Article Analysis Essay Example | Topics and Well Written Essays - 250 words - 1

Article Analysis - Essay Example In business, threat of substitutes always can negatively impact sales and profit when there are alternative gaming options (mobile games) at a lower price. Lower price increases demand along the law of demand. If PC game availability increased during a period where demand for old EA games is low, it would lead to an EA game surplus and the company would not be able to offset the costs of manufacture when consumers are not demanding these products. At the same time, lower-priced mobile games are more attractive to consumers when referencing the law of demand and it is likely that many consumer segments would turn toward mobile gaming as an alternative. As a result, sales and revenues would decline and profit would be reduced as EA attempted to offset production costs for increasing supply of PC games that are not selling. Marketing theory indicates that consumers are drawn to innovations such as the Xbox One and PlayStation 4. Even though demand is less than expected for these innovative products, as a matter of high pricing, consumers are not interested in older consoles such as the PS3. The PS3 and the Xbox 360 are entering a decline stage along the product life cycle which will, long-term, increase sales of the new gaming consoles. It is likely when price declines on the new consoles that consumers will begin demanding these new innovations in higher

Mean-Variance Optimization “Stimulation Approach” Essay Example for Free

Mean-Variance Optimization â€Å"Stimulation Approach† Essay To use of the balance of payments as a barometer of the forces of demand for and supply of foreign exchange in the market, it is necessary to isolate those entries which respond to relative economic conditions from those transactions which are made solely to fill the gap between the initial supply of and demand for foreign exchange. â€Å"The current account balance is often considered to be a measure of these forces. In 1980 the U. S. current account balance showed a surplus of $ 3. 72 billion. † (Groppelli, 2000)This surplus indicates that the supply of foreign currency exceeded the demand for foreign currency used to trade goods, services and gifts between the United States and the rest of the world. In the absence of any other transaction in the balance of payments, this balance will tend to put downward pressure on the price of foreign currencies against the U. S. dollar. Presenting the return for the equally-weighted portfolio of funds, the value weighted portfolio of funds, the return on the S P 500 and the percentage of funds that the S P 500 index beats. Another common approach to determine the impact of balance of payments developments on exchange rites is to obtain a reading of the forces in the market, excluding the entries which reflect government intervention in that market, the overall balance, changes in the official reserves of the United States and in the dollar reserves of foreign governments are considered to be the buffer accounts which bridge the gap between private supply and demand for foreign currencies relative to the U. S. dollar. We develop and explore the open economy intertemporal model in a slightly different manner. It provides insight into the gains from intertemporal trade, and the determinants of the optimum composition of the balance of payments. Mean Returns and Standard Deviation: Low-risk profit is not typically associated with the management of foreign exchange exposure. The key to the success of the model is not in the superiority of its forecasting equations, since these equations are far more simple than most of the alternatives used in the forecasting industry at the present time. Instead, the success is due to the use of diversification present in the model. By taking account of the interaction between forecasts, extreme positions in any currency are avoided. Since forecast errors are often highly correlated, small market biases may be profitably exploited. Every decision has its own tools to use in where you will be able to map out the likely consequences of decision, as you work out the importance of individual’s factors and choose the best course of action to take. The result of the said decision must correlate with proper action to achieve success. Whatever else happens in that decision, the manager must give up some control, and it cannot operate without the input of those concerns, and follow the procedure which is included in the process it self. It does need a variation of strategies and it’s up to the management to choose from those choices. Each business has its own problems to take and they have several of practices and strategies to deal with, these practices and strategies have been cited in the management procedures particularly appropriate in decision making The length of time required to close the deal. Second, cash transactions are often easier to execute than stock transactions. However, the fact that mergers and acquisition are undoubtedly popular as methods of business growth may lead us to conclude that they are always successful. In practice, this is not always true. A number of studies have analyzed the performance of companies after integrations and the findings are not very encouraging. This is just one of the reasons why in recent studies that many corporate marriages failed to work and ended in divorce. Optimal Portfolio may have contributed to some integration failures. Corporate growth can be restricted by government, as companies are only allowed to establish a certain market share. The integration which would result in the new organization controlling of 25% of the market is generally subject to government scrutiny which often results in such an analysis being blocked. Being prevented from expanding in a related area may force some companies to take the more risky route of diversifications, acquiring a company making different products in different markets. Data: An organize data distribution is provided so that when needed it will be one click away from the old system. Whats more these systems assist the organization in attaining its goal and will have an edge from other competitors due to electronic data capture and distribution that will help the company to have a better business opportunity, all because of major development. It only means new and better systems that allow the company to serve their customers in a well-organized manner, it also lessens the company’s expenses but rather have an increase in accurateness of orders. All the resources and requirements must be clear and have some allocation for supposition and documentation for some issues that need to be revised. Compile all the documents under control, this will help you mange the alteration that you think is not needed to the project. If ever a major change is needed you have to adjust you’re costing and estimated time. Documenting this factors help you account the changes, furthermore you will be able to explain thoroughly to your clients and stock holders. Structured project management it should contains logic, organized way and has subsequent defined steps, so the company must apply a written method where in the description of logical, organized approach is being used. Easily justified and so predominate in evaluation, many such standards are used. Just as fantasies help group members create a shared reality from perspective, stories, within narrative theory help collectively structure experiences for group members and thus serve as a foundation on which members form a common bond. They are fundamentally descriptive techniques that should be used primarily. These statistical packages contain a set of statistical test and manipulations. Descriptive or non-parametric, simple regression, analysis of variance and multivariate analysis, it recommended that any reasonably large set of data be handled through a true database or spreadsheet as described above and these files be simply read into the statistical program. There are experimental designs used most often in social and administrative science researches are simple randomized designs, randomized block designs. Efficient Frontier: Efficient frontier incorporates many benchmarks that are used in financial analysis; namely earnings, gross margins, operating margins, working capital, leverage, growth rate, etc. A company has the ability to influence its operating performance through a number of internal and external means. These include selling more products via increased marketing, enhancing margins by lowering cost structure or raising prices, or entering into new markets or selling new product lines. International market can also play an important role in improving operating performance. And there is several aspect of corporate culture that should be considered in the context of understanding the impact those mergers in the organization. The numerous models of exchange rate determination proposed in the economic literature differ primarily in their treatment of the degree on integration of national economies into a global system. The first point of connection as is seen in the debate surrounding purchasing power parity, is the extent of integration of goods markets, the question being, how freely interchangeable are domestic and foreign-produced goods? Providing the basis for exchange rate management the asset approach is an improvement compared with the simple monetary model. In the asset approach the real exchange rate is given an explicit role. However, the approach is unlikely to provide an adequate basis for regulation, when the central bank is concerned about the variability of the exchange rate.

Leonardo Da Vinci Essay -- Art, The Mona Lisa

â€Å"Artist, inventor, and scientist Leonardo Da Vinci was one of the greatest thinkers of the Renaissance.† (Stewarts 19) Often referred to as the â€Å"Renaissance Man†, Leonardo Da Vinci was a true genius (Stewarts 19). On April 15, 1452, Leonardo Da Vinci was born in Vinci, Italy, and the world was never the same (Leonardo Renaissance  ¶ 1). His mother moved away shortly after, leaving Leonardo Da Vinci’s father, Ser Piero Da Vinci (Rosand 228), to raise him (Leonardo Renaissance  ¶ 1). Growing up on a family farm, Leonardo could easily study nature (Leonardo Reviewed  ¶ 3). Leonardo Da Vinci developed a vast amount of interests during his extraordinary life. At the age of 15, Leonardo Da Vinci began to apprentice an artist named Andrea del Verrocchio in Florence, Italy (Leonardo Renaissance  ¶ 2). This apprenticeship allowed Da Vinci to study the basics of sculpting and painting (Stewart 19). Although at a young age, Leonardo Da Vinci began to show signs of incredible talent (Leonardo Renaissance  ¶ 2). In fact, Andrea del Verrocchio permitted him paint an angel in his painting, the Baptism of Christ (Stewart 19). When Verrocchio realized Da Vinci’s angel was much more life-like than his own, Andrea del Verrocchio vowed never to paint again (Stewart 19). While Da Vinci was in Florence, several Scopeto monks requested that he paint an altarpiece called the â€Å"Adoration of the Kings† (Leonardo Reviewed  ¶ 5). However, Leonardo Da Vinci stopped working on this piece in 1481, leaving it incomplete (Leonardo Reviewed  ¶ 5). In 1482, Leonardo Da Vinci made the move to Milan to work for the Duke of Milan (Leonardo Reviewed  ¶ 6). He carried out a variety of tasks while working in Milan, including paintings, designing costumes, and working on vario... ...controlled the human body (Summers  ¶ 18). Another area of science Leonardo Da Vinci exhibited interest in was mechanics (Summers  ¶ 16). He produced designs for ideas such as parachutes, aircrafts, helicopters, and a flying machine (Summers  ¶ 16). Also, he designed assorted war machines, including tanks and machine guns, and movable bridges since he also worked as an engineer and military architect (Summers  ¶ 16). In 1513, the King of France, King Francis I, invited Leonardo to come to Paris and granted him with the title â€Å"Master of All Arts and Sciences† (Stewart 21).For six years, he lived and worked in France (Encyclopedia  ¶ 1). He died in France in 1519 (Stewart 21). Leonardo Da Vinci truly was â€Å"the most versatile genius of the Renaissance.† (Rosand 228) His accomplishments are still used in modern day and will always have a lasting impression on the world.

