciating their efforts or whatever good they may have done before to save lives. This situation also makes fellow doctor fear performing certain risky procedures for fear of going through similar or worse experiences. Potential doctors are also discouraged from joining the medical profession when they witness such situations. Characteristics of Negligence Malpractice is negligence. Cases of negligence fall under the description of torts. A tort may be a common offence, thus malpractice could be a common offence. In the simplest terms, there are four essential elements of malpractice which include duty, breach, damage and (direct) causal affiliation. Each healthcare supplier assumes a duty when beginning diagnosis, consultations, or treatment of a patient. The duty or responsibility emanates from an implied or expressed contract. Another important element of medical malpractice is breach. If one fails to create an accurate diagnosis once he or she has assumed the duty to try and do so, one might commit a breach of responsibility. Thirdly, causal affiliation which states that damage is caused by a failure to properly diagnose the breach responsibility. Damage is the outcome of a failure to diagnose properly. Medical malpractice occurs when a patient sustains injuries or complications that may or may not be of a permanent and continuing nature due to negligence (Pozgar 558). Negligence is among the most typical civil suit filed against doctors. Legal responsibility for negligence cannot be found unless the following subsequent elements are present: One, the defendant should owe an obligation to the plaintiff to practice care. Two, the defendant should breach the quality of care stipulated by law for his/her behavior. Thirdly, the plaintiff should suffer loss or damage as a result of this breach. Lastly, the behavior of the defendant should be the near cause of the plaintiff’s injury or damage ((Pozgar 65). Cases related to medical malpractice In the case of Adderly v. Bremner it was noted that the defendant medical doctor was careless in not altering the syringes to vaccinate thirty eight patients and as an alternative used one needle for more than one patient (Pozgar 76). As a result, the plaintiff experienced blood poisoning. The doctor in this case did not provide the specified correct care. Any sensible doctor would have actually

Safe guarding adults Essay Example for Free

Safe guarding adults Essay Abuse is the violation of an individuals human and civil rights by any other person or persons. The harm may be physical, psychological or emotional or may be directed at exploiting the vulnerability of the victim in a more subtle way. There are many different types of abuse such as physical, sexual, emotional, neglect, exploitation, discriminatory, institutional, bullying, self-harm and domestic abuse. Institutional abuse is the maltreatment of a person (often children or older adults) from a system of power. This can range from acts similar to home-based child abuse, such as neglect, physical and sexual abuse, and hunger, to the effects of assistance programs working below acceptable service standards, or relying on harsh or unfair ways to modify behavior. Institutional abuse can typically occur in a care home, nursing home, acute hospital or in-patient setting and can be any of the following discriminatory abuse financial abuse neglect physical abuse psychological and emotional abuse sexual abuse verbal abuse1 Exploitation is the fact or action of treating someone unfairly in order to benefit from their work. The main type of exploitation in health and social care is financial exploitation. Financial abuse can take many forms. For instance, title to the older persons home or other assets is transferred to the abuser and then sold. Funds from checking, savings, and investment accounts are withdrawn without authorization. Wills are changed through intimidation. Loans are taken out and the funds given to the abuser. Checks are signed over to the abuser, who cashes them. Even outright theft of property may occur.2 It’s also about abuse of power, where carers use their role with vulnerable adults for their own gain. Eg.Sexual gain, financial gain Residential Care: A suspicious care giver might misuse an elder’s personal checks, credit cards, or accounts, forge the elders signature or steal cash, income checks, or household goods. This can occur in the residential care home because the PWUS is vulnerable to trusting their health care practitioner as they seem reliable.3 Domestic violence and abuse Any incident or pattern of incidents of controlling or threatening behavior, violence or abuse. The abuse can be: psychological physical sexual financial emotional Signs and symptoms Here are some signs to watch for: †¢Bruises or injuries that look like they came from choking, punching, or being thrown down. Black eyes, red or purple marks at the neck, and sprained wrists are common injuries in violent relationships. †¢Attempting to hide bruises with makeup or clothing †¢ Making excuses like tripping or being accident-prone or clumsy. Often the seriousness of the injury does not match up with the explanation. Example 2 A nurse comes to visit a couple in domiciliary care, after couple of visits nurse notices bruising on the women when doing personal care and notices she is more withdrawn then usual and becomes defensive when the nurse asks about the bruising. Also the husband has to stay in the room when his wife’s personal care takes place and only a woman is allowed to care for his wife, else he gets aggressive towards the women Discriminatory Abuse Examples of discriminatory abuse Discriminatory abuse is mistreatment on the grounds of a person having a  particular characteristic such as a differing; ethnicity; gender; age; disability; sexuality; health status; religion. Denying one individual or group the same rights as another individual or group.4 For example, someone could be assaulted due to the colour of their skin. 1 A carer looking after a person in domiciliary care, and not respecting their privacy due to them being a certain gender or race. For example, the carer going through draws/taking belongings due to a presumption about their ethnicity. Signs and Symptom Discriminatory abuse can include:   unequal treatment due to race, gender, religion, age, sexuality or disability verbal abuse, inappropriate language, slurs, harassment and deliberate exclusion denial of basic human and civil rights e.g. allowing people to follow their own spiritual or cultural beliefs or choice about their own sexuality Indicators of discriminatory abuse may include: lack of choice lack of privacy and dignity lack of personal belongings use of punishment withholding food and drink Physical Abuse Physical abuse is defined as the use of physical force that may result in bodily injury, physical pain, or impairment. Physical abuse may include hitting, beating, pushing, shoving, shaking, slapping, kicking, pinching, and burning. Also, inappropriate use of drugs and physical restraints, force-feeding, and physical punishment of any kind also are examples of physical abuse. Signs and symptoms bruises, black eyes, welts, lacerations, and rope marks bone fractures, broken bones, and skull fractures open wounds, cuts, punctures, untreated injuries in various stages of healing sprains, dislocations, and internal injuries/bleeding broken eyeglasses/frames, physical signs of being subjected to punishment, and signs of being restrained Sexual Abuse Sexual abuse is defined as sexual contact of any kind with a person. Sexual contact with any person incapable of giving consent is also considered sexual abuse. It includes unwanted touching, all types of sexual assault or battery, such as rape, sodomy, coerced nudity, and sexually explicit photographing.5 Signs and symptoms bruises around the breasts or genital area; unexplained venereal disease or genital infections; unexplained vaginal or anal bleeding; torn, stained, or bloody underclothing; and An elders report of being sexually assaulted or raped. Emotional or Psychological Abuse Emotional or psychological abuse is defined as the infliction of pain or distress through verbal or nonverbal acts. Emotional/psychological abuse includes verbal assaults, insults, threats, intimidation, humiliation, and harassment. In addition, treating an older person like an infant; isolating an elderly person from his/her family, friends, or regular activities; giving an older person the silent treatment; and enforced social isolation are examples of emotional/psychological abuse. Signs and symptoms being emotionally upset or agitated; being extremely withdrawn and non-communicative or non-responsive; Neglect Neglect is defined as the refusal or failure to fulfil any part of a persons obligations or duties. Neglect may also include failure of a person who has fiduciary responsibilities to provide care for a vulnerable adult. For example an elder (e.g., pay for necessary home care services) or the failure on the part of an in-home service provider to provide necessary care. For example, failure to provide an elderly person with such life necessities as food, water, clothing, shelter, personal hygiene, medicine, comfort, personal safety, and other essentials included in an implied or agreed-upon responsibility to an elder. Signs and symptoms dehydration, malnutrition, untreated bed sores, and poor personal hygiene; unattended or untreated health problems;  hazardous or unsafe living condition/arrangements (e.g., improper wiring, no heat, or no running water); unsanitary and unclean living conditions (e.g. dirt, fleas, lice on person, soiled bedding, urine smell, inadequate clothing); and An elders report of being mistreated. Bullying To bully someone is where an individual uses their superior strength to intimidate or influence someone to do something that they want them to do. E.g. Bully a person with a mental illness to move or eat something if they do not want to.6 Signs and symptoms Depending on the extent of the bullying, the signs and symptoms can be a range of physical and emotional ones. These can include The victim becoming withdrawn and quiet Repeated injuries which can’t be explained such as bruises, burns or cuts The victim showing signs of losing focus and becoming unable to concentrate Signs of compulsive behaviour An example of bullying in an old peoples home for dementia and Alzheimer’s: http://www.bbc.co.uk/news/uk-wales-south-east-wales-12125575 Self-Harm Self-harm is an indicator of abuse. As a carer you should pick up on self-harm and put the appropriate/care in place to deal with issues. Legal responsibility safeguard-‘duty of care’ Deliberate injury to oneself, typically as a manifestation of a psychological or psychiatric disorder Signs and symptoms Unexplained cuts, bruises, burns etc. usually on wrists, arms, thighs and chest Keeping fully covered all the time, even in hot weather Depressed nature: low mood, tearfulness, lack of motivation and interest in anything Withdrawing from others P2: Detailed descriptions of the indicators of abuse and self-harm: Disclosure This is where the PWUS voluntarily tells you or through discussion or  counselling says that they have been abused. This is an obvious indicator because it is coming directly from the person who has been abused. After the PWUS has told this information to a carer it would then be their duty to pass it on and for an investigation to take place. As a carer you have legal responsibility to report this. The incident should be further investigated because the PWUS may have a mental disability and may not understand what abuse is, therefore they may say they have been