Market Risk Management Through The Use Of Options - Free Essay Example

Sample details Pages: 8 Words: 2422 Downloads: 6 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? What is the role played by options, futures and forward contracts in managing market risks? The research critically analyzes this through the case study of Vodafone Group Plc. It first identifies the various factors that determine these risks since market risk includes different types of risks like commodity price risks, interest rate fluctuations risks and currency risks. Through the case study, it further aims to evaluate the effectiveness of using above derivatives, in managing market risks. Don’t waste time! Our writers will create an original "Market Risk Management Through The Use Of Options" essay for you Create order By considering the portfolio of company designed to hedge a particular amount of risk; the research also aims to critically evaluate the individual contributions of each of the above in risk management and also of the portfolio as whole. Introduction: Oxford dictionary defines risk as à ¢Ã¢â€š ¬Ã…“a situation involving exposure to dangerà ¢Ã¢â€š ¬? or à ¢Ã¢â€š ¬Ã…“expose (someone or something valued) to danger, harm, or lossà ¢Ã¢â€š ¬? (Oxford Dictionary). For a business entity à ¢Ã¢â€š ¬Ã…“Risksà ¢Ã¢â€š ¬? are connected to possible uncertainties that can result in negative effect on the entity. With the emergence of World Markets and various types of risks, risk management has become an integrated part of firms today. Different types of risks require different methods to handle, prevent or sometimes to absorb and benefit from risks. The downfall of risks has always been highlighted however they do have some arbitrage that results in potential gains. The Basel Committee that was formed in 1974 laid the regulatory framework for Financial Risk Management. (McNeil, Frey and Embrechts, 2005). Basel II (2001) defines Financial Risk Management to be formed of 4 steps: à ¢Ã¢â€š ¬Ã…“identification of risks into market, credit, operational and other risks; assessment of risks using data and risk model; monitoring and reporting of risk assessments on a timely basis and controlling these identified risks by senior management.à ¢Ã¢â€š ¬?(Alexander, 2005). It thus determines the probability of a negative event taking place and its effects on the entity. Once identified risk can be treated in following manners: Eliminated altogether by simple business practices. These are the risks that are detrimental to the business entity. Transferred to other participants. Actively managed at firm level. (Alexander, 1996). The risks basically depend on the time value of assets. Moreover with the increased level of multinational functioning of business entities and the highly volatile nature of markets, risk management has now become a critical part of running the business. It therefore becomes essential to understand as well as analyze the various factors that determine risks and the preventive measure s implemented against them. Also the hedging techniques being considered do not always ensure profits. The research would thereby include a detail study of the effectiveness of the methods implemented. One more important factor is the cost incurred. Risk management incurs certain costs and the process would therefore prove to be futile if the costs incurred donà ¢Ã¢â€š ¬Ã¢â€ž ¢t offer proportionally benefits. Literature Review: Market Risk constitutes of commodity risk, interest risk and currency risks. Commodity price risk includes the potential change in the price of a commodity. The rising or falling commodity prices affect the producers, traders and the end-users of the various commodities. Moreover if they are traded in foreign currency, there arises the risk of currency exchange rate. These are normally hedged by offering forward or future contracts at fixed rates. This is especially important for commodities like oil, natural gas, gold, electricity etc whose prices are highly volatile in nature. (Berk and Demarzo, 2010) Interest Risk relates to the change in interest rates of bonds, stocks or loans. A rising rate of interest would effectively reduce the price of a bond. Increased interest rates result in increasing the borrowing costs of the firm and thereby reduce its profitability. It is hedged by swaps or by investing in short term securities. Currency risks arise from the exceedingly vola tile exchange rates between the currencies of different countries. For e.g. Airbus, an aircraft manufacturing company based in France requires oil for its production. Oil being traded in US dollars and the company doing trading in Euros, has a foreign exchange risk. It would be therefore beneficial for Airbus to enter a forward contract with its oil suppliers. Options are another way of hedging against currency risks. (Berk and Demarzo, 2010). Forward contracts, Futures and Options are called the Financial Derivatives and are used largely to reduce market risks. Walsh David (1995) explains that if two securities have same payoffs in future, they must have same price today. Thus the value of a derivative moves in the same way as that of underlying asset. This is called arbitrage. Hedging of risks is nothing but the holder of an asset has two positions in opposite directions. One is of the derivative and opposite position is on the under-lying asset respectively. As such if t he value if the asset decreases then value of the