Colonial Representations of India in Prose Fiction :: Essays Papers

Colonial Representations of India in Prose Fiction As in representations of the other British colonies, India was used by colonial novelists as a tool of displacement of the individual and re-affirmation of the metropolitan whole. There are three methods by which this effect is achieved. The first method displays an unqualified reliance on a culture too remote to be approached except physically: a hero or protagonist in a pre-mutiny novel is at liberty to escape to India at a moment of crisis, rearrange his life to his advantage and return to a happy ending and the establishment of a newly defined metropolitan life. Dobbin of Thackeray's Vanity Fair (1848) and Peter Jenkins of Gaskell's Cranford (1853) exemplify this well. Even the child Bitherstone of Dickens' Dombey and Son (1848) regards India as his salvation. The second method demonstrates the duality of the post-mutiny era. We are told by Patrick Brantlinger that the earliest work of fiction to deal with the mutiny is "The Perils of Certain English Prisoners", a collaboration by Dickens and Wilkie Collins in the Christmas 1857 edition of Household Words . Wilkie Collins's The Moonstone (1868) revolves around the theft and reclamation of the Koh-i-Noor and creates an ambiguous point of antagonism between Brahmin and Englishman. The Brahmins cannot be said to be wholly right or wrong in their dealings with the stone and it is the British Ablewhite who is portrayed in the most one-dimensional manner and who is cast almost as penumbra to the issues redefining the character of the former. However, only eleven years after the Mutiny, Collins's Indians remain at all times a threatening presence subject only to the most tenuous negotiation:- the reader must not forget that they belong to the realm of the non-rational. Collins' Brahmins, unaware that they are observed, participate in magical rites and his Hindus, en masse, typify Romantic notions of Man's ideal union with Nature. As re-affirmation, they reconfirm the relationship between the central characters. The third method again demonstrates the duality of the post-mutiny era but with more emphasis on reconciliation. Later novels such as Rudyard Kipling's Kim (1901) or E. M. Forster's Passage to India (1924) attempt to remove either the Indian character from the confines of previous stereotype or the Anglo-Indian character from the confines of automatic moral superiority. Colonial Representations of India in Prose Fiction :: Essays Papers Colonial Representations of India in Prose Fiction As in representations of the other British colonies, India was used by colonial novelists as a tool of displacement of the individual and re-affirmation of the metropolitan whole. There are three methods by which this effect is achieved. The first method displays an unqualified reliance on a culture too remote to be approached except physically: a hero or protagonist in a pre-mutiny novel is at liberty to escape to India at a moment of crisis, rearrange his life to his advantage and return to a happy ending and the establishment of a newly defined metropolitan life. Dobbin of Thackeray's Vanity Fair (1848) and Peter Jenkins of Gaskell's Cranford (1853) exemplify this well. Even the child Bitherstone of Dickens' Dombey and Son (1848) regards India as his salvation. The second method demonstrates the duality of the post-mutiny era. We are told by Patrick Brantlinger that the earliest work of fiction to deal with the mutiny is "The Perils of Certain English Prisoners", a collaboration by Dickens and Wilkie Collins in the Christmas 1857 edition of Household Words . Wilkie Collins's The Moonstone (1868) revolves around the theft and reclamation of the Koh-i-Noor and creates an ambiguous point of antagonism between Brahmin and Englishman. The Brahmins cannot be said to be wholly right or wrong in their dealings with the stone and it is the British Ablewhite who is portrayed in the most one-dimensional manner and who is cast almost as penumbra to the issues redefining the character of the former. However, only eleven years after the Mutiny, Collins's Indians remain at all times a threatening presence subject only to the most tenuous negotiation:- the reader must not forget that they belong to the realm of the non-rational. Collins' Brahmins, unaware that they are observed, participate in magical rites and his Hindus, en masse, typify Romantic notions of Man's ideal union with Nature. As re-affirmation, they reconfirm the relationship between the central characters. The third method again demonstrates the duality of the post-mutiny era but with more emphasis on reconciliation. Later novels such as Rudyard Kipling's Kim (1901) or E. M. Forster's Passage to India (1924) attempt to remove either the Indian character from the confines of previous stereotype or the Anglo-Indian character from the confines of automatic moral superiority.

Biological Psychology Worksheet Essay

Answer the following questions in short-essay format. Be prepared to discuss your answers. 1. What is biological psychology? Biological psychology is the scientific study of the biology of behavior. This study is also known as biopsychology, psychobiology, behavioral biology, and/or behavioral neuroscience. 2. What is the historical development of biological psychology? The historical development of biopsychology is traced as far back as the ancient Greek era. It became the Roman church who dictated much of the human behavior according to their religious beliefs. After the Dark Ages subsided a new way of thinking was born and this period is called the Renaissance era. With this era came new ways of studying things, ways to see things by observing them and this was how modern science was founded. 3. Name one to three important theorists associated with biological psychology. One theorists related to the study of biological psychology is Rene Descartes. Rene Descartes elaborated on a theory in which the pneumatics of bodily fluids could explain reflexes and other motor behavior. Rene Descartes also was the first to identify, clearly, that the mind has a consciousness and is self-aware, which leaves the brain to be a tool for intelligence. 4. Describe the relationship between biological psychology and other fields in psychology and neuroscience. Whether it is the study of biopsychology and other fields of psychology or neuroscience, all psychologists and scientists are trying to understand the functions of the brain. The body and mind connection and how it reacts to certain behaviors or illnesses. Biological psychology is defined as the scientific study of the biological bases of behavior and mental states. Neuropsychology is a division of the science that attempts to understand the way structure and function of the brain relate to behavior and psychological processes. 5. Describe the major underlying assumptions of a biopsychological approach. Mental illnesses can cause biological consequences. Biological events cause mental illnesses. Trauma is something that can cause any person to experience some type of mental illness. Some believe that they are two things go hand in hand and cannot be separated and are completely linked to each other.