abused when in fact they haven’t. For example a person with dementia might think they are being abused but really they may just be confused. On the other hand someone may reveal they have been abused but may not reveal the full extent of the abuse. An example of where disclosure may occur is in domiciliary care where self-harm is taking place in the PWUS own home. When the carer comes to the PWUS home they may reveal to them that they are self-harming. Changes in behaviour This can include many different things such as confusion, trouble with sleeping, loss of confidence and expressions of anger/frustration. Changes in behaviour can easily go unnoticed because in care settings the staff are usually quite busy catering for everyone’s needs whilst trying to follow up procedures. This means staff may not notice such a change in PWUS behaviour. Some changes may be more obvious than others, for example, if there is a person who is usually quite loud, bubbly, chatty or out-going and then they become quiet, reserved, start isolation themselves and submissive then this is quite an obvious change in behaviour. An example of changes in behaviour may be in a care home where one PWUS starts to avoid a certain carer and shows fear when they are around, this may be due to this carer being abusive in the past. Difficulties with finance This may be easier to notice as it would be quite easy to notice if someone had taken a lump sum of money from an account however it may be hard to link it with abuse straight away. Especially if a person has given someone their trust with their finances, you may not want to believe they are abusing that trust. The indicator may be more obvious if it is a sudden change from having plenty of money to struggling with finances. This is likely to be noticed by someone who is around the PWUS when they spend their money or  someone who deals with their finances. An example for this indicator may be where a PWUS is being taken out for the day through community care and they are unable to afford their lunch even though they had plenty of money to last a couple of weeks only days before. They may go to get the money from their purse and then have nothing in there. It may also be hard to detect whether someone is being abused financially as if it’s an elderly person with dementia they may have just misplaced their money or forgotten where they have put someone. However if this happens on a regular occurrence then it might have to be put into investigation. Stress which triggers health problems This may be harder to link to abuse as stress can come from many different experiences and events in person’s life which can happen at any stage. Mental health problems may be depression, anxiety, dementia etc. In this situation if mental health problems are spotted there should be an investigation to make sure the real cause of this is found. This may be likely to occur in an elderly people’s home where abuse leads to stress which then makes a PWUS dementia worse. A person with dementia is already likely to be stressed as they forget things (even things like forgetting where they are) and they get confused so it would be important to look deeper into stress in case there is any unknown or undiscovered cause to the stress. Unexplained injuries Bruises and scars are signs of abuse. These are the more obvious indicators as they are visible. A PWUS might try to hide these signs because they feel embarrassed or they might feel it’s their fault. The abuser might blame them and say that it’s their fault and make the PWUS feel shameful. For example in a care home a carer might be abusing an elderly with dementia by grabbing theirs wrists and pulling them around or hurting them and then saying to the PWUS that it’s their fault. They might say ‘no one will believe them if you tell because you’re crazy, you have dementia. They won’t believe you; you make me do this to you’. So as you can see this would be enough to make a PWUS feel too scared to talk of their physical abuse and they may feel too embarrassed or like no one will believe them. So unexplained injuries could be a sign of abuse so if you see this it’s important to look into what  caused the injury. Poor Hygiene Poor hygiene can be a sign of abuse as it could be a sign of neglect. Hygiene could be they’re own personal hygiene like not looking and smelling clean. Or it could be their environment for example if it’s someone who is living at home but has a carer come to look after them or help them. A sign of neglect could be the house is not clean, or their duvet smells dirty and their clothes to. However it may also be where a PWUS has more difficult needs and the practitioner leaves them out to avoid catering to their difficult needs. Physical indicators: -scars -hygiene -malnourishment -cancers -heart disease -panic attacks -mouth ulcers Behavioural indicators: -not trusting other people -low mood -low self-esteem -becoming passive or complaint -poor attendance at school or to social activities -attention seeking -mood swings -withdrawn -aggressive behaviour towards others -not expressing wishes or choices -difficulty sleeping -social isolation Both: -Difficulty to pay bills -depression -break down in relationships -unemployment -poverty P3: Explanations of factors that may lead to abusive situations Vulnerable adults may include: Learning disabilities: They don’t fully understand how to look after themselves and people may get frustrated because they do not understand certain things. They may have a lack of social awareness that they are being abused or treated unfairly e.g. Down syndrome goes to cinema and pays and isn’t aware of how much change they should get. Physical disabilities: They physically can’t do some things for themselves, can’t fight back when being abused. They are reliant on others for personal care, if care isn’t provided they can become neglected which may lead to infection, dehydration, malnourishment etc. Dementia: Unable to remember things which means people can take advantage of them. Memory confusion may mean the PWUS doesn’t realise they are being abused, this may tend to be financial abuse because they ae unable to keep track of their money so won’t notice if any goes missing. Mental health needs: They are unaware of what is normal and what isn’t therefore they may think abuse is normal and they shouldn’t tell anyone about it. Due to mental distress there may be confusion or lack of understanding over the abuse taking place. Aphasia: This is similar to dementia and the memory problem may cause confusion and someone may take advantage of this. A sensory impairment: For example blind/deaf. Blind people can’t see you taking money (can’t see abuse taking place). Deaf people can’t hear verbal abuse taking place. Ill health: (cancer, diabetes) People with ill health need personal care, and they may not know how to get the help that they need. They might be open to poor quality services as desperation means they will try anything. Someone may take advantage of this desperation by charging lots of money for something that won’t work. (Practitioners making false claims) Older people: Tend to require or be reliant for person al care and managing finances therefore someone may take advantage of managing their finances by taking money for themselves. They also may be forgetful so may not notice the abuse taking place. Environments where abuse may take place: day care centres; community care; day care; independent living residential care; hospitals; home; health services, e.g. GP surgeries, dental surgeries, physiotherapy Contexts of abuse: Adults who feel shame or fear of reporting; this may affect anyone as they may be scared of any repercussions that may happen as a result of reporting abuse. Discriminatory practice; this may affect anyone because everyone could be a victim of being discriminated against. This would occur if the person has a protected characteristic of which they are being discriminated against. People who are dependent on others for personal care, for example physical disabilities. This may lead to abuse as the PWUS may be rough handled and/or neglected. Adults who do not have the social awareness that abuse has taken place: this may include PWUS with dementia or a learning difficulty. Financial abuse may be likely to take place as the PWUS will be unaware that their money is missing. Communication difficulties; this could affect a PWUS who is an aphasiac, has a sensory impairment or has autism. They may not be able to fight back or stick up for themselves. They also may not understand the abuse as well as struggle to report it. Social isolation; this is likely to occur with older people in their own homes or people with a mental illness because they may live alone and not go out and see friends meaning they are going without any social contact. People with a mental illness may socially isolate themselves on purpose because they do not want to be around other people. Bullying within care services; this could also affect anyone and it is where a carer may exert their power over a PWUS to show that they are above the PWUS. It may also happen between PWUS where verbal or physical abuse is taking place. Invasion of privacy; this could  also affect any of the groups and may be where a PWUS is not given privacy to get undressed or go to the bathroom etc. Relationships involving power; any of the groups Lack of mental capacity to consent to sexual relationships: This may include people with learning difficulties and mental illness and because they can’t consent this is where sexual abuse may take place and the health or care professional may take advantage of this. Examples of people who may abuse: Health or care professionals, those working in health or care environments, other people using services, partners, carers, relatives, friends, strangers and volunteers. Reasons why these people may abuse: The abuse may be due to a historical cycle of abuse where ‘the abused becomes the abuser’. Being abused in the past may lead someone to think that it is okay to abuse others. People with depression/anger management issues may use their power over others to abuse. Those with anger management may be unable to control their actions in a fit of rage. Reduced mental capacity maybe due to learning difficulty or mental illness may mean they do not understand that what they are doing is abusive. They may feel as though what they are doing is not wrong as they do not know the boundaries of what is right and wrong. Poor safeguarding procedures may mean practitioners may not fully understand their role in protecting PWUS’. This means the abuse may be accidental because they are not following certain procedures correctly. Cultural differences/first language not being English may lead to frustration and misunderstanding between a practitioner and PWUS. Poor role model in a senior member of staff may mean that any new members of staff think its common practice and that it’s okay for them to abuse the PWUS. First hand experiences of violence may lead to imitation of behaviour. Poor care from the health care professionals may be due to long hours, bringing in personal issues to work and taking it out on service users. Also being in a low paid job and being short staffed can all be contributing factors to poor care. Short staffing may mean that there is not enough time to care for all the PWUS properly. M1: Short term effects of abuse Physical abuse/exploitation Physical abuse can have many effects (short-term and long-term) on a PWUS and these can be physical, intellectual, emotional and social; Physical health and wellbeing is the positive functioning of body systems and the absence