Sunday 12 February 2012

Financial Markets

1. How can economies of scale help explain the existence of financial intermediaries? Does mutual fund lower transaction costs? How? Explain

Economies of scale bring with it high transaction costs. High transaction costs have a relative effect in the level of individual investment. Most individuals and business startups have insufficient funds to enlarge their investment fund. However, financial intermediaries provide a platform for cheap investment. Mutual fund does not lower transaction cost. This is so because these costs are dependent on turnover ratio. High ratio and non-liquid investments drive up transaction costs.

2. How does collateral help reduce the adverse selection problem in credit market? Explain

Most lenders consider the amount of collateral before giving out a loan. With increased level of collateral, a lender is left in an advantageous position to extend a given loan as he has less to lose in case of default and vice versa. Therefore, a sufficient level of collateral helps reduce the allocation and allocation problem in a credit market.

3. Rich people often worry that other will seek to marry them only for their money. Do you agree or disagree? Give reasons for your answer.

Largely, I agree. With the tough economic times most individuals enter in a relationship with a financially stable partner with an expectation of financial fortune in case of an uncertainty i.e. divorce or death.

4. What is a free-rider problem? How does this problem occur in the debt market? Explain

A free rider problem is a situation where a client of a business establishment benefits from the use of a given product without necessarily using his/her income/capital. Without stringent measures to guide the debt market, clients may access securities without a pay and later selling the share for a profit. This immoral act of making a fortune by free riding on securities is a threat to fair competition in the debt market.

5. What is conflict of interest? Describe three examples of conflict of interest in financial markets.

A conflict of interest is a situation that occurs when a firm undertaking a number of interests where one of the undertakings may limit or derail the execution of an act in the other interest. Conflict of interest in a financial market leads to a situation where information disseminated to other parties is incorrect or largely biased. The aforementioned can be experienced in a case where a financial firm is dealing with Underwriting and investment banking, Auditing and doing credit assessment. In accordance to its operations, a financial institution might alter crucial information in favor of issuing companies to avoid losses in cases where an underwriting exceeds banks expectation.

Tuesday 7 February 2012

Advantages and Disadvantages of Modern World Forager Societies

Foraging societies depend passively on what the environment will provide. They hunt and gather their food and unlike agricultural societies, they do not rear animals for food or plant crops; dogs are the only domesticated animals (O’Neil para. 1-3). Contrary to popular opinion about societies that existed before civilization being primitive, foraging societies are not primitive and demonstrate a high degree of efficiency. This essay shows the advantages that foraging societies possess over agricultural societies.

Advantages

Foraging societies are not attached permanently to the places they live; in fact they only construct encampments and simple easily to dismantle huts. This is because they mainly move away from an area when the climate changes and resources dwindle. Movement allows them to increase their food reserves and support a larger population than otherwise. Their social setup emphasizes the need for small bands of people in a given area so as to avoid conflict, therefore when the band population grows beyond the optimum, the band splits up and each goes a different way. Splitting up of large population densities becomes less stressful to the carrying capacity of the environment and allows them to care for their aged, senile and disabled. Foragers have minimal possessions and this gives them flexibility to migrate when there are unfavourable environmental changes (Haviland et.al. p. 158). Modern supposedly evolved societies are less stable than forager societies (Fernandez-Armesto p.264) because they encourage high population densities which intensify competition as discussed by Diamond (Jared Diamond). Much of other causes that Diamond identifies as the causes of the fall of societies are avoided in forage communities as has been shown above. For example, he notes that when the elite isolate themselves, they cannot see the urgency to solve environmental problem caused mainly by pollution because they do not feel the impact. Secondly, he points out depletion of resources, climate change and dependence on other communities as other causes of collapse of a society (Jared Diamond).

Forager societies do not have full time leaders, and are considered very democratic. They survive the problems identified by Diamond because their lack of hierarchy allows for fast sharing of information and thus respond faster to changes in environment. Secondly while foragers respect their environment as the source of livelihood, civilisations are “radically modifying the environment” (Fernandez-Armesto p.39) and even with their advanced technology, are less efficient. The lack efficiency explains why in the United States now, only 1% of the population produces food while the rest of the working class work 40-50 hours a week, while in the San community, adults who make up 60% of the population work only 15 hours per week to provide for the whole community. Adults must be 20 to work, yet in modern U.S. young people of 16 years old work. Ethnographer Richard Lee has described foragers as the most leisured of all societies. Their life expectancy is 60 while that of the U.S. prior to modern medicine was 50 (O’Neil para.20).

