Outline and discuss the Capital Asset Pricing Model (CAPM) as means of Essay - 2

Outline and discuss the Capital Asset Pricing Model (CAPM) as means of valuing securities and their risk. What are the drawbacks - Essay Example The CAPM focuses on a single holding period and assumes the investors can borrow or lend at the risk free rate. There are no limits on short sales and all investors have homogenous estimates of return, risk, and variances. There are no taxes and transaction costs and all assets are highly liquid and marketable. The quantities of the assets are fixed and there is perfect market meaning investors cannot influence price and are price takers. The CAPM is based on the Capital Market line and the Security Market Line. The CML implies that all investors under the CAPM assumption must hold a combination of risk free securities and a market portfolio. If the market is in equilibrium the market portfolio will consist of every security in the same proportion as it is in the market. The CML specifies the relationship between an efficient market portfolio’s risk and return. CAPM focuses on individual securities as well and the SML defines the relationship between the risk and return of ind ividual securities which can be figured out by using the risk premium formula RPm = (km –krf) bm The required return on a specific stock according to CAPM would be the sum of the risk free rate and the product of the risk premium into beta. ... Beta is the relevant risk of an asset and is calculated as the gradient of the characteristic line which is the plotting of historical returns of an individual stock. Beta measures the volatility of returns compared to the volatility in the market. It is the measure of risk used in the SML whereas standard deviation is used as the market risk measure in CML. Although, CAPM has been used in security valuations its assumptions do not reflect a real market setting. As most investors in the real world do not hold fully diversified efficient portfolios, the beta would not be a sufficient measure of risk and SML would not be applicable for the required rates of return. As there are taxes and transaction costs in reality and assets have different degrees of liquidity this assumption does not hold true either. All investors do not have same forecasts of expected risk and return and they usually borrow according to their credit standing which is higher than the risk free rate. There is a disp arity in borrowing and lending rates which will distort the CML and thus the SML line. In many markets, large investors can influence price through buying and selling securities. Examples: Example 1: Krf= 6% Km=5% Beta for Kellogs foods is 1.2 Then the cost of equity would be = 6 + ( 6-5 ) 1.2 = 7.2 Example 2: The CAPM can be used to calculate the cost of common stock through the insertion of the risk free rate, expected market risk premium and the beta coefficient into the SML equation. For example: Krf= 8% Km=12% Beta for Kellogs foods is 1.2 Then the cost of equity would be = 8 + ( 12-8 ) 1.2 = 8 + 4.8 = 12.8 % The required return on Kellog’s stock would be 12.8%, 0.8% greater than the market return as its beta is greater than 1. However, due to

