Teaching and Learning Turkish in Cyprus Thesis Proposal

Instructing and Learning Turkish in Cyprus - Thesis Proposal Example The exploration will focus at assessing the patterns and the reasonableness of the innovative condition of the province just as the fittingness of getting the hang of/showing Turkish in the nation as an outside or second language in the southern piece of Cyprus; Limassol. To have dependable outcomes both quantitative and subjective research approach will be applied. Among the most recent activity plans set up by the European Union is (EU) is etymological assorted variety and language learning inside long lasting learning degree. Long lasting learning alludes to all learning exercises attempted inside someone’s life, with a goal of improving aptitudes, fitness, and information inside a urban, individual, and different points of view identified with business. Around 200 semi-organized meetings ought to be directed utilizing subjective and quantitative research philosophies. The members will incorporate college understudies, colleges’ understudies and other Turkish speaker s living in Limassol. More than 1000 point by point polls ought to be figured and later examined after information assortment. A correlation ought to be made and the end drawn putting together the contention with respect to the outcomes. Perceptions ought to be completed for the most part on the disposition, conduct, and approach of the e-learning by understudies and educators. Different perceptions should target effects of other language training, challenges confronting those contribution the dialects just as the holes in language instruction in the nation. Following the country’s instruction educational program, Turkish e-learning, open-learning, and far off learning organizations ought to be set up in the vital districts. The area ought to be founded on since a long time ago run impacts just as rivalry from other language establishment. The foundation ought to be after the most limited time conceivable. Different components to be considered are government guidelines, secur ity, and mission. The learning timetable ought to be prepared at this point; e-learning convention ought to be very much planned with straightforwardness to encourage cognizance by any sort of understudy. Rules of who can apply or how might one apply ought to be set down; there ought to be a proposal to encourage numerous candidates and speedy foundation.

Evaluate the Impact of China’s Accession to the WTO on the world economy The WritePass Journal

Assess the Impact of China’s Accession to the WTO on the world economy Presentation Assess the Impact of China’s Accession to the WTO on the world economy IntroductionBackground Why did China join the WTO? China’s activities earlier and since joining the WTO duties it has given to the WTOAffect of China’s enrollment on the WTO as an institutionAffect of WTO Membership on China’s Internal Reform ProgrammeAffect on Exports and ImportsGlobal ImpactAsia The EU and the United States Impact on the BRICSAffect on Comparative Advantage Impact of China’s Foreign Currency ReservesImpact of China’s Exchange RateCommentary on Recent DevelopmentsConcluding RemarksBibliographyRelated Presentation Foundation In 1978, when a progression of changes focused on financial turn of events and opening to world exchange were made, China utilized these to get probably the biggest economy on the planet when of their increase to the WTO in 2001. Only preceding these significant changes, China was the world’s thirty-second positioned exporter nation. By 1989 it was the world’s thirteenth biggest exchanging nation.[1] During this time China had joined the International Monetary Fund and the World Bank. Before this, in the period 1949-1978, China was completely dedicated to Communist monetary strategies and sought after a Socialist overwhelming industry improvement procedure. Utilization was not at an ideal level, a significant part of the economy was under state control and extra assets were utilized for the structure of new factories.â There were various exchange boundaries, with duties on most products, tight import controls and import portions. China in this manner had a shut economy, until the Chinese initiative chose to adopt a progressively down to business strategy by acquainting components of free enterprise with advance financial development. The 1978 changes prompted a huge increment in China’s all out estimation of exchange, with normal yearly rate development rates in the mid-youngsters, prompting gigantic inflows of remote direct and portfolio venture. The critical fare drove methodology was a key factor in the amazing paces of development and lifted a great many individuals over the neediness line. The idea of China’s exchange inclinations additionally changed drastically, with a (most optimized plan of attack) industrialisation not very not at all like the one seen by the created world in the eighteenth and nineteenth Century. In 1978 over portion of China’s sends out were essential wares a figure that later tumbled to 5 percent. Fares of fabricated merchandise, only 46 percent of the aggregate in 1978, dramatically increased to 95 percent, with more than 30 percent of that being new and cutting edge products.[2] For what reason did China join the WTO? China officially turned into an individual from the WTO on December 11, 2001. Its increase is especially imperative in light of the fact that despite the fact that China was a piece of the General Agreement on Tariffs (GATT) its readmission to the multi-sidelong exchanging framework took 15 years from its accommodation in 1986 to its promotion in 2001. Obviously, this had a lot to do with the inheritance of the Communist upheaval in China in 1949. A noteworthy rationale in China joining the WTO was the negative impacts were it not to join. While the economy may have profited by security in the short run, it would have been an obstacle over the long haul in view of the exchange and basic favorable circumstances that the economy would be cut off from. Additionally, with the UK and the United States having such an incredible impact in the WTO and other world associations, China could see itself enduring approvals on account of policy driven issues (eg human rights) in the event that they would not join. Moreover, if China avoided itself from world exchange and remained in its Communist ‘bubble’ it would not be workable for it to impact a world fixated essentially on Capitalism. In this way, so as to have a significant impact in approach making, China expected to join the key associations. This would help ensure its inclinations and forestall financial arrangements being constrained upon it without it having any information, for example, agrarian exchange issues. Thirdly, noticeable Chinese pioneers accepted that without an outside disciplinary association, the monetary advancement that China had seen for as far back as not many decades may begin to level in view of personal stakes and debasement. The WTO would give strain to execute new changes and keep up financial headway. At that point, if the economy hence disintegrated, the Chinese government would have the option to fault outside impacts, for example, the WTO. The WTO would likewise prompt noteworthy financial advantages, explicitly through world exchange. WTO section would permit China to increase more prominent market access for its fares to Europe, Japan and the United States, particularly in the attire and material businesses. Likewise, as the economy was encountering a stoppage in the late 1990s, joining the WTO would give a positive infusion, with certain financial specialists anticipating extra development of 2% dad, making 10 to 15 million employments. During the period preceding WTO participation, remote direct venture (FDI) diminished year-on-year, which discloses China’s energy to join the WTO. There was a requirement for new venture from Europe and the US that China could guide into improving its administration area to enhance producing trades into Asian markets. At last, China may likewise have had a ulterior thought process in joining the WTO so as to fortify its financial and political binds with Taiwan. WTO participation for the two nations would expand exchange and could have conceivably started new discussions about political joining. Regardless, if relations between the two nations decayed, the WTO could go about as a middle person. China’s activities earlier and since joining the WTO responsibilities it has given to the WTO When China opened its economy to world exchange 1979, it has midway dealt with its exchange strategies, beginning with complex import and fare controls and exchange boundaries the 1980s, and in this way unwinding these with critical duty decreases on most of products to encourage joining the WTO. This, alongside local value advancement, guaranteed that residential costs of most exchanged great were predictable with world costs by the mid-1990s. If China actualizes its WTO responsibilities as per the concurred plan, China will turn out to be always coordinated into the world economy and the resultant development in worldwide exchange will profit other WTO