Disadvantage and Conclusion

Unfortunately foraging societies are unable to defend their hunting sources in the case of epidemics wiping out animals they hunt. The encroachment of industrial societies and agricultural societies in traditional hunting area has also reduced the sources of food for foragers especially calories (O’Neil para.6).

The disadvantages of foraging are only caused by the encroachment of other societies. It should be noted that the simple technology used by foraging societies does not make their life grim. Ethnography has found no reliable evidence to show that foragers have to struggle to survive. Settlements favour rapid increase in population and result to a hierarchy structure of governance that is characterised by elitism, a major source of isolation in communities and a cause for their fall. Mobility and flexibility of foraging communities absolves them from this fall.

Works cited

Diamond, Jared. Jared Diamond. YouTube Video. 2008. Retrieved 24, February 2011 from http://www.youtube.com/watch?v=bc4bXIg8JDk

Fernandez-Armesto, Felipe.  The World: A Brief History. Upper Saddle River, N.J.: Pearson/Prentice Hall, 2008.

Haviland, William A., Harald E.L. Prins Dana Walrath and Bunny McBride. Cultural Anthropology: the human challenge. 12th ed. Belmont, CA: Thomson Wadsworth, 2005

O’Neil, Dennis. Foragers. 2006. Retrieved 24, February 2011 from http://anthro.palomar.edu/subsistence/sub_2.htm

Sunday 5 February 2012

AVOIDING AND REDUCING HARMFUL HABITS

Higgins, S. J. W., Lauzon L. L., Yew A. C., Bratseth C. D. and McLeod N. Wellness 101: health education for the university student. Health Education, 110(4):309-327 DOI: 10.1108/09654281011052655

Summary of the article

The paper reports findings of a mixed-method study of Canadian university students. In the first phase, findings bring out the need for redevelopment of the educational course for first years. Then in the second phase, the re-development of the health education course is assessed based on its impact in the wellness and learning of students. The authors explain the methodology of their experiment and provide the findings of their experiment. The findings demonstrate the effectiveness of a health education that responds to needs identified by students. The study uses practicality to deliver both quantitative and qualitative in-depth findings. The article finds out that the decision individuals make regarding their health and wellness reflect their circumstances and the chances they have had in life. Further it shows that students really want to feel they belong to campus and prefer activities that create the bond in campus. They recognize that abandoning their health and wellness so as to pursue their academics is a sacrifice they make so as to get into their dream careers. The study finds out that Canadian students understand and willingly adopt good nutrition and dietary habits to a far greater extent than their other North American counterparts.

Assessment of the article

This article provides comprehensive analysis of the factors that affect the recognition of good health habits for university students. By delivering qualitative findings the authors are able to put the quantitative findings in context and conclusively offer a verdict on the question of student wellness and their health. Its answers the question of why students fail to avoid harmful eating habits even after being introduced to wellness and proper health through introductory courses based on what the authors call “topic-based” health information. The article further shows that effectiveness of the health information courses is limited by the resources deployed and policies implemented in the student setting. The authors advocate for the facilitation of a good environment for students so that they can practice healthy habits like proper dieting and nutrition. This study is appropriate because it handles demographic most prone to harmful habits of substance addiction and alcohol indulgence among others.

Reflection of the article use for nursing

It is important to provide the environment which easily allows individuals to adopt good habits. Therefore just like health education examined in this article, nursing should adopt a holistic approach in delivering healthcare. Nurses should recognize that individuals are influenced by their circumstances as to whether they adopt new behaviour. Secondly it is important to understand that different communities have different beliefs and reasons for practicing those beliefs and customs. Nurses must involve their patients in the context of their communities to find out their specific needs and reasons for adoption or non-adoption of good habits that are important for their health and wellness. The greater importance attributed to the sense of belonging to the campus by students sampled in the study asks for a community wide outreach of implementing healthcare so that individual do not abandon healthy habits just because the group they wish to be identified with does is synonymous with harmful habits.