derivative will also decrease. But the change in value is off-set by the opposite positions to each other. Thus risk is reduced. This is called hedging. Long Hedge refers when an investor anticipates increase in market price and therefore buys future contracts. Short Hedge is when an investor already has a futures contract and expects the value of asset to fall and therefore sells it beforehand. (Dubofsky and Miller, 2003) Long Hedge Short Hedge Change in value of position Change in price Change in value of position Change in price Fig.1 Hedging (Dubofsky, D and Miller, T. Jr. 2003) Forward Contracts- These involve buying or selling specific asset at a specific price at a specified time. It is basically a contract between two parties to trade a particular commodity or asset at a particular rate on a specified time. The buyer is said to be in à ¢Ã¢â€š ¬Ã‹Å"long positionà ¢Ã¢â€š ¬Ã¢â€ž ¢ while the seller hols the à ¢Ã¢â€š ¬Ã‹Å"short positionà ¢Ã¢â€š ¬Ã¢â€ž ¢. These are Over the Counter (OTC) Derivatives. These are used for locking-in the price and require no cash transfers in the beginning, thereby involve credit risks. Their main feature is the flexibility as forward contracts can be tailored as per the requirements of the traders. They are typically used to hedge the exchange rate risks. (Claessens, 1993) Futures- These are more standardized than the Forward contracts. They are traded at Foreign Exchanges. The standardized contract specifying the asset, price and delivery time is either bought or sold through broker. The delivery price depends on market and determined by the exchange. The default risk in futures is minimized due to clearinghouse. It acts as centred party and does the à ¢Ã¢â€š ¬Ã‹Å"marking to marketà ¢Ã¢â€š ¬Ã¢â€ž ¢ of tradersà ¢Ã¢â€š ¬Ã¢â€ž ¢ account; by doing profit-loss calculations daily. Initial margin amount is required and futures hence involve margin calls. Minimum credit risk is involved; but being standardized contracts, these cannot be tailored to individual demands. (Hinkelmann and  Swidler, 2004). Futures could be contracts on real assets for e.g. gold, oil, corn etc. or they could also be contracts of financial nature for e.g. currency, interest rates etc. (Tamiso and Freedman, 1995). Fig.2: Hedging through Futures. (Walsh, D. 1995) Options- The holder can buy from or sell to, the asset at a strike rate at a future maturity date. However the holder of the option has no moral obligation to do so. The cost of buying the option involves a premium which is to be paid up front. The option that enables the holder to buy an asset is called Call option while in Put option the holder is able to sell the asset. (Claessens, 1993) These can be bought Over the Counter (OTC) at a bank or can be exchange traded options. An American option could be exercised at any time before it expires. On the contrary, a European option has to b e exercised on maturity. Option is normally executed when its strike price is less than price of the stock. However, is the price of the stock is less than the strike price; the holder will not execute the option. Black and Scholes (1973) gave the formula to determine the price of a European option. According to the formula, the value of Call option is given by: where The value of Put option is given by: P = Ke-r (T-t) à ¢Ã¢â€š ¬Ã¢â‚¬Å" S + C = N(-d2) Ke-r (T-t) à ¢Ã¢â€š ¬Ã¢â‚¬Å" N(-d1) S. Where N (.) is a cumulative normal distribution function s- standard deviation of the share price, rf- risk-free interest rate per annum and t- time to expiry (in years). The above formula, also known as the Black-Scholes option pricing model; is based on the assumptions that the stock doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t pay any dividends, it is possible to buy or sell even a single share, there are no costs incurred in these transactions and that arbitrage opportunity doesnà ¢Ã¢â€ š ¬Ã¢â€ž ¢t exist. According to Black and Scholes (1973), à ¢Ã¢â€š ¬Ã…“the option value as a function of the stock price is independent of the expected return of the stock. The expected return of the option, however, will depend upon the expected return of the stock.à ¢Ã¢â€š ¬? Hence as the price of underlying asset increases, the price of option will also increase owing to their linear relationship. Black and Scholes (1972) further carried on various empirical tests to validity of the formula. They observed that price paid by the buyers of the option was higher than that shown by the formula. This was mainly because the transaction costs that are incurred are always paid by the buyers of the options. These costs were found to be high for options of high risks and vice-versa. The sellers of options thus got the price that was predicted by the formula. The case study would make use of this formula to determine the value of options held by the company. Walsh David (1995) exp lains that options have a non-linear relation with payoff. Its payoff increases with the price of the asset if it is in-the-money and has a constant payoff which is the option premium if it is out-of-the-money. On the contrary, futures and forward contracts have a linear relation with the payoffs in both, profit as well as loss. Therefore options might be preferred over futures and forwards for hedging. He further highlights the difference between hedging through futures and forward contracts. While in forward contracts, the company merely sets up a rate for future trading, it doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t involve any monetary transfer. Futures however make use of margin account and marking to market is done daily. Hence the results of futures over their time span vary greatly with those of forward contracts. Hence the individual contributions of each to risk management would be calculated during the research. The case study would also include a study the similarities and differences in futures, forward contracts and options and their individual effects on risk management. Data and Methodology: Objectives: The research aims to: Increase the understanding of the factors that determine market risks. Understand the haven provided by financial derivatives against these risks. Have a clear understanding of the methods or risk management techniques. Understand the process of risk management. Understand the intricacies of derivative markets. Data and Methodology: The Research is essentially a case study of Vodafone Group Plc. Primary data would include the information of the forward contracts with service providers, options and futures of the company in the market. Secondary data would be Qualitative in nature, comprising online journals, relative case studies and books. The research would be carried out in the following steps: Depending upon the nature of company, determine that factors that would affect the risk faced by the company. Evaluate the percentage of risk faced by the company. Determine the amount of this risk, which the company would want to hedge. The data would then be utilised to determine the amount of risk hedged by each of the above and then determine the total risk hedged by portfolio as whole. Calculate the cost of hedging the risk. Compare and contrast the findings with the defined à ¢Ã¢â€š ¬Ã‹Å"Effective Risk Management.à ¢Ã¢â€š ¬Ã¢â€ž ¢ Critically analyze the results. Suggest improvements if any, in the portfolio. Calculate the risk hedged with the suggested changes. Proposed Timetable: Date Activity 6th May, 2011 Submission of final proposal (By) 20th June, 2011 Collection of data as required by case study and start working on calculations. 1st July, 2011 Define the parameters for à ¢Ã¢â€š ¬Ã‹Å"effective risk managementà ¢Ã¢â€š ¬Ã¢â€ž ¢ and complete calculations. Complete the initial declaration pages of report. 15th July, 2011 Complete the literature review pertaining to case study. Finish report writing till that part. (up to 5000 words) 1st August, 2011 Compare and contrast the findings to the established parameters. Evaluate results. Some more relative literature review. 15th August, 2011 Finish writing the calculations, explaining results. Complete up to 10,000 words of report. 1st September, 2011 Complete the report and submit the first draft for feedback. 15th September, 2011 Redraft using the suggested changes. Final draft for submission 19th September, 2011 Final submission of the report. REFERENCES Alexander, C. (1996). The Handbook of Risk Management and Analysis. West Sussex: John Wiley Sons. Alexander, C. (2005). à ¢Ã¢â€š ¬Ã‹Å"The Present and Future of Financial Risk Management.à ¢Ã¢â€š ¬Ã¢â€ž ¢ Journal of Financial Econometrics, 3 (1), pp. 3-25. JSTOR (Online). Available at https://jfec.oxfordjournals.org/ (Accessed: 8th March, 2011). Berk, J and Demarzo, P. (2010). Corporate Finance. 2nd edn. Boston: Pearson. Black, F. and Scholes, M. (May Jun., 1973). à ¢Ã¢â€š ¬Ã‹Å"The Pricing of Options and Corporate Liabilities.à ¢Ã¢â€š ¬Ã¢â€ž ¢ The Journal of Political Economy.81 (3) pp. 637-654. JSTOR (Online). Available at https://www.jstor.org/stable/pdfplus/1831029.pdf?acceptTC=true (Accessed: 5th May, 2011). Black, F. and Scholes, M. (May 1972). à ¢Ã¢â€š ¬Ã‹Å"The Valuation of Option Contracts and a Test of Market Efficiency.à ¢Ã¢â€š ¬Ã¢â€ž ¢ The Journal of Finance.27 (2) pp 399-417. JSTOR (Online). Available at https://www.jstor.org/stable/2978484 (Accessed: 5th May, 2011). Claessens, S (1993). World Bank Technical Paper no 235.Washington DC: The World Bank. Dubofsky, D and Miller, T. Jr. (2003). Derivatives: Valuation and Risk Management. Oxford: Oxford University Press. Hinkelmann, C  Ãƒâ€šÃ‚  Swidler, S.  (2004). à ¢Ã¢â€š ¬Ã‹Å"Using futures contracts to hedge macroeconomic risk in the public sector.à ¢Ã¢â€š ¬Ã¢â€ž ¢ Derivatives Use, Trading Regulation.  10(1),  pp. 54-69. ABI/INFORM Global (Online) available at https://proquest.umi.com/pqdweb?index=0did=679304171SrchMode=2sid=1Fmt=6VInst=PRODVType=PQDRQT=309VName=PQDTS=1304643921clientId=18060 (Accessed: 21st March, 2011). McNeil, A.J., Frey, R., Embrechts, P. (2005) Quantitative Risk Management. Princeton and Oxford: Princeton University Press. Oxford Dictionary (Online) available at https://oxforddictionaries.com/?attempted=true (Accessed: 21st March, 2011). Tamiso, R. Freedman, R. (1995). à ¢Ã¢â€š ¬Ã‹Å"Confronting Uncertainty: Int elligent Risk Management with Futures.à ¢Ã¢â€š ¬Ã¢â€ž ¢ Artificial Intelligence in the Capital Markets: State-of-the-Art Applications for Institutional Investors, Bankers and Traders, Probus Publishing, Chicago. pp. 209-222. Available at https://www.inductive.com/RMR-FUT.pdf . (Accessed: 4th May, 2011). Walsh, David.   (1995). à ¢Ã¢â€š ¬Ã‹Å"Risk management using derivative securities.à ¢Ã¢â€š ¬Ã¢â€ž ¢Ãƒâ€šÃ‚  Managerial Finance.  21(1),  pp. 43. ABI/INFORM Global (Online).  Available at https://proquest.umi.com/pqdweb?index=6did=4708471SrchMode=2sid=3Fmt=6VInst=PRODVType=PQDRQT=309VName=PQDTS=1301258415clientId=18060 (Accessed: 27th March, 2011).

