Risk Management And Derivatives Finance Essay - Free Essay Example

Sample details Pages: 5 Words: 1480 Downloads: 6 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Dynamic asset allocation strategies are used by investors to hedge and insure their portfolio and thus, reduce their risk exposure. Each change in the value of assets in the portfolio will require from the investors to rebalance the asset allocation in order to keep the risk exposure constant. (Perold and Sharpe, 1995) In the European market, buying a put that we will exercise in order to make up for any decrease in the portfolio value is the most common method to hedge a portfolio. However, as European options are not available on listed exchanges in the U.S, investors have to find another way to insure their investments. A popular way to do so is to follow a dynamic asset allocation strategy. The most common one are: Buy-and-Hold strategies, Constant-Mix strategies, Constant-proportion portfolio insurance and Option-based portfolio insurance. Though, other authors identify different strategies that are not considered as being dynamic strategies. For exampl e: the Momentum strategies (Miccolis Goodman, 2012) or Stop-loss order strategies (Rubinstein, 1985). In an attempt to have a better understanding of these strategies and to be able to discuss them, the first part of this essay will be focused on the presentation of these strategies, showing their differences and similarities, while the second part will discuss the different factors that have to be taking into account when an investor choices a strategy. Different strategies to insure a portfolio When investing in US listed exchanges, investors cannot use protective put to insure their portfolio and then, they have to employ others techniques that are expected to give the same level of insurance than the traditional method. In their paper, Perold and Sharpe (1995) present and explain the main dynamic strategies that can be use on the US market. Buy-and-Hold strategy is a Do Nothing strategy because after the purchase of an initial mix of bonds and shares, this mix is he ld and does not required any rebalancing, even in the case of a change in the relative values of assets. Conversely, Constant-mix strategies are do something strategies because when the relative values change, the investor has to rebalance the portfolio in order to keep the desired mix constant. This strategy buy stocks as they fall and sell stocks as they rise. On the other hand, while constant mix strategies buy stocks as they fall, Constant-proportion portfolio insurance (CPPI) sells stocks as they fall and buys stocks as they rise. The main characteristic of this strategy is to keep the exposure to equities a constant multiple of the cushion (i.e. Asset- Floor). By maintaining this risk exposure constant, CPPI has a very limited downside risk (Cont Rama, 2009). Like CPPI strategy, Option-based portfolio insurance (OBPI) strategies sell stock as they fall and buy stocks as they rise. OBPI is also characterized by the realization of the same payoff at horizon as a portfo lio composed of bills and call options would do. These dynamic strategies are opposed to other strategies that can insure portfolio too. Miccolis Goodman (2012) present an example of Dynamic Asset Allocation: Momentum-based moving average (MA) strategies could aid to reduce the risk exposure of a portfolio and thus to achieve the goals of rebalancing. They identify different approaches insight these strategies. The first one involves the comparison of the MA value with the index; when the index is above the MA, the investor stays invested in the index; if the index is below the MA, he gets out. The second one is the Moving-Average-Crossover (MAC) strategy in which the investor uses two MAs (Short-term and Long-term) and when the short-term MA is greater than the long-term MA, he invests in assets. Unlike the first two approaches, the last one looks at the trend in the MA. When it is increasing, he has to invest in the asset, otherwise, he does not. In his paper, Rubinstein (1985) opposes dynamic strategies to Stop-loss orders that are one of the simplest techniques to insured a portfolio. The probability of experiencing any losses is zero and the investor does not need to look after the stocks performance every day. However, the market price can be different from the stop price as the value of the portfolio is not completely determined by the level of the SP 50 and then the insurance is not complete. Furthermore, in order to have a perfect portfolio insurance, Stop-loss order need to have a path-dependence equal to zero. Which one is the best? While comparing these different strategies, it appears that the choice of a specific strategy will depend of the degree of fit between a strategys exposure diagram and the investors risk tolerance. (Perold Sharpe, 1995) The type of market can also influence the choice of a strategy and the above strategies do not behave the same way in a volatile and not-so-volatile market. Volatile market and thus re versals will favor strategy that