Passenger Satisfaction Survey

Passenger Satisfaction Survey Report and Benchmarking of Performance Standards Hkkjrh; jsy ifjogu izcU/ku laLFkku y[kuA Indian Railways Institute of Transport Management Lucknow July 2012 PASSENGER SATISFACTION SURVEY REPORT AND BENCHMARKING OF PERFORMANCE STANDARDS Dr. KALPANA DUBE Senior Professor (Finance & PPP) Assisted by Kishor Mehta, CMI, IRITM Ankit Tandon, RA, IIM Lucknow July 2012 Indian Railways Institute of Transport Management Lucknow Government of India – Ministry of Railways DisclaimerThe findings contained in the Passenger Satisfaction Survey Report are meant to focus on those Service related areas which require better attention by the Service Providers. Like all other Surveys these represent only an indicative checklist of areas of action and reforms and are by no means exhaustive and fully descriptive. The Survey was restricted to some cities of northern parts of the Country, the observations and findings get limited to that extent and may not apply ipso fact o to all Indian Railway Passenger Services. PPP Knowledge Center, Copyright  ©IRITMMESSAGE FROM THE DIRECTOR PPP knowledge centre was setup at IRITM in 2008. IRITM has a Memorandum of Understanding (MoU) with IIM Lucknow, for writing Research Papers, Case Studies and assimilating research findings into comprehensive periodic reports to be used for improving training inputs. This is the 4th publication of the Centre. The earlier 3 publications :1. Ideas on PPP, Dr. Kalpana Dube, Sr. Prof. (Fin. & PPP), IRITM & Ashish Shukla 2. A Handbook on Project Finance & PPP Terminology, Dr. Kalpana Dube, Sr. Prof. (Fin. & PPP), IRITM & Ankit Tandon 3.Studying the Efficacy of an Airport Modernization Concession Agreement, Dr. Kalpana Dube, Sr. Prof. (Fin. & PPP), IRITM The above publications have been well received not only by the Railways but even outside in the Government, Private Sector and Educational Institutions. Indian Railways is the life line of the nation. It has been instrumental in bringing about a social, cultural and economic revolution in our society and has been a strong uniting and integrating force. Despite being a monopoly in passenger services which are highly subsidized, can it afford to have a dissatisfied customer?To keep the nation moving and the customers happy, our net social service obligations in 2010-11 constituted 17. 57% of total expenditure. Analysis of profitability of Coaching Services showed a loss of 21,324 crores to which net suburban losses in Chennai, Kolkatta and Mumbai contributed Rs. 2364 crores. Other factors have also accelerated the situation which include low second class ordinary fares non suburban commuters and concession in fare extended to various categories. No other transport sector today is offering rates which could compete with the Railways.Despite so much of effort if we are still unable to keep our Customer satisfied there certainly seems to be some communication gap between us and the Customer. In order to asses th at gap IRITM conducted a â€Å"Passenger Satisfaction Survey† on the Northern, North Central and North Eastern Railway, the result of which are summarized in the publication. We hope the results would allow us the Railway personnel to introspect about our â€Å"Customer Demand† and initiate us to give a better service and be more vocal in showing our concern for keeping our Customer Happy. Ashima Singh Director IRITM Lucknow July 2012FOREWORD Passenger Amenities and provision of certain essential as well as desirable features on Railway stations as well as on-board train services continually engage the attention of policy makers in the Railway Board as well as the Field Officers in the Zones and Divisions. The ground level scenario at major stations in the country differs in terms of scope as well as its perceived usefulness by the Railway Passengers. The present survey was designed to get a comprehensive feedback on 37 different service parameters related to passenger conveniences and station facilities.While the objective assessment fields were readily responded to by most passengers the open ended questions did not elicit detailed replies and were perfunctory. The perception gap between Passenger responses and Railway Officers’ responses also highlighted some interesting differences. Illumination at Stations, Signage and Clarity of Train Announcements and Booking Counter experience have got very favorable responses. The deficiency areas which were most reported on were cleanliness on platforms and train toilets, late running of trains as well as unauthorized people in compartments.What must be emphasized here is that none of these areas actually require capital expenditure or investments or repeated policy directives. They just require vigilantism, active supervision and better coordination among the service providers within the various departments. A standard protocol of maintenance, cleanliness and supervision functions needs to be wo rked upon just like the various service related parameters put in operation at the newly developed and modernized airports. (Please refer Annexure). This is a standard checklist of service parameters insisted upon by Delhi International Airport Limited (DIAL).A similar drill would go a long way in ensuring better services on our premium stations especially A1, and A categories. The booklet has been designed in such a manner that passenger responses can be very easily understood through use of colorful graphics and simple data presentation, however the larger question which needs to be addressed is that can we provide station and on board housekeeping services which are game changers and path breaking at the same time? Which reflect a paradigm shift in the way Passenger Services are traditionally being offered by Indian Railways.Perhaps the new Station Development Corporation announced recently may introduce sweeping changes to radically alter the present system of addressing Passeng er Amenities and general conveniences to be made available to the public. The Station Development Corporation has been conceived with the primary objective of augmenting and improving passenger related amenities at stations. All the issues highlighted in the current survey would perhaps get addressed if fast tracking the activities of the Station Development agency can show visible early results.The areas of action being well designed concourses, high end waiting spaces, easy access with disabled friendly options for station premises, congestion free platforms, modern catering facilities etc. The Report has been made more useful by adding edited versions of the comprehensive, pan-India Passenger Service Surveys and Station Cleanliness Surveys conducted by the CAG (Railways) in the last few years. In addition, some additional literature and visuals of world class stations have been added to give a feel of what the future may look like in the days to come for Passenger Amenities and S ervices in Modernized Railway Stations.The Report has also been substantiated with identifying certain important performance benchmarks, using examples from the Aviation Sector. Performance benchmarking and improving customer perception are important milestones in improving station premises and passenger services beyond the conventional targets to the next level. A level which is path breaking and futuristic in its vision and implementation. If the checklist of the 37 parameters used in this study as well as the findings contained in the Audit Reports are read and comprehended by the Railway officers responsible for these functions, the purpose of the survey would be fulfilled.However, it may be useful to reiterate that station maintenance procedures must follow the KISNE principle i. e. Keep It Smart Neat and Efficient. Also while we cannot promise the moon to our customers we must ensure that what we do promise we deliver at all times with 100% efficiency and Zero Failures. These are achievable because we have a long experience of managing stations and procedures are well laid out. What is perhaps needed is a well established drill of adhering to a standard protocol of Station and Train Maintenance Practices and not allow the drill to falter even for a day.A well thought strategy, precision in execution and applying Six Sigma principles for not deviating from the Standard Maintenance and Supervision Protocol would go a long way establishing a New Order which is easy to replicate and easy to follow. Dr. Kalpana Dube Senior Professor IRITM Lucknow July 2012 The more you engage with customers the clearer things become and the easier it is to determine what you should be doing. —-John Russell CONTENTS SN 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 TopicsObjectives of the Passenger Survey Criteria and Methodology Sample Size/Target Respondents Passenger Survey Findings Response by Railway Officers Suggestions for Proactive Action Comparison of General Public & Railway Officers’ Response Perception Gap – Between the General Public as Rail Users and Railway Officers as Rail Users Graphical Representation of the Findings Strategy For Promoting Indian Railways Image And Train Travel Experience – Some Suggestions Benchmarking & Performance Assessment Measures Sub Report One: Sample Service Quality Specifications For Delhi International Airport Ltd. DIAL) Conceptual Background for Railway Stations as Profit & Investment Centers Sub Report Two: CAG Recommendations on Passenger Services in Indian Railways 2008-09 Sub Report Three: CAG Recommendations on Cleanliness and Sanitation on Indian Railways 2007-08 Annexure 1: Citizen Charter on Passenger Services of Indian Railways Annexure 2: Questionnaire Used for the Passenger Satisfaction Survey for IR Performance & Service Standards Page No. 1 1 2 3 5 6 7 9 10 – 25 26 27 28 33 38 40 42 46Passenger Satisfaction Survey Report and Benchmarking of Performance Standards Obj ectives of the Passenger Survey †¢ †¢ To review the facilities provided to the passengers right from ticket booking to the on-board travel experience in the trains To asses if facilities provided in trains were adequate and effectively maintained or not, from the point of Passenger Satisfaction in Station Maintenance Practices. To know the priority areas so that these can be strengthened to optimize passenger satisfaction.To asses the overall travel experience of the passengers in the Indian Railways and their perception of the organization. †¢ †¢ Criteria and Methodology An open ended questionnaire with about 37 parameters was prepared and survey was conducted with the help of three field executives provided by the Indian Institute of Management (IIM) Lucknow. The survey was conducted over a period of ten days through direct contact and filling up of the questionnaire by on-board passengers of all the Travel Classes (AC, 2nd Sleeper).The routes identified for th e survey were mainly on the Northern part of the country Lucknow – New Delhi – Lucknow, Lucknow – Gorakhpur – Lucknow, Lucknow – Varanasi – Lucknow, Lucknow – Allahabad – Lucknow, Lucknow – Kanpur – Lucknow, Lucknow – Moradabad – Lucknow, Lucknow – Firozpur – Lucknow. All the Stations surveyed belonged to A-1 and A category. 1 Passenger Satisfaction Survey Report and Benchmarking of Performance Standards Sample Size/Target Respondents The sample size of the survey was around 700 passengers which included 100 Railway Officers as well.The general passengers age profile was from 15 years to 65 years with maximum response coming in from the young adults/youth i. e. 26-35 years of age. About 28% were female respondents and balance were males. Quality in a service or product is not what you put into it. It is what the client or customer gets out of it. ——–Peter F. Drucker 2 Passenger Satisfaction Survey Report and Benchmarking of Performance Standards Passenger Survey Findings Top Efficiencies 1. Illumination & Signages 2. Availability of Porters (Coolies) at the Station 2.Booking Clerk Competency & Behaviour 3. Clarity of Announcement at Stations Top Deficiencies 1. Cleanliness of Toilets 2. Unauthorized Vendors & Passengers 2. Cleanliness of Platforms 3. Late Running of Trains Top Three Concerns/Priority Areas 1. Punctuality 2. Quality of services 3. Safety Satisfactory Services (Rated as Good) 1. Ambience of Waiting Rooms/Rest Rooms 2. Seating, Water, Trolley facilities at the Platform 3. Pricing of Food 4. Linen/Bedroll Cleanliness 5. Fans and Lights in the Trains 3 Passenger Satisfaction Survey Report and Benchmarking of Performance StandardsOther Findings of the Survey †¢ More than 60% of the people have used IT Enabled services such as Internet Ticketing, Enquiry Kiosks, Touch Screens, etc. 64% of the passengers surveyed confirmed that t hey have seen service improvements in the Railways in the last five years. 31 % of the passengers surveyed are satisfied with the Railway Amenities/ facilities. 35 % of the passengers surveyed think that Railways are giving Value for Money for the services provided. 47 % of the passengers surveyed rated Overall Services provided by the Railways as Good †¢ †¢ †¢ Your most unhappy customers are your greatest source of learning. ——Bill Gates 4 Passenger Satisfaction Survey Report and Benchmarking of Performance Standards Response by Railway Officers Top Efficiencies 1. Booking Clerk Competency & Behaviour 2. Quality & Quantity of Food made available 3. Clarity of Announcement at Stations Top Deficiencies 1. Coach/Toilets occupied by Unauthorized Passenger & Vendors 2. Handling of Theft Cases 3. Cleanliness of Toilets/Coaches Top three Concerns/Priority Areas 1. Quality of Service 2. Punctuality 3. CleanlinessSatisfactory Services (Rated as Good) 1. Water in the Coaches 2. Seating, Water, Trolley facilities at the Platform 3. Cleanliness of Platform 4. Ambience of Waiting Rooms/Rest Rooms 5. Illumination & Signages 5 Passenger Satisfaction Survey Report and Benchmarking of Performance Standards Other Findings of the Survey †¢ More than 70% of the Railway Officers have used IT Enabled services such as internet ticketing, enquiry kiosks, touch screens, etc. 94% of the Railway Officers surveyed confirmed that they have seen service improvements in the Railways in the last five years. 7 % of the Railway Officers surveyed are satisfied with the Railway Amenities/ Facilities. 86 % of the Railway Officers surveyed think that Railways giving Value for Money for the services provided. 85 % of the Railway Officers surveyed rated Overall Services provided by the Railways as Good. †¢ †¢ †¢ †¢ 6 This handbook on Passenger Satisfaction Survey and Benchmarking of Performance Standards has been compiled using the results obtai ned in a 15 day extensive Passenger Survey launched by IRITM PPP Knowledge Centre in association with IIM Lucknow.The survey was in the northern part of the country covering A-1 and A category stations. 700 responses were obtained on 37 different passenger service parameters under nine categories ranging from Point of Sale to On-board Facilities to IT based Passenger Transactions. These have been compiled in easy to read, colourful graphics in this Report. The Report has been made more useful by adding edited versions of the comprehensive, pan-India Passenger Service Surveys and Station Cleanliness Surveys conducted by the CAG (Railways) in the last few years.In addition, some additional literature and visuals of world class stations have been added to give a feel of what the future may look like in the days to come for Passenger Amenities and Services in Modernized Railway Stations. This handbook would be of use not only to IRTS Probationers but also to all frontline Managers and S taff in Indian Railways responsible for Station Maintenance, Sanitation and Passenger Amenities. The handbook can also be accessed on the IRITM website www. iritm. indianrailways. gov. in.A customer is the most important visitor on our premises, he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so. — Mahatma Gandhi Hkkjrh; jsy ifjogu izcU/ku laLFkku y[kuA Indian Railways Institute of Transport Management Lucknow Hardoi By-Pass Road, P. O. Manak Nagar, Lucknow – 226 011 Ph. : 0522-2471961, Fax: 0522-2473929, website: www. iritm. indianrailways. gov. in

Review of “Berger Queen” by Erin Sharp

In her essay, â€Å"Berger Queen†, freelance writer Erin Sharp expounds on her experience working at McDonald’s. Sometimes seen as a less than desirable occupation, Sharp defers and states that this has been the most enjoyable job that she’s had. She opens her essay this way, in paragraph one, in narrative fashion. The rest of the essay is narrative with use of illustration by examples. The paragraphs that show illustration are three, four, five, six, and seven (all of the body paragraphs).Paragraph three uses the example of children passing notes to McDonald’s employees to pass on to Ronald McDonald, proving her point that McDonald’s is a favorite spot for most children. Paragraph four and five support the point that most adults lack respect for McDonald’s employees, going so far as to try to get free food from them, arguing over ten cent increases, and just acting absolutely ridiculous by doing things such as complaining about cold food an hour after it was served and demanding that accommodations be made for an item that was not on the menu (ie†¦lunch item during breakfast).Paragraph six goes on to further explain how adults treat McDonald’s employees with such a lack of respect and just how foolish people can really by. Sharp recalls a woman sitting in the drive thru eating her pancakes and sausage at the drive thru window while several vehicles sat behind her honking during a 90 second or less guarantee day. The essay ends on a brighter note, with the reassurance that all of McDonald’s customers do not treat the employees with a lack of respect; there are groups who look forward to coming to McDonalds every day to have their coffee and social time.