Western Colonialism and Capitalism Free Essays

string(104) " makes both commodities and the workers circulating commodities that circulate in the expanding market\." A lot of negative effects caused by Western colonialism and capitalism in the third world countries that have contributed to their current political and economic crises have been discussed; however, the main objective of this presentation is to discuss the progressive role played by Western colonialism and capitalism in the third world countries when contrasted with pre-colonial period and where they were left by their colonial masters to present date. Colonialism Colonialism refers to as a system whereby a state holds sovereignty over territory and people who are outside its own boundaries. It assumes the right of one people to impose their will to others. We will write a custom essay sample on Western Colonialism and Capitalism or any similar topic only for you Order Now Between nineteenth and twentieth centuries, most rich and powerful states in the European countries such as Britain did own third world colonies. Up-to-date, the legitimacy of colonialism by European countries to these third world countries has elicited a heated debate in political arena and among the moral philosophers all over the world. Colonialism is not a new phenomenon. In the past society used to expand to immediate territories and settling it own natives on the newly conquered land. Such example includes the ancient Greeks, Romans and Ottomans to mention but a few. But it is evident that colonialism was not static but evolving due to technological advancements particularly in navigation that enabled connecting to the remotest parts of the world. Invention of the fast sailing ships facilitated reaching the distant ports in other side of the world while managing to maintain closer ties between the mother land of the master colonialism and their colonial territories. Therefore, the modern European colonialism materialized when it was possible to move large number of people across the ocean and maintain political sovereignty regardless of geographical scatteredness. Many political theorists have troubled themselves in attempt to reconcile ideas about the justice and law with the practice with which European ruled over the third world countries. In nineteenth century, conflict emerged that made tension to build up between the proponents of liberal thought and colonial practice. Many of political philosophers stood to defend the principles of attainments of universalism and equity while on the other hand they were antagonistic in bid to legitimize colonialism and imperialism. They reconciled this controversy with idea that, there was a need for ‘civilization mission’ which was to be for temporal period of what they called political dependence that was vital so that to make ‘uncivilized’ societies to advance in a state of achieving sustainable liberal institutions and self government. Capitalism Capitalism refers to European practices that not only include social practices that are easily practiced over geographical and historical distances but also encompass the ‘way of thinking’. The term capitalist has been widely used in the Marxist theory which refers to means of production that are on the hands of a few and operated for making profit and that the benefits realized from the production belong to the owners of the means of production. Mercantilism was the earliest form of capitalist in the olden days that originated in the Middle East, Rome and also existed during early Middle Age. It involved distribution of goods in the transactions in such way that there is profit making. In this situation, goods were bought from one place and move to another site to be sold at relatively higher prices. Beside Romans, Arabic cultures were also known of mercantilism. They had a long history on their trade routes in their major empires. Medieval Europeans learnt learned about this type of economy from their Islamic neighbors as it has been noticed in large number of economic terms found in European languages some which are derivatives from Arabic. Gradually, mercantilism in Europe evolved into economic practices that were eventually referred to as capitalism. Capitalism employs the same principle as mercantilism that involves large scale profit realization by acquisition of goods at lower price than selling them at a profit. Capitalism is characterized by several features. First, there is accumulation of means of the production such as materials, land and tools by minority of people. This property accumulation is referred to as capital and the owners of these means of production are known as capitalists. The second characteristic of capitalism is productive labor. Human work is of great importance because it facilitates the production of goods and their distribution. This happens in form of the wage labor. The striking aspects of wage labor here is that it is not invested in the product and it is considered to be efficient in terms of productivity. Capitalism boosts individual productivity by means of division of labor whereby productive labor is divided into smallest components possible. In capitalism, the means of production and labor is manipulated by the capitalist by use of rational circulation to gain profit. On the other hand, capitalism as a way of thinking is basically individualistic. This is true because it focuses on capitalist endeavor. This bring out the Enlightenment concepts of individuality in that all the individuals are not the same; the society is composed of individual in pursuit of their own interest and that they should be free to peruse their own interests, that is ,economic freedom. Also, this concept advocates for democratic sense in that individuals perusing their own interests can guarantee the interests of the whole society. Therefore, Enlightenment idea of progress is grounded on the fact that the large-scale social goal of unregulated capitalism can produce wealth and make the national economy wealthier and more affluent than it would otherwise have not been. So, essentially, capitalism as a way of