Investment Management Essay

Both hedge funds and mutual funds are â€Å"pooled† instruments, but there are more differences than similarities between them. Three kinds of differences are going to introduce in the following part which are strategy, risk and reward. Strategy: The hedge funds managers have fewer limits to deal with, they can sell short, use derivatives and use leverage, and otherwise, they can also change the strategy significantly if they think it is appropriate. The mutual fund managers cannot be as flexible as hedge fund managers. In case they changes the strategy of the fund, the may be accused of â€Å"style drift†. Risk: As hedge funds are managed much more aggressive than the mutual fund, they can take speculative positions in derivative securities and have the ability to short sell stocks. This will obviously increase the leverage and the risk of the fund. Mutual funds are the opposite of the hedge funds, taking highly leveraged positions is not allowed and managers should take solid strategy to make the funds safe. Reward: Hedge funds take an aggressive strategy which has high risks to seek absolute returns (it means they want to produce positive return no matter what the market performance is). Mutual funds are managed relative to an index benchmark which means their return is steady because they are judged on their variance from that benchmark. 3. Arbitrage opportunity 3. 1 According to the case study, during the IPO of Ubid, there is only 20% equity offer to public, and remaining 80% will distribute to CC’s shareholders after 6 months. The arbitrage opportunity is appear because if we own CC’s share that we will receive Ubid’s share after six months. In that reason, we should form a portfolio which combines long position of CC and short position of Ubid. In Dec 9, there was 10,238,703 CC’s share outstanding and 9,146,883 Ubid’s share outstanding. However the 80% of Ubid’s share will distributed to CC’s shareholders after 6 month of IPO. In that reason, we can assume that 80% of Ubid’s share is subjected to CC’s share. (10,238,703? 80%)/9,146,883=0. 715 If we have long position on 1 share of CC, we should take 0. 715 short position of Ubid’s share. 3. 2 Based on the output in section 3. 1, the arbitrage opportunity has arise when we have 1 long position on CC’s share and 0. 15 short position on Ubid’s share. Therefore we need short sell the Ubid’s share and buy CC’s share. Assume that we buy 1 share of CC and short sell 0. 715 share of Ubid. After 6 months later. In addition, after 6 months, the 80% Ubid’s share will distribute to CC’s shareholders, therefore, after 6 months we have 1 share of CC will receive 0. 715 share of Ubid. Subject to 1 s hare of CC, we have 0. 715 share short position of Ubid. In that reason we will have a portfolio that combine 1 long position of CC and 0. 715 short position of Ubid. The total payoff of portfolio is sum of payoff in both position is: Price of CC after six month – price of CC + 0. 715? price of Ubid. As we mention before, our return is the total payoff of portfolio. According to the equation of payoff of portfolio, even the price of CC is drop to Zero, we also will generate positive return which is price difference between Ubid and CC, and this is our minimum return Price difference of Ubid and CC is 0. 715? 35. 6875-22. 75=2. 767 and the initial margin is 50% for long and short position, therefore the capital required is 50%? 2. 75+50%? 35. 6875=29. 22. The minimum rate of return is 4. Risks in arbitrage The arbitrage means that investors find temporary risk-free profit from misprice at inefficient market. Therefore, arbitrageurs will face risk lower than other investors. However, some of risks can limit arbitrageur to seek risk free profit. Firstly, arbitrageurs need to bear the fundamental risk. Although arbitrageurs can eliminate unsyst ematic (firm-specific) risk by portfolio diversification, they cannot mitigate systematic risk which arises from market contracture. This lead to some of bad news or policies can cause negative effects on fundament value and arbitrageurs’ profits. Thus, the fundamental risk can limit arbitrageurs to invest in inefficient market. Secondly, noise trader risk will limit arbitrage. High percentages of noise traders who make irrational investment of decision in market will lead price and risk level to be different with expected level for arbitrageurs, and cause misprice to be reduced. Thus the profit of arbitrage will be limit by noise trader risk. Finally, arbitrageurs will also face high implement cost. Implement cost includes commission, bid-ask spread, price impact, short sell cost and identification cost. High cost will cause arbitrageur loss interest on seeking misprice in inefficient market.