Commodity Market in India Essay Example

Commodity Market in India Essay Example Commodity Market in India Essay Commodity Market in India Essay 1. Commodity and Commodities market 1. 1 INTRODUCTION India, a commodity based economy where two-third of the one billion population depends on agricultural commodities, surprisingly has an under developed commodity market. Unlike the physical market, futures markets trades in commodity are largely used as risk management (hedging) mechanism on either physical commodity itself or open positions in commodity stock. For instance, a jeweller can hedge his inventory against perceived short-term downturn in gold prices by going short in the future markets. The article aims at knowhow of the commodities market and how the commodities traded on the exchange. The idea is to understand the importance of commodity derivatives and learn about the market from Indian point of view. In fact it was one of the most vibrant markets till early 70s. Its development and growth was shunted due to numerous restrictions earlier. Now, with most of these restrictions being removed, there is tremendous potential for growth of this market in the country. 1. 2 COMMODITY A commodity may be defined as an article, a product or material that is bought and sold. It can be classified as every kind of movable property, except Actionable Claims, Money Securities. Commodities actually offer immense potential to become a separate asset class for market-savvy investors, arbitrageurs and speculators. Retail investors, who claim to understand the equity markets, may find commodities an unfathomable market. But commodities are easy to understand as far as fundamentals of demand and supply are concerned. Retail investors should understand the risks and advantages of trading in commodities futures before taking a leap. Historically, pricing in commodities futures has been less volatile compared with equity and bonds, thus providing an efficient portfolio diversification option. In fact, the size of the commodities markets in India is also quite significant. Of the countrys GDP of Rs 13, 20,730 crore (Rs 13,207. 3 billion), commodities related (and dependent) industries constitute about 58 per cent. Currently, the various commodities across the country clock an annual turnover of Rs 1, 40,000 crore (Rs 1,400 billion). With the introduction of futures trading, the size of the commodities market grows many folds here on. . 3 COMMODITY MARKET Commodity market is an important constituent of the financial markets of any country. It is the market where a wide range of products, viz. , precious metals, base metals, crude oil, energy and soft commodities like palm oil, coffee etc. are traded. It is important to develop a vibrant, active and liquid commodity market. This would help investors hedge their comm odity risk, take speculative positions in commodities and exploit arbitrage opportunities in the market. Table: 1 Turnover in Financial Markets and Commodity Market (Rs in Crores) S No. Market segments 2002-03 2003-04 2004-05 (E) 1Government Securities Market 1,544,376(63)2,518,322(91. 2)2,827,872(91) 2Forex Market 658,035(27)2,318,531(84)3,867,936(124. 4) 3Total Stock Market Turnover (I+ II) 1,374,405(56)3,745,507(136)4,160,702(133. 8) I National Stock Exchange (a+b) 1,057,854(43)3,230,002(117)3,641,672(117. 1) a)Cash 617,989 1,099,534 1,147,027 b)Derivatives 439,865 2,130,468 2,494,645 II Bombay Stock Exchange (a+b) 316,551(13)515,505(18. 7)519,030(16. 7) a)Cash314,073 503,053 499,503 b)Derivatives2,478 12,452 19,527 4Commodities Market NA 130,215(4. )500,000(16. 1) Note: Fig. in bracket represents percentage to GDP at market prices Source: Sebi bulletin 1. 4 Its EVOLUTION IN INDIA Bombay Cotton Trade Association Ltd. , set up in 1875, was the first organized futures market. Bombay Cotton Exchange Ltd. was established in 1893 following the widespread discontent amongst leading cotton mill owners and merchants over functioning of Bombay Cotton Trade Association. Th e Futures trading in oilseeds started in 1900 with the establishment of the Gujarati Vyapari Mandali, which carried on futures trading in groundnut, castor seed and cotton. Futures trading in wheat was existent at several places in Punjab and Uttar Pradesh. But the most notable futures exchange for wheat was chamber of commerce at Hapur set up in 1913. Futures trading in bullion began in Mumbai in 1920. Calcutta Hessian Exchange Ltd. was established in 1919 for futures trading in raw jute and jute goods. But organized futures trading in raw jute began only in 1927 with the establishment of East Indian Jute Association Ltd. These two associations amalgamated in 1945 to form the East India Jute Hessian Ltd. to conduct organized trading in both Raw Jute and Jute goods. Forward Contracts (Regulation) Act was enacted in 1952 and the Forwards Markets Commission (FMC) was established in 1953 under the Ministry of Consumer Affairs and Public Distribution. In due course, several other exchanges were created in the country to trade in diverse commodities. 1. 5 Structure of Commodity Market 1. 6 Different types of commodities traded World-over one will find that a market exits for almost all the commodities known to us. These commodities can be broadly classified into the following: Precious Metals: Gold, Silver, Platinum etc Other Metals: Nickel, Aluminum, Copper etc Agro-Based Commodities: Wheat, Corn, Cotton, Oils, Oilseeds. Soft Commodities: Coffee, Cocoa, Sugar etc Live-Stock: Live Cattle, Pork Bellies etc Energy: Crude Oil, Natural Gas, Gasoline etc 1. 7 Different segments in Commodities market The commodities market exits in two distinct forms namely the Over the Counter (OTC) market and the Exchange based market. Also, as in equities, there exists the spot and the derivatives segment. The spot markets are essentially over the counter markets and the participation is restricted to people who are involved with that commodity say the farmer, processor, wholesaler etc. Derivative trading takes place through exchange-based markets with standardized contracts, settlements etc. 1. 8 Leading commodity markets of world Some of the leading exchanges of the world are New York Mercantile Exchange (NYMEX), the London Metal Exchange (LME) and the Chicago Board of Trade (CBOT). 1. 9 Leading commodity markets of India The government has now allowed national commodity exchanges, similar to the BSE NSE, to come up and let them deal in commodity derivatives in an electronic trading environment. These exchanges are expected to offer a nation-wide anonymous, order driven, screen based trading system for trading. The Forward Markets Commission (FMC) will regulate these exchanges. Consequently four commodity exchanges have been approved to commence business in this regard. They are: Multi Commodity Exchange (MCX) located at Mumbai. National Commodity and Derivatives Exchange Ltd (NCDEX) located at Mumbai. National Board of Trade (NBOT) located at Indore. National Multi Commodity Exchange (NMCE) located at Ahmedabad. Turnover on Commodity Futures Markets (Rs. In Crores) Exchange2003-042004-05 FIRST Half NCDEX149054011 NBOT5301451038 MCX245630695 NMCE238427943 ALL EXCHANGES129364170720 1. 10 Volumes in Commodity Derivatives Worldwide 2. Commodity Futures Trading in India 2. 1 INTRODUCTION Derivatives as a tool for managing risk first originated in the Commodities markets. They were then found useful as a hedging tool in financial markets as well. The basic concept of a derivative contract remains the same whether the underlying happens to be a commodity or a financial asset. However there are some features, which are very peculiar to commodity derivative markets. In the case of financial derivatives, most of these contracts are cash settled. Even in the case of physical settlement, financial assets are not bulky and do not need special facility for storage. Due to the bulky nature of the underlying assets, physical settlement in commodity derivatives creates the need for warehousing. Similarly, the concept of varying quality of asset does not really exist as far as financial underlyings are concerned. However in the case of commodities, the quality of the asset underlying a contract can vary largely. This becomes an important issue to be managed. . 2 Benefits to Industry from Futures trading. * Hedging the price risk associated with futures contractual commitments. * Spaced out purchases possible rather than large cash purchases and its storage. * Efficient price discovery prevents seasonal price volatility. * Greater flexibility, certainty and transparency in procuring commodities would aid bank lending. * Facilitate informed lending. * Hedg ed positions of producers and processors would reduce the risk of default faced by banks. * Lending for agricultural sector would go up with greater transparency in pricing and storage. Commodity Exchanges to act as distribution network to retail agri-finance from Banks to rural households. * Provide trading limit finance to Traders in commodities Exchanges. 2. 3 Benefits to Exchange Member * Access to a huge potential market much greater than the securities and cash market in commodities. * Robust, scalable, state-of-art technology deployment. * Member can trade in multiple commodities from a single point, on real time basis. * Traders would be trained to be Rural Advisors and Commodity Specialists and through them multiple rural needs would be met, like bank credit, information dissemination, etc. . 4 Why Commodity Futures? One answer that is heard in the financial sector is we need commodity futures markets so that we will have volumes, brokerage fees, and something to trade. I t hink that is missing the point. We have to look at futures market in a bigger perspective what is the role for commodity futures in Indias economy? In India agriculture has traditionally been an area with heavy government intervention. Government intervenes by trying to maintain buffer stocks, they try to fix prices, and they have import-export restrictions and a host of other interventions. Many economists think that e could have major benefits from liberalization of the agricultural sector. In this case, the question arises about who will maintain the buffer stock, how will we smoothen the price fluctuations, how will farmers not be vulnerable that tomorrow the price will crash when the crop comes out, how will farmers get signals that in the future there will be a great need for wheat or rice. In all these aspects the futures market has a very big role to play. If you think there will be a shortage of wheat tomorrow, the futures prices will go up today, and it will carry signals back to the farmer making sowing decisions today. In this fashion, a system of futures markets will improve cropping patterns. Next, if I am growing wheat and am worried that by the time the harvest comes out prices will go down, then I can sell my wheat on the futures market. I can sell my wheat at a price, which is fixed today, which eliminates my risk from price fluctuations. These days, agriculture requires investments farmers spend money on fertilizers, high yielding varieties, etc. They are worried when making these investments that by the time the crop comes out prices might have dropped, resulting in losses. Thus a farmer would like to lock in his future price and not be exposed to fluctuations in prices. The third is the role about storage. Today we have the Food Corporation of India, which is doing a huge job of storage, and it is a system, which in my opinion does not work. Futures market will produce their own kind of smoothing between the present and the future. If the future price is high and the present price is low, an arbitrager will buy today and sell in the future. The converse is also true, thus if the future price is low the arbitrageur will buy in the futures market. These activities produce their own optimal buffer stocks, smooth prices. They also work very effectively when there is trade in agricultural commodities; arbitrageurs on the futures market will use imports and exports to smooth Indian prices using foreign spot markets. In totality , commodity futures markets are a part and parcel of a program for agricultural liberalization. Many agriculture economists understand the need of liberalization in the sector. Futures markets are an instrument for achieving that liberalization. ***************************************************************************************************************************************************** Sagging Agricultural Commodity Exchanges Growth Constraints and Revival Policy Options Commodity derivatives have a crucial role to play in managing price risk especially in agriculture dominated economies. However, as long as prices of many commodities are restrained to a certain extent by government intervention in p roduction, supply and distribution, forward and futures markets for hedging price risk in those commodities have only limited practical relevance. A review of the nature of institutional and policy level constraints facing this segment calls for more focused and pragmatic approach from the government, the regulator and the exchanges for making the agricultural futures market a vibrant segment for risk management. K G Sahadevan Instability of commodity prices has always been a major concern of the producers as well as the consumers in an agriculture dominated country like India. Farmers’ direct exposure to price fluctuations, for instance, makes it too risky for them to invest in otherwise profitable activities. There are various ways to cope with this problem. Apart from increasing stability of the market by direct government intervention thwarting the market mechanism, various actors in the farm sector can better manage their activities in an environment of unstable prices through derivative markets. These markets serve a risk-shifting function, and can be used to lock-in prices instead of relying on uncertain price developments. Derivatives like forwards, futures, options, swaps, etc, are extensively used in many developed and developing countries in the world. The Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, International