buys stocks as they fall and sells them as they rise (i.e. Constant-mix strategies) because the marginal decision will be good one as investors trade in a way that take advantage of the reversals. Conversely, the CPPI will perform well in a bull market because as its buying stocks as they rise, each marginal purchase will pay off substantially. A Buy-and-Hold strategy will perform well in a flat market while both CPPI and OBPI will poorly perform. Finally, investors are likely to prefer Constant-mix strategies to Buy-and-Hold strategies when the market ends up near its starting point and vice-versa (Perold Sharpe, 1995). When comparing CPPI with the OBPI, Bertrand Prigent (2002) found that there was no dominance between these two strategies when taking the mean-variance approach. They also found that CPPI are simple and flexible strategies to insure a portfolio because all the features can be chosen according to the own investors objective (i.e. Initial cushion, floor and multiple) and that OBPI can be considered as a generalized CPPI strategy. Miccolis Goodman (2012) compare the performance of the Momentum-based moving average (MA) strategies to the Buy-and-Hold one. They found that each of these strategies has different strengths and weaknesses, but no one was perfect. In order to call off these weaknesses, they prove that an investor may possibly use several momentum strategies that could be apply under specific market condition in which they perform well. A test has been realized and the results showed that this use of several momentum strategies at a different time period following the market condition perform similarly to a Buy-and-Hold strategy. However, Miccolis Goodman (2012) also remind that MA does not replace asset allocation and rebalancing but could be useful tool to provide in and out signals in order to improve the performance of a dynamic strategy. The need for resetting the characteristics of a st rategy could also influence the choice of the investor. For example, while for the most of the dynamic strategies the resetting is not mandatory and depends on the investors aim, the OBPI has to reset these parameters at horizon. These strategies can be implemented in perpetuity but if the investors want to reset the parameters it can modify their basic characteristics and a CPPI strategy can easily become a constant-mix strategy by keeping a constant fraction of assets into the CPPI formula. Finally, investors with long time horizons usually prefer strategies that can be implemented in perpetuity (i.e. CPPI, buy-and-hold and constant-mix approaches) (Perold and Sharpe, 1995). Rubinstein (1985) states that when investors are looking to replicate a protective put, they are likely to favor other dynamic strategies than the Stop-loss order because they insure almost perfectly the portfolio while the Stop-loss order strategies suffer from extreme path-dependence. Finally, the choi ce of a strategy will depend of the investors preferences and of the market conditions. Conclusion When investors want to insure their portfolio in order to reduce their risk exposure, different options can be chosen. Stop-loss orders are one of the simplest techniques to insured a portfolio but the investors could also choice to apply one of the traditional dynamic asset allocation strategy: Buy-and-Hold strategies, Constant-Mix strategies, Constant-proportion portfolio insurance and Option-based portfolio insurance. It is not possible to say that one strategy is best for an investor and his choice will depend of his risk profile and of the market characteristics. However, Perold and Sharpe (1995) argue that the only strategy that all investors can apply is the Buy-and-Hold strategy because of its simplicity. An investor that has zero tolerance for risk is likely to apply a Buy-and-Hold strategy or a CPPI strategy while the tolerance for risk with an OBPI strategy will var y according to the investors wealth. Moreover, these strategies do not perform the same way under different market conditions and an investor has to take into account these differences if he wants to have an efficient strategy. The choice of a strategy will then depend of how much risk and/or reward an investor is willing to bear. Don’t waste time! Our writers will create an original "Risk Management And Derivatives Finance Essay" essay for you Create order

The Character Of Willy Loma - Free Essay Example