nations too. The above table of normal levy rates since 1997 exhibits how China has opened up to exchange from overall markets. In all parts, aside from several agrarian based ones feed grains and plant strands normal tax rates have fallen, with the best paces of decrease happening since Chinas WTO increase in 2001. For instance, the sugar levy fell by only 2%, to 40%, until 2001, however has in this way divided from 40% to 20% in 2007-2010. Refreshments and tobacco have additionally observed a tremendous decrease in their security, which must be sure for net sending out creating economies around the world. China’s ability to bring down its exchange obstructions and open its business sectors will bring about higher internal direct speculation capital streams. The degree of China’s protectionism for the most part reaches out to levies now. This is on the grounds that as a feature of planning for WTO increase, its pioneers consented to destroy the utilization of import shares, licenses, assigned exchanging rehearses and other non-tax hindrances. Not at all like the consistent levy decreases on exchanged products over various years, China’s administration part, which has recently experienced basically no remote rivalry, will see a huge increment in straightforwardness with the remainder of the world. Advancement of permitting in these parts will, over the long haul, guarantee full access to outside organizations, for example, in the broadcast communications industry which is at present run by state-claimed ventures. Other than advertise get to duties, the WTO conditions for promotion incorporated the national treatment and non separation standards, which are remembered for the Trade-Related Investment Measures and (TRIMs) and Trade-Related Aspects of Intellectual Property Rights (TRIPs). While most exchange responsibilities chiefly influence outside exchange, consistence with these duties are bound to affect on the local market with more prominent remote venture through the evacuation of between outskirt hindrances and a progressively steady business condition, including plainly characterized protected innovation rights. China’s execution of its WTO responsibilities has caused almost no conflict inside the WTO since its promotion. The Transitional Review Mechanism (TRM) was set up to survey China’s consistence with its responsibilities. Despite the fact that issues have been raised by China’s exchanging accomplices certain regions, no official grievance has been made against China and any issues that have emerged have been the consequence of early stage troubles as opposed to by and large rebelliousness. Influence of China’s enrollment on the WTO as an establishment At the point when China joined the WTO, it was accepted that it would not be content with being a typical part as a result of its developing size and that China would act in like manner by taking a forceful position in approach making. Besides, at the hour of increase, the Doha Round of exchange dealings were going to occur and China was required to affect the result of these discussions. Actually, in spite of the fact that China and other creating nations have had issues with created countries, the disappointment of the Doha Round can be credited to various issues, most strikingly dispute between the US and the EU over the utilization of fare endowments in farming. When all is said in done terms, most exchanging accomplices inside the WTO have approved of the effect of China, with one Japanese representative saying that China’s promotion to the WTO was the most significant exchange occasion of the ce

Business Economics Demand Pull and Cost-Push

Question: Portray about the Business Economics for Demand Pull and Cost-Push. Answer: (an) If the wages of cleaners is expanded in a burger shop, the gracefully of burgers will be diminished because of increment in the expense of creation. Figure 1: Decrease in Supply (Source: Created by Author) The diagram shows that flexibly from S to S2 that thus prompts overabundance request at the old harmony cost P (Canto, Joines and Laffer 2014). (b) Since burger is considered as an ordinary decent and subsequently, with the fall in salary the interest for burger will diminish. A large portion of the products that we as a rule buy are considered as expected merchandise. They are likewise considered as an unrivaled ware (Atkinson and Stiglitz 2015). Figure 2: Normal Good (Source: Created by Author) A solitary vender who sells a one of a kind decent in the market describes a restraining infrastructure showcase structure. The dealer doesn't confront any opposition in the syndication showcase, as he is the single proprietor of wares with no nearby substitutes. Then again, an industry is a characteristic restraining infrastructure when a solitary firm can gracefully a product to a total market at a subordinate expense (Askar 2013). Figure 3: Monopoly (Source: Created by Author) The above diagram shows that greater amount Q2 can be sold at a lower value P2. The incline of the AR bend is descending slanting under syndication that thusly suggests that if the monopolist sets the significant expenses, the interest will diminish. Under the restraining infrastructure showcase structure, there will undoubtedly be connection between the powers of interest and gracefully (Anton and Biglaiser 2013). Under flawless rivalry cost is proportional to minor expense at the harmony yield. In any case, under restraining infrastructure the cost is bigger than normal expense. At the point when the Reserve Bank of Australia mediates in the remote trade advertise, it creates request just as flexibly for the Australian dollar by buying or selling Australian dollars against an alternate cash. In the trade market of the Australian dollar, the RBA consistently directs its obstruction because of the way that liquidity and income are most extreme in that showcase. The greater part of the exchange of the remote trade intercession of the RBA happens in the spot advertise. Customarily, the Reserve Bank of Australia has for the most part picked to intercede by acting in the remote trade showcase in its own name (Benes et al. 2015). The advantages to Australia of the energy about the Australian dollar are as per the following: With the energy about the Australian dollar, Australian fares will undoubtedly turn out to be all the more exorbitant. The imports into Australia will get sensible and subsequently, there will be increment popular for imports. This has the likelihood to exacerbate the present record shortfall (Garton, Gaudry and Wilcox 2012). The special exchange understanding that Australia imparts to China for the most part incorporates a money bargain. This thusly permits the Australian dollar to exchange straightforwardly against the money of China. China has likewise permitted RMB to be exchanged against the AUS dollar legitimately. Accordingly, if the remote financial specialists become hopeful about China, it would prompt an expansion in the interest for RMB. The monetary association among Australia and China is probably going to give a more extensive ramifications to the Asia-Pacific zone both as far as state capital streams just as far as money related security (Bowman, Gilligan and OBrien 2015). The rate change in the estimation of the Wholesale Price Index on a yearly premise is named as swelling. It effectively gauges the adjustment in the costs of a crate of wares and administrations in a year. The awkwardness among request and gracefully of cash just as changes in the expense of creation and dispersion prompts expansion (Bresciani-Turroni 2013). The significant reason for expansion is simply the development in the amount of cash. The degree of costs and the estimation of cash additionally lead to expansion. There are predominantly two kinds of expansion that incorporates request pull swelling and cost-push swelling. Figure 4: Demand-pull swelling (Source: Created by Author) Request pull swelling happens when total interest for wares and administrations in an economy builds all the more quickly when contrasted with the gainful limit of the economy (Addison and Burton 2013). Figure 5: Cost-push expansion (Source: Created by Author) Then again, cost-push expansion happens when costs of creation methodology inputs rise. Expanding compensation are additionally a main consideration that prompts cost-push swelling as wages are viewed as the most basic expense for firms. The two monetary arrangements that the legislature could apply to decrease expansion are as per the following: Monetary Policy: The administration can raise burdens just as cut spending. These thus improves the spending conditions just as help to lessen request in the economy (Auerbach and Gorodnichenko 2012). 