Petroleum Exchange, London, London Metal Exchange, London Futures and Options Exchange, ‘Marche a Terme International de France’, Sidney Futures Exchange, Singapore International Monetary Exchange, Singapore Commodity Exchange, Kuala Lumpur Commodity Exchange, ‘Bolsa de Mercadorias Futuros’ (in Brazil); the Buenos Aires Grain Exchange, etc, are some of the leading commodity exchanges in the world engaged in trading of derivatives in commodities. Even in China during the last 10 years of liberalisation of internal market many exchanges were set up for exclusive trading in commodity futures and most of them like Shanghai Metals Exchange; China Commodity Futures Exchange; China Zhengzhou Commodity Exchange, Beijing Commodity Exchange, etc, have witnessed tremendous growth [UNCTAD 1998]. However, they have been utilised on a very limited scale in India. The objective of this paper is to bring to focus the problems and prospects of the futures market in agricultural commodities in India. On the basis of visit to some of the recognised commodity exchanges (see the list in Table 2) the study identifies bottlenecks in the organisational, trading and regulatory set-up of these exchanges and recommends certain broad policy alternatives for the revival of commodity exchanges in general. Historical Perspective Although India has a long history of trade in commodity derivatives, this segment remained underdeveloped due to government intervention in many commodity markets to control prices. The production, supply and distribution of many agricultural commodities are still governed by the state and forwards and futures trading are selectively introduced with stringent controls. While free trade in many commodity items is restricted under the Essential Commodities Act (ECA), 1955, forward and futures contracts are limited to certain commodity items under the Forward Contracts (Regulation) Act (FCRA), 1952. The first commodity exchange was set up in India by Bombay Cotton Trade Association and formal organised futures trading started in cotton in 1875. Subsequently, many exchanges came up in different parts of the country for futures trade in various commodities. The Gujarati Vyapari Mandali came into existence in 1900 which has undertaken futures trade in oilseeds first time in the country. The Calcutta Hessian Exchange and East India Jute Association were set up in 1919 and 1927 respectively for futures trade in raw jute. In 1921, futures in cotton were organised in Mumbai under the auspices of East India Cotton Association (EICA). Many exchanges were set up in major agricultural centres in north India before world war broke out and they were mostly engaged in wheat futures until it was prohibited. The existing exchanges in Hapur, Muzaffarnagar, Meerut, Bhatinda, etc, were established during this period. The futures trade in spices was first organised by India Pepper and Spices Trade Association (IPSTA) in Cochin in 1957. Futures in gold and silver began in Mumbai in 1920 and continued until it was prohibited by the government by mid-1950s. Though options are permitted now in stock market, they are not allowed in commodities. The commodity options were traded during the pre-independence period. Options on cotton were traded until they along with futures were banned in 1939 [Ministry of Food and Consumer Affairs 1999]. However, the government withdrew the ban on futures with passage of FCRA in 1952. The act has provided for the establishment and constitution of Forward Markets Commission (FMC) for the purpose of exercising the regulatory powers assigned to it by the act. Later, futures trade was altogether banned by the government in 1966 in order to have control on the movement of prices of many agricultural and essential commodities. After the ban of futures trade all the exchanges went out of business and many traders started resorting to unofficial and informal trade in futures. On recommendation of the Khusro Committee in 1980 government reintroduced futures on some selected commodities including cotton, jute, potatoes, etc. As part of economic liberalisation of 1990s an expert committee on forward markets under the chairmanship of K N Kabra was appointed by the government of India in 1993. Its report submitted in 1994 recommended the reintroduction of futures which were banned in 1966 and also to widen its coverage to many more agricultural commodities and silver. In order to give more thrust on agricultural sector, the National Agricultural Policy 2000 has envisaged external and domestic market reforms and dismantling of all controls and regulations in agricultural commodity markets. It has also proposed to enlarge the coverage of futures markets to minimise the wide fluctuations in commodity prices and for hedging the risk arising from price fluctuations. In line with the proposal many more agricultural commodities are being brought under futures trading. The Present Status Presently, 15 exchanges are in operation in India carrying out futures trading in as many as 30 commodity items (details are given in Table 1). Out of these, two exchanges, viz, IPSTA, Cochin and the Bombay Commodity Exchange (BCE) have been recently upgraded to international exchanges to deal in international contracts in pepper and castor oil respectively. Moreover, permission has been given to another two exchanges, viz. The First Commodities Exchange of India, Kochi (for copra/coconut, its oil and oilcake), and Keshav Commodity Exchange, Delhi (for potato), where futures trading is expected to start soon. Another eight new exchanges are proposed to set up and some of them are expected to start operation shortly. The government has also permitted four exchanges, viz, EICA, Mumbai; Central Gujarat Cotton Dealers Association, Vadodara; South India Cotton Association, Coimbatore; and Ahmedabad Cotton Merchants Association, Ahmedabad, for conducting NTSD contracts (explained below) in cotton. Lately, as part of further liberalisation of trade in agriculture and dismantling of ECA, 1955 futures trade in sugar has been permitted and three new exchanges, viz, e-Commodities, Mumbai; NCS Infotech, Hyderabad; and e-Sugar India. Com, Mumbai, have been given approval for conducting sugar futures [Ministry of Food and Consumer Affairs 1999]. Table 1:Profile of Commodity Futures Exchanges ExchangeActive MembersCommodity TradedVolume in Lakh Tonnes (Value in Rs Crore) 199920002001 1996-971997-981998-991999-002000-01 India Pepper and Spice Trade Association, Cochin554231Pepper0. 86 (765) 1. 56 (2834) 1. 73 (3411) 1. 24 (2862) 1. 29 (2580) -37Pepper(intl)007 (15) 0. 40 (106) 0. 02 (5. 6) The Bombay Cpmmodity Exchange, Mumbai865Castor seed2. 53 (279) 0. 25 (30) 0. 11 (17) 0. 9 (15) 0. 10 (14) 22Castor oil0. 04 (14)0. 01(5) -9-RBD Palmol-0. 04 (9) Kanpur Commodity Exchange, Kanpur-85Mustard seed, oil and cake-0. 108 (14) The EAst India Cotton Association, Mumbai15177Cotton0. 02 (9) 0. 35 (143) 0. 21 (139) The Chamber of Commerce, Hapur363621Potato0. 79 (29) 1. 76 (56) 0. 09 (5) 0. 22 (5) 0. 52 (14) 263426Gur29. 28 (1655) 30. 10 (2760) 23. 85 (2162) 23. 79 (2236) 28. 80 (2555) Coffee Futures Exchange, Bangalore554Cof fee-0. 50 (289) Ahmedabad Commodity Exchange383655Castor seed54. 84 (5981) 68. 76 (8006) 44. 91 (6854) 30. 68 (5220) 24. 73 (3469) The Rajkot Seeds Oil and Bullion Mercehants Association128- 19. 85 (2167) 21. 36 (2495) 16. 77 (2562) 16. 35 (2811) 18. 94 (2761) National Board of Trade, Indore-4851Soy seed, oil and cake1. 093 (261) 32. 56 (7874) -4-Mustard seed and mustard oil-0. 13 (31) Vijai Beopar Chamber, Muzaffarnagar403535Gur40. 71 (2281) 44. 06 (3429) 61. 34 (9518) 47. 48 (4510) 31. 28 (2877) Bhatinda Om Oil and Oilseeds Exchange, Bhatinda161615Gur29. 81 (1936) 23. 60 (1896) 20. 41 (1813) 21. 88 (2263) 21. 24 (2060) The Meerut Agro Commodities Exchanges Co, Meerut101111Gur2. 45 (144) 3. 25 (248) 3. 58 304) 4. 1 (389) 3. 7 (311) The Rajdhani Oils and Oilseeds Exchange,Delhi172124Gur8. 51 (548) 28. 60 (2231) 4. 51 (383) 8. 24 (787) 7. 78 (668) The East India Jute and Heesian Exchange, Calcutta574071Sacking25. 21 (5022) 5. 58 (1234) 7. 88 (1703) 111Hessian41. 38 (15604) 26. 60 (7342) 2. 43 (569) 0. 003 (0. 81) 0. 0008 (0. 22) The Spices and Oilseeds Exchange, Sangli-37Turmeric0. 83 (149) 0. 81 (152) 0. 01 (6) 0. 0002 (0. 03) 0. 0002 (0. 21) Source: Forward Markets Commission, Mumbai A brief profile of the exchanges which are currently in operation has been presented in Table 1. Many of the existing exchanges have become weak in spite of considerable membership strength and potential for large volume of trade. Some of the observations drawn on the basis of visit to six of these exchanges have been presented later in the paper. The number of members who are actively involved in trading in all these exchanges is abysmally low. It is important to know why traders who in spite of setting up the exchange are not keen to participate in trading actively. It has been observed from many exchanges that trading was unprofitable and could not be relied on it as a full-time business. Any attempt to revive the exchanges and rejuvenate the futures market in India needs to address this issue first. It is interesting to note that even in case of commodities in which very active domestic and international ready market exists with volatile prices, futures trade in those commodities are no attraction to the merchandisers. The IPSTA located in Cochin which is known for futures trade in spices for over five decades has not attracted many traders. It is the only exchange in the world engaged in trading of futures in pepper. Kerala being the producer of lion’s share (around 95 per cent) of pepper in India and Cochin being the port city where a majority of pepper exporters are operating the existing futures exchange should have a larger role to play [UNCTAD 1995]. However, in spite of having more than 150 members in the exchange, only around 10 members’ cubicles in the trading ring were occupied by the respective representatives during the trading hour. A further inquiry into the issue reveals that these members hail from families which are into pepper trade for generations and no new member from outside has come into the business. It is not clear as to why members of the exchange are keen to retain the status of the exchange as a specialised single-commodity exchange. The BCE arguably the richest exchange in India in terms of its infrastructure, is also facing the problem of empty trading ring. Though the exchange has a membership strength close to 600, less than five members are trading actively. Data in Table 1 shows that the volume in castor seed futures declined from 2. 53 lakh tonnes during 1996-97 to just 10,000 tonnes during 2000-01. The EICA which is one of the oldest exchanges in the country has a different story to tell. Cotton has a long tradition of futures trading in India. Cotton futures started in 1857 and continued until it was suspended in 1966. Cotton has large potential for futures trading due to its uncontrolled and uncertain supply and variability of prices. While prices within a crop season fluctuate between 7. 5 and 26. 2 per cent in the last decade, its output varied as much as 14 per cent from one year to the next. It has a strong domestic and international market. India is the third largest producer and the second largest consumer of cotton in the world. Moreover, cotton is placed under OGL list with zero import duty, and quota system for its exports is likely to be dismantled by 2005. Nevertheless, the present status of cotton exchange and the Indian cotton futures contract is no different from other exchanges. Although the exchange has a membership strength over 400, not more than 10 members actively trade in the exchange. It is often argued by the exchange authorities that the government’s indirect control on supply and prices by its procurement makes the futures market in cotton unattractive and worthless. Futures market in many other commodities indeed shows that there is scope for the rejuvenation of this sector in the country. The buoyant trading activities in the newly started National Board of Trade at Indore, the old exchanges like the Chamber of Commerce, Hapur; Viajai Beopar Chamber, Muzaffarnagar; Ahmedabad Commodity Exchange; Bhatinda oil exchange; East India Jute Exchange, Calcutta, etc, are the indications of prospects of futures trade in agricultural commodities. Commodity Futures Contract Futures contracts are an improved variant of forward contracts. They are agreements to purchase or sell a given quantity of a commodity at a predetermined price, with settlement expected to take place at a future date. The futures contracts as against forwards are standardised in terms of quality and quantity, and place and date of delivery of the commodity. The commodity futures contracts in India as defined by the FMC has the following features [Forward Markets Commission 2000]: (a) Trading in futures is necessarily organised under the auspices of a recognised association so that such trading is confined to or conducted through members of the association in accordance with the procedure laid down in the rules and bye-laws of the association. (b) It is invariably entered into for a standard variety known as the ‘basis variety’ with permission to deliver other identified varieties known as ‘tenderable varieties’. c) The units of price quotation and trading are fixed in these contracts, parties to the contracts not being capable of altering these units. (d) The delivery periods are specified. (e) The seller in a futures market has the choice to decide whether to deliver goods against outstanding sale contracts. In case he decides to deliver goods, he can do so not only at the location of the association through w hich trading is organised but also at a number of other pre-specified delivery centres. (f) In futures market actual delivery of goods takes place only in a very few cases. Transactions are mostly squared up before the due date of the contract and contracts are settled by payment of differences without any physical delivery of goods taking place. The terms and specifications of futures contracts, however, vary depending on the