Sample details Pages: 2 Words: 594 Downloads: 6 Date added: 2019/06/12 Category Literature Essay Level High school Tags: Death Of A Salesman Essay Did you like this example? The character Willy Loman is a shipping clerk who sells his companys products in different cities in the United States. However, author Arthur Miller did not disclose the specific products that Willie sold, perhaps because his role represented everyone in this situation to ensure that more viewers contacted and recognized the role. Willie is involved in a customer-based sales approach. Don’t waste time! Our writers will create an original "The Character Of Willy Loma" essay for you Create order He described this type of sales throughout the script, and he described the power of sales as pretending to sell until you achieved the desired results, looking good, fascinating people and jokes so people would like you. On many occasions, Willy described his experience in sales travel. For example, he told his wife that the trip was bad because people thought he was not flattering. Whats more, when he finally faced the truth of his failure, it ended. He found that people buy people. If one person is not true, people will not buy you. This makes him realize that his work skills are poor and he lacks comprehensive success. Author Arthur performed in New York in the 1940s, and Willy Lomans family lived in Brooklyn. New York at the time was before industrialization and adopted changes such as apartment construction. The play also describes different flashbacks, such as Willies encounter with Biff in Boston, his timeline is unknown. The culture in the background of the drama of the 1940s shows the consistency of American societys group norms for realizing the dream of American life that is richer, better, and richer. In the process of realizing this vision, most people give up social values such as honesty, integrity, and loyalty, but blindly believe in society driven by materialistic nature. Willies approach to customers includes fostering materialism by meeting customers, applying personal charisma, understanding customers, engaging their language, interests, and sales needs. Sales strategies are not largely dependent on education, but on customers. In order to succeed, salesmen like Willy are selling all over the country, can afford all the household appliances they need, and become rich. In addition, the background of the play is a business climate characterized by a golden age of economic growth after World War II. As war bonds mature, productivity increases, capital expands, and well-educated working-class people make the business environment favorable. Therefore, more citizens have the right to bear the various necessities in life, which makes sales an ideal cause In my opinion, Willie decided to work in sales because he thought it was easy to do, and it allowed him to realize the American dream of wealth and success. In addition to his own American dream, he had more of his own children. Willy believes that personality, not hard work and innovation, is the key to success. Time and again, he wants to make sure his boys are well-liked and popular. For example, when his son Biff confesses to making fun of his math teacherrs lisp, Willy is more concerned with how Biffrs classmates react: BIFF: I Crossed my eyes and talked with a lithp. WILLY: (Laughing.) You did? The kids like it? BIFF: They nearly died laughing! Throughout the script, Willie portrays his idea of success as believing that education, hard work, and innovation are not as important as being charismatic, looking good, and being flattering. Willie sees the world as popular and popular with peoples preferences. This concept runs through his entire career, and he believes that it will m ake him loved, trustworthy, and attract customers. At the same time, his beliefs, wealth and wealth are important goals in life, making sales an ideal career pursuit.

The Red Wheelbarrow Analysis Free Essays

The Red Wheelbarrow by William Carlos Williams so much depends upon a red wheel barrow glazed with rain water beside the white chickens. The Red Wheelbarrow Summary Our speaker reflects on how important a certain red wheelbarrow is. This wheelbarrow is wet from a recent rain, and there happen to be white chickens hanging out with the wheelbarrow. We will write a custom essay sample on The Red Wheelbarrow Analysis or any similar topic only for you Order Now The End. The Red Wheelbarrow Summary Line 1 so much depends * Our speaker doesn’t say â€Å"much depends† or â€Å"things depend† or â€Å"I depend,† he says â€Å"so much depends. † That â€Å"so† makes us feel the gravity of the situation. It’s as though our speaker really wants and needs to drive the point home. The verb â€Å"depends† is a strong one too, and one that suggest a that whatever is being depended upon is a pretty big deal. Line 2 upon * â€Å"Upon† – what a pretty preposition. And an important one too. So important, in fact, that it gets its very own line. * Visually (on the page) the first line of the poem (which is way longer than this line) actually looks like it’s resting upon the â€Å"upon† of line two. The first line  depends  upon this second line. Hehe. Line 3 a red wheel * A brand new couplet. We’re dying to know what â€Å"so much† depends upon – d rum roll, please. So much depends upon â€Å"a red wheel. † * A red wheel? We haven’t seen too many red wheels in our days. * The use of the word â€Å"red† really gets our imaginations going, for some reason. We hear the word â€Å"red† all the time, but for some reason, this color really sticks out in this poem. Why do you think that is? Line 4 barrow * Oh! It’s a red â€Å"wheelbarrow,† not a red wheel. Our speaker just chose to split the word â€Å"wheel† and â€Å"barrow† up and didn’t put