Marketing Plan for New Product Launch

{draw:g} {draw:frame} SUPERIOR UNIVERSITY LAHORE Project Name: Marketing Plan for new product launch Presented To: Sir Kashif* *Mahmood Group Name : The Stallionz Leader Name & Id: Imran Shoukat MBP Members Name & Id: Muhammad Arslan Dilawar MBP Abuzer Shabbir MBP Hassan Raza Muhammad Kashif Munir Company N*ame:* The Glimmers Limited. Company Logo: {draw:frame} Product Name: {draw:frame} * * * *Contents of Marketing Plan Part 1: Executive Summary Part 2: Purpose and Mission Part 3: Situational Analysis Product, Market Analysis Distribution Analysis Competitor Analysis Financial Analysis Other Analysis Part 4: Strategy and Objectives text:list-item} {text:list-item} Part 5: Tactical Programs {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} Part 6: Budgets, Performance Analysis, Implementation Budgeting and Analysis Implementation Part 7: Additional Considerations Executive Summary This report explains the marketing plan for launchin g a fresh Juice named â€Å"Refresh†. This product has been made by the Glimmers Limited. And it is approved from the Ministry of health. In the very beginning of the report we have explained the mission and vision of the Glimmers and then we have further carried out our. It will be introduced in the market with the help of various promotional displays, advertisement and distribution of free samples to the general public and financial institution. This report examines that this product is initially launching in Lahore’s domestic market. The study included both primary and secondary research. The primary study focused on a survey of the competitors and the likings and disliking of people. Through this strategy company can penetrate more into the market and can attract the bulk of customers. For this purpose we have conducted SWOT analysis of the company to see the company’s strengths, weaknesses, opportunities and threats. Then we have explained the purposes, benefits and objectives of our product. Then we have made a marketing mix strategy for our product. We have divided market into different segments and decided to target the kids, youngster mature and old age person. We have also paid special attention to the packaging, color and price of the product. We have decided to place the product in all the markets of Punjab especially in the canteens of colleges and universities. We will promote our product through electronic media, print media, cable, and outdoor sources. We shall also conducted a market survey in future to know the opinion of public about our product and developed our product accordingly. Introduction to the Glimmers Limited Company’s Vision Statement: â€Å"Be the global leader in customer value†. Company’s Mission Statement: â€Å"To set world class standards in the Juice industry through providing a diverse range of high quality Juice products that are prepared in accordance with Islamic principles striving to satisfy consumers tastes and needs and serving the Society† The Glimmer’s Business in Lahore The Glimmers will commence its operation in Lahore from October 2010. The factory facility has been founded on a 20 canal area of land in the Industrial area, Ferozepur Road Lahore. The factory is expected to match the demand of our products. We have ensured the installation of modern, sophisticated and efficient equipment, conforming to the very latest standards of â€Å"Goods Manufacturing Practices†. Introduction to Refresh People started too perished under the scorching heat of summer in our country. They need an energy drink to refresh themselves. Refresh is a fresh juice product. It provides energy and keeps people fresh when they are felt weak or tired from doing a lot of work. It contains vitamins and proteins which is a useful energy source. Vitamins give freshness and proteins are the energy cells that recharge the human body so that they work at their maximum. The students, employees and workers become tired due to the work burden and sunlight which make them feel loose. They need an energy drink that makes them re-energize so they may be able to perform better again and feel refresh. * Slogan*: â€Å"The taste u desire† Ingredients are: {text:list-item} Objectives: To increase 25% market share {text:list-item} {text:list-item} {text:list-item} {text:list-item} Current Market Situation Refresh is a fresh juice product that is going to introduce in the Lahore domestic market. We are focusing to all levels of generation. The kids, youths, mature and olds and overall families The prices of the refresh are moderate, because it is for everyone in the society. Market Demographics: The customer of the Refresh consists of following: Geographic’s: The refresh geographic target area is currently Lahore. We are supplying our product to all area of the Lahore. We have further divided the areas of Lahore into 4 zones. A zone includes Gulberg, M. M Alam road, Defence B zone includes upper Mall, Wahdat road, model town C zone includes lower mall, Allama Iqbal Town, Sabzazar Scheme D zone includes Multan road , Sakeem mor, Allama Iqbal town {draw:frame} b. Demographics: There is an almost equal ratio between male and female and also kids. We are focusing: Kids Youngsters Mature Old age persons Our Competitors The Refresh is currently facing a very competitive environment. Because the competitors of the Refresh are:- Shezan Country Nestle Sunfresh Benz Product Review: The Refresh is available in 250ml size and available in different Flavors like: Mango Apple Pineapple Orange Mix-fruit Competitive Review â€Å"Refresh† Competitors: The competitors of â€Å"Refresh† juice are more than 10. NESTLE & SHEZAN is leading market right now and other companies are far away from it. NESTLE & SHEZAN has loyal customers over the years because it is very old company and customers are aware of its merits & demerits. The company’s first purpose is to compete NESTLE and other juices which have large market share. The main competitors are {draw:frame} & {draw:frame} {draw:frame} Product: Shezan juice is a product by Shezan International Ltd. Qualities of Shezan: High availability Large range of flavors Standardized and attractive packing Large promotion and market coverage Available in Various weights packing. Price: Minimum price of juice is 12 R. s Place: Shezan has a large market share in Pakistan. Sales: Promotion: They promote this product through Electronic media Print Media FM Radio stations Wall Chalking {draw:frame} {draw:frame} Product: Nestle beverages is a product by Nestle International. Qualities of Nestle: Large promotion and market coverage Large range of flavors High availability Price: Minimum price of juice is 20 R. s Promotion: They promote this product through a. Electronic media b. Print Media c. FM Radio stations Place: Nestle has a large market share in Pakistan. All calculations based on non-rounded figures Strategy: Creating shared value global forum Good pricing Better Quality By offering different flavors Intensive distribution Attractive packing SWOT Analysis of Glimmers {draw:frame} Strengths: Updated technology plant Quality product Specialists available for specialized jobs and tasks Hire experienced staff Medical insurance of employees Pakistani made Targeted to low and middle class people. Reasonable price Expiry date above 6 months Weakness New in juice industry Small distribution network Strong competitor No market share Limited experience of customers Opportunities Increase the distribution network. Acquiring the newer technology & techniques. Market is very big & attractive. Take-over of the distributor Increased demand of high quality products due to Lahore being a developed city. Threats Political instability New entrance from the exiting competitors So many competitors Retaining consumers Economic instability. Increases of general sales tax Development of plant Marketing Strategy and Objectives The market strategy is based on positioning of the product in the mind of consumers. Providing high quality Juice to the customers. We will distribute our product on mass level so that we can maximize the profitability. Positioning Strategies: We want to put an image of our product in the consumers mind as compare to competitor’s product. We want to target the high school, college and graduate students and government sectors that have to work hard and need to â€Å"Refresh† them in an instant. *2. * Segmentation: * We made the market segmentation on the following basis: Density Age Gender Income Family size Family life cycle Occupation Education Social classes Life style 3. Targeting: We will target the following customers: Kids Youngsters Mature Old age persons Marketing Mix: Product Price Promotion Place Product Strategy: Develop the long-term relationship with the customers Give val ues to the customers to delighting them Do whatever it takes not to satisfy the customers but retain our customers In order to accomplish this objective, the company has established sales, marketing and support teams. Product variety: Our product would be available in the following flavors:- Mango Apple Orange Grapes Mix-fruit Brand name: The name which we have chosen for our product is *â€Å"Refresh*† {draw:frame} Quality: High quality assurance would be our first priority. This would be ensured by: Implementing high quality standards Total quality management Acquisition of the high quality raw materials Design: â€Å"Refresh† is a sweet, refreshing Juice with an eye catching Tetra hedral pack. *Features*: Here are of the some features of our product: Fresh original fruit juice Provides proteins and minerals Provides vitamins Beneficial for kidneys Excellent in taste Gives freshness Tetra Pack protection packing Packaging: Product units are packed in 6-layered Tetra Pack Brick Aseptic. Sizes: Our product is available in 250 ml pack. Pricing Strategies: Our pricing strategies for the product are for total cost, which include custom services and other expenses. Pricing strategy usually change as the product passes through its life cycle. The price should be set at moderate level in order to attract a large number of buyers and to gain large market share. Amounts are in Pak Rupees. The total per unit price for 250ml packs that we will offer as follows: The cost of fruits Rs. 3 Electricity Rs. 2 Factory Overhead Rs. 3 Miscellaneous Rs. 2 Retailer Margin Rs. 2 Profit Rs. 3 Total Price Rs. 15 In accordance to our strategy we have decided to offer the product to customers at the price of Rs. 15. The price is very much compatible and the offer is substantial enough to attract a large percentage of market in a very quick time. Price and Quality Grid: This grid shows what pricing strategy a firm is perusing:- {draw:rect} {draw:custom-shape} According to this grid we are offering high quality at low price. So we are following penetration strategy. Communication Strategies: Promotion: Actually the promotion is a first step when we are launching a new product, but we make its strategies in last. We want to make a good image in the mind of customers, so that they will buy only our products. Criteria for Promotion: In promotion our main objective is to provide: Awareness Knowledge Liking Preference Purchasing Main Sources of Promotion: Electronic Media Print Media Cabel network Billboards Hoardings Electronic Media: Print Media: Billboards: Hoardings: Cabel Network Benefits: Following are the additional benefits which are offered to the customers to give them Value: Give 5 rappers and get one free juice pack Purchase ten juice packs and get one pack free. If you purchase a small crate of juice then you will able to participate in lucky draw and you can win following prizes: Samsung FM Guru DVD system Rs. 5000 Place: Distributors Review To assure the availability of its product â€Å"Refresh† juice has established effective network of registered dealers. The main target of these juices is Lahore. draw:g} The end consumer would then purchase â€Å"Refresh† from the retailer. The distributor are the most reliable distributors in the region. They enjoy a flawless reputation combined with business relations with numerous retailers even in the rural areas of Lahore and near sides. This has ensured that â€Å"Refresh† will be made available all over Lahore. Budgeting: Controls: This is the main and last element of the marketing planning by using this we can check our product standard by comparing It with our standards if there is any problem arrive in marketing plan the it must be corrected. Three main functions are performed under this element of planning that is: Measuring Comparing Correcting Measuring: We can check our marketing condition through measuring in which different types of tasks may be performed like Surveys Survey *for* *The* Future: In order to learn weather people would like to buy or use our product, we have decided to conduct a market survey in future so that we can assure that people likes our product or not. Comparing: In controlling process we compare our product with our standards Correcting: If any problem occurs then correcting process will take place in which we found that from where the problem will arises. Marketing Organization: Refresh’s chief marketing officer, holds overall responsibility for all of the company’s marketing activities. There are other subordinates with him to help the sales campaigns, trade and consumer sales promotions, and public relations efforts. Action Programs: The â€Å"REFRESH† will be introduced in May. Following are summaries of the action programs we will use during this summer session to achieve our stated objectives. May We will initiate 80,00,000 rupees trade sales promotion campaign to educate dealers and generate excitement for the product launch, and provide sample crates to our selected product reviewers, opinion leaders and celebrities as part of our public relation strategy. June We will start an integrated print/displays/television campaign. The campaign will show how many features the â€Å"REFRESH† have for users to reenergize them. July As the juice advertisement continues, we will add consumer sales promotion by including them to our messages. We will also support or retailer to increase our sales. August _ _We plan to roll out a new advertisement having new views of customers through survey who have used our drink which will help to promote our juice. Story Board References: Philip Kotler* * * * (Principle Of Marketing) Journal of Marketing Journal of Advertisement Websites: www. mickinsey. com www. wikipedia. com *www. Nestle. Com* www. Angrofoods. com www. shezan. com www. marketing. com