of illness or disease. It is getting the right amount of nutrients, activity and rest needed to function. The potential short term effects of physical abuse on physical health and wellbeing include dehydration and malnourishment from not getting enough food and water. Also injuries such as bruising, cuts, finger print marks, whiplash, friction burns. There may also be long term effects for these injuries, for example if a PWUS gets a cut during personal care and this is not dealt with then it could get infected which could, in severe cases, lead to something like blood poisoning. Long term effects of head injuries may include something such as epilepsy which is very serious and could affect the PWUS in many different aspects of their life, for example they woul dn’t be able to watch films with flashing lights or go places like carnival or fair which usually have flashing flights which could prevent them spending special days out with their families. The potential short term effects of sexual exploitation may be injuries caused to the genital area as well as STI’s being passed on during sexual abuse which may take place in community care. PWUS with learning difficulties may be sexually abused as they would not understand what is happening and/or if it is abuse or if it is normal .This is because they don’t always know the difference between right and wrong and if the abuser is telling them its okay and normal they might not think any different as the abuser is meant to be the person caring for them. Financial exploitation could lead to the PWUS having to go without food and basic necessities as they are short of money therefore they may become malnourished. Financial abuse may take place in care from home where the carer has a responsibility to deal with their money and finances and they slowly and sneakily transfer money into their own account or they may take cash which is lying around and then make out the PWUS is just forgetting where they have put it and take advantage. This could go easily unnoticed as there would only be one carer and its in the comfort of the elderly PWUS home so not as many people would be there to become suspicious or realise. Intellectual health and wellbeing involves positive learning experiences which lead to skills and language being developed throughout life. Getting support to be able to learn and being mentally stimulated and challenged. The short term effects of physical abuse may include a head injury caused by the PWUS being shaken which may cause problems with cognitive processes and may cause the PWUS to become confused as well as have trouble with memory. If abusive practice is extensive enough that standard activity to stimulate intellect cannot be done by the PWUS because they may be unable to concentrate. This may lead to a fall in attendance at school/work. The short term effects of exploitation may include a PWUS being unable to focus on certain tasks due to thinking about being sexually taken advantage of. Also with financial exploitation the PWUS may have money worries due to their money being taken from them without their permission, this may then lead to them not taking part in activities that could stimulate the brain. If a PWUS is having money taken from them in their home during domiciliary care then they may feel very confused. Also a PWUS may be exploited by not being able to be involved in certain activities as a result of the carer leaving them out, maybe because their needs are more difficult than some of the other PWUS. This may lead to them not being intellectually stimulated and stumping their development in different skills and language. Emotional health and wellbeing includes being able to express yourself and if emotional support is required, being able to find and use this support. It is also being happy and secure in yourself as well as being in good mental health. Many emotions can arise when physical abuse and exploitation takes place and they tend to be very negative and can have negative effects on the person. Feelings of fear of the abuser are likely to occur, as a result of physical abuse. They may fear they may be abused again. If the abuse took home in a care home they may feel to scared to ever go into a care home again through the fear of being abused again. If it was sexual abuse they may feel upset and embarrassed/humiliated about the abuse. The abuser may also make the person feel as though the abuse is their fault therefore they may feel guilty and start to get a low mood which is the beginning of depression. The person being abused may become angry about the abuse as  well as becoming anxious abo ut it happening again. This could also lead to panic attacks. Exploitation such as a PWUS being treated unfairly by being left out/not interacted with as much as other PWUS may lead to them becoming upset and lower their self-confidence. They may start to make less of an effort and become withdrawn as they will feel excluded. Financial exploitation can lead to confusion as to where money is going and upset over not having enough money for certain things. Also if the PWUS becomes aware of the financial exploitation they may feel very taken advantage of and maybe helpless that they can’t do anything about it. They may feel no one will believe them or they may feel to scared to report it as they may fear abuse afterwards. Or they may feel maybe they are just being confused because that’s whats the carer has told them so they believe it. Social health and wellbeing is where a person has a social network of friends and family and is able to keep and form meaningful relationships. Also going out with these friends and families and enjoying yourself by taking part in different activities. Short term effects of physical abuse and exploitation on social health and wellbeing may include becoming withdrawn and not wanting to see friends and family. A PWUS, for example in a residential home, may stop wanting to participate in the activities provided and may stop interacting with other residents. The person may stop interacting with others as well as stop making choices for themselves and allowing others to make their choices for them. This will make them loose their independency which could result in them later being taken advantage of. Also the PWUS may begin to imitate unacceptable behaviour as they have poor role models around them. Exploitation could lead to a PWUS not wanting to interact with others if they have been left out in the past or have been taken advantage of. This could lead to social isolation as they would push people away and may lose social contacts. Strengths of spotting signs and symptoms early The indicators or warning signs of abuse are clues that something is happening in the life of the person that should be looked into. Some indicators are obvious signs of abuse. Other indicators are subtle, requiring careful observation. In some situations abuse may not be occurring  at all. It is important to think about the person and any health or behavioural issues they have. Some people may get injured more easily due to health reasons or aging. For example, some medications and some health problems like hemophilia (where the blood clots slowly) can cause easy bruising. Some people may engage in self-injurious behaviours that cause injuries that look like abuse. Even if you discover that a person has a health or behavioural issue that might be the cause of the injury, it is still important to investigate to rule out abuse as the cause. It is important to put aside any biases that you might have that care providers would not abuse a person with a disability that they support.

Impact of Credit Default Swaps (CDS)

Impact of Credit Default Swaps (CDS) Chapter 1 : Introduction A Swap is a derivative in which two counterparties agree to exchange one stream of cash flow against another stream. Swaps can be used to create unfunded exposures to an underlying asset, since counterparties can earn the profit or loss from movements in price without having to post the notional amount in cash or collateral. It can be used to hedge certain risks such as interest rate risk, or to speculate on changes in the expected direction of underlying prices. The main objective of the project is to understand about Credit Default Swaps (CDS), its global footprint, its role in subprime crisis, its settlement in global arena and to check the feasible settlement of CDS in India, after its introduction in India, by understanding about Indian Credit Derivatives market. Research is concerned with the systematic and objective collection, analysis and evaluation of information about specific aspects to check the feasible settlement of CDSs in India. The development of financial derivatives in recent past is astounding when we consider its volume globally. But at the same time the product once created for hedging the risk currently allows you to bear more risk sometimes making the whole financial system to tremble. May be thats why Warren Buffet called it a financial weapon of mass destruction. Whatever it may be but derivatives have grown exponentially and are necessary for the market to flourish. The credit derivatives are nothing but the logical extension to the family of derivatives and have already made its presence felt globally. The credit derivatives have played a significant role in the development of debt market but also share a blame for the proliferation of subprime crisis. A credit default swap which constitutes the major portion of credit derivatives is similar to an insurance contract which allows you to transfer your risk to third party in exchange of a premium. Right from its origin as plain vanilla product for hedging purpose it has grown to very complex products and now has posed a question mark on its credibility. The subprime crisis started in what were regarded as the worlds safest and most sophisticated markets and spread globally, carried by securities and derivatives that were thought to make the financial system safer. The subprime crisis brings the complexity of securitized products and derivatives products, the human greedy nature, inability of rating agencies to gauge the risk, inefficiency of regulatory bodies, etc. to the fore. Although CDS was not the cause of the subprime crisis but it had cascading effect on the market and was considered as the reason for the collapse of American International Group (AIG). The lessons from the consequences of subprime crisis have helped in creating awareness about the regulatory frameworks to be in place which has increased the transparency, standardization, and soundness in the market. The various measures include formation of central counterparty for CDS, hardwiring of auction protocol and ISDA determination committee. On the backdrop of global crisis the movement of CDS is being watched carefully. The various data sources now provide data even on weekly basis. The efforts are being paid off and the market size of CDS has reduced considerably. And now with the central counterparties in place the CDS market will have more transparency and better control. After opening up of the economy the equity market of India have grown significantly bringing in more transparency. But the corporate bond market is still in undeveloped mode and the efforts being taken on developing it have not provided expected returns. Under this light, India is now all set to launch Credit Default Swaps which are expected to ignite the spark which will flourish the corporate bond market. Considering the cautious nature of RBI and the havoc created by CDS in global market the move by RBI is significant. From the move of RBI one can say as the knife itself is