commodity and the exchange in which it is traded. The relevant terms and conditions of contracts traded in six sample exchanges in India are presented in Table 2. These terms are standardised and applicable across the trading community in the respective exchanges and are framed to promote trade in the respective commodity. For example, the contract size is important for better management of risk by the customer. It has implications for the amount of money that can be gained or lost relative to a given change in price levels. It also affects the margins required and the commission charged. Similarly, the margin to be deposited with the clearing house has implications for the cash position of customers because it blocks working capital for the period of the contract to which he is a party. Organisational Set-up In the Indian context, the scope of commodity exchanges has been limited to futures trading. They are associations of members which provide all organisational support for carrying out futures trading in a formal environment. These exchanges are managed by a board of directors which is composed primarily of the members of the association. There are also representatives of the government and public nominated by FMC. The majority of members of the board have been chosen from among the members of the association who have trading and business interest in the exchange. The board appoints a chief executive officer who with his team assists the board in day-to-day administration of the exchange. There are different classes of members who capitalise the exchange by way of participation in the form of equity, admission fee, security deposits, registration fee, etc. They are classified as ordinary members, trading members, trading-cum-clearing members, institutional clearing members, and designated clearing bank. The membership requirements for and the composition of members, however, vary from one exchange to the other. In some exchanges there are exclusive clearing members, broker members and registered non-members in addition to the above category of members. Clearinghouse is the organisational set up adjunct to the futures exchange which handles all back-office operations including matching up of each buy and sell transactions, execution, clearing and reporting of all transactions, settlement of all transactions on maturity by paying the price difference or by arranging physical delivery, etc, and assumes all counterparty risk on behalf of buyer and seller. There is no clearinghouse in a forward market due to which buyers and sellers face counterparty risk. In a futures exchange all transactions are routed through and guaranteed by the clearinghouse which automatically becomes a counterpart to each transaction. It assumes the position of counterpart to both sides of the transaction by selling contract to the buyer and buying the identical contract from the seller. Therefore, traders obtain a position vis-a-vis the clearinghouse. It ensures default risk-free transactions and provides financial guarantee on the strength of funds contributed by its members and through collection of margins, marking-to-market all outstanding contracts, position limits imposed on traders, fixing the daily price limits and settlement guarantee fund. The organisational structure and membership requirements of clearinghouses vary from one exchange to the other. The BCE and IPSTA have set up separate independent corporations (namely, Prime Commodities Clearing Corporation of India, and First Commodities Clearing Corporation of India, respectively) for handling clearing and guarantee of all futures transactions in the respective exchanges. While Coffee Futures Exchange India (COFEI), Bangalore has a clearinghouse as a separate division of the exchange, many other exchanges like the Chamber of Commerce, Hapur; Kanpur Commodity Exchange (KCE) and EICA, Mumbai run in-house clearinghouses s part of the respective exchanges. The clearing and guaranty are managed in these exchanges by a separate committee (normally called the clearinghouse committee). Membership of clearinghouse requires capital contribution in the form of equity, security deposit, admission fee, registration fee, guarantee fund contribution in addition to networth requirement depending on its organisational structure. For example, in the BCE the minimum capital requirement for membership in its clearinghouse as applicable to trading-cum-clearing members is Rs 50,000 each towards equity and security deposit, Rs 500 as annual subscription, and additionally, members are required to have networth of Rs 3 lakh. Similarly, COFEI prescribes Rs 5 lakh each towards equity and guarantee fund contribution and Rs 40,000 towards admission fee for a trading-cum-clearing member. However, in exchanges where clearing house is a part of the exchange the payment requirements are lower. For example, KCE prescribes payment of only Rs 25,000, Rs 1,000 and Rs 500 towards security deposit, registration fee and annual fee respectively for a clearing-cum-trading member. Margins (also called clearing margins) are good-faith deposits kept with a clearinghouse usually in the form of cash. There are two types of margins to be maintained by the trader with the clearinghouse: initial margin and maintenance or variation margins. They have important bearing on the success of futures. As they are non-interest bearing deposits payable to the clearinghouse up-front working capital of the trading parties gets blocked to that extent. While a higher margin requirement prevents traders from participating in trading, a lower margin makes the clearinghouse financially weak and hence more vulnerable to default. Internationally, many developed exchanges maintain a low margin on positions due to their better financial strength along with massive volume of trade resulting in large income accruing to them. However, this has not been the case with many exchanges in India. For example, the initial margin liability for transacting the minimum lot size in pepper is Rs 30,000 for domestic contracts and US$ 312. 0 for international contracts. Similarly, the volume of transactions these clearinghouses deal in many exchanges in India is abysmally low making their existence financially unviable. For ensuring financial integrity of the exchange and for counterparty risk-free trade position (exposure) limits have been imposed on clearing members apart from mandatory margins. These limits which are stringent in some exchanges and are liberal in others are normally linked to the members’ contribution towards equity capital or security deposit or a combination of both and settlement guarantee fund. In the BCE exposure limit of a clearing member is the sum of 50 times the face value of contribution to equity capital of the clearinghouse and 30 times the security deposit the member has maintained with the clearinghouse. While COFEI prescribes the limit of 80 times the sum of member’s equity investment and the contribution to the guarantee fund, EICA has stipulated a liberal exposure limit on open positions. It has a limit of 200 and 1,500 units (recall that one contract unit is equivalent to 93. quintals of cotton) respectively for composite and institutional members. The IPSTA has fixed a net exposure limit of 60 units (equivalent to 1,500 quintals) for domestic contracts and 90 units (equivalent to 2,250 quintals) for international contracts. Moreover, the settlement guarantee fund helps clearinghouse to honour all payments in case any trader defaults. The KCE maintains a trade guarantee fund with a corpus of Rs 100 lakh while COFEI in addition to a guarantee fund has su bstituted itself as party to clear all transactions. Yet another check on the possible default is through prescribing maximum price fluctuation on any trading day which helps limit the probable profit/loss from each unit of transaction. The relevant data on permitted price limit has been presented in Table 2. It is clear from the table that the maximum profit/loss potential from trade in each contract unit varies from as low as Rs 800 for potato futures in Chamber of Commerce, Hapur to as high as Rs 15,000 for pepper in IPSTA. Similarly, given the permissible open position of 200 units for a trading-cum-clearing member and maximum price fluctuation of Rs 150 per 100 kg for cotton futures in EICA, the maximum potential loss/profit in a trading day works out to be Rs 28. 05 lakh. Regulation of Commodity Futures Merchandising and stockholding of many commodities in India have always been regulated through various legislations like FCRA 1952; ECA 1955 and Prevention of Blackmarketing and Maintenance of Supplies of Commodities Act (PBMSCA) 1980. The ECA 1955 gives powers to control production, supply, distribution, etc, of essential commodities for maintaining or increasing supplies and for securing their equitable distribution and availability at fair prices. Using the powers under the ECA, 1955 various ministries/departments of the central government have issued control orders for regulating production/distribution/quality aspects/movement, etc, pertaining to the commodities which are essential and administered by them. Currently, 29 commodity groups have been declared essential under the act. The PBMSCA 1980 targets the prevention of unethical trade practices like hoarding and blackmarketing, etc, in essential commodities. It is being implemented by state governments to detain persons who obstruct the supplies of essential commodities. The FCRA 1952 provided for three-tier regulatory system for commodity futures trading in India: (a) an association recognised by the government of India on the recommendation of FMC, (b) the FMC and (c) the central government (department of consumer affairs). Stock exchanges and futures markets being a part of the union list their regulation is the responsibility of the central government. All types of forward contracts in India are governed by the provisions of the FCRA, 1952. The act divides commodities into three categories with reference to extent of regulation, viz, (a) the commodities in which futures trading can be organised under the auspices of recognised association, (b) the commodities in which futures trading is prohibited and (c) the free commodities which are neither regulated nor prohibited. While options in goods are prohibited by the FCRA, 1952, the ready delivery contracts remain outside its purview. The ready delivery contract as defined by the act is the one which provides for the delivery of goods and payment of a price therefor, either immediately or within a period not exceeding 11 days after the date of the contract. All ready delivery contracts where the delivery of goods and/or payment for goods is not completed within 11 days from the date of the contract are forward contracts. The act classifies forward contracts into two: (a) specific delivery contracts and (b) other than specific delivery contracts or futures contracts. Specific delivery contract means a forward contract which provides for the actual delivery of specific qualities or types of goods during a specified time period at a price fixed thereby or to be fixed in the manner thereby agreed and in which the names of both the buyer and the seller are mentioned. The specific delivery contracts are of two types: transferable and non-transferable. The distinction between the transferable specific delivery (TSD) contracts and non-transferable specific delivery (NTSD) contracts is based on the transferability of the rights or obligations under the contract. Forward trading in TSD and NTSD contracts are regulated by FCRA 1952. As per the section 15 of the act every forward contract in notified goods (currently 36 commodity items) which is entered into except those between members of a recognised association or through or with any such member is treated as illegal or void. As per the section 17(1) of the act, 82 items are prohibited from entering into forward contract. The section 18(1) of the act exempts the NTSD contracts from the regulatory provisions. However, over the years the regulatory provisions of the act were applied to the NTSD contracts as well and 79 commodity items are currently prohibited from NTSD contracts under section 17 of the act. Moreover, another 15 commodity items are brought under the regulatory provisions of the section 15 of the act out of which trading in the NTSD contract has been suspended in 12 items. At present, the NTSD contracts in cotton, raw jute and jute goods are permitted only between, through or with the members of the associations specifically recognised for the purpose. Subsequent to the report of the Committee on Forward Markets (known as the Kabra Committee) submitted in 1994 the government has so far permitted futures trading in nearly 35 commodities under the auspices of 23 commodity exchanges located in different parts of the country. The commodities in which futures trading is permitted are: pepper, turmeric, gur, castorseed, hessian, jute sacking, cotton, potato, castor oil, soyabean and its oil and cake, coffee, mustardseed and its oil and oilcake, ground nut and its oil, sunflower oil, copra/coconut and its oil and oilcake, cottonseed and its oil and oilcake, kapas, RBD palmolein, rice bran and its oil and oilcake, sesame seed and its oil and oilcake, safflower seed and its oil and oilcake, and sugar. This list may get enlarged further with the repeal of ECA 1955 and with further liberalisation of farm sector as envisaged in the National Agricultural Policy 2000 and the Union Budget 2002-03. The exchanges are required to get prior approval of the FMC for opening of each contract in commodities which are notified under section 15 of the FCRA 1952. Regulation is essential especially in a private ownership and market-oriented system to ensure the necessary checks and balances in the system. However, stringent and continuous regulation for long period of time would do no good to the system. The initial stringent regulation should ensure that a foolproof and growth oriented control system in terms of set-up of the exchange and its sound management, a clearinghouse which can promote trade and its financial integrity, sound