Expression in architecture Term Paper Example | Topics and Well Written Essays - 1250 words

Expression in architecture - Term Paper Example Drafting also gets referred to as technical drawing. It involves the process through which a mechanical engineer creates and designs instructions for manufacturing components (David & Madsen, 2011). Drafting can get carried out through a hand drawing scheme or a computer assisted model that will show the required steps to manufacture a component and also the required materials as well as the assembly notes. Through the use of computer added design tools, drafters get to make plans for almost everything from tiny electronic equipment to building constructions. Drafting gets used in almost all branches of engineering, as well as architecture (David & Madsen, 2011). To create construction drawings, architects employ the use of computer aided design and drafting tools. Drafters specialize in the creation of technical drawings and plans that get used by architects to build structures and other objects. As a mechanical engineer who specializes in drafting and design, one can get employed in various industries such as architectural and engineering firms, transportation equipment manufacturing and machinery manufacturing (David & Madsen, 2011). These industries provide a diverse work environment for individuals. This gets to be so since working as an engineer requires one to interact with other professionals such as engineers, surveyors, and or architects. Such a work environment requires for the drafter to have a good interpersonal skill as part and parcel of his or her personal attribute. My aim is to work as an aeronautical engineer where I will specialize in design and drafting. Work as an aeronautical drafter revolves around preparation of engineering drawings, which get to detail plans and specifications for the manufacture of aircrafts and their parts. Getting employed in an aeronautical firm as a drafter, an individual gets to work in an office setting for most periods of time. Such offices need to be comfortable and furnished

Concert Report Essay Example | Topics and Well Written Essays - 750 words - 3

Concert Report - Essay Example One of the most interesting facts of the next composition is that it was composed in 1808, the same year when Beethoven presented his 5th Symphony. There have been many gossips on that subject, though there are some concerns even nowadays. But I absolutely had no time thinking of this when music, pleasant to my ears, was played by talented musicians. The initial G minor nailed me at the chair but, changed with the downward movement, it slowed down into the more peaceful theme which was proceeded by upward movement again. Such radical changes were keeping some tension close to curiosity. That was my favorite part of â€Å"Symphony No.1 g minor† because there was no time to adjust to one direction and you were left as if you were standing at the crossroad. With the help of profound and tense manner, which was emphasized by the use of violins, there was a feeling of a pleasant relief as if you caught the last train that should be caught by everyone, at least, once in life.That co ncert became a fusion of emotional experience intertwining with the intellectual one, making both to feel the music and to understand where its roots are coming from. Usually at once after the performance, my friends start asking me questions if I liked it or not, what impressed me the most or if there was anything new. But they know, if I am keeping silence, it means that it was awesome, and I want to keep those emotions for as long as possible, living through them again in my mind and in my heart. The same happened that Sunday.

Political Perspectives of Marjorie Cohn. Cowboy Republic Essay

Political Perspectives of Marjorie Cohn. Cowboy Republic - Essay Example Given the dominance the United States in world affairs, most justice groups and organizations championing for human rights from around the world, including the United States, became critical about the decision. Despite the United States having signed up to the Rome statute that established the International Criminal Court in 2000, the administration of the then president George Bush unsigned the statute in 2002. Since then, the United States has continued to pressure other countries into signing agreements forbidding them from surrendering citizens of the United States to the International Criminal Court. The United States even threatened to use force, including military force in the event that any of its citizens are held at the court1. Erna Paris attempts to explore why The United States, a country known to be vocal in matters relating to human rights would refuse to protect human rights by not signing up to the Rome Statute that established the International Criminal Court. From a political perspective, the United States had the fear that the International Criminal Court may be used politically by other nations against it. For a long time, the United States continually got involved in dubious schemes around the world. In most cases, it got involved in the propping up of dictators and unpopular regimes. The United States has also been known to train and offer arms to a number of known abusers of human rights. This was mostly done during the period of cold war. The United States justified its actions as being better than if it allowed such countries to adopt communism. The United States was very involved in most regions of the world, citing the domino theory that if a single nation outside its known sphere of influence would fall, others would follow1. Erna Paris grapples with the dilemma in the twenty first century where the rule of international law is challenged by the political power held by the United States. The treaty that set up the International Crimi nal Court categorized as war crimes acts of forced pregnancy, rape, torture and forceful recruitment of child soldiers. The United States objected this inclusion and suggested that the court should only concern itself with genocide cases. The United States, being a large military and economic power, is expected to intervene in catastrophes of humanitarian consequences. This particularly makes citizens and officials of the United States vulnerable to arrests and trials by the International criminal Court in cases of humanitarian crises. The United States, a country known to promote its interests only, knew that the International Criminal Court would expose its political vulnerability to its perceived enemies. Being a country that boasts the best political institutions, the country would become helpless in trying to protect its citizens against the International Criminal Court without appearing to violate the human rights it has always championed for. Marjorie Cohn in the book, Cowboy Republic: Six Ways the Bush Gang has defied the Law, examines six ways of greatest importance that the government of the United States under the presidency of George Bush defied and consequently led to the weakening of the rule of law. The first reason was the establishment of the prison in Guantanamo bay, where suspects of terrorism were held without trial. Despite the president knowing well

On student engagement and interaction in IT-based education Essay

On student engagement and interaction in IT-based education - Essay Example The notion of pedagogy is strikingly complex (Anderson, 2005). Nonetheless, such notion could generally be defined in three ways: as a process of knowledge transfer; as a structure of information transfer; and as an art of teaching The third definition of pedagogy as a theory and praxis is considerably broad. This paper, however, heavily uses the term â€Å"pedagogy† as the process of teaching in which a particular knowledge or information is transmitted from one person or group to another. On the other hand, the question of how Information and Technology, or simply IT, significantly affects classroom learning can be substantially answered through the elements characterized in IT system and their intricate processes relating to the practice of pedagogy. Wellington (1994) gives several factors in which present-day IT system is highly advantageous: (1) stores a huge amount of information; (2) performs complex operations and calculations; (3) processes and displays a set of data in many and varied formats; and (4) facilitates in communicating information. By and large, these factors are indirectly and probably directly connected to the process of classroom teaching since pedagogy involves information, calculation, processes, and communications. Needless to say, IT is only a medium used in transferring a specialized type of data (i.e., body of knowledge) from one or numerous person/s to another. Engaging and Interacting Information and Technology widely facilitate the teacher’s pedagogy in encouraging and stimulating the learner’s engagement and interaction. ... In general, IT as a tool stimulates the students to be engaged, if not engrossed, into learning experience via experimentation or technological manipulation. In the University of Minnesota’s Interactive Classroom, biology students in their freshmen year are able to create ideas or knowledge based from their group interaction using IT application. In the context of conjectural paradigm, learners from this state-of-the-art classroom are able to visually and conceptually construct models, say, of the human body (e.g., cell structure) via the given interface. The biology teacher from said University says that the IT medium is a valuable tool for transforming a textbook-based knowledge into a new and fresh idea (University of Minnesota College of Biological Sciences, 2009). Another category is called revelatory paradigm; this paradigm primarily aims to permit students in discovering ideas or hypotheses in their own way. Unlike the â€Å"anyone anyone† type of classroom pedag ogy, interactive classroom as a method of teaching allows students to explore and discover the field or knowledge of biology in the way that suits their intellectual curiosity. Problem, Solution, and Impression One of the major obstacles of classroom education with respect to IT-based learning is the so-called digital divide. Like the notion of pedagogy, digital divide as a concept is varied. Besides economic in nature, the term â€Å"digital divide† entails the inability to acquire knowledge and learning via computer application due mainly to the adult person’s being â€Å"resistant to change† (Organisation for Economic Co-operation and Development, 2000). Moreover, the

Technology in humanity Speech or Presentation Example | Topics and Well Written Essays - 1500 words

Technology in humanity - Speech or Presentation Example Again this machine is very critical in elaborating evolutions in technology. As per the inventor and his partner outlines the machine does not rely on physics laws but definitely depict careful application of principles accompanying the contemporary propulsion of cars. This piece of machine depicts a real evolution in technology and furthermore, the machine inclines more on the new invention as compared to development of an existing technology. Mentioning on the free energy, it attracts more demand than attention amongst the population globally. Many people are very sensitive concerning electricity since in some cases it constitutes a larger percentage of the budget. Similarly, in industries many power bills constitute largest amount on the expenditure and this is consequentially transferred to the costs of products covered by the consumers. Up to this point now there is a glimpse on the revolution of technology in addition to new inventions and their role to the global economy. The technology selected for evaluation in this report is anticipated to cause an absolute change in electric power and the overall energy throughout the world (Sarmento, 2010). The electrical generator that can provide free electricity (the Machine) Invention and Development This machine has been developed for a span of six years by John Crispin, a businessman and Leu Briks, an electrician. The inventors’ propositions about the machine have been endorsed by Steve Brasington who is an independent engineer. The machine is called s home generator because of its design, functionality and the most applicable place for its use. In this case the most critical feature in the name is â€Å"generator† simply because it is capable of producing power. However, the magnetic electrical generator is more than the information outlined about it. Operation of the Magnetic Electrical Generator The generator is started from a battery ignition or through a manual kick. The generator utilizes a capacitor that is charged by the car battery. According to John, the world’s electrical power is produced through capacitors that are equally charged by the rotating turbines. Once the generator is kick- started it can run for years without stopping. After the capacity is charged, it uses the charge to propel the motor that in turn produces power. According to John and Leu, the generator is capable of producing 24 kilowatts in one day. In simple deduction, it implies that the generator has the capacity to produce one kilowatt per hour, power that is equally sufficient to sustain domestic operations effectively. Principle Involved in Running the Machine According to Steve Brasington, the machine utilizes principles applied in car generation today but in a unique way. John also describes the machine’s operation to be similar to the operation of the car engine and imperatively, the car engine can be replaced by the generator. When Steve Brasington had the opportunity to highlight more about the machine, he explained that the technology on which the machine utilizes is extremely complex and can only be understood as revolutionary. The home generator applies the principles of magnetic attraction and repulsion for its movement. The magnets attracts and repels alternatively on opposite sides causing a harmonize movement of the rotor and this induces electric power beyond the fields. The produced

Using either Peter Pan or Elidor, examine the relationship between the Essay

Using either Peter Pan or Elidor, examine the relationship between the real world and the fantasy world - Essay Example f a kind†, and although readers find themselves somewhat confused in drawing a straight line between reality and fantasy, â€Å"there are kinds of writing in which absolute clarity is not a virtue, when for instance, the author has to evoke a mood, to suggest feelings of which his characters are scarcely aware themselves†, and â€Å"clarity appeals to the intellect, but the emotions are often more deeply stirred by something less sharply comprehended†¦Ã¢â‚¬  (Mincoff, Marco, â€Å"The Study of Style†, p.10, 13). Many distinguished authors, essayists, critics have written about Peter Pan and the â€Å"Neverland† beginning their works with the famous opening sentence â€Å"All children, except one, grow up†. Many of them use a scientific psychological approach and argue about the Freudian Oedipus complex in the main character, which actually falls into â€Å"the third common area of psychological criticism, that is, the analysis of fictional characters† (â€Å"Literature: An Introduction to Fiction, Poetry, and Drama†, Kennedy, X.J. and Gioia, Dana, p.1398). Hereby, I would try to give my own understanding of the novel and leave scientific arguments to more adequate people for such a difficult task. Before I go into some deeper analysis of the novel itself, let me say that I agree with most of the opinions that we (the people) really wish at one time or another to remain children forever and never grow up, because everyone knows growing up brings too many problems along. A minor proof of this can be found in Goceva-Zdravkovska’s short poems about passage of time: It is obvious that in the three years period between these two short poems, the poet had grown up, and didn’t like it. Many people feel this way, and so did Peter Pan. However, his creator J. M Barrie knowing the boy wanted to remain a boy forever created the â€Å"Neverland† for him as well, and Peter never grew up. Speaking of Peter Pan’s creation and J. M. Barrie, it must be said that the author got the

Cultural issues facing Starbucks Essay Example | Topics and Well Written Essays - 500 words

Cultural issues facing Starbucks - Essay Example The socio religious paradigms are important factors that compel the businesses to adapt to new value system of the country of operation. Cyprus is emerging economy and UK is a developed economy that is significant in its increasing changing pattern of multicultural societies with gender equality as major facilitator. The Starbucks outlets in these countries cater to the public in similar manner irrespective of gender, religion, culture or nationality. But in Saudi Arabia, the company’s outlets are divided into separate segment that are designed to cater separately to single males and family units. This is primarily because Saudi Arabia is prominent country of the South East Asia with Islamic culture where single males are not allowed to mix with single women. Thus, separate family unit section in Starbucks allows women to come alone or with friends and family to enjoy coffee. Indeed gender inequality is major difference for changes in format for Starbucks outlet in Saudi Arabi a and other non Islamic countries. Another very important aspect that one experiences is that there are no natives working in Starbucks outlet in Saudi Arabia. In Cyprus and UK, the Starbucks is conscious about diversity and ensures that it employs people from across race, gender, culture and nations.