not harmful but it depends whether its in doctors hand or a robbers hand. Similarly CDS as a product is certainly not harmful but its utility will depend on the judicious use of the same. Chapter 2: Literature Review Derivatives The global economic order that emerged after World War II was a system where many less developed countries administered prices and centrally allocated resources. Even the developed economies operated under the Bretton Woods system of fixed exchange rates. The system of fixed prices came under stress from the 1970s onwards. High inflation and unemployment rates made interest rates more volatile. The Bretton Woods system was dismantled in 1971, freeing exchange rates to fluctuate. Less developed countries like India began opening up their economies and allowing prices to vary with market conditions. Price fluctuations made it hard for businesses to estimate their future production costs and revenues. Derivative securities provide them with a valuable set of tools for managing this risk. Financial markets are, by nature, extremely volatile and hence, the risk factor is an Important concern for financial agents. To reduce this risk, the concept of derivatives comes into the picture. Derivatives are products whose values are derived from one or more basic variables called bases. These bases can be underlying assets (for example forex, equity, etc), bases or reference rates. It is afinancial instrument(or more simply, an agreement between two people/two parties) that has a value determined by the future price of something else. Derivatives can be thought of as bets on the price of something.Itis the collective name used for a broad class offinancial instrumentsthatderivetheir value from other financial instruments (known as the underlying), events or conditions. Essentially, a derivative is a contract between two parties where the value of the contract is linked to the price of another financial instrument or by a specified event or condition. Asecurity whose price is dependent upon or derived fromone or more underlying assets.The derivative itself is merely a contract between two or more parties. Itsvalue is determinedby fluctuationsin the underlying asset.The most common underlying assets includestocks, bonds,commodities,currencies, interest rates and market indexes. Most derivatives are characterized by high leverage.Derivatives are generally used as an instrument to hedgerisk, but can also be used forspeculative purposes. For example, wheat farmers may wish to sell their harvest at a future date to eliminate the risk of a change in prices by that date. The transaction in this case would be the derivative, while the spot price of wheat would be the underlying asset. Derivatives have probably been around for as long as people have been trading with one another. Forward contracting dates back at least to the 12th century, and may well have been around before then. Merchants entered into contracts with one another for future delivery of specified amount of commodities at specified price. A primary motivation for pre-arranging a buyer or seller for a stock of commodities in early forward contracts was to lessen the possibility that large swings would inhibit marketing the commodity after a harvest. The need for a derivatives market The derivatives market performs a number of economic functions: They help in transferring risks from risk averse people to risk oriented people They help in the discovery of future as well as current prices They catalyze entrepreneurial activity They increase the volume traded in markets because of participation of risk averse people in greater numbers They increase savings and investment in the long run The participants in a derivatives market Hedgers use futures or options markets to reduce or eliminate the risk associated with price of an asset. Speculators use futures and options contracts to get extra leverage in betting on future movements in the price of an asset. They can increase both the potential gains and potential losses by usage of derivatives in a speculative venture. Arbitrageurs are in business to take advantage of a discrepancy between prices in two different markets. If, for example, they see the futures price of an asset getting out of line with the cash price, they will take offsetting positions in the two markets to lock in a profit. Types of Derivatives Forwards: A forward contract is a customized contract between two entities, where settlement takes place on a specific date in the future at todays pre-agreed price. Futures: A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Futures contracts are special types of forward contracts in the sense that the former are standardized exchange-traded contracts Options: Options are of two types calls and puts. Calls give the buyer the right but not the obligation to buy a given quantity of the underlying asset, at a given price on or before a given future date. Puts give the buyer the right, but not the obligation to sell a given quantity of the underlying asset at a given price on or before a given date. Warrants: Options generally have lives of upto one year, the majority of options traded on options exchanges having a maximum maturity of nine months. Longer-dated options are called warrants and are generally traded over-the-counter. LEAPS: The acronym LEAPS means Long-Term Equity Anticipation Securities. These are options having a maturity of upto three years. Baskets: Basket options are options on portfolios of underlying assets. The underlying asset is usually a moving average or a basket of assets. Equity index options are a form of basket options. Swaps: Swaps are private agreements between two parties to exchange cash flows in the future according to a prearranged formula. They can be regarded as portfolios of forward contracts. The two commonly used swaps are : Interest rate swaps: These entail swapping only the interest related cash flows between the parties in the same currency. Currency swaps: These entail swapping both principal and interest between the parties, with the cash flows in one direction being in a different currency than those in the opposite direction. Swaptions: Swaptions are options to buy or sell a swap that will become operative at the expiry of the options. Thus a swaption is an option on a forward swap. Rather than have calls and puts, the swaptions market has receiver swaptions and payer swaptions. A receiver swaption is an option to receive fixed and pay floating. A payer swaption is an options to pay fixed and receive floating. Uses of Derivatives Derivatives may be traded for a variety of reasons. A derivative enables a trader to hedge some pre-existing risk by taking positions in derivatives markets that offset potential losses in the underlying or spot market. In India, most derivatives users describe themselves as hedgers (Fitch Ratings, 2004) and Indian laws generally require that derivatives be used for hedging purposes only. Another motive for derivatives trading is speculation (i.e. taking positions to profit from anticipated price movements). In practice, it may be difficult to distinguish whether a particular trade was for hedging or speculation, and active markets require the participation of both hedgers and speculators. A third type of trader, called arbitrageurs, profit from discrepancies in the relationship of spot and derivatives prices, and thereby help to keep markets efficient. Jogani and Fernandes (2003) describe Indias long history in arbitrage trading, with line operators and traders arbitraging prices between exchanges located in different cities, and between two exchanges in the same city. Their study of Indian equity derivatives markets in 2002 indicates that markets were inefficient at that time. They argue that lack of knowledge; market frictions and regulatory impediments have led to low levels of capital employed in arbitrage trading in India. However, more recent evidence suggests that the efficiency of Indian equity derivatives markets may have improved (ISMR, 2004). Development of derivatives market in India Derivatives markets have been in existence in India in some form or other for a long time. In the area of commodities, the Bombay Cotton Trade Association started futures trading in 1875 and, by the early 1900s India had one of the worlds largest futures industry. In 1952 the government banned cash settlement and options trading and derivatives trading shifted to informal forwards markets. In recent years, government policy has changed, allowing for an increased role for market-based pricing and less suspicion of derivatives trading. The ban on futures trading of many commodities was lifted starting in the early 2000s, and national electronic commodity exchanges were created. In the equity markets, a system of trading called badla involving some elements of forwards trading had been in existence for decades.6 However, the system led to a number of undesirable practices and it was prohibited off and on till the Securities and Exchange Board of India (SEBI) banned it for good in 2001. A series of reforms of the stock market between 1993 and 1996 paved the way for the development of exchange-traded equity derivatives markets in India. In 1993, the government created the NSE in collaboration with state-owned financial institutions. NSE improved the efficiency and transparency of the stock markets by offering a fully automated screen-based trading system and real-time price dissemination. In 1995, a prohibition on trading options was lifted. In 1996, the NSE sent a proposal to SEBI for listing exchange-traded derivatives. The report of the L. C. Gupta Committee, set up by SEBI, recommended a phased introduction of derivative products, and bi-level regulation ( i.e., self-regulation by exchanges with SEBI providing a supervisory and advisory role). Another report, by the J. R. Varma Committee in 1998, worked out various operational details such as the margining systems. The first step towards introduction of derivatives trading in India was the promulgation of the Securities Laws(Amendment) Ordinance, 1995, which withdrew the prohibition on options in securities. The market for derivatives, however, did not take off, as there was no regulatory framework to govern trading of derivatives. SEBI set up a 24-member committee under the Chairmanship of Dr.L.C.Gupta on November 18, 1996 to develop appropriate regulatory framework for derivatives trading in India. The committee submitted its report on March 17, 1998 prescribing necessary pre-conditions for introduction of derivatives trading in India. The committee recommended that derivatives should be declared as securities so that regulatory framework applicable to trading of securities could also govern trading of securities. SEBI also set up a group in June 1998 under the Chairmanship of Prof.J.R.Varma, to recommend measures for risk control in derivatives market in India. The report, which was submitte d in October 1998, worked out the operational details of margining system, methodology for charging initial margins, broker net worth, deposit requirement and real-time monitoring requirements. The Securities Contract Regulation Act (SCRA) was amended in December 1999 to include derivatives within the ambit of securities and the regulatory framework was developed for governing derivatives trading. The act also made it clear that derivatives shall be legal and valid only if such contracts are traded on a recognized stock exchange, thus precluding OTC derivatives. The government also rescinded in March 2000, the three- decade old notification, which prohibited forward trading in securities. Derivatives trading commenced