a dash between them. * By splitting up the two pieces of this word, our speaker makes us think about the fact that a wheelbarrow is composed of two distinct parts: the wheel and the barrow (the part you load stuff into). In some ways, we feel like this couplet looks like a wheelbarrow. * OK, now that we’ve figured out what â€Å"so much† depends upon, we’re dying to know what kinds of things depend upon a red wheelbarrow. Um, dirt could depend upon a wheelbarrow. Six-year-olds who like to be pushed around in wheelbarrows could depend upon a wheelbarrow. A person who likes to do heavy gardening could depend upon a wheelbarrow. * What else could depend upon a wheelbarrow? It might help to do some research on wheelbarrows. Apparently, they’ve been around for almost 2,500 years and were invented in Ancient Greece. Why is it important that this particular wheelbarrow is â€Å"red†? The redness factor seems to play a huge part in just how cool this wheelbarrow is. Line 5 glazed with rain * A new couplet! * The word â€Å"glazed† makes us think of a shiny, glossy, glassy surface. Our wheelbarrow is sparkly from the rain. * Who left this VIP wheelbarrow out in the ra in? Talk about neglect. If we owned a red wheelbarrow upon which much depended, we would take better care of it. * But the idea that it is â€Å"glazed with rain† makes us think that it looks pretty snappy. Line 6 water Again, we have a one-word line, making it seem like the first line of this couplet (line 5)  depends  upon this section line. * Again, our speaker decides to split up the word â€Å"rainwater† into its equal parts: â€Å"rain† and â€Å"water. † Why would he do this? Perhaps to remind us that rain is composed of water? Line 7 beside the white * A new couplet! Here, we’re introduced to yet another snappy preposition: â€Å"beside. † * We’re given some more information about where our red wheelbarrow is and about the things around it. Apparently, our red wheelbarrow is standing beside something white. Talk about one colorful poem. We see the color â€Å"white† all the time in our daily lives, but there’ s something special about this â€Å"white,† just as there is something special about the wheelbarrow’s â€Å"red. † These colors are sticking out in our minds. Line 8 chickens * The wheelbarrow is not alone! Thank heavens. There are chickens to hang out with. * We think it is interesting that the speaker refers to these chickens as â€Å"the white chickens† and not as â€Å"some white chickens† or â€Å"the chickens. † He wants to describe them very carefully and very precisely. These are some special chickens. Again, the second line of this couplet looks (visually) as though it were holding up or supporting the first line, emphasizing the idea that so much depends upon the wheelbarrow. * Are these chickens part of the â€Å"so much† that depends upon the red wheelbarrow? What kind of relationship do you think these chickens have with said wheelbarrow? In a Station of the Metro|   | by  Ezra Pound| | The apparition of these faces in the crowd;Petals on a wet, black bough. | | | | | In a Station of the Metro Summary A man sees a bunch of faces in the subway and thinks they look like flowers on a tree branch. In a Station of the Metro† Summary Line 1 The apparition of these faces in the crowd; * The poet is watching faces appear in a crowded metro (subway) station. * You wouldn’t know it only from reading the poem, but we’re in Paris, which means that everyone looks really nice. * The poet is trying to get us to see things from his perspective, and the word â€Å"apparition† suggests that the faces are becoming visible to him very suddenly and probably disappearing just as fast. They almost look like ghosts. If you’ve ever been in a crowded subway, then you’re probably familiar with this phenomenon. By calling them â€Å"these faces,† he puts us right there in the metro station, as if he were pointing his finger and saying, â€Å"Look! † * The station mus t be pretty full, because there is a â€Å"crowd. † Line 2 Petals on a wet, black bough. * Although he doesn’t say so, the words â€Å"looks like† are implicit at the start of this line. The faces in the crowd â€Å"look like† flower petals on a â€Å"wet, black bough. † * A â€Å"bough† is a big tree branch, and the word, in case you’re wondering, is pronounced â€Å"bow,† as in â€Å"take a bow. † * When is a tree branch wet and black? Probably at night, after the rain. A Paris subway, on the other hand, is always wet and black. * Now, we’re going out on a limb here (pun! ), but he may be seeing the faces reflected in a puddle over black asphalt. Or it could just be a more general sense of wetness. At any rate, the faces in the subway are being compared to flowers on a tree branch. * Another fact to keep in mind is that Japan is famous for its beautiful flowering trees, and considering that this poem is written in Japanese  haiku  style . . . well, heck, he might just be thinking of a Japanese tree. Helen BY  H. D. All Greece hates the still eyes in the white face, the lustre as of olives where she stands, and the white hands. All Greece reviles the wan face