Bus230 Exam Iii Review Ch10-13

BBus20 – Exam III Review – Ch 10-13 Name: ___________________________________________________________________________ 1. While trying to determine the effects of lighting and noise on workers' productivity, which of the following found that social and psychological factors could significantly affect productivity? A. Frederick Taylor B. Elton Mayo C. Abraham Maslow D. Victor Vroom E. B. F. Skinner 2. Theories X and Y are most closely associated with A. Abraham Maslow. B. Frederick Herzberg. C. Douglas McGregor. D. Elton Mayo. E. William Ouchi. 3. Sue wants to be warm, but she is not; she has a A. roblem. B. motivation. C. morale. D. need. E. goal. 4. An inner drive that directs behavior toward objectives is called A. a goal. B. a need. C. motivation. D. morale. E. an incentive. 5. According to Maslow's hierarchy of needs, a person who buys a smoke alarm is motivated to do so in an attempt to fulfill the following need: A. physiological. B. social. C. esteem. D. security. E. self-actualization. 6. All of the following would be examples of objective assessments of an employee's performance appraisal except A. a factory worker's level of output. B. number of units sold for a salesperson.C. a ranking system for an office worker. D. batting average for a baseball player. E. shooting percentage for a basketball player. 7. The major reason for forming a labor union is that A. a group has more clout with management than an individual. B. management always listens to groups. C. unions are good social groups. D. unions are socialistic. E. unions force employers to hire too many people. 8. To achieve its objectives, management may use A. boycotts. B. strikes. C. lockouts. D. picketing. E. all of the above. 9. June works at McDonald's twenty hours per week as a grill operator.She will probably be paid with which of the following compensation methods? A. Commission. B. Time wages. C. Piece wages. D. A bonus. E. A salary. 10. When Sandy Smith moved to a new job that involved more responsibility and an increase in compensation, she received a A. transfer. B. demotion. C. lateral move. D. horizontal move. E. promotion. 11. When William Wilson became a father he began to look for household items that were safe for use around young children. His new perspective is related to his A. over-protectiveness. B. motivation. C. social class. D. reference groups. E. time utility. 12.After analyzing its own resources and unique abilities, a company is now trying to determine what group of customers it can satisfy with a good or service. It is in the process of choosing a A. production strategy. B. target market. C. sales plan. D. geographical region. E. product line. 13. When an organization hauls canned goods from the manufacturer to grocery stores, it is involved with which marketing function? A. Buying B. Selling C. Transporting D. Storing E. Grading 14. If a company markets to a segment of people who have a certain lifestyle, the type of segmentatio n being used is A. behavioristic. B. geographic. C. topographic.D. psychographic. E. demographic. 15. XYZ Inc. is surveying customers as to what kinds of services they would like the company to add. It is involved in the marketing function of A. buying. B. storing. C. financing. D. marketing research. E. risk taking. 16. Which of the marketing mix elements is the least flexible? A. Manufacturing B. Product C. Price D. Promotion E. Distribution 17. Many people incorrectly equate promotion with A. advertising. B. selling. C. pricing. D. product designing. E. distribution. 18. Which of the following involves the physical handling and movement of products in warehouse operations and in transportation?A. inventory planning and control B. transportation C. warehousing D. materials handling E. physical distribution 19. The financial value placed on an object involved in an exchange is A. the price. B. the discount. C. comparable value. D. negotiated value. E. nominal value. 20. Industrial products such as lumber, cotton, and iron are classified as A. major equipment. B. supplies. C. accessory equipment. D. raw materials. E. component parts. Bus20 – Exam III Review – Ch 10-13 Key 1. (p. 300) B 2. (p. 304) C 3. (p. 296-297) D 4. (p. 296) C 5. (p. 302) D 6. (p. 330) C 7. (p. 340) A 8. (p. 342) C 9. (p. 335) B 10. (p. 332) E 1. (p. 378-379) D 12. (p. 369) B 13. (p. 365) C 14. (p. 373) D 15. (p. 365) D 16. (p. 408) E 17. (p. 409) A 18. (p. 408) D 19. (p. 399) A 20. (p. 392) D Bus20 – Exam III Review – Ch 10-13 Summary Category|# of Questions| AACSB: Reflective Thinking|20| Bloom's Taxonomy: Comprehension|9| Bloom's Taxonomy: Knowledge|11| Difficulty: Easy|4| Difficulty: Hard|4| Difficulty: Medium|12| Ferrell – Chapter 10|5| Ferrell – Chapter 11|5| Ferrell – Chapter 12|5| Ferrell – Chapter 13|5| Learning Objective: 1|3| Learning Objective: 2|4| Learning Objective: 3|4| Learning Objective: 4|5| Learning Objective: 5|2| Learning Objective: 6|2|