in India in June 2000 after SEBI granted the final approval to this effect in May 2001. SEBI permitted the derivative segments of two stock exchanges, NSE and BSE, and their clearing house/corporation to commence trading and settlement in approved derivatives contracts . To begin with, SEBI approved trading in index futures contracts based on SP CNX Nifty and BSE-30(Sensex) index. This was followed by approval for trading in options based on these two indexes and options on individual securities. The trading in BSE Sensex options commenced on June 4, 2001 and the trading in options on individual securities commenced in July 2001. Futures contracts on individual stocks were launched in November 2001. The derivatives trading on NSE commenced with SP CNX Nifty Index futures on June 12, 2000. The trading in index options commenced on June 4, 2001 and trading in options on individual securities commenced on July 2, 2001. Single stock futures were launched on November 9, 2001. The index futures and options contract on NSE are based on SP CNX Trading and settlement in derivative contracts is done in accordance with the rules, byelaws, and regulations of the respective exchanges and their clearing house/corporation duly approved by SEBI and notified in the official gazette. Foreign Institutional Investors (FIIs) are permitted to trade in all Exchange traded derivative products. The following are some observations based on the trading statistics provided in the NSE report on the futur es and options (FO): †¢ Single-stock futures continue to account for a sizable proportion of the FO segment. It constituted 70 per cent of the total turnover during June 2002. A primary reason attributed to this phenomenon is that traders are comfortable with single-stock futures than equity options, as the former closely resembles the erstwhile badla system. On relative terms, volumes in the index options segment continues to remain poor. This may be due to the low volatility of the spot index. Typically, options are considered more valuable when the volatility of the underlying (in this case, the index) is high. A related issue is that brokers do not earn high commissions by recommending index options to their clients, because low volatility leads to higher waiting time for round-trips. Put volumes in the index options and equity options segment have increased since January 2002. The call-put volumes in index options have decreased from 2.86 in January 2002 to 1.32 in June. The fall in call-put volumes ratio suggests that the traders are increasingly becoming pessimistic on the market. Farther month futures contracts are still not actively traded. Trading in equity options on most stocks for even the next month was non-existent. Daily option price variations suggest that traders use the FO segment as a less risky alternative (read substitute) to generate profits from the stock price movements. The fact that the option premiums tail intra-day stock prices is evidence to this. Calls on Satyam fall, while puts rise when Satyam falls intra-day. If calls and puts are not looked as just substitutes for spot trading, the intra-day stock price variations should not have a one-to-one impact on the option premiums. SWAP In finance, a SWAP is a derivative in which two counterparties agree to exchange one stream of cash flow against another stream. These streams are called the legs of the swap. Conventionally they are the exchange of one security for another to change the maturity (bonds), quality of issues (stocks or bonds), or because investment objectives have changed. A swap is an agreement to exchange one stream of cash flows for another. Swaps are most usually used to:- Switch financing in one country for financing in another To replace a floating interest rate swap with a fixed interest rate (or vice versa) (Litzenberger, R.H)In August 1981 the World Bank issued $290 million in euro-bonds and swapped the interest and principal on these bonds with IBM for Swiss francs and German marks. The rapid growth in the use of interest rate swaps, currency swaps, and swaptions (options on swaps) has been phenomenal. Currently, the amount of outstanding interest rate and currency swaps is almost $3 trillion. Recently, swaps have grown to include currency swaps and interest rate swaps. It can be used to hedge certain risks such as interest rate risk, or to speculate on changes in the expected direction of underlying prices. If firms in separate countries have comparative advantages on interest rates, then a swap could benefit both firms. For example, one firm may have a lower fixed interest rate, while another has access to a lower floating interest rate. These firms could swap to take advantage of the lower rates. Different types of swaps:- Currency Swaps Cross currency swaps are agreements between counterparties to exchange interest and principal payments in different currencies. Like a forward, a cross currency swap consists of the exchange of principal amounts (based on todays spot rate) and interest payments between counterparties. It is considered to be a foreign exchange transaction and is not required by law to be shown on the balance sheet. In a currency swap, these streams of cash flows consist of a stream of interest and principal payments in one currency exchanged for a stream, of interest and principal payments of the same maturity in another currency. Because of the exchange and re-exchange of notional principal amounts, the currency swap generates a larger credit exposure than the interest rate swap. Cross-currency swaps can be used to transform the currency denomination of assets and liabilities. They are effective tools for managing foreign currency risk. They can create currency match within its portfolio and minimize exposures. Firms can use them to hedge foreign currency debts and foreign net investments. Currency swaps give companies extra flexibility to exploit their comparative advantage in their respective borrowing markets. Currency swaps allow companies to exploit advantages across a matrix of currencies and maturities. Currency swaps were originally done to get around exchange controls and hedge the risk on currency rate movements. It also helps in Reducing costs and risks associated with currency exchange. They are often combined with interest rate swaps. For example, one company would seek to swap a cash flow for their fixed rate debt denominated in US dollars for a floating-rate debt denominated in Euro. This is especially common in Europe where companies shop for the cheapest debt regardless of its denomination and then seek to exchange it for the debt in desired currency. Credit Default Swap Credit Default Swap is a financial instrument for swapping the risk of debt default. Credit default swaps may be used for emerging market bonds, mortgage backed securities, corporate bonds and local government bond. The buyer of a credit default swap pays a premium for effectively insuring against a debt default. He receives a lump sum payment if the debt instrument is defaulted. The seller of a credit default swap receives monthly payments from the buyer. If the debt instrument defaults they have to pay the agreed amount to the buyer of the credit default swap. The first credit default swap was introduced in 1995 by JP Morgan. By 2007, their total value has increased to an estimated $45 trillion to $62 trillion. Although since only 0.2% of Investment Companys default, the cash flow is much lower than this actual amount. Therefore, this shows that credit default swaps are being used for speculation and not insuring against actual bonds. As Warren Buffett calls them financial weapons of mass destruction. The credit default swaps are being blamed for much of the current market meltdown. Example of Credit Default Swap An investment trust owns  £1 million corporation bond issued by a private housing firm. If there is a risk the private housing firm may default on repayments, the investment trust may buy a CDS from a hedge fund. The CDS is worth  £1 million. The investment trust will pay an interest on this credit default swap of say 3%. This could involve payments of  £30,000 a year for the duration of the contract. If the private housing firm doesnt default. The hedge fund gains the interest from the investment bank and pays nothing out. It is simple profit. If the private housing firm does default, then the hedge fund has to pay compensation to the investment bank of  £1 million the value of the credit default swap. Therefore the hedge fund takes on a larger risk and could end up paying  £1million The higher the perceived risk of the bond, the higher the interest rate the hedge fund will require. Credit default swaps are used not only by investment banks, but also by other financial institutions. Corporate entities use credit default swaps either for protection purposes, to hedge or to sell. Investment banks are primarily affected by the buyers. If a number of major corporate entities have bought protection from the same investment bank, and all of them fail simultaneously, this will put pressure on the investment bank to pay out. Moreover, the credit risk caused by the above failure may lead to other risks, such as liquidity risk, market risk and operational risk. Therefore, most of the investment banks re-sell the sold protection on the market to other market participants. Edwards (2004) argues that derivatives do not reduce credit risk, but rather transfer it from banks to other banks or entities. Therefore, most of the investment banks re-sell the sold protection on the market to other market participants. Edwards (2004) argues that derivatives do not reduce credit risk, but rather transfer it from banks to other banks or entities. Some of the top banks in America are carrying unknown gambling risks that no one has warned about, and they are all tied up in U.S. bank derivative portfolios (Edwards M, 2004). Commodity Swap A commodity swap is an agreement whereby a floating (or market or spot) price is exchanged for a fixed price over a specified period. The vast majority of commodity swaps involve oil. A swap where exchanged cash flows are dependent on the price of an underlying commodity. This swap is usually used to hedge against the price of a commodity. Commodities are physical assets such as precious metals, base metals, energy stores (such as natural gas or crude oil) and food (including wheat, pork bellies, cattle, etc.). In this swap, the user of a commodity would secure a maximum price and agree to pay a financial institution this fixed price. Then in return, the user would get payments based on the market price for the commodity involved. They are used for hedging against Fluctuations in commodity prices or Fluctuations in spreads between final product and raw material prices. A company that uses commodities as input may find its profits becoming very volatile if the commodity prices become volatile. This is particularly so when the output prices may not change as frequently as the commodity prices change. In such cases, the company would enter into a swap whereby it receives payment linked to commodity prices and pays a fixed rate in exchange. There are two kinds of agents participating in the commodity markets: end-users (hedgers) and investors (speculators). Commodity swaps are becoming increasingly common in the energy and agricultural industries, where demand and supply are both subject to considerable uncertainty. For example, heavy users of oil, such as airlines, will often enter into contracts in which they agree to make a series of fixed payments, say every six months for two years, and receive payments on those same dates as determined by an