Textual Analysis Essay Example | Topics and Well Written Essays - 1000 words - 2

Textual Analysis - Essay Example For him, group absolution means the dominance of the group influence over individual will. Grossman effectively convinces the audience through pathos and logos that people can kill another person because of their group bonds that dissolve their accountability and promote their anonymity, although he commits the fallacies of false analogy, biased sample, and confusing cause and effect, when he fails to expand his sampling and to identify other probable motivations and conditions for killing. Grossman effectively convinces the audience through pathos that it takes emotional bonding to do something as hard as killing another human being, as well as being killed. He uses different emotional examples to support his claim. For instance, he mentions Dinter who explains that the â€Å"integration of the individual in the group† can be so deep that when the group is destroyed or defeated, individuals either fall to depression or commit suicide (Grossman 149-150). This example is emotio nally charged because it describes how people give up their lives when their groups falter. Furthermore, Grossman highlights the emotional connections involved in group bonding that can overpass the will of survival. He cites the account of a veteran U.S. Marines Corp. Gwynne Dyer, who underlines the role of â€Å"peer pressure† in combat, while Ardant du Picq calls it â€Å"mutual surveillance† (Grossman 150). He mentions these people who believe that groups form emotional connections, which make them extremely aware of and sensitive to one another’s opinions and actions. In addition, Grossman uses examples of emotional value to stress the association between emotional group bonds and individual action. He narrates the action of Audie Murphy as a form of gallantry: â€Å"[Murphy] won the Medal of Honor by single-handedly taking on a German infantry company† (Grossman 155). The word â€Å"single-handedly† suggests that, for Grossman, what Murphy di d is not stupid, but rather admirable. Grossman extends this admiration by quoting something deeply emotional from Murphy, who said that he attacked the Germans against all odds because â€Å"they were killing [his] friends† (Grossman 155). Murphy is illustrated as a selfless, devoted comrade, an emotional tactic that depicts how emotions surpass rationality in the context of heroic acts. Grossman, hence, clearly articulates through the testimonies of others that killing is a group business with strong emotional attachment, and not a product of individual will alone. While using pathos, Grossman also employs logos to explain how the group shapes individual combat behavior. He uses analogy to describe the parallelism between animal and human group behavior. He narrates the result of the 1972 research of Kruck, who learned that some animals slaughter prey that are more than necessary for their consumption because of group behavior (Grossman 151). Grossman believes that the same analogy applies to people in groups, where they think and act like a herd, instead of as separate individuals. He adds the explanation of Shalit, which he believes is important to corroborate his analogy. Shalit believes that â€Å"senseless violence in the animal world† is similar to â€Å"violence in the human domain,† and in both cases, groups are the ones who conduct violent acts, not individuals (Grossman 151). Senseless violence cannot be performed by one individual in normal cases, but groups can

Should broadcasters be required to accept advocacy advertising Research Paper

Should broadcasters be required to accept advocacy advertising - Research Paper Example It is the duty of the media to convey only the facts to the public. If media has some interests in exaggerating certain issues or hiding certain issues, the public will never get the exact dimensions of such issues. In other words, public may become forced to take wrong stands on issues if they get inadequate information. For example, Obama’s bailout package or healthcare reform policies may have lot of advantages and disadvantages. It is the duty of the media to convey both the merits and demerits of these policies to the public. If the media tries to focus more on either the merit or the demerit, the public will not get the actual picture about these polices. In an advocacy advertising campaign, â€Å"although separate displays may be taken within a campaign are to different audiences, each of these advertisements should communicate the same central message of the campaign†(The Essentials of Advocacy Advertising, n. d). In short, advocacy advertising forces broadcaste rs to spread the same message to the audience through different types of advertising. Thus the audience or the public will get the same content in different forms while broadcasters engage in a advocacy advertising.

Textual Analysis Essay Example | Topics and Well Written Essays - 1000 words - 2

Textual Analysis - Essay Example For him, group absolution means the dominance of the group influence over individual will. Grossman effectively convinces the audience through pathos and logos that people can kill another person because of their group bonds that dissolve their accountability and promote their anonymity, although he commits the fallacies of false analogy, biased sample, and confusing cause and effect, when he fails to expand his sampling and to identify other probable motivations and conditions for killing. Grossman effectively convinces the audience through pathos that it takes emotional bonding to do something as hard as killing another human being, as well as being killed. He uses different emotional examples to support his claim. For instance, he mentions Dinter who explains that the â€Å"integration of the individual in the group† can be so deep that when the group is destroyed or defeated, individuals either fall to depression or commit suicide (Grossman 149-150). This example is emotio nally charged because it describes how people give up their lives when their groups falter. Furthermore, Grossman highlights the emotional connections involved in group bonding that can overpass the will of survival. He cites the account of a veteran U.S. Marines Corp. Gwynne Dyer, who underlines the role of â€Å"peer pressure† in combat, while Ardant du Picq calls it â€Å"mutual surveillance† (Grossman 150). He mentions these people who believe that groups form emotional connections, which make them extremely aware of and sensitive to one another’s opinions and actions. In addition, Grossman uses examples of emotional value to stress the association between emotional group bonds and individual action. He narrates the action of Audie Murphy as a form of gallantry: â€Å"[Murphy] won the Medal of Honor by single-handedly taking on a German infantry company† (Grossman 155). The word â€Å"single-handedly† suggests that, for Grossman, what Murphy di d is not stupid, but rather admirable. Grossman extends this admiration by quoting something deeply emotional from Murphy, who said that he attacked the Germans against all odds because â€Å"they were killing [his] friends† (Grossman 155). Murphy is illustrated as a selfless, devoted comrade, an emotional tactic that depicts how emotions surpass rationality in the context of heroic acts. Grossman, hence, clearly articulates through the testimonies of others that killing is a group business with strong emotional attachment, and not a product of individual will alone. While using pathos, Grossman also employs logos to explain how the group shapes individual combat behavior. He uses analogy to describe the parallelism between animal and human group behavior. He narrates the result of the 1972 research of Kruck, who learned that some animals slaughter prey that are more than necessary for their consumption because of group behavior (Grossman 151). Grossman believes that the same analogy applies to people in groups, where they think and act like a herd, instead of as separate individuals. He adds the explanation of Shalit, which he believes is important to corroborate his analogy. Shalit believes that â€Å"senseless violence in the animal world† is similar to â€Å"violence in the human domain,† and in both cases, groups are the ones who conduct violent acts, not individuals (Grossman 151). Senseless violence cannot be performed by one individual in normal cases, but groups can