when she smiles, hating it deeper still when it grows wan and white, remembering past enchantments and past ills. Greece sees unmoved, God’s daughter, born of love, the beauty of cool feet and slenderest knees, could love indeed the maid, only if she were laid, white ash amid funereal cypresses. Summary: The narrator praises  Helen  for her beauty, which he compares to a ship bringing a â€Å"weary, wayworn wanderer† to his home. Her classic beauty has reminded him of ancient times, and he watches her stand like a statue while holding a stone lamp. Analysis: In â€Å"To Helen,† first published in 1831 and revised in later years, Poe displays an early interest in the theme of female beauty to which his later works often return. He wrote this poem in honor of Jane Stith Stanard, the mother of his childhood friend Rob, although he later wrote a different, longer poem of the same name to Sarah Helen Whitman. Jane Stanard had recently died, and, through his writing, Poe sought to thank her for acting as a second mother to him. The Helen of the 1831 poem embodies a classic beauty and poise, and by using Jane Stanard as the inspiration, Poe celebrated the latter woman as one of his earliest loves. Although Poe never explained why he changed Jane Stanard’s name to Helen in the poem, one possible interpretation is that he intended to connect her to the famed Helen of Troy, who sparked the Trojan War of Homer’s  Iliad  because of her beauty. The remainder of the poem shows a definite classical influence, with Poe’s elevated diction and his direct references to â€Å"the glory that was Greece† and â€Å"the grandeur that was Rome. He also praises Helen’s beauty by describing her â€Å"hyacinth hair† and â€Å"classic face,† details that are associated with ancient standards of the female ideal. If Poe indeed intended for the name â€Å"Helen† to refer to Helen of Troy, then he has given his character high praise indeed. Along with the ambiguity of Hele n’s name, the identity of the narrator is also in question, as he does not have a name or much of a physical presence. He refers to himself as the alliterative â€Å"weary, wayworn wanderer† who has returned home, drawn to Helen’s alluring and comforting hearth. Poe may have intended the narrator to be a direct reflection of himself, who as a boy felt more welcome in Jane Stanard’s house than in other environments. At the same time, he may have sought to depict the narrator as an archetypal man, who like all other men found a nurturing source in a woman’s home. Otherwise, the narrator might be akin to a victorious Greek warrior who, like Homer’s Odysseus, has returned from some struggle overseas. The role of the female in â€Å"To Helen† is multifaceted. In one sense, Helen guards the home hearth in the traditional domestic role of caregiver while displaying a faithful attachment that recalls the idealized love of  Annabel Lee  in Poe’s eponymous 1849 poem. Simultaneously, Helen is the protagonist’s guide and inspiration who brings him back from the lonely seas, and her depiction as â€Å"statue-like† with an â€Å"agate lamp† characterizes her as steadfast and dependable. Finally, there are mentions of Naiads, or ancient Greek water nymphs, and Psyche, the mythological woman who represents the soul and who marries Eros, the god of love. These twin allusions emphasize the concordance between Helen’s outer and inner beauty. As is typical with many of Poe’s poems, the rhythm and rhyme scheme of â€Å"To Helen† is irregular but musical in sound. The poem consists of three stanzas of five lines each, where the end rhyme of the first stanza is ABABB, that of the second is ABABA, and that of the third is ABBAB. Poe uses soothing, positive words and rhythms to create a fitting tone and atmosphere for the poem. His concluding image is that of light, with a â€Å"brilliant window niche† and the agate lamp suggesting the glowing of the â€Å"Holy Land,† for which Helen is the beacon. How to cite The Red Wheelbarrow Analysis, Essay examples

Anime Evolution and Influence in America free essay sample

Chareunsack David Lon English 3 June 6th, 2012 Anime Evolving amp; its Influence in America As a child or young adult growing up in the 1990’s you remember watching shows like Dragon Ball Z, Sailor Moon, or Inuyasha. Then you watch these shows later on in your life you notice that the movement of their mouths doesn’t fall into sync with the English language. If you ever noticed this then you later learn that it is because America adopted them from Japan, where it was first originated. Many cartoons or animations we see on television aren’t all made in America. It makes you wonder how did anime not only influence American culture, but how has it evolved since it was first introduced? What is Manga? What do newspapers, comic books, and graphic novels have in common? They all portray a type of entertainment that people from certain age groups look at. In Japan this type of entertainment is common for people of all ages. The comic strip provided Japanese story-lines with a structure that was readily accessible to the masses. These would