thinking is built on the concept of economic growth (Friedman Friedman, pp5). While this may be true, capitalism has been having a close link with adverse effects of human inequality and valorization that has characterized exploitation of one or more groups by others. It has been argued that capitalist relations evoke alienation of workers from the products they make. This makes both commodities and the workers circulating commodities that circulate in the expanding market. You read "Western Colonialism and Capitalism" in category "Papers" When the laborers are considered to be interchangeable, it becomes the interest of the capitalist to give workers low wage or no wage at all. By doing this, capitalists are able to create surplus of money from their capital invested meanwhile their commodities circulate in the market. Because human beings were one of the vital commodities for success in early capitalism, enslaved workers could be shipped between the colonial territories to the help in monocropping on the large plantations. Presently, capitalist is usually understood to be a mean of system whereby the allocation of resources is by dictates of mechanism of the markets that are driven by profit motive. The advantages of the capitalism are that the government does not interfere with the business because there is limited control over it and that people have choice on what they want to do and where. Also, people are at liberty to do what they want with their money. However, this mode of economy has negative outcomes. Because the government is required to liberalize the market it has limited control over it and this can make few businesses to take monopoly which may lead to inefficiencies. In addition to this, capitalism only reward those who are fortunate to have natural scare abilities and not necessarily as result of hard work and this lead to huge inequities in income and wealth. The Progressive role of Western colonialism and capitalism in Third world Even though colonialism and capitalism had its own shortcomings, nevertheless, there is also a positive effect on balance we can talk about. Before colonialism, Africa only knew of socialism which was widely practiced among different communities. Socialism is a system that advocates for collective ownership and management of the means of production and distribution of goods. It is the opposite of capitalism which is a system hereby economy is based on private ownership of the means of production and personal profit can be realized through capital investment and employment of labor. Colonialism brought a new idea to Africa that the material progress and prosperity were possible for the masses of people. Africans in pre-colonial period did not imagine that could ever happen. They assumed that the material possessions they had were fixed. They believed in such things like plenty of the harvest could result to increase of food in the basket but the idea that living conditions could be changed was strange to them. They did not have a clue of the prospect that instead of trekking for miles in search of water it was possible to have piped water homes. Colonialism brought idea of progress in humanity. They enabled them to realize that people have capability to improve their condition of existence and that tomorrow could be much better that today (Ondeng, pp 26). Development of Infrastructure When colonialism stepped into sub-Saharan Africa three main objectives were the driving force. First objective was to meet the increasing demand of the raw materials for their industries. Second objective was to be able to secure areas and their territories that could form the market for their industrial goods produced by the capitalisms as it was are of industrial evolution. The last objective was that, they wanted to identify and dominate certain strategic areas that would be their future potential region for their investments. Therefore, as it can be seen, the main aim of capitalism expansion through colonialism was purely economic. But it was first necessary through political process of colonialism to create colonial territories to be able to achieve economic goals. Establishment of colonial territories was immediately followed by setting out diversified changes that included both social and economic among subdued societies in order to fulfill economic targets. This called for breaking down the already existed social and political system which resulted in replacement of traditional chiefdoms and kingdoms by Western European political system and consolidation of colonial state. Greater portions of fertile lands were given to settler farmers who produced non-agricultural raw materials for western industries. In order to make this kind of economy efficient, there was a dire need to establish communication infrastructure such roads, railway lines and ports so that there can be a linkage between hinterland and coastal to facilitate securing resources and human labor. In such regions only footpaths did exist that were used by human porters and animal. Most of the roads and railway network seen today in many parts of African countries speaks of a positive legacy from Western colonialism and capitalist in Africa and other third world countries. A good example of such country is Nigeria. In pre-colonial period, transport systems were limited to porterage over the land that was only utilized by animal and humans and small boats in waterways that are in southern and central Nigeria. In states of Nigeria, there were extensive trade routes in its territories which also facilitated movement of goods across the deserts to trade with North Africa and extended to the coast that involved trade with European. The roads were maintained by local leaders using hired labor or conscripted locals on the basis of the age. During this period the basic means of transport were pack animals and human porters. When British claimed Nigeria to be its colony, is started building transport network that would make efficient its ruling over this territory and make easier utilization of the resources in the region. It started with construction of the roads which