and facilitating contract terms and conditions, etc, is in place. The exchanges are already assumed to be self-regulatory agencies. Their role must get strengthened further along with FMC minimising its role as a facilitator making the existing regulation an ‘appropriate regulation’. Constraints and Policy Options Commodity exchanges in India are in their nascent stage of development. There are numerous bottlenecks in the growth of this particular segment in India. These problems are not unknown to the government and the FMC. The FMC has already coordinated a number of studies carried out by experts with funding from World Bank during 1999-00. An integrated report [Youssef 2000] of these wide ranging studies has highlighted several issues for the consideration of government and FMC. These institutional and policy level issues have to be addressed by the government and the FMC for rejuvenating the paralysed agricultural futures markets. Some of the major problems that handicap the commodity exchanges are discussed below [Sahadevan 2002a]. Constitution of exchanges: All commodity exchanges in India are mutual organisations. They are promoted by traders who carryout trading as well as keep the management control of exchanges. The exchange staff including the chief executive officer/secretary is the staff of promoters. This structure poses a serious threat to the integrity of exchanges. The structure needs to be altered so as to ensure an arms length relationship between those who promote and manage the exchange on the one hand and those who have trading interest in exchanges on the other. Many leading exchanges in the world like Chicago Mercantile Exchange, International Petroleum Exchange, and New York Mercantile Exchange, etc, are demutualised organisations where arms-length relationship between management and trading is maintained. The pepper exchange in Cochin is seriously considering change in its set up from a non-profit making organisation to a profit-making equity-based organisation with public participation. Trading parameters: The terms and conditions of contracts play a crucial role in the growth and development of trading in any exchange. They should be market friendly in the sense that the terms are affordable to large traders as well as small traders and should be attractive to all prospective beneficiaries of futures trading including growers, processors, merchandisers, consumers, etc. However, the contract specifications (as given in Table 2) in many exchanges are prohibitive to many segments. For example, the lot size of cotton contract in EICA is 55 bales which is equivalent to nearly 10 tonnes of cotton. Similarly, the costlier commodity like pepper for which the lot size fixed by the pepper exchange, Cochin is 2. 5 tonnes with 15 tonnes as deliverable quantity. Many such finer aspects of contracts can be pointed out which apparently seem to go against the wider interests of prospective beneficiaries of futures trading. One needs to really go into the micro details of these specifications before making any judgments as to how market friendly these contracts are. Notes: IM and SM represent initial margin and special margin respectively. Price limit and margins vary from time to time. 1 Delivery month of the contract. 2 Bench Mark Price is the average of the opening, highest, lowest and the closing prices of the first three trading days of commencement month of any contract. 3 Bench Mark Price is arrived at by taking the average of the opening, highest, lowest and closing prices of the commencement day of trading of any contract. 4 The official closing price (OCP) is the weighted average price of the trades executed during the last 30 minutes of the trading session. Gross Exposure (GE) means the sum total of net outstanding position. 6 Delivery month relating to international castor oil contracts and all other specifications are common for all commodities traded in Bombay Commodity Exchange. 7 The Bench Mark Price (BMP) is determined by taking the weighted average of the transacted price of all the contracts traded on the first five days of the contract. Source: Bye-Laws of the respective exchanges. Infrastructure: L ack of efficient and modern infrastructural facilities are bottlenecks in the growth of futures markets in India. Though some of the exchanges notably BCE and EICA own huge office premises, they lack necessary institutional infrastructure including warehousing facilities, independent clearing house in addition to modern trading ring. The KCE for example, lacks basic facilities to disseminate the trading information. The exchange has only a couple of small office rooms and a poorly maintained trading ring which seem to have never been utilised. Trading system: Most of the exchanges till date have open outcry system. Of the sample of six exchanges visited, only COFEI has introduced electronic trading system. The FMC has been emphasising the need for automation and on-line trading system for ensuring better transparency and fairness in trading practices. It has been observed that less than 10 per cent of members are only actively trading in these exchanges. Volume of trade has been consistently declining. In some exchanges, e g, KCE, the market is non-existent. An active and vibrant market is necessary for introducing electronic trading system. Steps have to be initiated for creating market and making the exchange financially sound for investing in automation and on-line trading. It has been noticed that after introducing computerised trading in COFEI, trade volume dropped substantially leaving a large financial burden on the exchange. Moreover, majority of trading members in some of the exchanges are not educated enough to handle English language and to operate computer. For example, most of the members of the Chamber of Commerce, Hapur said to have no working knowledge of English without which computerised trading is difficult. Therefore, the priority of FMC and exchanges should be the creation of a better environment for active trading. Computerisation can be second step once a vibrant market is in place. Broking community: Although a large number of members exist in the records of exchanges, most of them shy away from trading due to the fact that the business is not very profitable. It is essential to attract large-scale broking firms who have diversified into stock broking and other related businesses. Regulation including setting standards for brokers, imposing capital adequacy norms, qualification criterion, etc, would become more meaningful when more and more active traders are attracted to the business. Existence of unofficial market: The grey/black market which existed outside the exchange premises during the ban on futures trading for over 30 years still continues to exist even inside the exchanges. It has been widely accepted and admitted by some of the CEOs/secretaries of exchanges that at least 25-30 per cent trade in the exchanges go unreported. The unofficial market operating outside the official exchange is much larger. These unofficial traders find the margin, stamp duty and income tax requirements least encouraging to come to the official contract channels. Multiplicity of exchanges: Currently 20 exchanges are operational of which three are specifically for conducting NTSD contracts and the remaining are in the trade of nearly 30 commodity items. Recently, five new exchanges have been approved and three of them are exclusively for futures contract in sugar. Many of these exchanges are set up as specialised ones for trading in one or a few commodities. The international experience however shows that exchanges are only to provide a platform for trade in many commodities and different forms of contracts. The Chicago Mercantile Exchange started as an agricultural exchange, and now largely relies on trade in financial futures; while the New York Mercantile Exchange, now the world’s largest energy exchange, once traded butter and potatoes. If an exchange provides a well organised trading system for certain commodities, with well-developed procedures, a good intermediary structure, and a sound clearing house, it can build on these strengths to introduce new products and to attract large number of traders which would eventually make the exchange more broad-based and financially sound. Controlled market: Price variability is an essential precondition for futures markets. Any distortion in the market mechanism where free play of supply and demand forces for commodities determines prices will dilute the process of natural variability of prices and potential risk. It is imperative that for a vibrant futures market commodity pricing must be left to market forces, without monopolistic or undue government control. However, in India many of the commodities in which futures trading is allowed have been still protected under ECA 1955. There are also commodity-based specialised government agencies like Cotton Corporation of India, NAFED, Jute Corporation of India, etc, which seek to control supplies of some farm products. Regulation: The government has two important roles to play – an oversight role by which the government disciplining those who try to manipulate the markets for their own benefit, and ensuring the sanctity of contracts; and secondly, an enabling role by which the government providing the necessary legal and regulatory framework for the smooth functioning of the system. The regulatory intervention should be most active at the time of the establishment of the exchange and of contracts. If the contracts are well formulated, and delivery modalities provide effective line of defence against attempts at manipulation, government has to only act as a watchdog intervening only when necessary. The goal of the regulatory agency is not only to regulate but also to inculcate the culture of self-regulation among the participants. This in turn, over a period of time, will give way for more self-regulation supported by the advisory role of state regulation. Promotion of the use of derivatives: With the increasing technological sophistication of trading methods, better transparency and guarantee of trade in futures, more institutional players like mutual funds, foreign institutional investors should be allowed to trade in recognised commodity exchanges. The exchanges under the guidance of the FMC must undertake publicity and mass awareness programmes for the promotion of this segment. For this purpose it would be beneficial for FMC to have a broad based functional alliance with its counterpart in stock markets. Modification of income tax provisions and rationalisation of stamp duty: In the past, speculative and non-speculative businesses were treated equally for taxation so far as right to set off or carry forward of loss was concerned. As a result, it was possible to set off speculative losses against speculative profits. Current tax rule however does not allow for setting off or carrying forward of speculative losses against regular business income. It does not treat losses on futures transaction as a normal business expense. The futures trading industry has been demanding amendments in the tax law for the promotion of futures trading activities. Similarly, the stamp duty provisions on futures trading make the transaction cost higher and moreover, the rates vary from one state to the other. While states like Gujarat, Madhya Pradesh, Kerala do not impose stamp duty on futures trading, some other states like Maharashtra imposes stamp duty on futures trading of certain commodity items. Conclusions Commodity derivatives have a crucial role to play in the price risk management process especially in agriculture dominated economy. Derivatives like forwards, futures, options, swaps, etc, are extensively used in many developed as well as developing countries in the world. However, they have been utilised in a very limited scale in India. The production, supply and distribution of many agricultural commodities are controlled by the government and only forwards and futures trading are permitted in certain commodity items. The present study is an investigation into the present status, growth constraints and developmental policy alternatives for derivative markets in agricultural commodities in India. The study has surveyed the recognised exchanges and their organisational, trading and the regulatory set up for futures trading. In the light of visit to six exchanges the study identified the problems and prospects of the futures markets and outlined various policy alternatives for revival of agricultural commodity futures in India. A review of the nature of institutional and policy level constraints facing this segment calls for more focused and pragmatic approach from government, the regulator and the exchanges for making the agricultural futures markets a vibrant segment for risk management. [This paper is drawn on the report entitled ‘Derivatives and Price Risk Management: A Study of Agricultural Commodity Futures in India’ which is a broader study carried out by the author with financial support from Indian Institute of Management, Lucknow. References Forward Markets Commission, Ministry of Food and Consumer Affairs, Government of India (2000): Forward Trading and Forward Markets Commission. Ministry of Food and Consumer Affairs, Government of India (1999): Futures Trading, Commodity Exchanges and Forward Markets Commission, New Delhi. Sahadevan, K G (2002a): ‘Risk Management in Agricultural Commodity Markets: A Study of Some Selected Commodity Futures’, Working Paper Series: 2002- 07, Indian Institute of Management, Lucknow. (2002b): ‘Derivatives and Risk Management: A Study of Agricultural Commodity Futures in India’, A Research Project Report, Indian Institute of Management, Lucknow. United Nations Conference on Trade and Development (1995): ‘Feasibility Study on a Worldwide Pepper Futures Contract’, (UNCTAD/COM/64). – (1998): ‘A survey of Commodity Risk Management Instruments’, (UNCTAD/COM/15/Rev2). Youssef, Frida (2000): ‘Integrated Report on Commodity Exchanges and Forward Markets Commission’, Report of the World Bank Project for the Improvement of the Commodities Futures Markets in India.