Prayer in Public Schools Essay Example for Free

Prayer in Public Schools Essay In the essay named Banning Prayer in Public Schools Has Led to Americas Demise by Gary Bergel, the argument is made that by removing prayer and any form of religious contemplation has caused America to plummet from righteous living, prosperity and success within the last quarter century. He states that from around June 25, 1962, when 39 billion students were forbidden to pray in school, Americas moral decline began to accelerate more rapidly. Bergel supports his claim by stating the main reasons behind the U. S. Supreme Court ruling and by issuing some religious tidbits. Even though Bergel lists some facts and names some general ideas, he has an extremely weak argument for the simple reason of the claims and warrants not being supported with factual or personal evidence. The opposing article that I have chosen is titled Argument against School Prayer by Adam Frucci. Frucci first starts out by saying that the article is not intended to bash God, or Christianity. But its purpose is to argue all forms of religion in schools, high school in particular. He states that high school is a place where you begin to separate from your parents and begin to form your own ideas. Keeping this in mind, its the absolute worst place to start forcing values and beliefs on you. He further states that religion will never be non-discriminatory; it can never totally include everyone. There will always be someone who doesnt fit in simply because of a personal belief, and high school is not the place to institute isolationism and criticism on any level outside of an academic level. Again, I like this article but it is somewhat biased because of the writers status of a student in a catholic high school. I get the feeling that he is really bitter about having the catholic beliefs forced on himbut frankly he, or his parents, chose for him to attend the school so he might as well adapt, learn, and become stronger from the situation. Both of the arguments are weak in their own ways and strong in others, and I will attempt to acknowledge most of their faults. Beginning with Bergels argument of the demoralization of the US as a result of the removal of prayer from public schools, I get the since that he is very adamant about getting his views across regardless of analyzing the other side of the story. The whole essay is just the ranting and ravings of a bitter Christian. No support is given to his main thoughts anywhere throughout the paper. In all of his main thoughts, he spouts some statistics and information about different factors that have influenced the topic, however there is no substantial evidence of factual data, but rather only his own opinion. In the first section of the essay, he mentions that there has been a decline in family and morality. How does one evaluate a decline in something so abstract and so subjective? It is clear that from here on out, he is making general assumptions based solely on his beliefs. Bergel goes on to argue that removing prayer from school creates the secular system beyond the power of God. This is a faulty argument for the simple Christian fact that if God is all powerful, how can anything be created beyond Gods power. If anything, removal of prayer will keep children from experiencing God in more than a church setting. He also argues that in doing so, religion in being stripped from the lips and minds of children. Its not restraining a child from totally expressing or acting religiously, its simply preventing prayer to be forced on those who arent believers. Its, in essence, protecting the first amendment rights of those affected and moreover, is a gross exaggeration of the case in hand in addition to the fact that religion cant be totally taken from some one. At a point in the article, he mentions the Engle vs. Vitale Supreme Court case. The whole ruling has nothing to do with keeping kids from learning the religion, its concerned with children who arent believers of Christianity not being forced to participate in something that they dont believe in. Bergel seems to forget that the basic principle of separation of church and state is that the US isnt a professed catholic state therefore it cant just allow the use of one religion over another in any public arena. The Engle vs. Vitale ruling doesnt eliminate the learning of religion, it simply doesnt allow institutions to force the practice of Christianity on kids of other faiths. In general, his rational appears to be based on passionate fervor rather than rational thought and analysis of the Engle vs. Vitale ruling and its surrounding issues. He never pinpoints the issues and examines them within his analysis. He never presents an argument against the opposition but rather rants and raves about what he believes to be right thus stacking the evidence and therefore making it seem as if anything that is in opposition to his beliefs are wrong. In addition, he never mentions anything about his main idea of prayer in school prayer, thus committing a red herring. In Fruccis article concerning the argument for the removal of school prayer, it has both good and bad aspects to it, thusly providing me with the evidence that this is a stronger argument than that of Bergel. Frucci suggests to us that high school is the worst time to impose such a subject for the simple reason that its a time when one is learning about ones self and its not the time to impose new mindsets. Firstly, Religion cant be imposed but rather be encouraged and taughtits up to the educated whether or not to accept the knowledge. Fruccis statement is purely circumstantial because people learn at all times of life and new ideas are presented everyday. Therefore, the teaching of religion in schools can only offer more options rather than changing ones whole mindset. In saying that the setting is inappropriate, Frucci is clearly showing signs of his immaturity. In my own opinion, school is the one of the best places to teach religion. The childs inability to concentrate and focus on the task at had does not warrant removal of school prayer. If thats the case, school in general should be gotten rid of because of the childs inherent nature to be easily distracted and loose concentration. One of Fruccis strongest arguments within the paper is that prayer in schools does create a since of discrimination. However, he takes it to the extreme when saying that the since of community will be ruined because of their nonparticipation. Overall, Fruccis essay is stronger than Brugels in the since of me, the reader, being able to relate to the authors point of view, as well as the amount of support that was given to each point raised. Fruccis essay presents more of an argument, as opposed to Brugels which is more of an outcry of ideas. However both essays are pretty weak in their persuasiveness, but since I have to choose on, Id have to say that Fruccis is the stronger of the two.

Death Cap mushroom Essay Example for Free

Death Cap mushroom Essay If you took RNA polymerase out of the equation? Human cells use RNA polymerase to make a template of a cell’s DNA. It is one of the first steps in the process of eventual protein production. RNA is the enzyme that makes RNA chains using genes found in DNA as a pattern. These specific genetic codes are  expressed on mRNA. When the toxin blocks the action of RNA  polymerase, it by default, stops the production of mRNA in the transcription phase. mRNA, if available, goes on to the translation phase and is read by tRNA. In the reading of the mRNA pattern, tRNA matches the correct amino acid to that specific pattern. The amino acids are read and placed three at a time to match the mRNA codon. From these codon of amino acids, polypeptides are formed with the help of the cell’s ribosome. In turn, these polypeptides form to make proteins. (Hudon-Miller, 2012) What’s the big deal about protein? Proteins, the performers of the cell, cause action at all levels of cellular functioning. At the cellular level protein is needed to reproduce that cell, for cell structure and functioning. Proteins are also used as enzymes to begin other biochemical functions that affect everything from immunity to electrolyte balance. The liver’s function has decreased because the proteins needed to make it’s cells work have been blocked by alpha-amanitin’s ability to stop protein production simply by blocking the function of RNA polymerase. These proteins are so important that without them you die as they destroy first your body’s filters, the liver and the kidneys. (Hudon-Miller, 2012; Santi, et al., 2012) References Luca Santi, Caterina Maggioli, Marianna Mastroroberto, Manuel Tufoni, Lucia Napoli, and Paolo Caraceni, â€Å"Acute liver failure caused by amanita phalloides poisoning.† International Journal of Hepatology, vol. 2012, Article ID 487480, 6 pages, 2012. doi:10.1155/2012/487480 Hudon-Miller, S. (2012) Death cap mushrooms. Retrieved from http://www.youtube.com/watch? v=vXONgeDC31Afeature=youtu.be