was later followed by railway lines construction. This facilitated movement of good and people from one place to another as the need demanded which was critical as it helped to maintain strong economic and political ties within its territory. Since Nigeria gained independence there has been little in building new infrastructure network apart from what was established by their colonial master. This has been so because the Civilian governments had experiencing budgetary deficit and their priorities were to maintain regional divisions rather than improving transportation network and building better one in accordance modern world technology. However, while some few military governments were interested in development of better transport system, this turned to be a day dream. Therefore, post-colonial transport systems currently existing are just minimal maintenance of the infrastructure which their colonial master had set. This is a clear indication of the progressive role the Western colonialism and capitalism did play in Nigeria before they had left (Husher, para. 4-9). Suppression of barbaric practices Colonialism brought enlightenment in Africa. During pre-colonial period some African countries cannibalism and pagan worship was common practices. Practices such as cannibalism were usually restricted to specific regions particularly in West Africa. Such practices were not necessarily driven by craves for human flesh but were basically for rituals and sacrifices. The belief behind these practices of man eating were to receive imbibe magic strength that was considered to be transferred by through soul material. This soul material was particularly identified by certain body part of the victim particularly the head. In the community that practiced such behavior they had a belief that if a young man ate the elder, such individual could get wisdom or if it was an elder who ate a young victim this could have added vigor. African had a strong attachment with the dead. In fact, cannibalism in Africa was part of religious act that consisted of complex rules that actually prescribed who should partake of the human flesh and who is supposed to be eaten and also clearly spelt out which part were to be eaten. It also described what parts of the victim’s body were to be kept as part of relics. There were other instances where medicines were made out of the human flesh. For instance, in Leopard societies in Sierra Leone, they used human entails to make certain kind of medicines. When the Sierra Leone became a British colony, the first thing they did was to bring to an end this practice. First, the British investigated what was happening in the jungle. When it had a breakthrough in its investigations to address this extraordinary killing of human beings, it passed a bill which was called ‘The Leopard Ordonance’. This outlawed any possession of a leopard skin that were usually worn by these people who practiced these rituals, a three- pronged knife and a special native medicine called Borfina that constituted a concoction of human flesh such as fat and blood. It was potent in the hand of its owner as it was believed to help one to be powerful and rich . Through use of law and assimilation of European culture Africans experienced a transformation that played a great role in liberating them from such practices. This helped to uphold human dignity and universal human rights particularly right to life (Karoline, para. 7-14). Modern medicine As many of colonial powers embarked on a political project to control much of the world, diseases were the major obstacles for their expansion particularly in African continent. Tropical diseases such as malaria among others posed great challenge because there was no efficient form of medical treatment that existed in African land before except traditional medicine. Many African had a belief that disease was as result of witchcraft or evil spirits as opposed to empirical approach in treatment and management of the disease by European countries . This necessitated them to have attachment of medical personnel to commercial marines and putting up of rudimentary hospital facilities at their colonial territories. A good example is development of medical care in Tanzania. Christian missionaries were the first to introduce allopathic medicine in the territory. Eventually the colonial master in Tanzania assumed the responsibility of providing the health care to serve the army garrison that was stationed in the region partly to counter indigenous resistance and also to provide health care to European settlers. In British colonies they promoted establishment of the London and Liverpool schools of medicine where the study of tropical disease such as those found in the region was given the first priority. After World War 1, Tanzania became a British colony and it assumed the control of colonial medical care where it provided medical care at provincial and district administration levels, voluntary services that involved missions and employer-based that catered for the medical needs at plantations, mines and factories. They also implemented preventative measures that were in form of public health programs. This greatly helped to address the health needs of African that never existed before. It is on the basis of these colonial efforts to address tropical diseases which were a threat to their lives helped to see African countries with improved health care and reduced mortality rate from fatal tropical diseases (Baer, Singer and Susser, pp 18-22). Conclusion Colonialism by the Europe countries was considered to be a mission of civilization to the ‘uncivilized societies’ to be able to advance in state of achieving sustainable liberalized institutions and self government. However the legitimacy of colonialism by these European nations has always staged unsettled debate both in political sphere and with moral philosophers all over the world. Colonialism proved to be the only way through which West Europe could peruse their capitalism motives in the third world countries. Even though there have been shortcomings associated with colonial rule there has been an overall positive effect for Africa. Colonial rule brought enlightenment where ignorance did thrive. It helped to suppress barbaric practices such as pagan worship and cannibalism among others. It laid the seeds of the intellectual and material development as seen through infrastructure development, formal education and modern medicine that saved many Africans lives from deadly tropical diseases that were considered to be caused by witchcraft. Also it helped to reduce the economic gap whereby integration of colonies into international capitalist economy ushered in initial stages of globalization. How to cite Western Colonialism and Capitalism, Papers