Criminal Case Study Example | Topics and Well Written Essays - 1500 words

Criminal - Case Study Example This will ensure that there is an efficient trial which is aimed to bring across justice. Criminal law deals with crimes and the legal punishments of criminal offences under the body of statutory and common law. A peaceful social order and justice is achieved in the society by imposing sanction of the crime. Criminal justice is governed by four theories namely: punishment, incapacitation, deterrence and rehabilitation. 1 A crime is an act of default or conduct prejudicial to the community, the commission of which by law renders the person responsible liable to be prosecuted and eventually punishing the guilty person accordingly. The prosecutor has a duty of bring the charges against the accused person and prove establish his guilty beyond any reasonable doubts. The prosecution for crime is conduct in the name of the state and the case is styled as - State versus name of the accused. (Van de Haag, 1978) Whereas civil law deals with the relationship between an individual and their rights and obligations under the law, criminal law is a system of regulating the behaviours of persons in relation to societal norms. A criminal proceeding commences with an alleged crime whereby an accusation is made by the compliant and the police being the government agent investigates the matter. During the proceedings, the interest of the government is represented by the prosecuting attorney or prosecutor while those of the defendant are represented by his defence attorney or by himself. 2 An exact circumstance that comprises a crime is supposed to be spelt out by the criminal statute in what is known as the element of the offence. The defendant cannot be proved to be guilty of the offence unless the prosecuting authority proves the elements of the offence spelt out in the criminal statute. Three elements of the offence are: the act itself, the actus reus, guilty act; the requisite mental state, the mens rea, guilty mind; and the attendant circumstances. (Fletcher, 1998) For our case, Arnold who was a member of an anti-capitalist organisation committed to the violent overthrow of society is a criminal offence when he released a toxic gas into the underground rail system of a city. This is a public nuisance which is actionable at the suit of the prosecutor on behalf of the public. A public nuisance can be defined as an act which interferes with the enjoyment of a right whereby all member of the society are entitled to for example right to fresh air or travel on the highway or rail. (Langhan, 1999) Arnold endangered the life of passengers using the railway system with the toxic case hence he should be prosecuted for public nuisance. The remedies in nuisance are damages, injunction and abatement. Damages This is an ordinary common law remedy whereby the damages claimed are un-liquidated as the court has power to fix them. Injunction This is an equitable remedy which is granted at the discretion of the court circumstances