Strategies for Password Cracking

Strategies for Password Cracking Abdulmalik Nasser The aim of my project is to give ICT students an idea of the mechanism of cracking password using an using John the ripper. I will also explain the process that the application does to crack a password. Moreover,I will talk about password complexity. how does the complexity increase the cracking time? are there intractable passwords? why? encryptions . Finally , I will explain different types of cracking like brute force, dictionary attack etc. Password cracking is one of the oldest hacking arts. Every system must store passwords somewhere in order to authenticate users. However, in order to protect these passwords from being stolen, they are encrypted. Password cracking is the art of decrypting the passwords in order to recover them. Passwords are the most common means of authentication. Passwords are protected by using one-way cryptographic algorithms that produce a hash of set length. Cryptography can only protect something to the point where the only feasible attack on the encrypted secret is to try and guess it. However, in the case of passwords guessing is easy. Passwords are insecure by nature because they are used for preventing humans from guessing a small secret created by humans. To understand how to get a good understanding about password, we have to understand how they are stored in a system. To store a password in a text form is strongly unacceptable. The same thing when storing the passwords deep in tree of directories that would result in Security through Obscurity and this is also unacceptable. Unix management file system gives an acceptable solution: one of the main distributions of Multicast (the precursor to Unix) stored the file of password in a clear text, but it can be seen by a super user only. This was a improper solution. Also caused a bug to which switching some temporary file and showed the password in text being printed for all the clients when they login. Unix instead of doing that, saves the passwords that were hashed in the password file and not the actual passwords. After that, as the user puts his password , the system has the ability to simply compare the hash of the user password input and it will be compared with the stored hash value [1]. Â   Â   3.1 What a complex password should include. Figure 1 what password combination should include. A strong password should include what is listed in Fig1 in order to be complex password. so, what complex password means that password that include :Upper lower case letters, symbols and numbers getting that password is an extreme power consumption and time wasting for any password cracker [2]. 3.2 Common passwords Figure 2 : the most common passwords According to a study that was accomplished by David Bisson in 2014 . The result shows the most common passwords that are used on the Internet which any cracker would definitely add to his word list. These are typical example of an obvious passwords and easy to crack unfortunately. Easy passwords like what is shown above is very easy to guess it would not even use processor of the cracker it will be in his word list, because these passwords are the most common passwords at all time. So, any password cracker would definitely start cracking the password with guessing such passwords [3]. Figure 3: TOP 100 password hints by category [4] Fig3 shows the result of a study that was done by Troyhunt shows how people choose their password. Guessing a password from the E-mail address: Figure 4: Passwords derived from the email address [4] Figure 5: Number of Password combinations alphanumeric Password [5] The table above shows number of possibilities based on the password length so, any digit of the password is considered as process loop. Each digit can have 64^ the number of digits. Imagine having 13 characters that 64 raised to the power of 13 its an extremely big number of combination that the cracker has to try. Its extreme based on the source of the cracker processor and its also based on time. 3.3 Password complexity and Time Complex password is extremely important for securing your data and information. Most of the people think their password is being hacked or sniffed but the main reason for their password was not complex so, the depending on the assigned password the time will be proportional for example, three digit numeral or alphabet password ahc, 897, or even abc432 would take less than a second for cracking. However,[emailprotected] would take almost a month to be cracked, because the cracking cycle will go checking numbers,alphabet,and symbols and that is why complex password is strongly required [6]. The quicker your PC can hash passwords, the more you can crack in a given certain of time, and that results in a better chance of having of cracked passwords. We used John The Ripper because it is an open source cracking tool which is available on almost all Linux distros. However, it is not usually the best choice. John runs depending upon the CPU, but password hashing can be launched really efficiently depending upon graphics cards. Hashcat is password cracking tool that can run on graphics cards, and on the right hardware can do much better than John. Password cracking computers most of the time have number high-performance GPUs and depend on these for their rapidity . You might not find Hashcat in your distros repositories, but its downloadable on www.hashcat. net (itsfree as in zero cost, but not free as in free software) [7]. 5.1 Cracking tools and applications 5.1.1 Aircrack-ng its a free network hacking tool which include packet sniffer,detector, and various of encryption types cracker. Moreover, it includes Analysis tool that works with WLAN. In addition, this tool can sniff and monitor packets which travels from one person to another. This tool can run in a verity of platforms eg, FreeBSD, OSX, Wubdows, OpenBSD and Linux. Maemo, Zaurus and Android platforms 5.1.2 Crow bar This tool is exclusive on Linux operating systems. It is a free tool that runs a type of password cracking technique called Brute Force. It doesnt save a list of passwords, but try every possible combination of a password. this tool is supporting remote Desktop Protocol with NLA, VNC key authentication, open VPN and SSH private key authentication. 5.1.3 L0phtCrack This is a recovery password auditing app designed by Mudge. It was written to crack windows encrypted passwords. Moreover, it can crack from Primary domain controllers, and network servers or Active Directory. It also allows the user to sniff a password off the wire. This tool can go further and create many methods for guessing a password. It can work only on Microsoft Windows OS. 5.1.4 Medusa It a tool that is designed to be a strong, fast login using brute force. The purpose of this tool is to work with a lot of services remotely at the same time. That means this tool can not only brut force only one host but multiple hosts and passwords at a time. The targeted information can be registered in different methods. So each entry can be single information or file with many entries.Each mod file is for separate mod file . Meaning , this is needed for brute forcing. It is a free tool and Medusa works on Linux and MAC OS X operating systems. 5.1.5 Ophcrack This is a rainbow table that discovers passwords and crack a complex passwords. Moreover, it can crack simple passwords within minutes.In order to get the great advantage of this tool the user has to buy what is so-called rainbow tables to crack complex passwords.This tool is free runs on Linux,Microsoft Windows and MAC operating system. 5.1.6 RainBow Crack This tool is free and runs on Linux,Microsoft Windows, and MAC OS. It is specialized in hash cracking . It is a common brute force cracking tool that tries every combination of plaintext and that results in time consuming for complex passwords. It does not only crack passwords only but store the result in a library called(Rainbow tables).The brute force process takes extremely long time to be done but when using precompute tables it is one of the fastest cracking tool. 5.1.7 SolarWinds This tool works on Windows only .It is also known as FireWall Security Manager. It is the best solution for any company that needs reports and advanced management on their sensitive devices. It can be configured to allow multiple clients to be deployed at Multiple system administrators at once. It also features network discovery router password decryption , SNMP brute force cracker and TCP connection reset application. 5.1.8 THC hydra This tool is free and works on all the operating systems except MAC. This tool allows the user to remotely break into a system and crack a password using different protocols. It crack using fifty protocols. it can crack a network login. it crack the password using the dictionary or brute force attacks. It also features login brute force attack. 5.1.9 Wfuzz This is a free tool that works on Linux Windows and Mac Os. it features the following :multiple injection points capability, recrusion when doing dictionary brute force, Post headers and authentication data brute force, out put to HTML, Proxy and SOCK support. It is usually used to brute force web applications and to find user name and password [8] [9]. 6.1 Overview John the ripper is the best cracking tool ever. John the ripper comes with two versions the popular version is free and there is a pro version which is commercial version. It runs on many platforms like DOS, Unix, BeOS, Win32 and OpenVMS. It is similar to THChydra but the main difference is that Hydra is Online password cracker whereas John the ripper is offline password cracker. It is usually used by hacktivists for penetrating passwords. John the Ripper is a fast password cracker. Period. In fact, you can consider John The Ripper as the definitive password hacking tool. Johnny is a graphical interface that can replace John the ripper to simplify the cracking process instead of using the command line interface. it comes by default with kali Linux. 6.2 John the ripper features Decrypt most guessing hashes using wordlist dictionaries. Ability to specify guessing with certain letters and symbols assigned by the user without using the dictionary. Ability to decrypt more than hash at once. Automatically detect the type of the hash. Rapidly crack passwords. ability to continue guessing process that has started earlier from another device [10] [11]. 6.3 How does John the ripper work? John the ripper cracks the password in four main Modes: 6.3.1 WordList Mode Its the simplest technique that mainly allows the user to assign what is so-called word lists which is a text file includes a password in each line and some password files. Also features the ability of generating other likely password files. 6.3.2 Single Crack Mode this is the mode a user should start cracking with. It assigns the login names. Moreover, it uses GECOS which contain personal information about the user, user home dictionary, also several of rules applied. It also have got the ability to crack other password hashes if guessing is success, it would try the same password for all the hashes because more likely there will be another user with the same password. Usually the administrator should have an access to the a file which contains the users information and passwords. Finally, single mode is much faster because it cracks single password at a time. The user can also use this mode in two different files at the same time [12]. 6.3.3 External Mode To define an external cracking mode you need to create a configuration file section called [List.External:MODE], where MODE is any name that you assign to the mode. The section should contain some functions programmed in a C-like language. John will compile and use the functions if you enable this cracking mode via the command line 6.3.4 Incremental Mode. This is the most effective and powerful cracking mode. It assigns every possible combination of characters for cracking passwords . but it still have a disadvantage which is the cracking process will keep running and will never stop because the tried combination password characters are too large. there for, crackers usually limit the character combinations to lower case so, it doesnt take as much time as if its not set. It uses what is so-calledtrigraph process for example: (aa, ab,ac,etc,), (ba,bc,bd,be,baa,bba etc,) it would not miss any password combination every combination will be tried. Its main advantage is to crack a password in a limited time [11] [10]. 7.1 Brute force attack This technique of password attack That is not actually decrypt any data, but also continue trying a list of password combination eg, words, letters .A simple brute force could be dictionary of all words commn passwords. doing trying cycle until it gets the access to an account. the complex example of brute force is trying every possible combinations of numbers, letters and symbols. However, this technique is the has to be the last option for any cracker because it can take long and the bigger number of encryption (64-32-265)bit the longer time it will take for cracking. 7.2 Dictionary attack This type of password where the cracker can assume the password consisting of string of words, Years, or special number that is chosen from the dictionary. This tool has to be included with what is so-called dictionary input list. The cracker can download a big database including specific vocabularies for example, Sports, movies, and so on. 7.3 Password sniffing This technique called sniff because the the crackers have the ability to sniff the authentication packets that are travelling from the client to the server among the Internet or the local area network. This technique can provide the cracker with hashes or other authentication data necessary for cracking process. There are verity of sniffers tools such as Wireshark,ScoopLM,KerbCrack. The NTLNv2 authentication traffic cannot be sniffed neither by ScoopLM nor Kerbcrack. 7.4 Password capturing Alot of crackers get passwords easily by launching a keyboard sniffing Trojan horse or buying a physical keyboard logging device.According to many reports 82% of the most widely used viruses steal critical data.Most of them sniff passwords. Less than a $100 anyone can get key logging device which is very small and can simply fit between the keyboard and the computers keyboard port. Its also extremely easy to sniff password even from wireless keyboards [13]. To conclude, First, There are verity of applications and tools that you could crack any password. Second, protecting your password requires using strong password. Moreover, there is nothing called uncrackable password its just a matter of time and resources. Finally, the only thing you can do is using strong password and keep changing your password from time to time. [1]M. Tokutomi and S. Martin, Password Cracking. [2]Chit Ko Ko Win, Password management for you, 08:57:17 UTC. [3]D. Bisson, Cracked Ashley Madison passwords consistent with years of poor security, Graham Cluley, 16-Sep-2015. . [4]The science of password selection, Troy Hunt, 17-Jul-2011. [Online]. Available: https://www.troyhunt.com/science-of-password-selection/. [Accessed: 16-Feb-2017]. [5]jsheehan2014, Choosing a Password: Needle in a Haystack, MACED Tech Resource, 15-May-2015. . [6]How Long Would it Take to Crack Your Password? Find Out! Randomize, Random ize. [Online]. Available: http://random-ize.com/how-long-to-hack-pass/. [Accessed: 15-Feb-2017]. [7]B. Evard, JOHN THE RIPPER, linuxvoice, 2015. [Online]. Available: https://www.linuxvoice.com/issues/008/john.pdf. [Accessed: 13-Feb-2017]. [8]Wfuzz, Concise Courses. . [9]10 Most Popular Password Cracking Tools, InfoSec Resources, 27-Dec-2016. [Online]. Available: http://resources.infosecinstitute.com/10-popular-password-cracking-tools/. [Accessed: 27-Feb-2017]. [10]ports, John the Ripper, 18-Feb-2014. [Online]. Available: http://tools.kali.org/password-attacks/john. [Accessed: 19-Feb-2017]. [11]John the Ripper cracking modes, openwall. [Online]. Available: http://www.openwall.com/john/doc/MODES.shtml. [Accessed: 20-Feb-2017]. [12]passwords What exactly is single mode in John the Ripper doing?, Information Security Stack Exchange, 2014. [Online]. Available: https://security.stackexchange.com/questions/37072/what-exactly-is-single-mode-in-john-the-ripper-doing. [Accessed: 20-Feb-2017]. [13]Types of Password Attacks, windowsitpro, 30-Jan-2006. [Online]. Available: http://windowsitpro.com/security/types-password-attacks. [Accessed: 02-Mar-2017].

Effective Use of Pathos :: Writers Writing Composition Essays

Effective Use of Pathos Ellen Goodman and Carol Tavris share styles in writing, audiences, and rhetorical appeals. Both authors write informally and direct their message towards listeners between the age of 30-45 years of age. Goodman and Tavris also use pathos to back up their essays. In Countering the Culture of Sex, Goodman addresses teenage sex and the media. Sex is sold throughout the United States by the television and music. Goodman thinks is the media is going to continue to propagate this material to the youth of the nation, then there needs to be a complete view of sex and the consequences. The images teenagers see today are only positive images of sex. They do not put the bad facts: sexually transmitted diseases, AIDS, and pregnancy, with all the good advertising sex has developed in their minds. Goodman stands for a movement towards correct portrayal of sex in the media. In Groups We Shrink From Loner’s Heroics, Tavris describes the phenomenon of social loafing. Through two incidences, Tavris depicts a society where people in groups allow a murder or beating to take place without intervention. This lack of responsibility stems from the group individual’s belief that someone else is already taking care of the situation. Tavris feels strongly that people who merely stand and watch should also be considered in the wrong. She wants the public to unite and look out for each other’s best interests, to not fall into a diffusion of responsibility. The writing styles in both essays are similar; they are informal. Tavris notes, â€Å"They behave badly because they aren’t paying attention, or they leave it to Harry, or they don’t want to rock the boat†¦Ã¢â‚¬  These modern day phrases make it easier for the reader to understand. These words take Tavris from the status of a Ph. D. in Sociological Psychology to an everyday person trying to make everyone understand her point. Goodman’s informal approach, â€Å"These messages that kids actually listen to ought to be piped into the hearing rooms where Congress is busy concocting a new welfare policy,† make it easier for her to connect with her audience. Welfare is an issue and an area of concern for many adults. The sarcastic, informal tone in Goodman’s words reflects the strength in her own belief and the belief she possess in the everyday citizen.

Choclate Happiness :: Happiness Essays

A smile, a laugh, a quick thought, starry nights, walking in warm rain storms, playing soccer, chocolate; these are all things that make me happy. It may be different for the person sitting next to me in my advanced composition class, but everyone feels it. Happiness is an emotion that is the product of an object or an event. It is something that makes a man in his years of aged wisdom stop, smile, and think of happy times. To me happiness is like a piece of chocolate, it is something that everyone wants, something that we sometimes have to work hard for, and something that is always worth the risk of acting in order to have it.   Ã‚  Ã‚  Ã‚  Ã‚  Everyone wants chocolate. The food of the gods! Chocolate covered cherries, chocolate cake, chocolate mints, white chocolate, dark chocolate, milk chocolate, chocolate, and more chocolate. It is plain to see chocolate is a happiness for me. For those who don’t like chocolate it is the same concept. There is something out there that an individual person just can’t get enough of, just one of those little things that make them enormously happy. It doesn’t matter if that be chocolate, playing football, or holding the hand of a loved one, everyone has something out there that makes him or her happy, and everyone desires to have that feeling. Bear with me for a moment and participate in a little experiment. Think of something that makes you as an individual happier then anything else in the world. Think of the number one thing on that incredibly long list of nouns that describe happiness, and ponder it for a moment. what emotion are you feeling righ t now, and can it be called happiness? Now think of what it would be like to lose that number one item. No how do you feel? The fact is we all want to have that feeling, that emotion of happiness. â€Å"We all live with the objective of being happy, out lives our different and yet the same† Anne Frank. Everyone wants happiness, everyone wants chocolate.   Ã‚  Ã‚  Ã‚  Ã‚  The best chocolate is the homemade kind; the best happiness is the kind that is worked for. The best kind of chocolate is ‘real’ chocolate. Something that I have often been told is that if you are going to do something then it is worth doing the best that you can.

Cantebury Tales - Relation Of Wife Of Bath To Contemporary Women Essay

Hundreds of centuries before the fourteenth century, during it and yet still after, civilization, led by the educated theologians, politicians and whoever else made up the ruling class, women were looked at as the Devil’s ally – a sensual and deceitful creature who was a constant bearer of sin and the cause of most of man’s misfortune. Women then and now may look upon most of these â€Å"devilish† characteristics as desirable, strong-willed and feministic. Chaucer appears to support women and specifically these devilish feminists by creating two very strong-willed and successful women in the Wife of Bath and the old hag in the Wife’s tale. However, through all of the tough outer attributes, on the inside are the same classic and traditional damsels in distress that require a man just like the women of that time always had. Through the original strong qualities of the two women, Chaucer provides a hopeful example and model for women of now and then. Furthermore, by giving these women some stronger, domineering and â€Å"masculine† features Chaucer is terrifically satirizing the gender roles and stereotypes of the time. Along with all of these strong feminist messages also come out anti-feminism ideals about keeping women in a certain role, causing a lengthy and intelligent debate upon what Chaucer really meant. All of these reasons are why it is important to discuss and understand The Wife of Bath’s relation and influence on contemporary women. Chaucer’s main target of his satirical wit and criticism throughout his Canterbury Tales is the Anglo-Saxon church and even though in this tale he focuses more on the gender debate his fiery scorn and contempt of the corrupt church and its disciples is embodied in the Wife’s prologues first three lines: â€Å"Experience, though no authority, Were in this world, were good enough for me, To speak of woe that is in all marriage;† Here Chaucer, through the eyes of a women, points out that there is far too much reliance on authority, meaning the opinions of older and perhaps ancient writers. This sort of authority was responsible for the horrible distortion of woman’s character and place in society and thus Chaucer felt his satirical and sarcastic attack about love in marriage was necessary. Chaucer does it through the Wife of Bath as a medium to reach the hopelessly ignorant women of the time should they hear of the tale. The Wife o... ...When he had leisure and took some vacation, From all his other worldly occupation, To read, within this book, of wicked wives.† His reading of â€Å"wicked wives† and clearly anti-feminist literature is a perfect example of she no longer having control as is her husbands statement: â€Å"A woman fair, save she be chaste also, Is like a ring of gold in a sow's nose.† By this he means a fair and good woman is no more than an ornament or accessory to her man. Clearly if he was being mastered by a woman he would not make statements such as these. The Wife of Bath, Dame Alice, portrays and exhibits numerous qualities of a strong and confident woman and an unknown feminist. Furthermore, these characteristics are what women nowadays point to as Chaucer’s bravery to point out and criticize the unfair treatment of women over the centuries and eras. Unfortunately for them, Chaucer was not quite as brilliant and innovative as contemporary women would like to think. As evident with the hypocrisy showed by the Wife of Bath. In conclusion, The Wife of Bath definitely has some strong positive messages for contemporary women and even yet he deeper shows them what not to do with the hypocrisy of the Wife.