Wal Mart Essay

Wal Mart Essay Wal Mart Essay Case 4: Wal-Mart Stores Inc. June 2012 1. To what extent is Wal-Mart’s performance attributable to industry attractiveness and to what extent to competitive advantage? Wal-Mart can attribute most of its success to competitive advantage rather than industry attractiveness. As they expand their product lineup they bring themselves in to more and more competition with business already established in these fields such as grocers, pharmacies and other medical services. Additionally the market is already very saturated with very few untapped markets. Population growth in the US slowing and urbanization is increasing 1 may lead to their strategy of putting good sized stores into one horse towns running in to trouble as many of these one horse towns slowly cease to exist. This as I already alluded to would leave them in markets where their main competitors are established or establishing. When we compare certain financial indicators we find further evidence that the industry isn’t terribly attractive. The only thing that really sets Wal-Mart apart from its competitor’s numbers wise is its scale. It has gross profit margin is ~6% lower than ei ther target or Dollar General for both the years 2010 and 2011. Comparing other margins reveals similar results with Wal-Mart actually lagging behind their main competitors. Their current ratio is not quite 0.9 for both those years, another key area where Wal-Mart is significantly lagging. What Wal-Mart does have is some incredibly strong competitive advantages. Their immense size has allowed them to create economies of scale and gives them tremendous bargaining power over their suppliers too. As stated in the text, P&G derives 18% of their revenue from Wal-Mart yet their products are only 3% Wal-Marts revenue. Their sales forecasting techniques and EDI extended to all of their vendors make allow them to keep inventory on hand low and product mix finely tuned to the respective markets creating, as close as you can get in their business, just-in-time inventory management. This means that despite having more than 6 times the sales revenue of their nearest competitor they have only 5 times the inventory. Wal-Mart controls its own warehousing and distribution, an outcome of their original business model when they focused mainly on supplying small communities and developing that became a priority for them. It has yielded impressive results as they are a world leader in dist ribution logistics. It’s fair to say that what advantages they have are a result of competitive advantage but to what extent beyond scale are they really performing better than some of their main rivals? 2/3. In which of Wal-Mart’s principal functions/ activities do Wal-Mart’s main competitive advantages lie and what are the distinctive resources and capabilities in each of these functions/activities? Purchasing: Wal-Mart’s tremendous size allows them to lean on any suppliers and make them provide their products at as low a cost as possible. In fact many suppliers rely so heavily on Wal-Mart’s business that they have purchasing agents at the Wal-Mart HQ. This comes with the additional distinct advantage that the purchasing agent is isolated from his own organization possibly allowing the Wal-Mart executives to place additional pressure on them. It also gives Wal-Mart the ability to pressure their suppliers on environmental and labor policy. In short: All of their suppliers dance to their tune, a HUGE advantage. Warehousing and Distribution: In a word: efficient. Their enormous distribution centers rely on a hub and spoke system not dissimilar to the one in effect for airlines. They have optimized this system well enough that even returning trucks are 60% full on backhauls. The use of third party logistics means that they can operate on a five day cycle which is much faster than their competitors. Incremental improvements mean inventory turnover continues to increase and trucks are being packed more tightly. This begs

Free Essays on Legal Brief- Korematsu

1. Korematsu v. United States, (1944); pg. 638, briefed 1/23/96 2. Facts: Shortly after the bombing of Pearl Harbor, the president issued an order allowing the military commanders to exclude persons of Japanese ancestry from areas identified as military areas. 3. Procedural Posture: Korematsu was convicted of violating the exclusionary laws. 4. Issue: Whether classification and exclusion based on Japanese ancestry during the WWII was a violation of equal protection. 5. Holding: No. 6. Majority Reasoning: All legal restrictions that curtail the civil rights of a single racial group are immediately suspect, triggering the â€Å"most rigid scrutiny.† There must be a â€Å"pressing public necessity† for the classification. Here, it was impossible to segregate out the loyal from the disloyal persons, so exclusion of the whole class was justified due to the public dangers involved. The Congress has given the power to the military to make these military based decisions. They are not based on racism. 7. Dissent Reasoning: [Murphy] Contended the the racial classification was not even rationally related to the end of protecting from invasion because it was over inclusive. It is an unreasonable assumption that all persons of Japanese ancestry have the capacity to engage in espionage. The Army had the more effective alternative, which would accord with due process, to hold individual loyalty hearings to determine who was a risk. [Jackson] felt that the decision was even more onerous. A military commander may breach the constitution temporarily every now and then, but for the Supreme Court to rationalize it is to make racism part of the Constitutional doctrine, ready to be used in the future by anyone who can show military expediency.... Free Essays on Legal Brief- Korematsu Free Essays on Legal Brief- Korematsu 1. Korematsu v. United States, (1944); pg. 638, briefed 1/23/96 2. Facts: Shortly after the bombing of Pearl Harbor, the president issued an order allowing the military commanders to exclude persons of Japanese ancestry from areas identified as military areas. 3. Procedural Posture: Korematsu was convicted of violating the exclusionary laws. 4. Issue: Whether classification and exclusion based on Japanese ancestry during the WWII was a violation of equal protection. 5. Holding: No. 6. Majority Reasoning: All legal restrictions that curtail the civil rights of a single racial group are immediately suspect, triggering the â€Å"most rigid scrutiny.† There must be a â€Å"pressing public necessity† for the classification. Here, it was impossible to segregate out the loyal from the disloyal persons, so exclusion of the whole class was justified due to the public dangers involved. The Congress has given the power to the military to make these military based decisions. They are not based on racism. 7. Dissent Reasoning: [Murphy] Contended the the racial classification was not even rationally related to the end of protecting from invasion because it was over inclusive. It is an unreasonable assumption that all persons of Japanese ancestry have the capacity to engage in espionage. The Army had the more effective alternative, which would accord with due process, to hold individual loyalty hearings to determine who was a risk. [Jackson] felt that the decision was even more onerous. A military commander may breach the constitution temporarily every now and then, but for the Supreme Court to rationalize it is to make racism part of the Constitutional doctrine, ready to be used in the future by anyone who can show military expediency....

Business Succession Planning Research Paper Example | Topics and Well Written Essays - 1500 words

Business Succession Planning - Research Paper Example The minority shareholders are those shareholders who are in a position to exercise control over the issues of the company. This situation may lead to a conflict of interests between the majority and minority shareholders. The reasons for such conflicts and the likely effects of those conflicts on corporate governance and the ways to solve such conflicts are discussed in this paper. Structural reasons: The organization structure is so designed that some people may have advantages over others by having access to information and resources so that they have more insider information. Hence, this creates an organization which is not transparent. Also, the majority of shareholders can have control of financial resources and human resources of the company and this may create domination over the minority group. The Institutional allocation of authority can be imbalanced and can be according to the benefit of a few people. The majority of shareholders may have more power in decision making and when the minority does not agree for decisions they may threaten to create a deadlock until the minority group agrees. In the case of proprietary companies(3), the ownership and management are overlapping and there is no distinction between the two. Hence, the company is managed in such a way that is best for the owners which may cause conflict with the minority shareholders. The absence of Information and Factual Complexity: Withhold of valuable information causes mistrust among the minority group and this can ruin the confidence of the minority group on the management. Hence, when there is information is available freely the shareholders are not willing to believe the credibility and this can cause confusion. Breakdown of relations: Personal relations between directors, shareholders and employees can be a cause of conflict, or can at least exacerbate conflicts caused by other factors such as loss of trust, poor communication, stereotypes of gender or class, high levels of emotion, ego clashes, cultural or gender tensions, autocratic or uncooperative behavior.