Comparing IFRS To GAAP Paper Essay

There are several differences between the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (GAAP). The IFRS is considered more of a â€Å"principles based† accounting standard in contrast to U.S. GAAP which is considered more â€Å"rules based.† By being more â€Å"principles based†, IFRS, arguably, represents and captures the economics of a transaction better than U.S. GAAP. As a team me collaborated to answer the following seven questions. IFRS 2-1: In what ways does the format of a statement of financial of position under IFRS often differ from a balance sheet presented under GAAP? IFRS does not mandate a specific order or classification of accounts on the statement of financial position. In most cases, companies report assets in reverse order of liquidity. An example of the order of accounts on the statement of financial position is as follows: Long Term Assets Current Assets Shareholder Equity Long Term Liabilities Current Liabilities GAAP specifically requires that all accounts be ordered based on their degree of liquidity. Therefore, cash is usually reported first and non-current assets will be reported last. Below is an example of the order typically found on a GAAP balance sheet: Current Assets Long Term Assets Current Liabilities Long Term Liabilities Shareholder Equity IFRS 2-2: Do the IFRS and GAAP conceptual frameworks differ in terms of the objective of financial reporting? Explain. No, GAAP and IFRS maintain very similar viewpoints on the objectivity of financial data. Both of these authoritative bodies agree that financial reporting data should be relevant and faithfully represented. Information that is relevant is anything that could be viewed as useful in the eyes of an investor, creditor, or regulator. Information that is faithfully represented should conform to  industry standards and any estimates should be conservative in nature. IFRS 2-3: What terms commonly used under IFRS is synonymous with common stock and balance sheet? Balance Sheet is synonymous with the â€Å"Statement of Financial Position† and Common Stock is typically labeled as â€Å"Share Capital Ordinary† on IFRS financial statements. IFRS 3-1: Describe some of the issues the SEC must consider in deciding whether the United States should adopt IFRS. The SEC has several aspects to consider when it comes to the adoption of IFRS in the United States. First, the SEC should consider the overall costs impact this will have on businesses. It is likely that it would cost billions of dollars in new reporting expenses for U.S corporations to implement IFRS. It would also require accounting firms to vastly change their education requirements. Second, the SEC’s main job is to protect investors from fraud on public exchanges. The commission must determine whether IFRS does a better job of protecting investors from unlawful activity. IFRS 4-1: Compare and contrast the rules regarding revenue recognition under IFRS versus GAAP. Under GAAP, it is possible to use cash-basis or accrual basis accounting for revenue recognition. Under cash basis, revenue is recognized with payment is received. Under accrual basis, revenue is recognized when it becomes economically significant. GAAP has specific requirements for various industries on when an event qualifies to be recognized as revenue. IFRS has fewer requirements on revenue recognition, but follows the same basic principle of economic significance. Revenue can be recorded when t is probable that any future economic benefit associated with the item of revenue will flow to the entity and it can be measured reliably. IFRS 4-2: Under IFRS, do the definitions of revenues and expenses include gains and losses? Explain. Under IFRS, revenue is used to describe the total amount of economic benefits arising from the ordinary operating activities of a business. Therefore, it does not include non-operating gains. This principle applies equally to expenses, which do not include losses from non-operating activities. FRS 7-1: Some people argue that the internal control requirements of the Sarbanes-Oxley Act (SOX) put U.S. companies at a competitive disadvantage to companies outside the United States. Discuss the competitive implications (both pros and cons) of SOX. When it was implemented in 2002, SOX created an array of new reporting requirements for publically traded companies. While it is true that this costs American  businesses additional capital in compliance expenses, it also creates a more stable financial system. The major frauds of Enron and WorldCom were much more damaging the financial system. Overall, it reduces the risks for investors in public companies and encourages foreign direct investment. After all of the information was gathered, I could say that I have a much better understanding of the differences between the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (GAAP). References: Terms Synonymous with Common Stock and Balance Sheet – IFRS2-3. (n.d.). Retrieved January 16, 2015, from http://octotutor.com/terms-synonymous-with-common-stock-and-balance-sheet-ifrs2-3/ Still in flux: Future of IFRS in U.S. remains unclear after SEC report. (n.d.). Retrieved January 16, 2015, from http://www.journalofaccountancy.com/Issues/2012/Sep/20126059.htm