Post-impressionism and Artists

Impressionism was a movement that came about in the late 19th century, most specifically its roots can be traced back the 1874 when a group called the Anonymous Society of Painters, Sculptors, Printmakers, etc. organized an exhibition in Paris. (Samu, 2004). The group led several exhibitions through the 1880’s which brought them into the spot light despite criticism from the conventional art community in France. The movement received its name from one of the movements most now most recognized artists Claude Monet and his piece Impression, Sunrise. It is said that a critic accused the painting of being a sketch or â€Å"impression†. (Samu, 2004) Paintings of this period tended to be outdoor scenes and panoramas. My Grandfather, Lawrence Bird, who was an artist and set designer for Disney modeled his style of art after this period. He was inspired by the artists of this period and their focus on developing their own technique that was more centered around light and its effect on the image. The painting technique included short choppy and broken strokes with vibrant and light colors adding new dimensions to their paintings. Impressionism did an amazing thing it realized the phenomenon of transitoriness. The artist that carries his canvas out into the great outdoors and strives to record every small detail of what his eye can perceive is in very different state of mind than the artist that creates his art in a studio reconstructed from sketches or studies. (Collins, 2012) The social, economic and political climate of this time saw many changes. You had the industrial revolution, which replaced small farms and factories with large industrial complexes. This eventually led people into more urban areas out of the country side. There is the release of the communist manifesto by Marx and Engles and of course Darwin’s release of â€Å"Orgin of the species. † (Werner, 1998) Both changing the way people thought and viewed the world they lived in. Due to the above mentioned industrial revolution there are many new and useful items now readily available to artists, authors, sculptors and so forth. One of these items includes synthetic chemical pigments that often have greater luminosity than previous organic pigments, thus allowing the artists to explore more vibrant styles. The most notable and recognized painters of this time embraced this new medium in which to work with. These artists included: Alfred Sisley, Armand Guillaumin, Berthe Morisot, Camille Pissarro, Claude Monet and Pierre Renoir. As a former sailor in the United States Navy I have an affinity for lighthouses and depictions of the sea. One of my favorite pieces of this time is Claude Monet’s – Mouth of the Seine, done in 1865. This masterpiece, with its lighthouse in the distance depicts the coming and going of the many merchant, fishing and leisure vessels as they navigate the waters of the Seine river as it empties into the English Channel. The image to me, represents a simpler time where sailing was an art that was performed by skill rather than instruments and automation. Impressionism was not brought about by a necessity or tragic change in the social environment, more so out of the fact of new ideas and the availability of these new mediums. This allowed the artists to break free of the â€Å"statu quo† and express their view on the world around them in a fresh, new and vibrant way. Impressionism opened up the art world’s eyes and lead to the influence of many new and creative artists that expounded on not only using the optical impressions but also using the new found artistic style to also expression emotion and themes of greater symbolism. (Voorhies, 2000) These artists â€Å"rebelled† against the so-called limitations of impressionism. These artists felt that impressionism was missing many key elements including emotional, structural, symbolic and spiritual representation. (Misialowski, 2006) Artists of this time frame worked, in most cases, independently and today are most often referred to as Post-Impressionists. The style was defined by vibrant colors, thick paint application, real life subject matter, geometric shapes, and distortion of objects figures for expressive emotional effect. Some of the key artists of this time included: Vincent van Gogh, Paul Cezanne, Paul Gauguin, Georges Seurat. Aristide Maillol and Edouard Vuillard. One of my favorite pieces of this time comes of course from van Gogh. The piece is titled Stra?enarbeiter which means Road Workers. The imagery of this piece is rough and course with distorted views and sharp lines. The shapes of the trees almost draw you away from the what the piece is actually titled after, the road workers who are shown off in the distance and then again on the left edge of the painting. The colors give the image a dark look like it is depicting a late fall day with the workers frantically trying to complete the task before the onset of winter. Again, like the impressionism movement, there was not really a prime reason for this movement other than the artists wants to more freely express themselves through their work. The social climate of the times were changing allowing for these artists to do what they were doing, however; the majority of these post-impressionism artists were â€Å"starving artists† and didn’t gain huge notoriety until after death. The two paintings are similar but completely different. Each of the pieces captures the artists view of the world as they perceive it, the use of color to exact a response from the viewer. Each artist depicted a scene in which people were working against the elements with those that were there for leisure. Where they differ is in the way the artist wants the picture to be viewed. While Monet wanted to show the beauty of the landscape, ships and buildings, van Gogh showed a different view of it being distorted colorless and hopeless. As impressionism gave way to post impressionism, post impressionism paved the way for modern art. Showing many artists that it was okay to express and play with imagery. That art was not locked down to someone else’s definition of what it should be. It was what your perception of it was. It could be the anger of a thousand paint splatters. It could be the combination of print, paint, chalk and pastels. What you thought was art was art. As my Grandfather told me, art is not limited or bound by rules nor is it created in a lab. Art comes from within, from your emotions, from your perceptions. Impressionism unlocked chains of a thousand years of oppression to give us the inspiration for what we have now.

Explain Advantages and Disadvantages of the Process of Amending the Constitution

â€Å"Explain advantages and disadvantages of the process of amending the constitution† {15 marks} There process of amending the US constitution is a long process with lots of checks and balances created by the founding fathers; this was to limit radical and frequent amendments. The first part of the process is proposing an amendment this can be done in two ways, firstly by having two-thirds of both houses of the  United States Congress  agree to the proposal, or by a  national convention  assembled at the request of the  legislatures  of at least two-thirds of the  states agreeing to the proposal.To have a proposed amendment become part of the US constitution the proposed amendment needs to ratified, by having either ? of the states (38 states) agree to ratify the proposal or by holding state ratifying conventions in ? of the states, however this method has only been used once.One advantage of the process of amending the constitution is that it protects the cons titution from frequent change to do with popular opinion, it means that to amend the constitution the amendment has to be sensible and needed at not something to be taken lightly, this can be shown by the fact that the constitution has only been amended 27 times which shows change is possible but not too easy that it changes the historic values that America was built upon, helps control one party controlling power.This is an advantage as it means that when a party comes into power (e. g. republicans) they cannot go and make lots of amendments that benefit them or are in their opinion, as the house of representatives usually as around 50/50 republican democrats proportion and you need 2/3 to have a proposal accepted. The system is democratic as 38/50 must agree which means its fair and reduces the chance of lots of unnecessary changes.One Disadvantage is that the process is time consuming which means that if an amendment is popular with the public e. g. banning guns due to increased gun crime then it may be rejected by republicans which means it a no, however this was the point when the constitution was created, and was purposely made difficult to amend. However some would argue that it’s so hard to amend that it cannot move with the modern times freely.Another disadvantage is that because of the difficulties of amending the constitution it has led to the supreme court assuming the role, this is when the supreme court rules on a case that something is unconstitutional which means that local governments can decide whether to enforce their decisions. In an extreme case if amendment proposals are constantly being rejected then a new constitution may branch off to create these new amendments in a separate constitution wiping out the existing one.In conclusion the process of amending the constitution is a long and tedious one but it makes sure that an amendment has to be supported by a large percentage and something that should be taken seriously, this means that there is not lots of amendments which could jeopardise the historic values of the American constitution, and also make the nation less stable as there is constant change which could confuse people. Lastly the process of amending the constitution is confusing and frustrating but without it America could be changed radically very quickly.