eventually contribute to the development of a modern Japanese comic book or â€Å"manga† (). Manga is used in the English-speaking world as a generic term for all comic books and graphic novels that were originally published in Japan (). Many people in America tend to not read a comic or graphic novel once they hit a certain age, in fear of their peers deeming them â€Å"un-cool†. In Japan, comics are highly popular with males and females of all ages, no matter what his or her interests (). When people in the United States think of comics, they think of superheroes and comic strips in newspapers. They don’t think of comics as art or literature (). What is Anime? Have you ever watched Snow White and the Seven Dwarfs? If you have then you know that in 1937 () it became so successful that it influenced that art of Japanese animation, or anime. What is anime, you may ask. Anime is used as a term to refer to all animation forms all over the world (). Japanese anime and American cartoons are completely different from their art forms, to the genre of its story line, or plot, to their type of audience. The audiences for these two types of animations are extremely different. While cartoons are mostly generated toward children, anime has a larger range of their audience. An anime audience ranges from children, to young adults to even businessmen. Cartoons usually have a simple and defined plot and theyre usually about the good guys fighting the bad guys (). Most Anime series, on the other hand, are also about the same good vs. evil but the plots are rarely simple and rarely predictable (). In a handful of anime series there are incidences where the writer makes the line between good and evil so unclear; you’ll be left in wonder as to who is right or and who is wrong. Look at the Wave Country arc of  Naruto  which is now at  Naruto Shippuden. Zabuza, evil as he was, had evoked more sympathetic tears than any of the typical Disney antagonists (). History The History of Manga originates from scrolls dating back to the 12th century, however whether these scrolls are actually manga is still dispute. Anime began at the start of the 20th century, when Japanese filmmakers experimented with the animation techniques that were being explored in the west; the United States, France, Germany, and Russia. Osamu Tezuka Osamu Tezuka, born in 1928-1989, was often known as the â€Å"godfather† of anime and the â€Å"God of Manga†. Osama Tezuka made cartooning and animation into serious art forms in Japan, where he is often compared with  Walt Disney (). Although bullied as a child he had many hobbies, one of which he will be remembered for, for the rest of his life. While he used to read comics he often drew them as well. Even as he attended medical school, he continued his love for drawing manga. Tezuka was still a medical student when he began drawing a serial newspaper strip called  Machan no Nikkicho, Diary of Ma-chan (). From the age of 18, he worked at a furious pace and had dozens of different stories published in newspapers, magazines and books. His work gradually became successful enough to get him noticed by the big publishers in Tokyo and his career was soon off to a real start (). Originally an aspiring animator, Tezuka became a cartoonist after World War II. He was only 20 years old when his first significant work, the novel length, Shintakarajima or â€Å"New Treasure Island†, appered in 1947. In just a few years, he became Japan’s most popular manga artist, eventually earning the tittle â€Å"God of Manga† (). Anime Influencing America Many integrations goes through the process, having to work its way from the ground up and then become a phenomenon in pop culture and anime is one of the best example of this integration. Anime becoming a cultural boom in 1990’s didn’t just happen overnight. At first recognized by the most avid and ravenous of fans -those that had the proper resources- things like anime, Japanese pop and samurai culture were definite underground sensations (). Producing Anime Video game consoles picked up steam and began to infiltrate millions of American households. These consoles, all Japanese made until Microsoft entered the fray in 2001, carried numerous Japanese franchises and storytelling methods that would enthrall children and teenagers across America (). When cable television began airing anime in small chunks here and there, vast amounts of those children who had grown up on Japanese video games immediately attached themselves. By the end of the 1990s, anime was a fringe pop culture niche. Thanks in part to the growth of DVD formatting and internet downloads, it was a full-blown mega-industry only 3 or 4 years later. Today, major anime releases find their way into the American marketplace on one of a dozen different television channels, hundreds of weekly DVD releases and major theatrical releases. Miyazaki won an Oscar in 2002 and Jon Lasseter the head of Pixar and Americas current iteration of Walt Disney has cited the Japanese master as a major influence on Pixars work and named him one of the greatest animators in the world ().