Mineral Exploration Essay Example for Free

Mineral Exploration Essay Mineral exploration is the initial stage of the mining cycle. It is a sequential process of information gathering that assesses the mineral potential of a given area. In simple words it is the search for mineral deposits. The reason of exploration is to trace a new source of metal or useful minerals. This includes industrial minerals like silica or clay minerals, metals like iron, lead, zinc, etc., and precious metals and gemstones like gold and diamonds. Types of Mineral Exploration  ·Grassroots exploration involves looking for a deposit in an area where the mineral or metal has never been found till date.  ·Brownfield exploration is the search for any traces of additional deposits near an identified mine.  ·On-mine-site exploration is about expanding a mineral resource that has been found beforehand and developed on the property of an existing mine. Mineral Exploration Process Prospecting It is the search for mineral deposits and starts with an idea or geologic model that identifies lands worthy of advance exploration. It basically includes prospectors walking the around examining and mapping rock types and collecting rock and soil samples by hand for either mineral or laboratory analysis. Mining Claim Staking It is exercised in all the countries as a way of indicating to the government the area that a company wishes to explore further in detail. The license required to stake a claim can be applied for at a mining recorders office. Once a claim is staked and approved by the appropriate government agency, it gives the company the exclusive right to explore that section of ground for a specific time. Detailed Exploration Once a claim has been staked and based on the results of its initial prospecting work, the company will come to a decision on whether to carry on with more detailed exploration. Many minerals are buried deep beneath soil so to test if minerals are present advanced techniques are used such as geophysical and geochemical surveys, and diamond drilling programs are also used. Sampling and Drilling If earlier stages suggest that there is the probability of a mineral deposit underground, the exploration company now might be able to sample that rock to calculate approximately the extent and form of that mineral deposit. The samples are then sent to laboratories for testing and the company will analyze the results.

Narketing in the Digital Age :: essays research papers

Marketing In The Digital Age ANSWERS Be sure to answer all parts of each question. Be sure to use complete sentences whenever appropriate. Good Luck! 1.  Ã‚  Ã‚  Ã‚  Ã‚  What were the four major forces that shaped the digital age? Digitalized and Connectivity Internet Explosion New type of Intermediaries Customization and Customerization 2.  Ã‚  Ã‚  Ã‚  Ã‚  What are the four major e-commerce domains? Business to Consumer Business to Business Consumer to Consumer Consumer to Business 3.  Ã‚  Ã‚  Ã‚  Ã‚  Define internet, intranet and extranet Internet: A vast public web of computer networks, which connect users off all types   Ã‚  Ã‚  Ã‚  Ã‚   Around the world to each other and to an amazingly large information repository. Intranet: A network that connects people within a company to each other and to the Company network. Extranet: A network that connects a company with it’s suppliers and distributors. 4.  Ã‚  Ã‚  Ã‚  Ã‚  Discuss the benefits of integrating online selling with in-store selling (use examples). For example the store Game Stop and Game Stop dot com. They have an advantage on both territories and they broaden the customer base, by being available and online. You can afford to discount more sometimes online, to keep the customer shopping, and the company can make the customer service base open both online and in person, no matter how you bought the product. Also if you there was a problem with the product, you can physically take it back to the store and they can return or exchange. So the benefits are great, because the company has both markets at it’s advantage. 5.  Ã‚  Ã‚  Ã‚  Ã‚  E-commerce and the Internet bring many benefits to both buyers and sellers alike. Briefly discuss the benefits to both buyers and sellers. For buyers they might get the opportunity to by a mass quantity at a low price and it can keep a company’s overhead down. For a buyer, to me the main element is convenience, because you do not have to go to the actual store, you tend to get online discounts that is not available in store, and you have a better chance in obtaining your product, because you can possibly be obtaining it directly from the company. 6.  Ã‚  Ã‚  Ã‚  Ã‚  Discuss the differences between click-only companies and click-and-mortar e-marketers. Click-only companies are online only, but a click- and-mortar has both Brick and Mortar and has added an e-commerce to the company. 7.  Ã‚  Ã‚  Ã‚  Ã‚  Define viral marketing. What is the link between viral marketing and word-of-mouth communication? Discuss the benefits of viral marketing. Viral Marketing is the internets version of word of mouth. Vial marketing involves creating an email or another marketing plan that is so infectious that it makes a person want to forward it.