Capital Market Theory Rsm 332 – Week 2

CAPITAL MARKET THEORY RSM 332 – Week 2 Week 1 – Introduction – Financial Accounting (Review) Week 2 – Financial Markets and Net Present Value Week 3 – Present Value Concepts Week 4 – Bond Valuation and Term Structure Theory Week 5 – Valuation of Stocks Week 6 – Risk and Return – Problem Set #1 Due Week 7* – Midterm (Tuesday*) Week 8 – Portfolio Theory Week 9 – Capital Asset Pricing Model Week 10 – Arbitrage Pricing Theory Week 11 – Operation and Efficiency of Capital Markets Week 12 – Course Review – Problem Set #2 Due Contact: otto. [email  protected] utoronto. ca CAPITAL MARKET THEORY RSM 332 – Week 2AGENDA 1. 2. 3. 4. 5. Announcements Financial Markets and Net Present Value Survey Results Optional Material (e. g. Cases, Practical Knowledge, News, etc. ) Suggestions/Practice for Exam(s) Contact: otto. [email  protected] utoronto. ca Extended Office Hours Friday , October 19th (11:00am-3:00pm) †¢ Room 6 – TZ6 (Tanz Neuroscience Bldg – 6 Queen’s Park Crescent West) TBD – Saturday, October 20th †¢ Depends if there is enough demand Thursday, October 25th (5:00pm-7:00pm and 7:00pm-9:00pm) †¢ During regular timeslot †¢ Cover optional material (e. g. cases, practical knowledge, etc. ) Contact: otto. [email  protected] utoronto. ca Exams Midterm (Tuesday, October 23rd – 8:00pm-10:00pm): †¢ EX 100 (Examination Facility – 255 McCaul Street) †¢ 2 Hours Final (TBA): †¢ 2 Hours Preparation: †¢ Problem Sets 1 & 2 †¢ Crib Sheet (Start Early and 1-Sided) †¢ Calculator (Silent) Contact: otto. [email  protected] utoronto. ca Tutorials †¢ Starting – September 19/20/21 †¢ Wednesday (6:00pm-8:00pm) †¢ TZ6 (Tanz Neuroscience Bldg – 6 Queen’s Park Crescent West) †¢ Thursday (11:00am-1:00pm) †¢ RW 110 (Ramsay Wright Laborat ories – 25 Harbord Street) †¢ Friday (5:00pm-7:00pm) †¢ RW 110 (Ramsay Wright Laboratories – 25 Harbord Street) Review: †¢ Midterms and Finals (2008-2011) Xiaofei Zhao (xiaofei. [email  protected] utoronto. ca) †¢ http://332ta. raykan. com †¢ Contact: otto. [email  protected] utoronto. ca Outside of Lecture Office Hours (Drop-In): †¢ Wednesdays: 4:00pm-6:00pm †¢ 105 St. George Street – Rotman (North Building) Room 413 or 417 Office Hours (Other Days/Times): †¢ Extended Hours †¢ By Appointment Contact: otto. [email  protected] utoronto. ca Corporate Finance: What is Going On? 3) Firm’s Financial (5) Investors (4) (Financial Institutions, (1) Individuals, Other Firms) (1) (2) (3) (4) (5) Cash raised from investors by selling financial assets Cash invested in real assets (some are intangible) Cash generated by operations Cash reinvested in the firm (retained earnings) Cash repaid to investors (interest, divi dends, etc. ) Operations (2) Decision Maker Reference: Alex MacKay Financial Markets: What is Going On? Firms (Users of Capital) Initial Public Offering (IPO) Secondary Offerings (SEO) Borrowing (Loans, Bonds)Dividends, $ Repurchases, Interest Payments $ Market Mechanisms or Market Makers (Stock Exchanges, Banks, Investment Funds, †¦) $ $ Firms Issue Stock Certificates and Bonds $ $$$ Invested in Stocks and Bonds Investors (Providers of Capital) Investment Banks help firms make transactions Brokers/Dealers help investors make transactions Reference: Alex MacKay Financial Theory and Corporate Policy Chapter 1 (Copeland, Weston and Shastri) Course Reserve FINANCIAL MARKETS AND NET PRESENT VALUE Consumption Plan and Investment RuleConsider 1 period problems Assumptions: †¢ No uncertainty †¢ One period (two dates), consumptions occur on date 0 and date 1 †¢ A consumer is endowed with initial wealth (Y0) on date 0, and will receive income (Y1) on date 1 †¢ Simple interest rate (r) Date 0 Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca Date 1 Consumption Plan and Investment Rule 4 CASES †¢ Case I: †¢ Case II: No Capital Market, No Production Opportunities With Capital Market, No Production Opportunities †¢ Case III: No Capital Market, With Production Opportunities †¢ Case IV: With Capital Market, With Production OpportunitiesReference: Raymond Kan Contact: otto. [email  protected] utoronto. ca Consumption and Investment without Capital Markets C1 U2 U1 U0 C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment without Capital Markets C1 Slope of the Tangent (-ve) = (Marginal Rate of Substitution) (MRS) MRS = ? C1 ? C0 U1 U(C0, C1) MRS = ? U / ? C0 ?U / ? C1 C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Poli cy) 4 th Edition 2004 Consumption and Investment without Capital MarketsC1 Production/Investment Opportunity Set C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment without Capital Markets C1 Rate at which a dollar of consumption today (C0) is transformed by productive investment into a dollar of consumption (C1) tomorrow. C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment without Capital Markets C1 C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment without Capital Markets C1 Marginal Rate of Transformation (MRT) MRT = ? C1 ? C0 C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment without Capital Markets C1 U1 C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment without Capital Markets C1 Y1 U1 Resource Bundle: (Y0, Y1) Y0Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th C0 Edition 2004 Consumption and Investment without Capital Markets C1 Increase investment until MRT = MRS U1 C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment without Capital Markets C1 U2 U1 C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment without Capital MarketsC1 MRT = MRS U2 U1 C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment without Capital Markets C1 U2 U1 (Increase Investment) Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th C0 Edition 2004 Consumption and Investment with Capital Markets C1 Slope = -(1+r) Borrowing and Lending opportunities (Capital Market Line) (at market interest rate r) C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets C1 Interest plus Principal (Invest/Lending) Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th C0 Edition 2004 Consumption and Investment with Capital Markets C1 Interest plus Princip al (Borrowed Amount – Principal) Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th C0 Edition 2004 Consumption and Investment with Capital Markets C1 U1 C0Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets C1 Y1 U1 Endowment: (Y0, Y1) Y0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th C0 Edition 2004 Consumption and Investment with Capital Markets C1 (Invest) Y1 U1 Y0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th C0 Edition 2004 Consumption and Investment with Capital Markets C1Market rate of return > Subjective Time Preference (1+r) > (1+rtime preference) Y1 U1 Y0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th C0 Edition 2004 Consumption and Investment with Capital Markets C1 U1 (Consume Less) Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th C0 Edition 2004 Consumption and Investment with Capital Markets C1 U1 (Invest) Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th C0Edition 2004 Consumption and Investment with Capital Markets C1 U2 Y1 U1 Y0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th C0 Edition 2004 Consumption and Investment with Capital Markets C1 Market Interest Rate = Subjective Time Preference U2 Y1 U1 Y0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th C0 Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 U1 C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] toronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 C0 Reference: Copeland, W eston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 U3 = (production and capital market) U2 = (with production alone) U1 = (initial endowment) C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption Plan and Investment RuleConsider 1 period problems Assumptions: †¢ No uncertainty †¢ One period (two dates), consumptions occur on date 0 and date 1 †¢ A consumer is endowed with initial wealth (Y0) on date 0, and will receive income (Y1) on date 1 †¢ Simple interest rate (r) Date 0 Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca Date 1 Consumption Plan and Investment Rule 4 CASES †¢ Case I: †¢ Case II: No Capital Market, No Production Opportunities With Capital Market, No Production Opportuni ties †¢ Case III: No Capital Market, With Production Opportunities †¢ Case IV: With Capital Market, With Production Opportunities Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca Consumption Plan and Investment Rule CASE I – No Capital Market, No Production Opportunities †¢ Consumer can consume Y0 on date 0, and Y1 on date 1 Date 0 Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca Date 1 Consumption Plan and Investment Rule CASE II – With Capital Market, No Production Opportunities The set of consumption plans is broadened 1. 2. Consumer can save from Y0, invests in financial assets, and consumes more on date 1 Borrow against Y1, consume more on date 0, pay back loan with interest on date 1 from Y1, and consume less on date 1 Date 0 Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca Date 1 Consumption Plan and Investment Rule CASE II – With Capital Market, No Production Opportunitie s †¢ Denote C0 and C1 as date 0 and date 1 consumption respectively †¢ Constraint on them is: C1 = (Y0 – C0) (1+r) + Y1 Consumption Budget Line (Constraint) C0 + C1 = Y0 + Y1 1+ r 1+ r Y Date 0 Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca Date 1 In general, the consumer will be better off with capital markets Consumption Plan and Investment Rule CASE II – With Capital Market, No Production Opportunities Present Value †¢ For any cash flow, C0, C1, define its present value as: PV = C0 + C1 + r †¢ Budget constraint can be restated as: †¢ The present value of consumption equals the present value of income Date 0 Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca Date 1 Consumption Plan and Investment Rule CASE II – With Capital Market, No Production Opportunities Example: †¢ Assume an investor has a wealth of $1. 5M on date 0, and will have an income of $0. 55M on date 1 †¢ The intere st rate is 10%. †¢ The present value of total income is: $2M = $1. 5M + $0. 55M (1+ 0. 10) Date 0 Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca Date 1 Consumption Plan and Investment RuleCASE III – No Capital Market, With Production Opportunities Physical Investment †¢ Suppose the consumer is also an entrepreneur who identifies a physical investment opportunity †¢ Initial investment requires $0. 5M on date 0 †¢ Return of $0. 85M on date 1 †¢ Should this consumer/investor take this project? †¢ Without a capital market, it depends on her/his utility function Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca Consumption Plan and Investment Rule CASE IV – With Capital Market, With Production Opportunities †¢ By investing $0. 5M in a financial asset, receive $0. 55M in return (i. . 10% return) †¢ By investing $0. 5M in a physical asset, receive $0. 85M in return (i. e. 70% return) †¢ Consumer/Investor should take this project †¢ Interest rate is also called the opportunity cost of capital †¢ i. e. Return foregone by investing in a project rather than in comparable investment alternatives Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca Consumption Plan and Investment Rule CASE IV – With Capital Market, With Production Opportunities Net Present Value (NPV) †¢ Is the project’s net contribution to wealth (i. e. present value minus initial investment) NPV = C0 + C1 1+ r In the above example, the NPV of the project is: NPV = -$0. 5M + $0. 85M = $0. 2727M (1 + 0. 10) Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca Consumption Plan and Investment Rule CASE IV – With Capital Market, With Production Opportunities NPV Rule †¢ States that: †¢ If a project has a positive NPV, we should accept it †¢ If a project has a negative NPV, we should reject it Equivalent Rules †¢ NPV Rule – Accept positive NPV projects †¢ Rate-of-Return Rule – Invest in projects which offer a rate higher than the cost of capital Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca A Separation Theorem You are at a Honda (HMC) shareholders’ meeting †¢ Three shareholders are quite vocal about what the company should do Shareholder #1 – Old Lady †¢ Wants money right now †¢ Wants HMC to invest in sports cars which will yield a quick profit Shareholder #2 – Representative of a Little Boy’s Trust Fund †¢ Wants money a long way in the future †¢ Wants HMC to invest in building electric cars Shareholder #3 – Young Professional †¢ Wants money at some specified time in future (i. e. 10 years) †¢ Wants HMC to build smaller cars because of an expected oil crisis Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca A Separation TheoremWhat do you think Honda manag ers should do? Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca A Separation Theorem What do you think Honda managers should do? MAXIMIZE VALUE Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca A Separation Theorem In general, each shareholder may want: †¢ Maximum wealth †¢ Ability to transfer wealth across time into consumption †¢ Choose risk characteristics of consumption plan Each shareholder, however, can: †¢ Achieve own consumption plan through investments in financial assets †¢ Achieve risk characteristics of plan by investing in more or less risky securitiesEQUITY (CAPITAL GAINS, DIVIDENDS) Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca A Separation Theorem In general, each shareholder may want: †¢ Maximum wealth †¢ Ability to transfer wealth across time into consumption †¢ Choose risk characteristics of consumption plan Each shareholder, however, can: †¢ Achieve own consumption plan through investments in financial assets †¢ Achieve risk characteristics of plan by investing in more or less risky securities EQUITY (CAPITAL GAINS, DIVIDENDS) DEBT (INTEREST) TAX AGENCY COSTS Reference: Raymond Kan Contact: otto. [email  protected] utoronto. ca A Separation Theorem In general, each shareholder may want: †¢ Maximum wealth †¢ Ability to transfer wealth across time into consumption †¢ Choose risk characteristics of consumption plan Each shareholder, however, can: WHAT TYPE OF INCOME DO YOU PREFER? †¢ Achieve own consumption plan through investments in financial assets †¢ Achieve risk characteristics of plan by investing in more or less risky securities EQUITY (CAPITAL GAINS, DIVIDENDS) DEBT (INTEREST) TAX AGENCY COSTS Reference: Raymond Kan Contact: otto. [email  protected] utoronto. caConsumption and Investment with Capital Markets (With Production Set) C1 U3 = (production and capital market) U2 = (with producti on alone) U1 = (initial endowment) C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 Choose the optimal production decision by taking on projects until the marginal rate of return on investment equals the objective market rate) C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 (Choose the optimal consumption pattern by borrowing or lending along the capital market line to equate your subjective time preference with the market rate of return) C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] toronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 (Production/Investment Decision) (Consumption Decision) C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 (Production/Investment Decision) (Consumption Decision) (Fisher Separation Theorem) C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004Consumption and Investment with Capital Markets (With Production Set) C1 (Fisher Separation Theorem) Given perfect and complete capital markets, the production decision is governed solely by an objective market criterion (represented by maximizing attained wealth ) without regard to individuals’ subjective preferences that enter into consumption decisions C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 (Production/Investment Decision) (Consumption Decision) Fisher Separation Theorem) C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 (Production/Investment Decision) (Consumption Decision) (Fisher Separation Theorem) MRS = MRT = 1+r C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Consumption and Investment with Capital Markets (With Production Set) C1 ALL INDIVIDUALS USE THE SAME TIME VALUE OF MONEY (i. e. ame market interest rate) IN MAKING THEIR PRODUCTION/INVESTMENT DECISIONS (Fisher Separation Theorem) MRS = MRT = 1+r C0 Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto. [email  protected] utoronto. ca and Corporate Policy) 4 th Edition 2004 Example Ronald, a finance student, has $400 cash-on-hand and has $1,100 in trust from his grandmother. Ronald will receive the trust funds next year. (Market interest rate is 10% or trust funds worth $1,000 today). Ronald has 2 mutually exclusive investment opportunities (i. e. AAA and BBB rated investments). Contact: otto. [email  protected] utoronto. caReference: Don Brean Example Ronald, a finance student, has $400 cash-on-hand and has $1,100 in trust from his grandmother. Ronald will receive the trust funds next year. (Market interest rate is 10% or trust funds worth $1,000 today). Ronald has 2 mutually exclusive investment opportunities (i. e. AAA and BBB rated investments). 1. 2. 