Homeostasis Essay Example | Topics and Well Written Essays - 500 words

Homeostasis - Essay Example The excretion of these hormones from the kidneys stops when intake is enough and diluted urine is excreted. The homeostatic mechanism at times acts as the sole surviving mechanism of the body. The presence of homeostasis in our body gives us the freedom to work in any weather, day or night, hot or cold, dry or stormy. If there was no homeostasis, we could not have been able to regulate our body temperature. That would have resulted in the hibernation of our species during winters like many other living things. The regulation and adoption of our body's internal environment according to the external environment has provided us with the freedom to work in summers when we could preserve water by excreting concentrated urine, work in winters by preserving heat by peripheral vasoconstriction and erection of skin hair which trap a layer of air preserving body heat. When the body is pushed beyond the limits of homeostatic control, cellular death occurs such as frost bite that occurs in extre me cold or stroke that could occur in extreme dehydration when homeostasis fails due to the extremes of temperature. Maintenance of homeostasis is especially important in a developing embryo since the developing organs require a perfect internal environment to grow in. also, the metabolic enzymes require specific conditions to function and produce the energy required by the embryo. Absence or failure of homeostatic mechanism in developing embryo could lead to in-vitro death or abnormal development and the new born may not be liable to life.

The Rock and Roll Music Era Essay Example | Topics and Well Written Essays - 1750 words

The Rock and Roll Music Era - Essay Example This "The Rock and Roll Music Era" essay outlines the origin of this genre and how it became popular. Early rock and roll was a fusion of three leading music genres of the time, and these are pop music, western-country music and Rn’Bs; rock and roll grew to phenomenal heights as songs by rock and roll artists such as Little Richard Chuck Berry and Elvis Presley became instant chart hits throughout the world (Welch, n.d). Socially, the rock and roll era was characterized by widespread racial segregation and high racial intolerance between the blacks and the whites in the American society; race mixing was a huge problem due to the racial hostilities that characterized the American society at the time. Economically, America was still recovering from the pangs of both the civil war and the world wars that had caused massive havoc to its economy; even though the situation was slowly getting better and trade was picking up, the American society was still wary over the potential of a n economic relapse. Politically, the rock and roll era was a period in the American history when there were high political anxieties and fears over the possibility and threat of foreign conspirators even though the world wars had just been concluded and calm had returned in the global society. Culturally, rock and roll was an era defined by a fusion of music cultures i.e. rock and roll is regarded as one of the most influential and phenomenal eras of music especially because it was a fusion of the three most popular forms of music. Rock and roll was also popular all over the world because it emerged along with the rise of television and the highly expressive popular youth culture. Until then, people had listened to music through the radio i.e. WLS 890, a radio station that played the most popular songs of the time, about young love and cars in particular; this station was common among the youth of the time. The youth of this era were very expressive and experimental and their teenage angst coupled with their free spiritedness lifestyle was a perennial source of worry to their parents who were wary of the potential ramifications of teenage rebellion in the hostile American society. These teenagers were fast at picking up the rock and roll mannerisms and influences especiall y fashion by watching TV and imitating the rock and roll superstars in their manner of dressing and their tastes in things

Architecture of the UAE Essay Example | Topics and Well Written Essays - 1000 words