2. Money related Policy: The pace of premium could be expanded by the Central Bank that will thusly make borrowings all the more expensive and sparing progressively alluring. The amount hypothesis of cash expresses that the wide-running degree of costs of merchandise and ventures is legitimately relative to the measure of cash available for use or cash gracefully. It for the most part expresses that there is an immediate connection between the amount of cash in an economy just as the degree of costs of items and administrations sold (Su et al. 2016). As indicated by Quantity Theory of Money, if the measure of cash pairs in an economy, the degree of cost likewise copies. As indicated by the financial analysts, a fast increment in the cash gracefully prompts a quick ascent in swelling. Cash development that surpasses the extension of financial yield brings about swelling. On the off chance that the producers of the fiscal strategy decline the flexibly of cash, the pace of premium will get expanded. In the event that the pace of premium are controlled by free economy it turns out to be increasingly alluring so as to store assets just as to lessen obtaining from the Central Bank. One of the pace of intrigue that is publicized in the free economy is the coupon rate. According to the financial analysts, serious markets allot assets proficiently. As per the financial specialists, proficient distribution of assets happens when people can pick the items and administrations that they want. Assets are being distributed adequately for the most part when they are being utilized to fabricate the fitting measure of products just as administrations that is wanted for the most part by the clients. Allocative proficiency necessitates that an individual creates every item up to where the bit of leeway it passes on to the general public. As per the business analysts, a productive assignment of assets is the blend of dissemination of contributions just as yields with the end goal that any modify in the economy that improves a person off. Effectiveness is additionally acquired when there is proficiency in the creation. As it were, the assembling of the biggest estimation of items just as administrations with accessible assets. It likewise takes when every common advantage picked up from business are depleted (Rancire and Tornell 2016). The non-value determinants of interest are as per the following: Marking: Sellers utilize publicizing, item quality, and client assistance just as item separation. That thusly prompts solid brand pictures and accordingly, the buyers have a solid inclination for their items. Henceforth, the interest bend shifts towards the privilege as the interest for items increments. Market Size: With the fast extension of the market, the interest of the clients for the products is probably going to build (Verheyen 2015). Corresponding merchandise: The interest for an item is impacted by the adjustment in the cost of the item. Thus, the interest for motion pictures is probably going to get affected by the cost of popcorn in the cinema. Correspondingly, the interest for motion pictures in the specific venue is additionally prone to get impacted because of the cost of close by stopping. Accessible Income: If the measure of pay of the buyers adjusts, the penchant to buy will likewise change. In this way, regardless of cost, if there is a financial blast, an individual is bound to buy. Regularity: The necessities for wares change by season. Accordingly, there is an amazing interest for grass trimmers in the spring, however not in the fall. Future Expectation: The buyers are probably going to buy more items later on, in the event that they expect that the cost is probably going to increment later on. The estimation of cash is dictated by the gracefully of cash just as interest for cash that is like that of the cost of a ware. Amount Theory of Money expresses that the general degree of value (P) is straightforwardly depended on the flexibly of cash (M). At the end of the day, if M duplicates, P will likewise twofold. Then again, if M is lessened, P will likewise reduce by the comparative amount (Cline 2015). The development of the cash flexibly decides the expansion rate. As per Quantity Theory of Money, if the measure of cash duplicates in an economy, the degree of cost likewise copies. This thusly prompts expansion in the economy. As swelling builds, the estimation of cash lessens. References Addison, J.T. also, Burton, J., 2013. The death of interest pull and costpush in expansion theory.PSL Quarterly Review,33(133). Anton, J.J. what's more, Biglaiser, G., 2013. Quality, overhauls and harmony in a powerful imposing business model market.Journal of Economic Theory,148(3), pp.1179-1212. Askar, S.S., 2013. On complex elements of restraining infrastructure market.Economic Modelling,31, pp.586-589. Atkinson, A.B. what's more, Stiglitz, J.E., 2015.Lectures on open financial matters. Princeton University Press. Auerbach, A.J. what's more, Gorodnichenko, Y., 2012. Estimating the yield reactions to financial policy.American Economic Journal: Economic Policy,4(2), pp.1-27. Benes, J., Berg, A., Portillo, R.A. what's more, Vavra, D., 2015. Demonstrating disinfected intercessions and accounting report impacts of financial arrangement in a New-Keynesian framework.Open Economies Review,26(1), pp.81-

What do we mean by business environment Free Essays

Business Organizations basically mean a gathering of individuals cooperating as a group in a specific association by conveying items, merchandise and enterprises to client in return of benefit. Be that as it may, these association are affected by numerous variables inside the earth in which they work and said to be the exceptionally predominant power in the forming and embellishment of the association. I'm not catching our meaning by business condition? Business condition is a lot of impact, which shapes and forms an association. We will compose a custom article test on I don't get our meaning by business condition? or then again any comparative theme just for you Request Now There are number of factor which shapes and forms an association. In other word, the turn of events and quality of an association lies on these seven fundamental impact, for example, methods of doing thing, rules and guideline, rule and techniques, mentality and conduct, item and administration, structure of a power lastly the channel of correspondence. As everybody knows, various individuals have they own of methods of doing thing since they are not important to have a similar idea with others and possibly everything relies upon a type of style or convention, which should be followed. For a model, a football crew has numerous vital, for example, 4-4-2, 4-4-3, 3-5-2, etc. Be that as it may, they utilize diverse key when confronting distinctive rival or possibly changes their key with regards to a specific situation e. g. player got sent off or harmed, trouble in safeguarding, desperation to score, and so forth. Nobody can announce a specific strategy or method of doing thing of association is the best. This is on the grounds that each given situation requires diverse arrangement. Rules and guideline is must for an association. Without it, everybody won't be tried to do what the individual in question assumes in an appropriate way inside the dateline. Let us investigate this model, which is sound natural for a few of us. Being an APIIT understudy, everybody carefully preclude the wearing of T-shirt, pants, tennis shoes or shoes, just as provocative and improper clothing. Standard and method are basic for an association. Each activity or undertaking given must be finished by a specific standard and method to guarantee a decent yield or result consequently. For example, let’s investigate a football crew once more. So as to score an objective, the ball must be played to each other until somebody has the brilliant chance to score an objective. Mentality and conduct assume a significant job for an association. Fundamentally, there is two sort of business condition, which is outside and inner. I don't get our meaning by outer condition? Outer condition is non-controllable condition, which is outside an association. This condition can be separated into various territories, for example, politic, economy, social, innovation - P-E-S-T-and last not the least globalization. World of politics alludes to the arrangement of law, guideline and government approaches existing inside a specific nation. A few people contended this is the most impressive impact at work e. g. in the event that an agent needs to fire up a business in a specific nation, first the individual in question must guarantee the political solidness of that nation. For example, an insecure political atmosphere in a nation won't ingrain trust in individuals and this will thusly influence the business atmosphere unfavorably. Whenever given a choice to maintain a business in Kabul, Afghanistan or Tokyo, Japan, I am almost certain that everybody will pick the subsequent choice. Additionally, the expense bargains, which are understandings between governments to maintain a strategic distance from, twofold tax assessment from benefits by the outside and the household government would serve to quicken the remote interest in a nation. Two principle approaches are privatization (where government auctions a portion of its current open enterprise to the private area e. g. MAS, Telekom) and deregulation (evacuation of government redtape and organization from the activity of the market or also called obligation charge e. g. same rate). Next, monetary condition, which is principally, underscores on customers’ interest for good and benefits and the subsequent gracefully circumstance. How an association will admission relies upon the degree of requests for its merchandise and enterprises. Factors, for example, purchasing conduct, buying power, value levels, loan fees, and so forth are significant determinants of requests. Since, World Cup is this month, let us take another model on football. The football fever begins, as you stroll around in the city you can see numerous football monstrosities wearing their most loved teams’ shirt. This unmistakably shows the requests for shirt increments as the loan fees increments. Alongside that, the condition of economy as far as changes in levels of pay, business, expansion and remote trade rates influence the degree of utilization and the way of life. Business association themselves can help request by expanding work and venture, and alternately they can unfavorably impact the economy when they cut back on speculation or conserve laborers. For example, the present condition of economy of Argentina will diminish the outside venture and. Therefore, huge numbers of their comrades were jobless and making destruction wherever causing a significant misfortune for the administration. Social condition is comprised of the mentalities, convictions, customs and estimations of individuals in the public arena. Business visionaries must understand that these social components shift with the various classes of individuals inside a nation †the rich and poor people, the informed and the uneducated, the liberal and the preservationist, and so on. For a model, in India the Indians conviction and think about the cow as their mom for giving milk. Along these lines, they don't eat meat. Be that as it may, of late a McDonald outlet in India offers a type of burger or feast with hamburger. These end up being a debacle for McDonald the same number of the residents blew up and start to make ruin in the nation. McDonalds’ outlet in India at long last found an answer. They altered and roll out slight improvements in their plans, meat burger is supplanted by fish burger. A great moves which took care of when they got a quick reaction from the resident. This show how significant is to know the convictions and customs of a specific nation. It is dolt to think little of the convictions and customs of a nation. Thus, it has gotten essential for organizations to break down and concentrate cautiously these components and issues if their merchandise and enterprises are to be acknowledged. Another significant and not another factor in the general condition is the innovation condition. Its expanding significance and impact is presently being felt unmistakably and capably than at some other time. The adjustments in innovation are essentially upsetting how work is perfomed in manufacturing plants and workplaces, and without a doubt the entire market. For example, gigantic progression in innovation and quick changes in data innovation assists with expanding the efficiency of an association. The utilization of greetings tech machines and types of gear will incredibly impact the achievement of association. It just spare a great deal of time, vitality and assists with chopping down number of representatives. Associations that can't stay up with such changes are abandoned, and therefore pushed out of rivalry. One region that has developed as being fundamental to business association is data innovation. Expect that an association managing thousands maybe millions clients information, some way or another need to utilize the innovation utilized to gather, process, delivered, keep up and update the clients data. Chip have permitted the presentation of little minimal effort small scale PCs that have family unit application for checking climate conditions. Numerous businesses, for example, motorcar producers are utilizing microchips to control the activity of the motor. Globalization condition is a fundamental factor in association. With the fast progression of media transmission framework and data innovation has constrained association to continue past their national or geographic limits looking for available resources to abuse existing new innovation in order to in front of their rivals. Speed and quality in tending to the requirements of overall clients and constantly learning of associations will enormously affected the accomplishment of associations. As everybody knows, the present business condition is one where the entire world is viewed as one commercial center, borderless world. To put it plainly, the capacity to think all around while acting locally. One model is the use of web and cell phone which associates you to individuals all around the world regardless of where they are. Market condition is a lot of like the financial condition, yet there are various recognize highlights. Basically this is nature of contenders, purchasers and venders. It is imperative to screen these three gatherings of individuals. For example, contenders should likewise be examined intimately with respect to their qualities and shortcoming. Clients should likewise be inquired about completely so as to establishe needs and patterns. Organizations ought to likewise be constanly keeping watch for new items and materials from existing or new provider. It really alludes to an association conduct framework whish is continually changing as it adjusts to the advancing necessity of society. As should be obvious clients itself impact the interest level since they have the purchasing or buying power. On the off chance that you pay special mind to cell phone ventures, there are number of organizations contending each other to beat, outmaneuver and outlive each other to turn into the number 1 driving cell phone. That is the reason you can see numerous cell phones with various size and standpoint out for deals like mushroom to fulfill the clients need. At last, lets investigate inside condition. There are number of zone which covers interior condition, for example, the principles and guideline, worker the board, produst and administration and offices. Rule

College Admissions Counseling in India

College Admissions Counseling in India August 6 The state of U.S. college admissions counseling in India is quite bad. And, at Ivy Coach, we aim to correct this. As Ivy Coach has opened up an office in India, we thought wed discuss the current state of college admissions counseling within the country. In a line, it is quite bad! And thats an understatement. For students in India who wish to pursue their university educations within the United States and at some of the most prestigious universities in particular (like the ones ranked in the top twenty in US News World Report) there is nowhere to turn for help. And we mean nowhere. Weve taken the time to examine the private college counseling firms students in India (and their parents) have turned to in the past and while it doesnt surprise us that these firms dont seem to know what theyre doing (with no expertise in U.S. highly selective university admissions), what is ironic to us is that they advertise that they dont know what theyre doing on their websites. Thats right. They advertise that they have no idea what theyre doing. As an example, a firm known as eduabroad writes this about the Personal Statement, the college essay that is part of the Common Application: A  Statement of Purpose (SOP)  is an essay expressing your purpose of study in a particular university and your career objectives, academic achievements, ambitions, future plans, clearly and precisely so the college can understand and evaluate your application better before granting an admission. Are they kidding? A Personal Statement should, by no means, boast of achievements. It should not cite your ambitions, future plans, and express your purpose of study in a particular university. How could it? That same Personal Statement is sent to every single school. In supplemental essays to universities, those essays can and absolutely should be tailored to each individual school but the Personal Statement cannot be. And to boast about personal achievements? Clearly this firm has little understanding of the holistic admissions process. Boasting of achievements doesnt inspire admissions officers to want to root for students. In fact, it has the complete opposite effect! This is a very good reason why students dont get innot why they do. This is the kind of company that is advising students on how to gain admission to a top university in the United States? Or how about OnCourse, a firm started by two very recent college graduates. As weve said for many years, what makes someone who just graduated from university  qualified to advise students on how to gain admission to these universities? Just because this kid got in, he or she  is suddenly a master of the process for all students? No. And thus Ivy Coach, a firm with a  quarter century of experience advising students on gaining admission to highly selective U.S. universities (including the Ivy League universities), enters the Indian marketplace. We have been advising students in India for many years when they come to us online, but weve now got an office in the country of India as well.