oil price index. Computations are often based on a specific number of tons of oil in order to lock in the price the airline pays for a specific quantity of oil, purchased at regular intervals over the two-year period. However, the airline will typically buy the actual oil it needs from the spot market. Equity Swap The outstanding performance of equity markets in the 1980s and the 1990s, have brought in some technological innovations that have made widespread participation in the equity market more feasible and more marketable and the demographic imperative of baby-boomer saving has generated significant interest in equity derivatives. In addition to the listed equity options on individual stocks and individual indices, a burgeoning over-the-counter (OTC) market has evolved in the distribution and utilization of equity swaps. An equity swap is a special type of total return swap, where the underlying asset is a stock, a basket of stocks, or a stock index. An exchange of the potential appreciation of equitys value and dividends for a guaranteed return plus any decrease in the value of the equity. An equity swap permits an equity holder a guaranteed return but demands the holder give up all rights to appreciation and dividend income. Compared to actually owning the stock, in this case you do not have to pay anything up front, but you do not have any voting or other rights that stock holders do have. Equity swaps make the index trading strategy even easier. Besides diversification and tax benefits, equity swaps also allow large institutions to hedge specific assets or positions in their portfolios The equity swap is the best swap amongst all the other swaps as it being an over-the-counter derivatives transaction; they have the attractive feature of being customizable for a particular users situation. Investors may have specific time horizons, portfolio compositions, or other terms and conditions that are not matched by exchange-listed derivatives. They are private transactions that are not directly reportable to any regulatory authority. A derivatives dealer can, through a foreign subsidiary in the particular country, invest in the foreign securities without the withholding tax and enter into a swap with the parent dealer company, which can then enter a swap with the American investor, effectively passing on the dividends without the withholding tax Interest Rate Swap An interest rate swap, or simply a rate swap, is an agreement between two parties to exchange a sequence of interest payments without exchanging the underlying debt. In a typical fixed/floating rate swap, the first party promises to pay to the second at designated intervals a stipulated amount of interest calculated at a fixed rate on the notional principal; the second party promises to pay to the first at the same intervals a floating amount of interest on the notional principle calculated according to a floating-rate index. The interest rate swap is essentially a strip of forward contracts exchanging interest payments. Thus, interest rate swaps, like interest rate futures or interest rate forward contracts, offer a mechanism for restructuring cash flows and, if properly used, provide a financial instrument for hedging against interest rate risk The reason for the exchange of the interest obligation is to take benefit from comparative advantage. Some companies may have comparative advantage in fixed rate markets while other companies have a comparative advantage in floating rate markets. When companies want to borrow they look for cheap borrowing i.e. from the market where they have comparative advantage. However this may lead to a company borrowing fixed when it wants floating or borrowing floating when it wants fixed. This is where a swap comes in. A swap has the effect of transforming a fixed rate loan into a float Impact of Credit Default Swaps (CDS) Impact of Credit Default Swaps (CDS) Chapter 1 : Introduction A Swap is a derivative in which two counterparties agree to exchange one stream of cash flow against another stream. Swaps can be used to create unfunded exposures to an underlying asset, since counterparties can earn the profit or loss from movements in price without having to post the notional amount in cash or collateral. It can be used to hedge certain risks such as interest rate risk, or to speculate on changes in the expected direction of underlying prices. The main objective of the project is to understand about Credit Default Swaps (CDS), its global footprint, its role in subprime crisis, its settlement in global arena and to check the feasible settlement of CDS in India, after its introduction in India, by understanding about Indian Credit Derivatives market. Research is concerned with the systematic and objective collection, analysis and evaluation of information about specific aspects to check the feasible settlement of CDSs in India. The development of financial derivatives in recent past is astounding when we consider its volume globally. But at the same time the product once created for hedging the risk currently allows you to bear more risk sometimes making the whole financial system to tremble. May be thats why Warren Buffet called it a financial weapon of mass destruction. Whatever it may be but derivatives have grown exponentially and are necessary for the market to flourish. The credit derivatives are nothing but the logical extension to the family of derivatives and have already made its presence felt globally. The credit derivatives have played a significant role in the development of debt market but also share a blame for the proliferation of subprime crisis. A credit default swap which constitutes the major portion of credit derivatives is similar to an insurance contract which allows you to transfer your risk to third party in exchange of a premium. Right from its origin as plain vanilla product for hedging purpose it has grown to very complex products and now has posed a question mark on its credibility. The subprime crisis started in what were regarded as the worlds safest and most sophisticated markets and spread globally, carried by securities and derivatives that were thought to make the financial system safer. The subprime crisis brings the complexity of securitized products and derivatives products, the human greedy nature, inability of rating agencies to gauge the risk, inefficiency of regulatory bodies, etc. to the fore. Although CDS was not the cause of the subprime crisis but it had cascading effect on the market and was considered as the reason for the collapse of American International Group (AIG). The lessons from the consequences of subprime crisis have helped in creating awareness about the regulatory frameworks to be in place which has increased the transparency, standardization, and soundness in the market. The various measures include formation of central counterparty for CDS, hardwiring of auction protocol and ISDA determination committee. On the backdrop of global crisis the movement of CDS is being watched carefully. The various data sources now provide data even on weekly basis. The efforts are being paid off and the market size of CDS has reduced considerably. And now with the central counterparties in place the CDS market will have more transparency and better control. After opening up of the economy the equity market of India have grown significantly bringing in more transparency. But the corporate bond market is still in undeveloped mode and the efforts being taken on developing it have not provided expected returns. Under this light, India is now all set to launch Credit Default Swaps which are expected to ignite the spark which will flourish the corporate bond market. Considering the cautious nature of RBI and the havoc created by CDS in global market the move by RBI is significant. From the move of RBI one can say as the knife itself is not harmful but it depends whether its in doctors hand or a robbers hand. Similarly CDS as a product is certainly not harmful but its utility will depend on the judicious use of the same. Chapter 2: Literature Review Derivatives The global economic order that emerged after World War II was a system where many less developed countries administered prices and centrally allocated resources. Even the developed economies operated under the Bretton Woods system of fixed exchange rates. The system of fixed prices came under stress from the 1970s onwards. High inflation and unemployment rates made interest rates more volatile. The Bretton Woods system was dismantled in 1971, freeing exchange rates to fluctuate. Less developed countries like India began opening up their economies and allowing prices to vary with market conditions. Price fluctuations made it hard for businesses to estimate their future production costs and revenues. Derivative securities provide them with a valuable set of tools for managing this risk. Financial markets are, by nature, extremely volatile and hence, the risk factor is an Important concern for financial agents. To reduce this risk, the concept of derivatives comes into the picture. Derivatives are products whose values are derived from one or more basic variables called bases. These bases can be underlying assets (for example forex, equity, etc), bases or reference rates. It is afinancial instrument(or more simply, an agreement between two people/two parties) that has a value determined by the future price of something else. Derivatives can be thought of as bets on the price of something.Itis the collective name used for a broad class offinancial instrumentsthatderivetheir value from other financial instruments (known as the underlying), events or conditions. Essentially, a derivative is a contract between two parties where the value of the contract is linked to the price of another financial instrument or by a specified event or condition. Asecurity whose price is dependent upon or derived fromone or more underlying assets.The derivative itself is merely a contract between two or more parties. Itsvalue is determinedby fluctuationsin the underlying asset.The most common underlying assets includestocks, bonds,commodities,currencies, interest rates and market indexes. Most derivatives are characterized by high leverage.Derivatives are generally used as an instrument to hedgerisk, but can also be used forspeculative purposes. For example, wheat farmers may wish to sell their harvest at a future date to eliminate the risk of a change in prices by that date. The transaction in this case would be the derivative, while the spot price of wheat would be the underlying asset. Derivatives have probably been around for as long as people have been trading with one another. Forward contracting dates back at least to the 12th century, and may well have been around before then. Merchants entered into contracts with one another for future delivery of specified amount of commodities at specified price. A primary motivation for pre-arranging a buyer or seller for a stock of commodities in early forward contracts was to lessen the possibility that large swings would inhibit marketing the commodity after a harvest. The need for a derivatives market The derivatives market performs a number of economic functions: They help in transferring risks from risk averse people to risk oriented people They help in the discovery of future as well as current prices They catalyze entrepreneurial activity They increase the volume traded in markets because of participation of risk averse people in greater numbers They increase savings and investment in the long run The participants in a derivatives market Hedgers use futures or options markets to reduce or eliminate the risk associated with price