Marketing essentials Essay Example | Topics and Well Written Essays - 3000 words

Marketing essentials - Essay Example It was originally named as Cadbury Schweppes Overseas Ltd (CSOL) after its merger with Schweppes. The mission of the organisation is to offer best quality products to its customers in order to enhance its market share and brand identity in the markets of the United Kingdom as well as globally (Cadbury, n.d.). Thus, in the year 2007, Cadbury undertook a vital strategic move and shifted from the sector of beverages towards confectionary, which not only augmented its corporate image and but its profit margin as well. It started developing various products such as ‘5 stars’, ‘Perk’, ‘Celebrations’, ‘Temptations’, ‘Diary Milks and Gems’. Along with this, it also has offered milk food beverage as well namely Bournvita. Thus, it can be affirmed that Cadbury is a renowned brand and in terms of financial aspect held annual revenue of ?5, 384 million in the year 2008 (Cadbury, n.d.). The major objective of this assignment is to p repare a marketing plan for Cadbury for the next one to three years. It also highlights the situation of the company and the market in the current scenario. The paper also focuses on the SWOT analysis and competitors’ analysis in order to evaluate the existing position of the organisation, Cadbury in the global market. Moreover, it also includes development of an innovative product idea for the organisation along with financial forecasts for the product for the future three years. Analysis of Company Situation Cadbury is a reputed organisation and it mainly operates in international confectionary market. It is the second leading supplier of chocolate and other sugar confectionaries in the market of the United Kingdom (Cadbury, n.d.). As the company is operating from many years so it has established an apparent market brand image that enhanced its position to a large extent among other leading competitors. Moreover, as the organisation is functioning in global markets, it incl udes high prospects of diversifying the booming products of one market to other emerging markets. This helps to augment the market share and uniqueness of the brand in the varied emerging markets all round the globe (Scribd, n.d.). Although Cadbury functions in more than 60 countries, the maximum turnover is originated from the markets of the United States, South Africa, Ireland and United Kingdom. Along with these, other promising markets namely India, Thailand and China also offer significant impact on the growth and development of the Cadbury brand. The other important factor, which enhanced the individuality of the brand among other apparent players in the market, is heavy concentration and investment over advanced technologies. This helped the organisation to offer various new products at an efficient cost, which enhanced the dependency and receptiveness of the customers (Scribd, n.d.). Thus, it facilitated in improvement of the financial situation of the organisation as well. In addition, the strong administration team with centralised hierarchical structure facilitates Cadbury in maintaining a uniform culture, which amplifies the

An analytical paper of the short story summer by Edith Wharton Essay

An analytical paper of the short story summer by Edith Wharton - Essay Example Then she remembered his sudden pause when he had come close to the desk and had his first look at her. The sight had made him forget what he was going to say; she recalled the change in his face, and jumping up she ran over the bare boards to her washstand, found the matches, lit a candle, and lifted it to the square of looking-glass on the white-washed wall. Her small face, usually so darkly pale, glowed like a rose in the faint orb of light, and under her rumpled hair her eyes seemed deeper and larger than by day. Perhaps after all it was a mistake to wish they were blue. A clumsy band and button fastened her unbleached night-gown about the throat. She undid it, freed her thin shoulders, and saw herself a bride in low-necked satin, walking down an aisle with Lucius Harney. He would kiss her as they left the church....She put down the candle and covered her face with her hands as if to imprison the kiss.† (Edith Wharton, Summer, Ch.III) The vocabulary used in the above passage is powerfully suggestive. It explores the two central themes of the novel – ‘different social classes’ and ‘sexual awakening’. "Its no use trying to be anything in this place," – this line only echoes the sexual repression of her times. The arrival of Lucius Harney had evoked in her, a sense of being ‘the other’. She now, more than ever, began to feel the burden of her improper lineage. It aroused in her – both, a sense of shame and a sense of envy. Despite her lower social ranking, she increasingly seems to become aware of her growing desires. This passage traces the beginning of Charity’s awakening to a new sense of self. The simile, â€Å"glowed like a rose† is provocative in implication. She experiences a growing passion when she â€Å"freed her thin shoulders†. The imagery used in these lines boldly shows how liberating and satisfying awareness of sexuality can be. This physical awakening heralds her

Homework Essay Example | Topics and Well Written Essays - 500 words - 5

Homework - Essay Example Recording the information of the transaction in a journal: After recording data chronologically in the source document, it is transferred to the general journal, which may have other specific journals such as sales and cash journals as suggested by Simplestudies LLC (2012). The journal information is transmitted relevant accounts in the ledger hence posting: The information from the general journal is transferred to ledger where information of all accounts in a business is maintained. Posting in accounting is the process of transmitting the details of financial transaction to the ledger. These transactions are initially found in the business journals. Posting is important in double entry accounts as it transfers the debit and credit aspects of a financial to relevant accounts. A trial balance in accounting refers to a statement, which has a conventional format of its own. It is not necessarily a ledger account. It provides a summary report used to check whether all financial transactions in the accounting system follow the double entry rules as suggested by Simplestudies LLC (2012). The trail balance is the sixth step in the accounting process and it can be prepared at anytime. However, it is mostly prepared before financial statements are prepared. The trial balance as opposed to the financial statement is prepared and applied by the internal accounting team. A trial balance is usually prepared in order to check the accuracy calculations used in accounting process. In accounting a trial balance is also used to ensure that the rules of double entry are followed during the recording of financial transactions done at a specific time. This is usually done by summing all debit balances found in the general ledger. It is also done by ensuring that the sum of debit balances is equal to the sum of all credit balances of the general ledger according to Simplestudies LLC (2012). A trial balance usually provides a list of all the accounts found in the

Law School Personal Statement Example | Topics and Well Written Essays - 500 words

Law School - Personal Statement Example This story of my past has always been the inspiration for my future, and the farther I look backward, the farther forward I am able to see and to proceed. Therefore, it is optimistic vision of life and the ability to look forward that helped me reach a higher status in life, and, today, I own a million dollar business and investments. In spite of my low beginnings, I have always persisted with the goal to become an attorney in life and have been successful to the date as I have completed my B.S. (Criminal Justice) in May 2008 from Virginia University. My unwavering aspiration for the career of an attorney has guided me here and I am definite about the way ahead to the attainment of my ultimate goal and success in life. I strongly believe that my person has been the creation of my past, and whatever I have grown to become or will ever reach to attain in my life is the result of my pat experiences.

Homework Essay Example | Topics and Well Written Essays - 500 words - 5

Homework - Essay Example Recording the information of the transaction in a journal: After recording data chronologically in the source document, it is transferred to the general journal, which may have other specific journals such as sales and cash journals as suggested by Simplestudies LLC (2012). The journal information is transmitted relevant accounts in the ledger hence posting: The information from the general journal is transferred to ledger where information of all accounts in a business is maintained. Posting in accounting is the process of transmitting the details of financial transaction to the ledger. These transactions are initially found in the business journals. Posting is important in double entry accounts as it transfers the debit and credit aspects of a financial to relevant accounts. A trial balance in accounting refers to a statement, which has a conventional format of its own. It is not necessarily a ledger account. It provides a summary report used to check whether all financial transactions in the accounting system follow the double entry rules as suggested by Simplestudies LLC (2012). The trail balance is the sixth step in the accounting process and it can be prepared at anytime. However, it is mostly prepared before financial statements are prepared. The trial balance as opposed to the financial statement is prepared and applied by the internal accounting team. A trial balance is usually prepared in order to check the accuracy calculations used in accounting process. In accounting a trial balance is also used to ensure that the rules of double entry are followed during the recording of financial transactions done at a specific time. This is usually done by summing all debit balances found in the general ledger. It is also done by ensuring that the sum of debit balances is equal to the sum of all credit balances of the general ledger according to Simplestudies LLC (2012). A trial balance usually provides a list of all the accounts found in the

Book Review - Joshua Rest -Land Won (Turabian Format) Essay

Book Review - Joshua Rest -Land Won (Turabian Format) - Essay Example The author of the book is an accomplished theological writer with more than sixty books already published. Before his death, Jensen held a BA degree from Wagner College and worked for thirty years as professor at Bryan College in Tennessee. This paper is a knowledgeable review of his informative commentary on Joshua and the journey to the Promised Land. Summary of the Content Even for a person who is not acquainted with the book of Joshua, Jensen’s commentary provides a good resource for studying the entire text. In this detailed analysis, the author puts the book of Joshua in its chronological setting. He traces the flow of events through four parts that detail the journey of the Israelites. The central character in this commentary is the biblical Joshua. The author portrays Joshua as a revolutionary leader who was handpicked by God. His main duty was to lead the Israelites through the remaining part of the journey into the Promised Land. The author provides brief biographica l information on Joshua to make the reader acquainted with the kind of leader he was. To take the reader through the journey, Jensen avails a map detailing Joshua’s three campaigns at the beginning of the text. ... The third and fourth parts deal with the issues of inheritance and consecration as outlined in the book of Deuteronomy. Written in a plain and nontechnical style, this eloquent commentary contains a map, an outline, clear annotation, and a very useful bibliography on Joshua. Another valuable aspect of the book is the comparison the author makes between the proceedings in the book of Joshua and the main beliefs of Christianity illustrated by the New Testament. Evaluation of the Text Like many other works of Jensen, this particular commentary employs a clear nontechnical style. This style is easy to follow through and comprehend. What captures the attention of the reader is the way Jensen outlines each progress in the journey to the Promised Land. For instance, before embarking on an analysis of Joshua’s leadership, the author provides information on events preceding the coronation of Joshua as the leader. He then follows with an analysis of the events that follow until the Isra elites settle in the Promised Land. Since the sequence of events is easy to follow through the commentary, Jensen’s work makes an informative read. The author certainly achieves the goal of making the reader understand the journey and conquest from his point of view. According to Jansen’s commentary, the book of Joshua gives Rehab (the harlot who saved the spies) a special place in the conquest.1 This view is emphasized in the book of Mathew (1:5) which reserves a prime place for her in the Messianic history. Another positive about the book is the way Joshua is portrayed as an admirable mentor.2 This is certainly a perspective most Christians ought to take when reading the book of Joshua. Most people read the book of Joshua as a chronological account of the