The Nature And Role Of The Financial System Finance Essay - Free Essay Example

Financial system is a mechanism where economic exchange activities can be done. The economic activities can be done through the interaction between financial institutions and the financial market. The purposes of this interaction are to mobilize fund and providing payment facilities for the financing of commercial activities. With the emergence of Islamic finance, the dual financial systems being introduce. In dual financial system the conventional financial systems operating side by side with the Islamic financial systems. The Islamic Financial system consists of the role of four essential mechanisms: The Islamic banking institutions, Takaful, Islamic Capital Market and Islamic Money market. The structure of this financial system may consist of specialized and non-specialized financial institutions, of organized and unorganized financial markets, of financial instruments and services which facilitate transfer of funds. It also comprises of procedures and practices adopted in the Islamic financial markets. The operation and mechanism of the financial system is scrutinized by Bank Negara Malaysia advisory board and Securities Commission Syariah Advisory Board to ensure compliance of Islamic rules and regulations. The Islamic financial institutions which are govern and control under Bank Negara Malays ia are the organizations that mobilize the depositors savings, and provide financing, acting as creditor or in the form of capital venture or financing in the form of profit and loss sharing (PLS). They also provide various financial services to the community, particularly business organizations. The activities will be dealing in financial assets such as deposits, loans, securities or dealing in real assets such as machinery, equipment, stocks of goods and real estate. The activities of different financial institutions may be either specialized or their function may be overlap. They may be classified base on the basis of their primary activity or the degree of their specialization with relation to savers or borrowers with whom they customarily deal or scope of activity or the type of ownership are some of the criteria which are often used to classify a large number and variety of financial institutions which exist in the economy. Financial institutions are divided into banking an d non-banking institutions. The banking institutions traditionally participate in the economys payments mechanism, i.e., they provide transactions services, their deposit liabilities constitute a major part of the national money supply, and they can, as a whole, create deposits or credit, which is money and Banks, subject to legal reserve requirements, can advance credit by creating claims against themselves. Financial institutions are also classified as intermediaries and non-intermediaries. As the term indicates, intermediaries intermediate between savers and investors; they lend money as well as mobilize savings; their liabilities are towards the ultimate savers, while their assets are from the investors or borrowers. Non-intermediary institutions do the loan business but their resources are not directly obtained from the savers. All banking institutions are intermediaries. Many non-banking institutions also act as intermediaries) and when they do so they are known as Non-Banking Financial Intermediaries. The Evolution of Financial Intermediaries in Malaysia In this section, our task is to survey the landscape and identify the institutional players. By describing what financial intermediaries look like today, it is also revealing to see how financial intermediaries have evolved over the last century. Institutional Players The banking system in Malaysia, which is the major component of the financial sector, consists of Bank Negara Malaysia, commercial banks, Islamic banks, International Islamic banks, Investment bank, other non bank institutions and money brokers. Which are all regulated and supervised by Bank Negara Malaysia.  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  The other non-bank institutions are supervised by other government agencies. These institutions can be divided into four major groups, consisting of the development finance institutions, the saving institutions, the provident and pension funds, and a group of other financial intermediaries, comprising of building societies, unit trusts and property trusts, leasing companies, factoring companies, credit token companies, venture capital companies, special investment agencies and several financial institutions such as the National Mortgage Corporation (Cagamas) and Credit Guarantee Corporation. The traditional banking system role has been to make long- term loans and fund them by issuing short-term deposits.  [1]  But banking systems are prohibited from engaging in securities market activities such as securities underwriting or the sale of trust funds. Therefore, the current design of non-bank financial institution are allowed to deal in the securities market a part of providing services which are similar to the banking system. The contribution of each non-bank financial institutions: insurance companies and pension funds; they receive investment funds from their customers, both of these institutions place their money in a variety of money-earning investments. Leasing companies; they purchase equipment/asset and then lease to businesses for a set number of years. Factoring companies; provide specialized forms of credit to businesses by making loans and purchasing accounts receivable at a discount, usually assumes responsibility for collecting the debt, specialize in bill processing and collections and to take advantage of e conomies of scale. Market makers; as an agent that offer to buy or sell security (trading in securities),  [2]  storage the securities and insured the securities against loss, provide margin credit,  [3]  cash management account services.  [4] Trust funds; pool the funds of many small investors and purchase large quantities of securities, offer a wide variety of funds designed to appeal to most investment strategies, allow the small investors to obtain the benefits of lower transaction costs in purchasing securities and reduce the risk by diversifying the portfolio. The National Mortgage Corporation; is to promote the secondary mortgage market in Malaysia, with the issuance of secondary mortgage securities, Cagamas Berhad performs the function of an intermediary to bring together the primary lenders of housing loans and investors of long-term funds. Evolution The evolution of financial intermediation in Malaysia is reflected in Table 1. Table 1 shows the major financial intermediaries by assets and also by percentage share (in parentheses) from 1960 to 2000. To the extent that we can view the pace of financial intermediation as a horse race, there seem to be a clear winners and losers. For example, in terms of relative importance the winners are unit trust, Cagamas Berhad, leasing companies, factoring companies and venture capital companies. Commercial banks and finance companies are losers. These findings raise some interesting questions. First, what caused the change in the mix of financial intermediaries? In this section, we will examine this evolutionary process via three factors. Deregulation of Interest Rate Interest rate deregulation that affects loan pricing takes its earliest form.  [5]  Canada, in 1960, was the first to deregulate its interest rate. Other countries deregulated in the 1980s or thereafter.  [6]  This deregulation allows more freedom and activity to the banks and other institutions to issue new depository products as well as diversified short and long term credit instruments.  [7]  Leightner and Lovell (1998) state that some relaxation to the banks portfolio were part of the liberalization that enables bank to diversify investment to private as well as the foreign equity.  [8]  This made possible with the establishment of the foreign exchange market and the expansion of the underwriting activities of the financial intermediaries. Liberalization in Japan and Germany for instance, brings new paradigm to the roles of the banking institutions. The bank in Germany and Japan is no longer to be a creditor, but can also be the equity holder and in the board of directors and management. Liberalization of the banking industry, for example in Malaysia and some other countries, take banking institution into a new dimension that is the establishment of Islamic banking.  [9]  The increasing demand on the interest free banking offer by the Islamic financial institutions leads many conventional banks to offer Islamic counter or rather known as dual banking. This development happens to Muslim and non-Muslim countries. The results show that the individuals prefer to diversify their investment other than deposits. In particular, they invest in securities such as stocks, bonds and unit trusts. Therefore, new investment in unit trust for the small saver altered permanently the financial landscape. The Institutionalization of Financial Markets Institutionalization refers to the fact that more and more funds in Malaysia have been flowing indirectly into the financial markets through financial intermediaries, particularly pension funds, trust funds and insurance companies rather than directly from savers. As a result, these institutional players have become much more important in the financial markets relative to individual investors. What caused institutionalization? Quite simply, it was driven by the growth of these financial intermediaries, particularly pension and unit trust.  [10]  Pension fund growth was encouraged by government policy. Tax laws, for instance, encourage employers to help their employees by substituting pension benefits for wages. This is good for employees because they do not pay taxes on their pension benefits until they are received after retirement. Unit trusts gained considerably from these changes in pension plan laws. Defined contribution plans were allowed to include unit trust on th e menu of assets for which plan members could choose. In addition, the increasing attractiveness of specialized funds such as bond funds and index funds has also fueled unit trust fund growth. The Transformation of Traditional Banking The fact that banks are exposed to the non-performing loans that stood at 9.1% for the periods of 1997 to 1999 and it seems to us that banking is a declining industry. However, first, the so-called decline of commercial banking is limited to a decline in the relative importance of commercial banking. As shown in Table 1, the decline of commercial banks assets as a fraction of total intermediated assets from 43.4% in 1980 to 41.3% in 2001. Table 1 also shows that banking industry assets actually increased between 1960 and 2000. In other words, bank assets have actually increased just not as fast as the assets of other financial intermediaries. Second, many of the new innovative activities in which banks engage are not reflected on bank balance sheets as assets even though they add significantly to bank revenue.  [11]  These include, for example, trading in interest rate and currency swaps, selling derivative instruments and issuing credit guarantees. Third, banks have a stro ng comparative advantage in lending to individuals and small businesses.  [12]  Finally, banks have joined forces with a number of other types of financial intermediaries.  [13]  For example, banks have combined with unit trust funds, merchant banks, insurance companies and finance companies. Bank acquisitions of non-bank financial intermediaries are part of broader consolidation of the entire financial services industry. Diagram 1: Structure of Regulatory Framework Minister of Land and Co-operative Development Licensing of : Brokers Representatives Trading Adviser Representatives Fund Managers Representatives Minister of Finance Minister of Domestic Trade Consumer Affairs Securities Commission Act 1993 Securities Industry Act 1983 Registrar of Companies Securities Commission Future Industry Act 1993 Companies Act 1965 Cooperative Act 1993 Kuala Lumpur Stock exchange (KLSE) BNM Islamic Banking Act 1983 Licensing of Dealers Representatives Investment Adviser Representatives Fund Managers Representatives Securities Clearing Automated Network Sdn Bhd (SCANS) Malaysian Central Depository Sdn Bhd (MCD) Kuala Lumpur Commodity Exchange (KLCE) Malaysian Futures Clearing Corporation Sdn Bhd (MFCC) Kuala Lumpur Options Financial Futures Exchange (KLOFFE) Malaysian Monetary Exchange (MME) Malaysian Derivative Clearing House Sdn Bhd (MDCH) Table 1: Malaysia: Assets of the Financial System, 1960-2000 As at end of (RM million) 1960 1970 1980 1990 2000 Banking System 2,356 (66.3) 7,455 (64.1) 54,346 (73.3) 223,500 (69.8) 829,900 (66.8) Central Bank 1,114 (31.4) 2,422 (20.8) 12,994 (17.5) 37,500 (11.7) 148,900 (12.0) Commercial Banks 1,232 (34.7) 4,460 (38.4) 32,186 (43.4) 130,600 (40.8) 513,600 (41.3) Finance Companies 10 (0.3) 531 (4.6) 5,635 (7.6) 39,400 (12.3) 109,400 (8.8) Merchant Banks 2,229 (3.0) 11,100 (3.5) 36,900 (3.0) Discount Houses 42 (0.4) 1,292 (1.7) 4,900 (1.5) 21,100 (1.7) Non-Bank Financial Intermediries 1,197 (33.7) 4,167 (35.9) 19,807 (26.7) 96,900 (30.2) 413,100 (33.2) Provident and Pension Funds 733 (20.6) 2,717 (23.4) 11,370 (15.3) 51,800 (16.2) 217,600 (17.5) Life and General Insurance Funds 103 (2.9) 439 (3.8) 2,476 (3.3) 10,300 (3.2) 52,200 (4.2) Development Financial Institutions 113 (1.0) 2,193 (3.0) 6,000 (1.9) 25,100 (2.0) Savings Institutions 267 (7.5) 645 (5.5) 2,463 (3.3) 10,000 (3.1) 32,300 (2.6) Other Intermediaries 93 (2.6) 233 (2.0) 1,305 (1.8) 19,800 (6.2) 85,900 (6.9) Total 3,553 11,622 74,153 320,400 1243,000 Source: Bank Negara Malaysia, Annual Reports (various issues) Financial Markets Financial markets are the centers or an arrangement that provide facilities for buying and selling of financial claims and services the corporations, financial institutions, individuals and governments trade in financial products in these markets either directly or through brokers and dealers on organized exchanges or off-exchanges. The participants on the demand and supply sides of these markets are financial institutions, agents, brokers, dealers, borrowers, lenders, savers, and others who are interlinked by the laws, contracts, covenants and communication networks. Financial markets are sometimes classified as primary (direct) and secondary (indirect) markets. The primary markets deal in the new financial claims or new securities and, therefore, they are also known as new issue markets. On the other hand, secondary markets deal in securities already issued or existing or outstanding. The primary markets mobilize savings and supply fresh or additional capital to business units. A lthough secondary markets do not contribute directly to the supply of additional capital, they do so indirectly by rendering securities issued on the primary markets liquid. Stock markets have both primary and secondary market segments. Very often financial markets are classified as money markets and capital markets, although there is no essential difference between the two as both perform the same function of transferring resources to the producers. This conventional distinction is based on the differences in the period of maturity of financial assets issued in these markets. While money markets deal in the short-term claims (with a period of maturity of one year or less), capital markets do so in the long-term (maturity period above one year) claims. Contrary to popular usage, the capital market is not only co-extensive with the stock market; but it is also much wider than the stock market. Similarly, it is not always possible to include a given participant in either of the two (money and capital) markets alone. Commercial banks, for example, belong to both. While treasury bills market, call money market, and commercial bills market are examples of money market, stock market and government bonds market are examples of capital market. Keeping in view different purposes, financial markets have also been classified into the following categories: (a) organized and unorganized, (b) formal and informal, (c) official and parallel, and (d) domestic and foreign. There is no precise connotation with which the words unorganized and informal are used in this context. They are quite often used interchangeably. The financial transactions which take place outside the well-established exchanges or without systematic and orderly structure or arrangements constitute the unorganized markets. They generally refer to the markets in villages or rural areas, but they exist in urban areas also. Interbank money markets and most foreign exchange markets do not have organized excha nges. But they are not unorganized markets in the same way the rural markets are. The informal markets are said to usually involve families and small groups of individuals lending and borrowing from each other. This description cannot be strictly applied to the foreign exchange markets, but they are also mostly informal markets. The nature, meaning, and scope of activities of these types of markets will be discussed later in the book. As mentioned earlier, financial systems deal in financial services and claims or financial assets or securities or financial instruments. These services and claims are many and varied in character. This is so because of the diversity of motives behind borrowing and lending. The stage of development of the financial system can often be judged from the diversity of financial instruments that exist in the system. It is not possible here to discuss individually the nature of various financial claims that exist in the financial system. The financial a ssets represent a claim to the payment of a sum of money sometime in the future (repayment of principal) and/or a periodic (regular or not so regular) payment in the form of interest or dividend. With regard to bank deposit or government bond or industrial debenture, the holder receives both the regular periodic payments and the repayment of the principal at a fixed date. Whereas with regard to ordinary share or perpetual bond, only periodic payments are received (which are regular in the case of perpetual bond but may be irregular in the case of ordinary share). Financial securities are classified as primary (direct) and secondary (indirect) securities. The primary securities are issued by the ultimate investors directly to the ultimate savers as ordinary shares and debentures, while the secondary securities are issued by the financial intermediaries to the ultimate savers as bank deposits, units, insurance policies, and so on. For the purpose of certain types of analysis, it is al so useful to talk about ownership securities (viz., shares) and debt securities (viz., debentures, deposits). Financial instruments differ from each other in respect of their investment characteristics which, of course, are