Architecture of the UAE - Essay Example sis is now placed on projects to be completed within the specified project duration due to the current trend of shifting most projects towards the fast track approach. This has led to the need to pinpoint exactly the relevant causes of delay that have to be monitored during the entire phases of the project on time. (Olsen & West, 2007) There is a major construction boom in Dubai; Garhoud Bridge expanding hotels, sky scrapers, projects, palm islands, metro and so on, is currently in full swing. This requires a lot of investment and Dubai has been successful in attracting foreign investment by giving benefits such as residence visa and 99 year freehold ownership. All this has led into a vicious circle where the flow of money in Dubai has increased resulting increase in absolute prices which has in turn led to higher inflation. (Stern, 2009) Who is building this huge new city and its peers around the United Arab Emirates? Some of the worlds most acclaimed architects — whose reputations in western capitals, China, and India have put them in high demand — have been drawn to these desert lands. They include Frank Gehry, Zaha Hadid, Tadao Ando, Rem Kolhaas, Carlos Ott and many others. (Kaufman, 2007) To the untrained eye, the Dubai of 25 years ago might have seemed an unappealing place to build. The region was more or less a blank slate. But to talented international architects striving to execute their unique vision and to the firms that grew around them, Dubai was fertile ground. Here there was no need to remove previously constructed housing complexes or industrial structures, theater districts or public buildings (Stern, 2009). There had been no visionaries or practitioners of architecture whose footprints would be erased in order to build anew. Most importantly, there were ample funds available, and the support of the local population who shared the new, unique vision of development. As a result, the imagination and creativity of the worlds greatest architects

Ethnography and Analysis of a Musical Performance Essay

Ethnography and Analysis of a Musical Performance - Essay Example Like the typical vocal system of metal bands, the vocal harmony was existent and the final sound resembled to a feminine voice even though all the performers were male. The loudness of the voice was extreme to add excitement to the atmosphere of the concert. The performances were certainly high pitched. This paper puts the spotlight on the indispensible role of music as a way of promoting intercultural relationships between the citizens and nations of the world. Analyzing an event gathering musicians from two continents clarifies the function of music as a way of supporting Internationalism and solidarity between all the people of the world. This paper aims to defend music's role as a melting pot of different cultures rather than an enemy of the authenticity of different cultures. An ideology is known to be a group of ideas, values or conceptions to which agree a large amount of people. Different ideologies often come into conflict with each other. Globalization aims to help differen t cultures coexist by promoting cultural exchange between different civilizations. Music, being a cultural activity that is tightly connected to identity, plays a very important role in helping the world overcome civilization related conflicts by proving that the 'global' is more important than the 'national'. The event took place in order to celebrate Halloween. That occasion motivating the creation is a universal celebrating. Music, being attached to festive atmospheres, spread the feeling of unity between the elements of a given culture. However, in this multinational event music's role extends to cover assuring cooperation between various cultures. Like any event gathering artists from different areas of the world, one of the main purposes of this concert is to give the performing artists the chance to discover eachother's music techniques and to possibly experiment mixing with these genres. The Venue of the concert was in MAO Club. The general atmosphere that reigned in Beijing throughout of the performance was the typical atmosphere expected from a metal festival in any place in the world. The overall atmosphere was unconventional, wild and quite extreme, "The strong stimulating beats, the coarse, rough loud vocal delivery, the wild singing of nonsense syllables, and the music's direct, unrestrained and liberating quality" (Taylor,2007: 33). The concert being held in China means logically that the biggest part of its attendance was of Chinese natives. The Chinese audience however grasped that western form of music and fully interacted to it proving that music has no nationality. In the twentieth century, the revolution in means of communication introduced to the Chinese people the various musical techniques of Western music and the new ideas of the entertainment business. This led consequently to the creation of some sort of "star system" in China at least in big citie s. The public was then introduced to means such as "mass-circulation newspaper and glossy magazines, movies, radio and the phonograph" (Gunde, 2002: 96) helping to create a mass popular commercial culture. Nowadays, Chinese youth finds in that genre of music their individuality as they let down their hair and dance along to the music with their friends and enjoy this feeling of freedom. In addition to that, the three opening acts were Asian bands that felt that western