Something About Me free essay sample

I grew up in a south side Chicago land area, which was very difficult for me. I remember all the tragic violence that the gangs in my neighborhood brought to my community. I also remember the times when they would go up to me after school and ask me if I would join their gang and would tell me how I would have all these people to back me up. I would always say no though. Stuff like that never had my attention. I come from a good and respectfully family. I was brought up to never be a follower and to be a leader. All of my uncles had to do everything themselves and had to work for their own money. They never had an allowance or anything like that. They had to make their own money and get jobs. This is very important because most people have not learned responsibility or independency throughout their family. We will write a custom essay sample on Something About Me or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page I started to be responsible when I was at the age of 7. As an only child I never had any one to look up to in my house hold. I was taught to do things on my own such as wash clothes, take the garbage out, and was dishes. I only had a mother so I was alone in an apartment, even though my grandmother lived up stair. She would always come down and check on me here and there and ask â€Å"are you okay?† or â€Å"do you need anything†. But other than that I was alone and I really didn’t mind it. I had a responsibility that a 12 or 13 year old should have. And I was proud of that because most of my uncles had the same responsibility as me at my age. So that made me feel good because it made me felt like I would one day grow up to be successful like them. When I wasn’t cleaning the house I was doing homework or hanging out with friends. I really didn’t explore around my neighborhood much because I didn’t feel safe. I would always be two houseâ€⠄¢s down from my own or if anything a block away. I was independent almost all threw my life as a young child. I didn’t mind being alone because I was mature for my age. My mother could trust me alone because she knew my grandmother would check up on me and or she knew I wasn’t a trouble maker. I never really had friends that lived around me so the only time I would see them is at school. After I grew up and moved out the neighborhood I still feel the need to be independent in my life today. I’m always alone at my house because my mother works two jobs and my stepfather works also. So it doesn’t bother me as it would to someone who would have their parent(s) with them all the time. I feel like I get more things accomplished in life as I’m independent. I’ve handled all my problems on my own and if anything my friends were there for me on a few of them. I look on getting a job and making my own money and attending a college that is right for me. I also plan to save up my own money and buy my own car. I wish to do everything in life on my own. I don’t feel the need to ask my parents for anything for the fact that I want to show them that I can do it on my own if I had to. I grew up fast and I’m just living life as it comes and trying to keep up with everything that I’m surrounded by. I’m happy to say that I’m glad I grew up fast because if I didn’t I think I would still act a little childish and I think I’m not at that stage anymore. I feel that I’m ready for the real world and to begin making money, moving out, and having my own family, I would like to thank my family members that I looked up to that stayed true and did the right things in life. At my age I know I’m ready for the real world and only time will take too see when I can get my first job.

Neoclassism and Romanticism Era Art essays

Neoclassism and Romanticism Era Art essays The period of Neoclassical art began in the 18th century and overlapped with the 18th century Age of Enlightenment. The Neoclassical art period continued on into the 19th century. The Neoclassical art period embraced stylistic characteristics and often resembled art from the ancient Greco-Roman society. Neoclassical art was grandiose, poised, and very self-controlled. This period held a belief that society was too reckless, playful, and indulgent. The period sought to provide society with past virtues, ethics, and morality. The period of Romanticism began around the 1770s and continued until the second half of the 19th century. The period of Romanticism conflicted with the Age of Enlightenment and the Neoclassical art period in the 18th century. Self-Consciousness was a key element to the period of Romanticism. Romanticism evolved from myth and symbolism while embracing nature. Romantics were unsure about the world around them and many became socially involved while seeking involvement in politics as a result. Many others became socially detached. Artists during the period of Romanticism expressed their views with emotion, often taking public stands and expressing these emotions through their writings and art. The artists of this period felt the middle-class did not understand them and were indifferent to their values and The artists of the Neoclassical period were often viewed as having a higher social class than the artists of the period of Romanticism. The artists during the Neoclassical period did not seek to arouse emotions and were cautious. Artists of the period of Romanticism were the opposite. They sought to stir emotions of society and create more individualism and spontaneity. They ...