Impact of Race, Gender and Place/Location on the shape and course of the African American experience between 1860 and 1915

Several variables have shaped and influenced the course of the African American. This essay explores three of these variables namely race, class and location. Coming from slavery and being considered as equal to animals without rights made African American race to be frowned upon by whites (Washington p.8-9). African Americans had limited opportunities for work, study, political rights and free movement because of their race. Race has also created a form of stereotyping that recognizes the African American as ignorant, stupid and without civilization. Being black or colored meant that one could not access several privileges in the society, and this made the whites advance through education and enterprise while leaving the black to his uncivilized ways of existence (Dubois p.60).

African Americans even after the end of slavery had a difficult time of progressing economically as they lacked proper education. They became of a lower class in the majority of America, only able to do jobs that did not require education and therefore only able to secure very little in terms of pay. The lack of capital also restricted African Americans from developing their own institutions. The time to socially organize and deliberate on their future was limited because both adults and children were preoccupied with working for the white farmers and merchants who paid little coins at the end of a day’s toil. In the cotton fields it was evident that even meal times were not proper for discussions and signified the hard effect of the toil had on the African Americans. Class segregation also resulted to differences in the funding of institutions by blacks and white, for example white schools received about three times federal funding than black schools (Dubois p.112). There were fewer schools available for blacks, and those wishing to pursue education at first had to leave their towns for other towns (Washington p.42). Secondly the few schools that were in existence were mostly established as a result of pity for the African American, and were only meant to teach them basic of reading and writing without emphasizing on the application of that education to their life. As such, there were blacks studying French even though they could not use that anywhere, because their class meant that they were prohibited from the social places that French whites might frequent, and make their learning of French worthy (Dubois p.29). Differentiation by class became visible in the churches, which were mostly Baptist. The songs adopted mainly were promising of a later time when emancipation would happen to make them of equal class to other Americans. Movements calling for equality sprang from churches, since this were the only places to gather enough numbers of the African Americans while they were not working in the fields (Dubois p.120).

African Americans were mainly coming from the south of America, and the states in the south were advocating for the continuation of slavery, while those of the north were for its abolition (Washington p.7). Even after the emancipation of the African American from slavery, the whites in the south still considered them as slaves for some time. During the period of slavery, very little if any was provided for the development of the African American and therefore, most African Americans found themselves depending on the federal governments for everything. This matter was further complicated by the fact that the south lacked any infrastructure that would aid the African American to provide for them. This created a frustration depicted mostly by the youth who despaired at the thoughts of having no education and having to work for low wages to fend for themselves. Their ignorance also opened them to exploitation by the white owners who upon receiving full installments for the purchase of land, refused to hand over the deed to the purchasing African American and instead made the African American continue working as a laborer on a land their own land (Washington p.106).

It is without wonder that with the struggle after the emancipation, the African American mostly became interested in the education of their fellows. It was widely believed that with education, their race would be able to be full Americans. Education was the one way to make the African American embrace civilization and withdraw from ignorant ways of living like the practice of lynching that brought shame to the whole race (Johnson p.146). More institutions for African Americans were developed in the south because that is where many African Americans were (Washington p.137). Africans American in order to be recognized by other Americans had to perform exceptionally in their fields, to dispel the notion that nothing much might come out of African Americans even when educated. So the pioneers of progress in recognition by other Americans in their fields became heroes to the rest of the African Americans and accelerated the embracement of hard work and mastery as the ways of concurring the poverty and backwardness that covered the soul of the African American (Johnson p.147).

In conclusion, we can say that race acted as the main determent to the progress of the African American as it was something that couldn’t be hidden unless one was of a colored race. Being located at the south where slavery was practiced widely also provided no or very little chance of advancement of the African American. Lastly the two variables resulted in further discrimination economically into classes, with African Americans finding themselves in lower classes economically with little capital and a lot of debt that majority depended on the state to afford their expenses. Above all variables, race had the most significance and is largely the cause of the other variables namely class and location. To a lesser extend compared to race, the location of African Americans at the south contributed to the lowering of their class.

Works Cited

Johnson, Weldon James. The Autobiography of an ex-colored man. Filiquarian Publishing LLC, 2007

Dubois, William Edward Burghardt. The Souls of Black Folk. Forgotten Books, 2008.

Washington, Booker T. Up from Slavery; An Autobiography. Forgotten Books,