interdependent and interrelated. Among the investment characteristics of financial assets or financial products, the following are important: (i)liquidity, (ii) marketability, (iii) reversibility, (iv) transferability, (v) transactions costs, (vi) risk of default or the degree of capital and income uncertainty, and a wide array of other risks, (vii) maturity period, (viii) tax status, (ix) options such as call-back or buy-back option, (x) volatility of prices, and (xi) the rate of return-nominal, effective, and real. DEFINITION AND SCOPE OF A CAPITAL MARKET (THE ECONOMIC FUNCTIONS OF FINANCIAL INSTITUTIONS) The previous section gave a brief overview of the major types of financial institu ­tions. To understand why financial institutions exist and the economic services that they provide, it is important to understand the different ways in which funds are transferred within an economy between businesses, government, and households (economic entities) that need to borrow funds (borrowers) and those that have sur ­plus funds to lend (investors). In a very simple economy without financial institutions, transactions between, different borrowers and lenders are difficult to arrange. Borrowers and savers incur significant search and information costs trying to find each other. Transactions be ­tween borrowers and savers may also be limited, because few financial contracts in ­volve only two parties. Similarly, risks are great, since individual entities have little or no knowledge of each other and little ability to monitor each others actions. Also, the transaction s costs may be so high that small entities may be unwilling to supply funds. Investors also have little ability to diversify their risk, due to the high cost of many financial contracts. Supplier of funds: surplus (savings) units Lenders: Housesolders, companies, governments, rest of the worlds Demand of funds: deficit unit Borrowers: Housesolders, companies, governments, rest of the worlds Financial Markets Financial institutions help to reduce transactions, search, monitoring, and infor ­mation costs. They provide risk management services and allow investors to diversify their risk and hold portfolios of financial assets by creating ways of indirect financing. Financial institutions also play important roles in an efficient payment system be ­tween entities and in managing pure risk (insurance). The upper panel of Figure 1 shows the role of financial institutions as intermedi ­aries between borrowers and lenders. The term primary securitie s refers to direct financial claims against individuals, governments, and non-financial firms. A simple economy without any financial insti ­tutions would accommodate only direct financial claims or financial contracts. In ef ­fect, a borrower gives an investor a financial contract or direct financial claim or se ­curity that promises a stake in the borrowers company (i.e., shares of stock) or future payments returning the amount invested plus interest (i.e., a bond, or some other sort of IOU). These are examples of direct or primary securities. As an economy develops, markets emerge for trading direct securities. Some function as auction markets, where trading is carried out in one physical location, as occurs on the New York Stock Exchange; others function as over-the-counter mar ­kets, where trading is carried out by distant contacts, perhaps over the phone and computer, as on the National Association of Security Dealers Automated Quotation (NASDAQ) sy stem. Loans made directly with borrowers are another example of a primary or direct security, where a direct contract is made between a borrower and a bank or other individual lender. Table 1.2 provides examples of primary securities in the first column. The financial assets owned by banks, insurance companies, and mu ­tual funds, such as loans, bonds, and common stock, are all direct securities, where the lenders give funds to the borrowers, and the lenders receive financial contracts guaranteeing repayment of funds plus interest or shares of ownership in the bor ­rower companies. Investors lend funds in return for a direct or primary security. Secondary securities, in contrast, are financial liabilities of financial institu ­tions-that is, claim against financial institutions. In Table 1.2, financial institu ­tions liabilities-deposits, policyholder reserve obligations, and mutual fund shares-are secondary securities or claims against financial insti tutions. In effect, fi ­nancial institutions created secondary securities that offer advantages over primary securities or direct financial claims. EXAMPLES OF PRIMARY AND SECONDARY SECURITIES Primary Securities Secondary Securities Commercial loans Savings deposits Mortgage loans Transaction deposits Consumer loans Certificates of deposit Government bonds Insurance policyholders reserves Corporate bonds Mutual fund shares Corporate common stock Pension fund reserves Table 1.2 shows this type of indirect financing. Unfortunately, like most fields, finance sometimes uses confusing terminology. Readers should carefully avoid confusing the use of the words primary and secondary in this dis ­cussion with their use in other contexts. For example, students who have previously stud ­ied corporate finance or investments may have encountered the terms primary and sec ­ondary markets; primary markets are those for originally issued securities, and secondary markets handle resale of securities. In the context of this chapter, primary and secondary distinguish between issuers of securities and not between changes in securities ownership. PRIMARY AND SECONDARY MARKET In a market economy the existence of financial markets can greatly ease the process of exchanging loanable funds for financial claims. A firm that wants to borrow money can go to the market in the knowledge that those with funds to lend will be there. The process is made easier still if specialist traders are known to be actively participating in the markets, buying and selling financial claims on their own account, thereby smoothing over days on which trading is thin or when there is an excess of potential borrowers or lenders. Further economies are achieved if agents or brokers can be employed to enter the market representing the customer to buy and sell securities. The existence of the market serves borrowers and lenders alike by reducing the search costs which each has to incur to get in touch with the other, and also maintains confidence in market prices. Markets do not always have a physical location. A market for loanable funds might consist of nothing more than a list of kn own dealers who can be contacted by letter or telephone. The International Stock Exchange is the centre of the securities market. It has both a physical trading site which is used for a very small number of securities, and a highly developed system of trading which takes place in a number of locations via computer linkages. The discount market is another traditional financial market, but one which operates without a physical site at all. This market operates by representatives of the discount houses maintaining close daily contact with the leading banks, either by telephone or personal visits, to determine where trading opportunities are. Two types of financial markets exist for real and financial assets, and it is important to distinguish between them. A primary market for financial assets deals in new issues of all types of loanable funds. Transactions in primary markets result either in the creation or in the extinction of financial claims. The creation of a new loan causes th e transfer of cash from a lender to a borrower in exchange for a financial claim on the latter. The claim is extinguished when the cash, usually interest and principal, has been repaid to the lender. A secondary market is a market in old issues. Transactions in secondary markets do not create or extinguish financial claims. Cash does not pass between borrowers and lenders, but existing issues simply change hands. The borrower remains unaffected by the transaction while the lender transfers the right of repayment to another. The main economic function of the secondary markets is to support the operations of the associated primary markets for new issues by providing liquidity to lenders. In the absence of a developed secondary market an individual saver might be very unwilling to lend out money for long periods of time, except at rates of high interest too high to be attractive to borrowers. If the chances of making a sale when necessary are unacceptably low, no lender would commit fu nds. Therefore an active secondary market is essential for an active primary one. However, there is no guarantee that the lender will receive back in sale proceeds the full amount at the time they are sold, since markets fluctuate all the time, and prices are not constant. Secondary markets also contribute to the efficiency of the primary market by providing pricing information. In the share market, for example, the current prices of traded securities significantly reduce the problem of setting a price on new issues with similar risk profiles, and information from the secondary market will also influence the attitude of potential participants in primary markets. Figure 3.2 illustrates the connections between primary and secondary markets. Not all primary markets have secondary markets associated with them and some securities are issued for which there are no secondary markets, that is, the securities are not