The Pros and Cons of Solar Power

The Pros and Cons of Solar Power The prospect of generating pollution-free power from the sun’s rays is appealing, but to-date the low price of oil combined with the high costs of developing new technology have prevented the widespread adoption of solar power in the United States and beyond. At a current cost of 25 to 50 cents per kilowatt-hour, solar power costs as much as five times more than conventional fossil fuel-based electricity. And dwindling supplies of polysilicon, the element found in traditional photovoltaic cells, are not helping. The Politics of Solar Power According to Gary Gerber of the Berkeley, California-based Sun Light Power, not long after Ronald Reagan moved into the White House in 1980 and removed the solar collectors from the roof that Jimmy Carter had installed, tax credits for solar development disappeared and the industry plunged â€Å"over a cliff.† Federal spending on solar energy picked up under the Clinton administration, but trailed off again once George W. Bush took office. But growing climate change worries and high oil prices have forced the Bush administration to reconsider its stance on alternatives like solar, and the White House has proposed $148 million for solar energy development in 2007, up almost 80 percent from what it invested in 2006. Increasing the Efficiency and Lowering the Cost of Solar Power In the realm of research and development, enterprising engineers are working hard to get solar power’s costs down, and expect it to be price-competitive with fossil fuels within 20 years. One technological innovator is California-based Nanosolar, which replaces the silicon used to absorb sunlight and convert it into electricity with a thin film of copper, indium, gallium and selenium (CIGS). Nanosolar’s Martin Roscheisen says CIGS-based cells are flexible and more durable, making them easier to install in a wide range of applications. Roscheisen expects he will be able to build a 400-megawatt electricity plant for about a tenth of the price of a comparable silicon-based plant. Other companies making waves with CIGS-based solar cells include New York’s DayStar Technologies and California’s Miasolà ©. Another recent innovation in solar power is the co-called â€Å"spray-on† cell, such as those made by Massachusetts’ Konarka. Like paint, the composite can be sprayed on to other materials, where it can harness the sun’s infrared rays to power cell phones and other portable or wireless devices. Some analysts think spray-on cells could become five times more efficient than the current photovoltaic standard. Venture Capitalists Investing in Solar Power Environmentalists and mechanical engineers aren’t the only ones bullish on solar these days. According to the Cleantech Venture Network, a forum of investors interested in clean renewable energy, venture capitalists poured some $100 million into solar start-ups of all sizes in 2006 alone, and expect to commit even more money in 2007. Given the venture capital community’s interest in relatively short-term returns, it’s a good bet that some of today’s promising solar start-ups will be tomorrow’s energy behemoths. EarthTalk is a regular feature of E/The Environmental Magazine. Selected EarthTalk columns are reprinted on About Environmental Issues by permission of the editors of E.

Why I wish to attend Virginia Commonwealth University Essay

Why I wish to attend Virginia Commonwealth University - Essay Example When it comes to quality of education offered at VCU, I think there is nothing to worry about. It's a world class university, and I know my certificates will be recognized and respected wherever I find myself across this world. For that reason, I feel that is the right place for me to study. I developed this interest after a summer visit to the campus and consultations with other students who had graduated from this university. They students gave me an insight of what life in this university is really like. And I liked it. The security standard in this school, as well as its proximity to my home is all an added advantage. Emergency telephones across the campus give me a sense of security. It's difficult to study in an insecure environment. I wish to make a name for my self and I am convinced that Virginia Commonwealth University will help me achieve this dream. The university's international student population would also give me the privilege to study in a culturally diverse environment. That means I will study about the cultures of different peoples without having to travel out of this country. After talking to a representative who came to my school to inform me about VCU, my intentions were clear and I 'm ready to attend VCU. He clearly brought out the advantages of studying at VCU compared with the other universities. They were just enormous. And the difference was absolutely clear. I just saw my dream university in VCU.

Demutualisation of Insurance Companies Essay Example | Topics and Well Written Essays - 2000 words

Demutualisation of Insurance Companies - Essay Example It is advantageous to the members as shares can be traded in the equity or stock markets while the membership rights in the mutual companies can not be traded. Thus demutualisation increases the possibility for the involved parties to make profits and at the same time benefit the economy as a whole. Demutualisation was originally used to signify this specific conversion process of the insurance companies. However this term is being used more broadly to describe the process of conversion of any member-owned organisation to become shareholder owned. Conversion of London Stock Exchange and New York Stock Exchange are some of the classic examples in the direction of demutualisation of companies other than insurance companies. The demutualisation of insurance companies is undertaken pursuant a plan of conversion approved by the policyholders and the state legislators Demutualization Claims Clearing House). In the case of mutual life policyholders a time of conversion they may receive stock, cash and/or policy credits in lieu of their ownership rights in the old mutual insurance company. In some cases the compensation is limited only to the subscription rights to acquire shares in the newly formed company. In some other cases the membership rights are transferred to a Mutual Holding Company (MHC) which owns a newly formed subsidiary stock insurance company. In the context of th... These changes include: (1) The traditional life insurance products of life coverage and risk transfers were not favourably looked into by the consumers over the period of time. The consumers showed considerable preference in the wealth management/annuity business which showed good potential for new growth opportunities. (2) The large scale deregulation of the financial services industry with the passing of Gramm-Leach-Bliley Act in the year 1999 eliminated the barriers between the commercial banking, insurance business and the investment banking which paved the way for combining all the business in one entity (3) The modifications brought about in the Internal Revenue Codes abolished the tax advantages which were hitherto available to a mutual insurer and (4) There were a number of foreign insurance companies that showed interest in the insurance market of the United States which changed the structure of the insurance companies Similar circumstances prevailed in the European economies augmented the need for conversion of the insurance companies to stock companies from their original form of mutual companies with the membership of policyholders. Mutual Companies and Stock Companies In a mutual life insurance company the company is owned by the policyholders that make them both insureds and insurers. The policyholders are vested with the right to vote to elect the members of the Board of Directors and also to receive the policy dividends. In the event of insolvency and dissolution, they are also entitled to receive the sale proceeds of the assets of the company. The policyholders as members of the mutual company can have their insurance at the lowest possible cost. They do not have to share the profits of the company