of an asset. Speculators use futures and options contracts to get extra leverage in betting on future movements in the price of an asset. They can increase both the potential gains and potential losses by usage of derivatives in a speculative venture. Arbitrageurs are in business to take advantage of a discrepancy between prices in two different markets. If, for example, they see the futures price of an asset getting out of line with the cash price, they will take offsetting positions in the two markets to lock in a profit. Types of Derivatives Forwards: A forward contract is a customized contract between two entities, where settlement takes place on a specific date in the future at todays pre-agreed price. Futures: A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Futures contracts are special types of forward contracts in the sense that the former are standardized exchange-traded contracts Options: Options are of two types calls and puts. Calls give the buyer the right but not the obligation to buy a given quantity of the underlying asset, at a given price on or before a given future date. Puts give the buyer the right, but not the obligation to sell a given quantity of the underlying asset at a given price on or before a given date. Warrants: Options generally have lives of upto one year, the majority of options traded on options exchanges having a maximum maturity of nine months. Longer-dated options are called warrants and are generally traded over-the-counter. LEAPS: The acronym LEAPS means Long-Term Equity Anticipation Securities. These are options having a maturity of upto three years. Baskets: Basket options are options on portfolios of underlying assets. The underlying asset is usually a moving average or a basket of assets. Equity index options are a form of basket options. Swaps: Swaps are private agreements between two parties to exchange cash flows in the future according to a prearranged formula. They can be regarded as portfolios of forward contracts. The two commonly used swaps are : Interest rate swaps: These entail swapping only the interest related cash flows between the parties in the same currency. Currency swaps: These entail swapping both principal and interest between the parties, with the cash flows in one direction being in a different currency than those in the opposite direction. Swaptions: Swaptions are options to buy or sell a swap that will become operative at the expiry of the options. Thus a swaption is an option on a forward swap. Rather than have calls and puts, the swaptions market has receiver swaptions and payer swaptions. A receiver swaption is an option to receive fixed and pay floating. A payer swaption is an options to pay fixed and receive floating. Uses of Derivatives Derivatives may be traded for a variety of reasons. A derivative enables a trader to hedge some pre-existing risk by taking positions in derivatives markets that offset potential losses in the underlying or spot market. In India, most derivatives users describe themselves as hedgers (Fitch Ratings, 2004) and Indian laws generally require that derivatives be used for hedging purposes only. Another motive for derivatives trading is speculation (i.e. taking positions to profit from anticipated price movements). In practice, it may be difficult to distinguish whether a particular trade was for hedging or speculation, and active markets require the participation of both hedgers and speculators. A third type of trader, called arbitrageurs, profit from discrepancies in the relationship of spot and derivatives prices, and thereby help to keep markets efficient. Jogani and Fernandes (2003) describe Indias long history in arbitrage trading, with line operators and traders arbitraging prices between exchanges located in different cities, and between two exchanges in the same city. Their study of Indian equity derivatives markets in 2002 indicates that markets were inefficient at that time. They argue that lack of knowledge; market frictions and regulatory impediments have led to low levels of capital employed in arbitrage trading in India. However, more recent evidence suggests that the efficiency of Indian equity derivatives markets may have improved (ISMR, 2004). Development of derivatives market in India Derivatives markets have been in existence in India in some form or other for a long time. In the area of commodities, the Bombay Cotton Trade Association started futures trading in 1875 and, by the early 1900s India had one of the worlds largest futures industry. In 1952 the government banned cash settlement and options trading and derivatives trading shifted to informal forwards markets. In recent years, government policy has changed, allowing for an increased role for market-based pricing and less suspicion of derivatives trading. The ban on futures trading of many commodities was lifted starting in the early 2000s, and national electronic commodity exchanges were created. In the equity markets, a system of trading called badla involving some elements of forwards trading had been in existence for decades.6 However, the system led to a number of undesirable practices and it was prohibited off and on till the Securities and Exchange Board of India (SEBI) banned it for good in 2001. A series of reforms of the stock market between 1993 and 1996 paved the way for the development of exchange-traded equity derivatives markets in India. In 1993, the government created the NSE in collaboration with state-owned financial institutions. NSE improved the efficiency and transparency of the stock markets by offering a fully automated screen-based trading system and real-time price dissemination. In 1995, a prohibition on trading options was lifted. In 1996, the NSE sent a proposal to SEBI for listing exchange-traded derivatives. The report of the L. C. Gupta Committee, set up by SEBI, recommended a phased introduction of derivative products, and bi-level regulation ( i.e., self-regulation by exchanges with SEBI providing a supervisory and advisory role). Another report, by the J. R. Varma Committee in 1998, worked out various operational details such as the margining systems. The first step towards introduction of derivatives trading in India was the promulgation of the Securities Laws(Amendment) Ordinance, 1995, which withdrew the prohibition on options in securities. The market for derivatives, however, did not take off, as there was no regulatory framework to govern trading of derivatives. SEBI set up a 24-member committee under the Chairmanship of Dr.L.C.Gupta on November 18, 1996 to develop appropriate regulatory framework for derivatives trading in India. The committee submitted its report on March 17, 1998 prescribing necessary pre-conditions for introduction of derivatives trading in India. The committee recommended that derivatives should be declared as securities so that regulatory framework applicable to trading of securities could also govern trading of securities. SEBI also set up a group in June 1998 under the Chairmanship of Prof.J.R.Varma, to recommend measures for risk control in derivatives market in India. The report, which was submitte d in October 1998, worked out the operational details of margining system, methodology for charging initial margins, broker net worth, deposit requirement and real-time monitoring requirements. The Securities Contract Regulation Act (SCRA) was amended in December 1999 to include derivatives within the ambit of securities and the regulatory framework was developed for governing derivatives trading. The act also made it clear that derivatives shall be legal and valid only if such contracts are traded on a recognized stock exchange, thus precluding OTC derivatives. The government also rescinded in March 2000, the three- decade old notification, which prohibited forward trading in securities. Derivatives trading commenced in India in June 2000 after SEBI granted the final approval to this effect in May 2001. SEBI permitted the derivative segments of two stock exchanges, NSE and BSE, and their clearing house/corporation to commence trading and settlement in approved derivatives contracts . To begin with, SEBI approved trading in index futures contracts based on SP CNX Nifty and BSE-30(Sensex) index. This was followed by approval for trading in options based on these two indexes and options on individual securities. The trading in BSE Sensex options commenced on June 4, 2001 and the trading in options on individual securities commenced in July 2001. Futures contracts on individual stocks were launched in November 2001. The derivatives trading on NSE commenced with SP CNX Nifty Index futures on June 12, 2000. The trading in index options commenced on June 4, 2001 and trading in options on individual securities commenced on July 2, 2001. Single stock futures were launched on November 9, 2001. The index futures and options contract on NSE are based on SP CNX Trading and settlement in derivative contracts is done in accordance with the rules, byelaws, and regulations of the respective exchanges and their clearing house/corporation duly approved by SEBI and notified in the official gazette. Foreign Institutional Investors (FIIs) are permitted to trade in all Exchange traded derivative products. The following are some observations based on the trading statistics provided in the NSE report on the futur es and options (FO): †¢ Single-stock futures continue to account for a sizable proportion of the FO segment. It constituted 70 per cent of the total turnover during June 2002. A primary reason attributed to this phenomenon is that traders are comfortable with single-stock futures than equity options, as the former closely resembles the erstwhile badla system. On relative terms, volumes in the index options segment continues to remain poor. This may be due to the low volatility of the spot index. Typically, options are considered more valuable when the volatility of the underlying (in this case, the index) is high. A related issue is that brokers do not earn high commissions by recommending index options to their clients, because low volatility leads to higher waiting time for round-trips. Put volumes in the index options and equity options segment have increased since January 2002. The call-put volumes in index options have decreased from 2.86 in January 2002 to 1.32 in June. The fall in call-put volumes ratio suggests that the traders are increasingly becoming pessimistic on the market. Farther month futures contracts are still not actively traded. Trading in equity options on most stocks for even the next month was non-existent. Daily option price variations suggest that traders use the FO segment as a less risky alternative (read substitute) to generate profits from the stock price movements. The fact that the option premiums tail intra-day stock prices is evidence to this. Calls on Satyam fall, while puts rise when Satyam falls intra-day. If calls and puts are not looked as just substitutes for spot trading, the intra-day stock price variations should not have a one-to-one impact on the option premiums. SWAP In finance, a SWAP is a derivative in which two counterparties agree to exchange one stream of cash flow against another stream. These streams are called the legs of the swap. Conventionally they are the exchange of one security for another to change the maturity (bonds), quality of issues (stocks or bonds), or because investment objectives have changed. A swap is an agreement to exchange one stream of cash flows for another. Swaps are most usually used to:- Switch financing in one country for financing in another To replace a floating interest rate swap with a fixed interest rate (or vice