negotiable. Conversely, for every secondary market there must exist, or have existed, an associated primary market. The distinction between primary and secondary markets is not unique to financial markets. The same is true in the markets for physical goods. There is both a market for new and for used cars. In the primary car market, newly manufactured cars are sold, and in the secondary market, often in a different location and involving another group of participants, used cars are bought and sold. On the other hand, a haircut is an example of a good, or in this case a service, bought in a primary market, but for which a secondary market does not exist. It is possible for a physical good to be sold or a financial security to be issued in a primary market which subsequently ceases to function, leaving the secondary market only. Examples are to be found in the markets for farm land and the paintings of old masters. The creation of new farm land is limited to countries still exploiting formerly unused land, whereas in the UK, there has been a substantial a nd continuing loss of farm land to other uses. In the case of the paintings of continued to be actively traded. The mismatch in activity levels of the primary and secondary markets for securities is not usually quite so marked, but it is considerable. Another example is that of ECU denominated bonds where the market effectively disappeared during 1992/3 and then recovered. Trading in new issues of ordinary shares, for example, is variable in frequency and may be subject to distortionary pricing. But trading in existing corporate issues is very active, although the monetary value of money transactions is not always very great. Some controversy surrounds the economic function of the secondary markets. The fact that there is active trading in these markets, sometimes in circumstances where the associated primary market appears to have disappeared, often leads financial commentators and others to conclude that the activities of these secondary markets are bringing about a misallocati on of resources. But consider the choices open to savers who wish to invest. They can invest in the markets, either directly or through an intermediary. The saver has the choice of either lending directly to a deficit unit via the primary markets or of purchasing an existing security in the secondary markets. If an existing security is purchased, the previous holder of that security will receive cash which can be used either to spend on consumption goods and services or reinvested in the financial markets. Only if the money is spent on imported goods, or in the acquisition of foreign assets are the proceeds lost to the economy. Finally it is desirable that markets should operate in such a way that savings are directed to the most productive firms, or be allocatively efficient. This is attractive to individual lenders, as it leads to maximum return and minimum risk, the optimal trade-off facing the investor. If managers in financial institutions consis ­tently place lenders fu nds with borrowers yielding low returns or high default records, investors will either take their funds elsewhere, increase the interest compensation they require, or impose severe restrictions on the kinds of business in which they will invest. Allocative efficiency may also be desirable from a social point of view and savings should flow to the most productive firms to benefit the economy as a whole. The problem gets more complicated when viewed from this angle because the definition of productivity from a social perspective may be different from that taken by lenders. Lenders may not care whether the firms to whom they lend are monopolists, pollute the atmosphere or engage in illegal activities, but other groups in society might. Clearly, it is possible for there to be conflict between the objectives of the individual decision-makers and the wishes of society. This problem can even exist within a single group of investors. Pension funds, for example, invest money in order to p rovide pensions for their members but may find that some of their members demand that the funds are not invested overseas or in a competing firm in the same sector. Whilst these decisions may. if sufficiently widespread, affect the relative issue costs, it is not clear that the result should be interpreted as being allocatively inefficient. This idea that investors should have a strong view about the uses to which their funds are put is becoming increasingly important and is taken seriously by fund managers, and many financial institutions use ethical or environmental factors in their marketing. In a monetary economy, the distinction between saving and investment is a real one. Savings can always be held in the form of cash and near-cash assets, such as precious metals. To lend is to forgo liquidity. In order to stimulate long-term lending it is necessary to provide the means by which lenders can restore liquidity without calling in their loans. This is the function of the secondary markets. DESIRABLE CHARACTERISTICS OF MARKETS Whenever funds change hands as a result of voluntary exchanges, financial markets can be said to exist, but some markets function better than others. It is helpful to have criteria which can be used to evaluate the effectiveness of these markets. To begin with primary markets, the most pressing need of users is that they should be able to do business with each other at low cost. If transactions costs, such as brokerage fees, are a significant proportion of the funds borrowed then the effective rate of interest paid on loans will be very high, reducing the demand for loanable funds. So one test of the economic value of a primary market is the average proportion of the borrowed funds consumed in transaction costs. It is also beneficial to be confident about the existence of a healthy secondary market, and be sure that securities are truly negotiable. The main value here is in minimising the interest compensation sought by lenders. It follows that a primary market should operate in su ch a way that it minimises disruptions to the secondary markets. Suppose each new issue of loans caused dramatic falls in the prices of old issues, perhaps because each new issue more than marginally increased the total stock of a particular type of security. The effect of new issues might then be decrease the price and undermine the value, and hence the liquidity, of old issues, in turn negatively affecting the primary market. Therefore, it is desirable that transactions in the secondary market should be much greater in value and volume than those in the primary one. There are limits to the extent to which it is possible for markets to bring about the optimal allocation of funds. Mistakes occur because decisions are made with imperfect information, but the costs of gaining more information are greater than the benefits. The additional information may be known to transactors in the secondary market, and if so, the condition and prospects of borrowers will be monitored there. To now consider secondary markets, it is important to remember that the purpose of a secondary market is to enable holders of securities to convert them into cash without undue loss. Therefore one desirable characteristic of this market is for it to be an active one.

PESTLE, PORTER and SWOT analysis of LUKOIL Essay - 2595 Words

Alina Belkina 1. Short overview of LUKOIL Industry Oil and gas Founded 1991 Headquarters Moscow, Russia CEO Vagit Alekperov Products Petroleum, Natural gas, Petrochemicals Revenue Increase US$ 139.2 billion (2012) Net income Increase US$ 11. billion (2012) Employees 150,000 LUKOIL, a vertically integrated oil company, and carries out exploration, acquisition, integration and subsequent efficient development of oil and gas fields outside the Russian Federation to facilitate the transformation of LUKOIL into a transnational energy corporation. LUKOIL operates in 25 countries (the most major of them are Russia, Azerbaijan, USA, Georgia, Turkey and Czech Republic). Net income in 2013 is $3.105 billion. Basic earnings†¦show more content†¦2. Interest rate The interest rate in Russia was last recorded at 5.50 percent. Interest Rate in Russia is reported by the Central Bank of Russia. It is quite high interest rate in comparison with for instance European countries. The average interest rate in Europe is 0.25%. For LUKOIL it is a threat of decreasing the company’s sales, because during high interest rate potential consumers tend to spend less (borrowings become more expensive). Therefore the consumer purchasing power is quite low and company’s sales will be decreased. Figure 2.2 Russia interest rate 3. Inflation rate Figure 2.4 Russia inflation rate Figure 2.5 Petroleum price RUB per liter As we can see Figure 2.4 and Figure 2.5, the oil price and rate of inflation are connected directly: when oil price goes up, the inflation follows in the same direction. We can explain it by that the oil is the major input in economy (oil is used for manufacturing and transportation). The inflation rate in Russia was recorded at 6.30 percent in October of 2013. It has a positive impact on Oil and Gas industry. LUKOIL can estimate future profit more accurate and eliminate several risks which effected by the oil price and inflation rate. 4. Unemployment rate Figure 2.5 Russia unemployment rate At the moment the rate is 5,5%. And the tendency has a declining character. Thus it could be opportunity to find high-qualified employees. There is a competition on a