versa) (Litzenberger, R.H)In August 1981 the World Bank issued $290 million in euro-bonds and swapped the interest and principal on these bonds with IBM for Swiss francs and German marks. The rapid growth in the use of interest rate swaps, currency swaps, and swaptions (options on swaps) has been phenomenal. Currently, the amount of outstanding interest rate and currency swaps is almost $3 trillion. Recently, swaps have grown to include currency swaps and interest rate swaps. It can be used to hedge certain risks such as interest rate risk, or to speculate on changes in the expected direction of underlying prices. If firms in separate countries have comparative advantages on interest rates, then a swap could benefit both firms. For example, one firm may have a lower fixed interest rate, while another has access to a lower floating interest rate. These firms could swap to take advantage of the lower rates. Different types of swaps:- Currency Swaps Cross currency swaps are agreements between counterparties to exchange interest and principal payments in different currencies. Like a forward, a cross currency swap consists of the exchange of principal amounts (based on todays spot rate) and interest payments between counterparties. It is considered to be a foreign exchange transaction and is not required by law to be shown on the balance sheet. In a currency swap, these streams of cash flows consist of a stream of interest and principal payments in one currency exchanged for a stream, of interest and principal payments of the same maturity in another currency. Because of the exchange and re-exchange of notional principal amounts, the currency swap generates a larger credit exposure than the interest rate swap. Cross-currency swaps can be used to transform the currency denomination of assets and liabilities. They are effective tools for managing foreign currency risk. They can create currency match within its portfolio and minimize exposures. Firms can use them to hedge foreign currency debts and foreign net investments. Currency swaps give companies extra flexibility to exploit their comparative advantage in their respective borrowing markets. Currency swaps allow companies to exploit advantages across a matrix of currencies and maturities. Currency swaps were originally done to get around exchange controls and hedge the risk on currency rate movements. It also helps in Reducing costs and risks associated with currency exchange. They are often combined with interest rate swaps. For example, one company would seek to swap a cash flow for their fixed rate debt denominated in US dollars for a floating-rate debt denominated in Euro. This is especially common in Europe where companies shop for the cheapest debt regardless of its denomination and then seek to exchange it for the debt in desired currency. Credit Default Swap Credit Default Swap is a financial instrument for swapping the risk of debt default. Credit default swaps may be used for emerging market bonds, mortgage backed securities, corporate bonds and local government bond. The buyer of a credit default swap pays a premium for effectively insuring against a debt default. He receives a lump sum payment if the debt instrument is defaulted. The seller of a credit default swap receives monthly payments from the buyer. If the debt instrument defaults they have to pay the agreed amount to the buyer of the credit default swap. The first credit default swap was introduced in 1995 by JP Morgan. By 2007, their total value has increased to an estimated $45 trillion to $62 trillion. Although since only 0.2% of Investment Companys default, the cash flow is much lower than this actual amount. Therefore, this shows that credit default swaps are being used for speculation and not insuring against actual bonds. As Warren Buffett calls them financial weapons of mass destruction. The credit default swaps are being blamed for much of the current market meltdown. Example of Credit Default Swap An investment trust owns  £1 million corporation bond issued by a private housing firm. If there is a risk the private housing firm may default on repayments, the investment trust may buy a CDS from a hedge fund. The CDS is worth  £1 million. The investment trust will pay an interest on this credit default swap of say 3%. This could involve payments of  £30,000 a year for the duration of the contract. If the private housing firm doesnt default. The hedge fund gains the interest from the investment bank and pays nothing out. It is simple profit. If the private housing firm does default, then the hedge fund has to pay compensation to the investment bank of  £1 million the value of the credit default swap. Therefore the hedge fund takes on a larger risk and could end up paying  £1million The higher the perceived risk of the bond, the higher the interest rate the hedge fund will require. Credit default swaps are used not only by investment banks, but also by other financial institutions. Corporate entities use credit default swaps either for protection purposes, to hedge or to sell. Investment banks are primarily affected by the buyers. If a number of major corporate entities have bought protection from the same investment bank, and all of them fail simultaneously, this will put pressure on the investment bank to pay out. Moreover, the credit risk caused by the above failure may lead to other risks, such as liquidity risk, market risk and operational risk. Therefore, most of the investment banks re-sell the sold protection on the market to other market participants. Edwards (2004) argues that derivatives do not reduce credit risk, but rather transfer it from banks to other banks or entities. Therefore, most of the investment banks re-sell the sold protection on the market to other market participants. Edwards (2004) argues that derivatives do not reduce credit risk, but rather transfer it from banks to other banks or entities. Some of the top banks in America are carrying unknown gambling risks that no one has warned about, and they are all tied up in U.S. bank derivative portfolios (Edwards M, 2004). Commodity Swap A commodity swap is an agreement whereby a floating (or market or spot) price is exchanged for a fixed price over a specified period. The vast majority of commodity swaps involve oil. A swap where exchanged cash flows are dependent on the price of an underlying commodity. This swap is usually used to hedge against the price of a commodity. Commodities are physical assets such as precious metals, base metals, energy stores (such as natural gas or crude oil) and food (including wheat, pork bellies, cattle, etc.). In this swap, the user of a commodity would secure a maximum price and agree to pay a financial institution this fixed price. Then in return, the user would get payments based on the market price for the commodity involved. They are used for hedging against Fluctuations in commodity prices or Fluctuations in spreads between final product and raw material prices. A company that uses commodities as input may find its profits becoming very volatile if the commodity prices become volatile. This is particularly so when the output prices may not change as frequently as the commodity prices change. In such cases, the company would enter into a swap whereby it receives payment linked to commodity prices and pays a fixed rate in exchange. There are two kinds of agents participating in the commodity markets: end-users (hedgers) and investors (speculators). Commodity swaps are becoming increasingly common in the energy and agricultural industries, where demand and supply are both subject to considerable uncertainty. For example, heavy users of oil, such as airlines, will often enter into contracts in which they agree to make a series of fixed payments, say every six months for two years, and receive payments on those same dates as determined by an oil price index. Computations are often based on a specific number of tons of oil in order to lock in the price the airline pays for a specific quantity of oil, purchased at regular intervals over the two-year period. However, the airline will typically buy the actual oil it needs from the spot market. Equity Swap The outstanding performance of equity markets in the 1980s and the 1990s, have brought in some technological innovations that have made widespread participation in the equity market more feasible and more marketable and the demographic imperative of baby-boomer saving has generated significant interest in equity derivatives. In addition to the listed equity options on individual stocks and individual indices, a burgeoning over-the-counter (OTC) market has evolved in the distribution and utilization of equity swaps. An equity swap is a special type of total return swap, where the underlying asset is a stock, a basket of stocks, or a stock index. An exchange of the potential appreciation of equitys value and dividends for a guaranteed return plus any decrease in the value of the equity. An equity swap permits an equity holder a guaranteed return but demands the holder give up all rights to appreciation and dividend income. Compared to actually owning the stock, in this case you do not have to pay anything up front, but you do not have any voting or other rights that stock holders do have. Equity swaps make the index trading strategy even easier. Besides diversification and tax benefits, equity swaps also allow large institutions to hedge specific assets or positions in their portfolios The equity swap is the best swap amongst all the other swaps as it being an over-the-counter derivatives transaction; they have the attractive feature of being customizable for a particular users situation. Investors may have specific time horizons, portfolio compositions, or other terms and conditions that are not matched by exchange-listed derivatives. They are private transactions that are not directly reportable to any regulatory authority. A derivatives dealer can, through a foreign subsidiary in the particular country, invest in the foreign securities without the withholding tax and enter into a swap with the parent dealer company, which can then enter a swap with the American investor, effectively passing on the dividends without the withholding tax Interest Rate Swap An interest rate swap, or simply a rate swap, is an agreement between two parties to exchange a sequence of interest payments without exchanging the underlying debt. In a typical fixed/floating rate swap, the first party promises to pay to the second at designated intervals a stipulated amount of interest calculated at a fixed rate on the notional principal; the second party promises to pay to the first at the same intervals a floating amount of interest on the notional principle calculated according to a floating-rate index. The interest rate swap is essentially a strip of forward contracts exchanging interest payments. Thus, interest rate swaps, like interest rate futures or interest rate forward contracts, offer a mechanism for restructuring cash flows and, if properly used, provide a financial instrument for hedging against interest rate risk The reason for the exchange of the interest obligation is to take benefit from comparative advantage. Some companies may have comparative advantage in fixed rate markets while other companies have a comparative advantage in floating rate markets. When companies want to borrow they look for cheap borrowing i.e. from the market where they have comparative advantage. However this may lead to a company borrowing fixed when it wants floating or borrowing floating when it wants fixed. This is where a swap comes in. A swap has the effect of transforming a fixed rate loan into a float