3. Which investment should Ronal d invest in, AAA or BBB? How much should he invest? If Ronald makes investment describe his cash flows? (i. e. Consumption spending divided equally in present value terms) Contact: otto. [email  protected] utoronto. ca Reference: Don Brean ExampleRonald, a finance student, has $400 cash-on-hand and has $1,100 in trust from his grandmother. Ronald will receive the trust funds next year. (Market interest rate is 10% or trust funds worth $1,000 today). Ronald has 2 mutually exclusive investment opportunities (i. e. AAA and BBB rated investments). 1. Which investment should Ronald invest in, AAA or BBB? Contact: otto. [email  protected] utoronto. ca Reference: Don Brean Example Ronald, a finance student, has $400 cash-on-hand and has $1,100 in trust from his grandmother. Ronald will receive the trust funds next year. (Market interest rate is 10% or trust funds worth $1,000 today).Ronald has 2 mutually exclusive investment opportunities (i. e. AAA and BBB rated investments). 1. Which investment should Ronald invest in, AAA or BBB? Contact: otto. [email  protected] utoronto. ca Reference: Don Brean Example Ronald, a finance student, has $400 cash-on-hand and has $1,100 in trust from his grandmother. Ronald will receive the trust funds next year. (Market interest rate is 10% or trust funds worth $1,000 today). Ronald has 2 mutually exclusive investment opportunities (i. e. AAA and BBB rated investments). 1. Which investment should Ronald invest in, AAA or BBB? 2. How much should he invest? Contact: otto. [email  protected] toronto. ca Reference: Don Brean Example Ronald, a finance student, has $400 cash-on-hand and has $1,100 in trust from his grandmother. Ronald will receive the trust funds next year. (Market interest rate is 10% or trust funds worth $1,000 today). Ronald has 2 mutually exclusive investment opportunities (i. e. AAA and BBB rated investments). 3. If Ronald makes investment describe his cash flows? (i. e. Consumption spending divided equally i n present value terms) Contact: otto. [email  protected] utoronto. ca Reference: Don Brean Example Ronald, a finance student, has $400 cash-on-hand and has $1,100 in trust from his grandmother.Ronald will receive the trust funds next year. (Market interest rate is 10% or trust funds worth $1,000 today). Ronald has 2 mutually exclusive investment opportunities (i. e. AAA and BBB rated investments). 3. If Ronald makes investment describe his cash flows? (i. e. Consumption spending divided equally in present value terms) PV of Wealth = PV of Consumption PV (C0) = PV (C1) (i. e. C0 = C1 / (1+r) ) NPVBBB Ronald’s PV of Wealth = $400 + $1,000 + $87. 27 = $1,487. 27 $1,487. 27 = C0 + C1 / (1+r) = C0 + [C0 (1+r)] / (1+r) C0 = $743. 64 and C1 = $818 Contact: otto. [email  protected] utoronto. ca Reference: Don Brean ExampleRonald, a finance student, has $400 cash-on-hand and has $1,100 in trust from his grandmother. Ronald will receive the trust funds next year. (Market interest r ate is 10% or trust funds worth $1,000 today). Ronald has 2 mutually exclusive investment opportunities (i. e. AAA and BBB rated investments). 3. If Ronald makes investment describe his cash flows? (i. e. Consumption spending divided equally in present value terms) C0 = $743. 64 Investment in BBB Cash Flow Requirement (CF0) = ($743. 64 + $300) = $1,043. 64 Borrowing Requirement = CF0 – $400 = $643. 64 Contact: otto. [email  protected] utoronto. ca Reference: Don Brean ExampleRonald, a finance student, has $400 cash-on-hand and has $1,100 in trust from his grandmother. Ronald will receive the trust funds next year. (Market interest rate is 10% or trust funds worth $1,000 today). Ronald has 2 mutually exclusive investment opportunities (i. e. AAA and BBB rated investments). 3. If Ronald makes investment describe his cash flows? (i. e. Consumption spending divided equally in present value terms) C1 = $818 Return from BBB Cash Inflow (next year) = $1,100 + $426 = $1,526 Cash Ou tflow (next year) = $818 + $643. 64 + $64. 36 = $1,526 Loan Repayment Interest on Loan @ 10% Contact: otto. [email  protected] utoronto. a Reference: Don Brean Example Ronald, a finance student, has $400 cash-on-hand and has $1,100 in trust from his grandmother. Ronald will receive the trust funds next year. (Market interest rate is 10% or trust funds worth $1,000 today). Ronald has 2 mutually exclusive investment opportunities (i. e. AAA and BBB rated investments). CONCLUDING THOUGHT Ronald’s optimal investment decision (i. e. $300 in BBB) is independent or separate from his decision as to how he inter-temporally allocates his consumption (i. e. C0 and C1) The independence of those two decisions is referred to as the Fisher Separation Theorem. Contact: otto. [email  protected] utoronto. ca Reference: Don Brean â€Å"GET TO KNOW YOU† SURVEY (Name: Optional) Question #1: †¢ What has occurred in your other courses that you were happy about and would like to be i ncorporated into this course ? †¢ What has occurred in your other courses that you were NOT happy about? Question #2: †¢ Anything specific you would like to learn? What are your learning goals in this course? †¢ Any specific requests from the instructor, TAs, program, other support staff, etc? Question #3: †¢ Are you thinking of pursuing further education in Finance, if not then what do you have in mind? And/or†¦ What job(s) are you interested in?Question #4: †¢ Tell me more about yourself (e. g. goals, program concentration, 2nd or 3rd year, etc†¦ ) Question #5: †¢ Any other comments, requests, suggestions, etc? TAKE ~3 MINUTES INDIVIDUALLY TO FILL OUT SURVEY TAKE ~ 5 MINUTES TO TALK TO 5 CLASSMATES WHOM YOU HAVEN’T MET YET (write down initials) SURVEY RESULTS (SUMMARY) †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ Real world experiences, practica l (real-world) examples, cases†¦ Relevant news (where to find news), Current issues in the market Relate course material to real world Exam tips/techniques Applications and excel models used in the real world Interactive class, games, videos†¦Extended office hours (availability) to address questions Humour Practice questions and solutions; Past exams and solutions Capital markets (high-level overview) Typical jobs in finance, Leading finance organizations Additional tutorial time Stock picking, portfolio allocation/analysis, investment tools/strategies, trading tips Learning topics that can be applied in real life Relate designations/roles to course material and applications Better understanding of financial instruments (e. g. Mortgages, bonds, etc†¦ ) View of finance from other functional areas (e. g. Marketing) 13 Popular Case Studies (Failures) 1. 2. 3. 4. 5. . Barings (Bank) – Operational Risk (Trading Activities – From arbitrageur to speculator) Nat ional Australia Bank – Operational and Market Risks (Currency Trading) Bankgesellschaft Berlin (Bank) – Credit and Operational Risks (Loans to Property Developers) Taisei Fire and Marine Insurance Co – Insurance & Governance Risks (Uninsured exposure – Lack of understanding) Washington Mutual (Bank) – Credit, Regulatory and Governance Risks; Stress and Scenario Testing (Low lending standards and bad quality acquisitions) Fannie Mae and Freddie Mac – Credit, Market, Operational, Regulatory Governance and Moral Risk; Politicians vs.Financial Risk Management (Sub-prime loans) Long-Term Capital Management – LTCM (Hedge Fund) – Market & Model Risks (Short liquid vs. Long Illiquid Investments (e. g.Bonds) – Russia Defaulted) Bankers Trust (Bank) – Operational Risk (Misled clients on derivatives sold to them) Orange County – Market and Interest Rate Risks (Wrong way bet on interest rates – Borrowing Short a nd Investing Long – Interest Rates Increased) Northern Rock (UK Bank) – Portfolio, Capital Funding, Operational and Reputational Risks; Stress and Scenario Testing (Sub-prime mortgages – Bank Run) Metallgesellschaft AG (Energy Group) – Market Risks (Cash Flow Issues from Written Forwards) Worldcom (Telecom) – Operational Risks (Accounting Fraud – Massive cquisitions & Debt) China Aviation Oil (Singapore) – Market and Governance Risks (Misreported oil futures trading losses, Un-hedged open short positions, Oil Prices Increased) Source: PRMIA 7. 8. 9. 10. 11. 12. 13. SURVEY AND BREAK 13 POPULAR CASE STUDIES Midterm 2011 – Q3 Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Part A – Assume that there is no capital market, which investment, A or B, will Jack choose? Justify your answer with calculations (6 marks) Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Part A  œ Assume that there is no capital market, which investment, A or B, will Jack choose?Justify your answer with calculations (6 marks) †¢ If Jack does not invest, his utility is zero †¢ If Jack makes investment A (Utility is ? ) †¢ If Jack makes investment B (Utility is ? ) †¢ Y0 = $500 and Y1 = $0 †¢ Savings = Investment = Y – C Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Part A – Assume that there is no capital market, which investment, A or B, will Jack choose? Justify your answer with calculations (6 marks) †¢ Investment A †¢ UA = (500-244)1/4 (400)1/2 = 80 Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Contact: otto. [email  protected] utoronto. caPart A – Assume that there is no capital market, which investment, A or B, will Jack choose? Justify your answer with calculations (6 marks) †¢ Investment B †¢ UB (I) = (500-I)1/4 (50(I)1/2)1/2 †¢ UB (I) = (5 0)1/2 [(500-I)I]1/4 †¢ Find I* by differentiating UB (I) wrt I (set to zero) †¢ dUB(I) = (50)1/2 (1/4) [(500-I)I]-3/4 (500-2I) dI I* = 250 Derivatives (Review) Reference: Martin J. Osborne http://www. economics. utoronto. ca/osborne/MathTutorial/CLCF. HTM Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Part A – Assume that there is no capital market, which investment, A or B, will Jack choose?Justify your answer with calculations (6 marks) †¢ Investment B †¢ UB (250) = (50)1/2 [(500-I)I]1/4 †¢ UB (250) = 111. 80 †¢ UB > UA Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Part A – Assume that there is no capital market, which investment, A or B, will Jack choose? Justify your answer with calculations (6 marks) †¢ Note: Two methods to calculate I* †¢ 1st method (take derivative of Utility Function) †¢ What’s the 2nd method? Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Alternatively – Investment B Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3Part B – Which investment, A or B will Jack choose? What is his utilitymaximizing investment I* and the optimal consumption plan? (6 marks) (Assume a perfect capital market for borrowing and lending exists and the market interest rate is 20%) Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Part B – Which investment, A or B will Jack choose? What is his utilitymaximizing investment I* and the optimal consumption plan? (6 marks) †¢ Jack will choose the investment with the highest NPV †¢ Calculate NPVA and NPVB Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3Part B – Which investment, A or B will Jack choose? What is his utilitymaximizing investment I* and the optimal consumption plan? (6 marks) †¢ NPVA = -$244 + ($400)/(1+0. 20) = $89. 33 Contact: otto. [email  p rotected] utoronto. ca Midterm 2011 – Q3 Contact: otto. [email  protected] utoronto. ca Part B – Which investment, A or B will Jack choose? What is his utilitymaximizing investment I* and the optimal consumption plan? (6 marks) †¢ To solve for NPVB †¢ Need to find optimal investment (I*) †¢ set MRT = -(1+r) = -1. 20 I* = $434. 03 †¢ MRT = – dF/dI = -25/(I1/2) = -1. 20 †¢ F = 50 ($434. 31/2) = $1041. 67 †¢ NPVB = -$434. 03 + ($1041. 67/1. 20) = $434. 03 Midterm 2011 – Q3 Part B – Which investment, A or B will Jack choose? What is his utilitymaximizing investment I* and the optimal consumption plan? (6 marks) †¢ To solve for optimal consumption plan (i. e. C0*and C1*) Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Part B – Which investment, A or B will Jack choose? What is his utilitymaximizing investment I* and the optimal consumption plan? (6 marks) †¢ To solve for optimal consumption plan (i. e. C0*and C1*) †¢ Total Wealth = $500 + $434. 03 = $934. 3 (set equal to C0 + C1/(1+r)) †¢ PV Wealth = PV Consumption †¢ C1 = 1120. 84 – 1. 2C0 Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Contact: otto. [email  protected] utoronto. ca Part B – Which investment, A or B will Jack choose? What is his utilitymaximizing investment I* and the optimal consumption plan? (6 marks) †¢ To solve for optimal consumption plan (i. e. C0*and C1*) †¢ Total Wealth = $500 + $434. 03 = $934. 03 (set equal to C0 + C1/(1+r)) †¢ U(C0, C1) = C01/4 (1120. 84 – 1. 2C0 )1/2 †¢ dU/dC0 = (1/4)C0-3/4 (1120. 84 – 1. 2C0)1/2 – 1. 2 x (1/2)C01/4(1120. 4 – 1. 2C0)-1/2 †¢ Setting it equal to zero: 1120. 84 – 1. 2C0 = 2. 4C0 C0* = $311. 34 †¢ C1* = 1120. 84 – 1. 2C0 = $747. 22 Midterm 2011 – Q3 Part B – Which investment, A or B will Jack choose? What is his utilitymaximizing investment I* and the optimal consumption plan? (6 marks) (Assume a perfect capital market for borrowing and lending exists and the market interest rate is 20%) †¢ Alternatively: To solve for optimal consumption plan (i. e. C0*and C1*) Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Part B – Which investment, A or B will Jack choose?What is his utilitymaximizing investment I* and the optimal consumption plan? (6 marks) †¢ Alternatively: To solve for optimal consumption plan (i. e. C0*and C1*) †¢ MRS = – (1+r), which leads to †¢ – (C1/2C0) = 1. 2 C1 = 2. 4 C0 †¢ Budget constraint: C0 + C1 / (1+r) = Total Wealth = $934. 03 C1 = 1120. 84 – 1. 2C0 C0* = $311. 34 C1* = $747. 22 Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Part C – Jack can hire a worker to supervise one investment for him. As a result, he can now invest in both production opportunities if he wants.If he hires a worker, he has to pay wages in equal instalments (i. e. Same wage today and next period). What maximum wage per period would Jack be willing to pay? (4 marks) Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Part C – Jack can hire a worker to supervise one investment for him. As a result, he can now invest in both production opportunities if he wants. If he hires a worker, he has to pay wages in equal instalments (i. e. Same wage today and next period). What maximum wage per period would Jack be willing to pay? (4 marks) †¢ NPVA = $89. 33 = W + (W/1. 20) †¢ W = $48. 3 (i. e. Maximum wage per period) Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Part D – Jill earns an income of $250 today and $250 next period but has no access to any production opportunities. She can, however spend some money today to purchase investment opportunity B. Her utility function is: U(C0, C1) = C0 + 2C1 + min(C0, C1) What is the highest price that Jill is willing to pay? (4 marks) Contact: otto. [email  protected] utoronto. ca Midterm 2011 – Q3 Part D – Jill earns an income of $250 today and $250 next period but has no access to any production opportunities.She can, however spend some money today to purchase investment opportunity B. Her utility function is: U(C0, C1) = C0 + 2C1 + min(C0, C1) What is the highest price that Jill is willing to pay? (4 marks) †¢ With a perfect capital market, the Fisher Separation Theorem applies †¢ So the maximum amount she will pay is $434. 03 (i. e. NPVB) Contact: otto. [email  protected] utoronto. ca FINANCIAL MARKETS AND NET PRESENT VALUE (TO SUCCEED – PRACTICE, PRACTICE, PRACTICE) Week 3 – Quick Review (Self-Evaluation) of Week 2 â€Å"GET TO KNOW YOU† SURVEY (Name: Optional)Question #1: †¢ What has occurred in your other courses that you were happy about and would like to be incorporated int o this course ? †¢ What has occurred in your other courses that you were NOT happy about? Question #2: †¢ Anything specific you would like to learn? What are your learning goals in this course? †¢ Any specific requests from the instructor, TAs, program, other support staff, etc? Question #3: †¢ Are you thinking of pursuing further education in Finance, if not then what do you have in mind? And/or†¦ What job(s) are you interested in? Question #4: †¢ Tell me more about yourself (e. . goals, program concentration, 2nd or 3rd year, etc†¦ ) Question #5: †¢ Any other comments, requests, suggestions, etc? TAKE ~3 MINUTES INDIVIDUALLY TO FILL OUT SURVEY TAKE ~ 5 MINUTES TO TALK TO 5 CLASSMATES WHOM YOU HAVEN’T MET YET (write down initials) SURVEY RESULTS (SUMMARY) †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ Real world experiences, practical (real-world) examples, cases†¦ Relevant news (where to find news), Current issues in the market Relate course material to real world Exam tips/techniques Applications and excel models used in the real world Interactive class, games, videos†¦Extended office hours (availability) to address questions Humour Practice questions and solutions; Past exams and solutions Capital markets (high-level overview) Typical jobs in finance, Leading finance organizations Additional tutorial time Stock picking, portfolio allocation/analysis, investment tools/strategies, trading tips Learning topics that can be applied in real life Relate designations/roles to course material and applications Better understanding of financial instruments (e. g. Mortgages, bonds, etc†¦ ) View of finance from other functional areas (e. g. Marketing) http://www. explorefinancialservices. om/Options http://www. explorefinancialservices. com/ Financial Markets: What is Going On? Firms (Users of Capital) Initial Public Off ering (IPO) Secondary Offerings (SEO) Borrowing (Loans, Bonds) Dividends, $ Repurchases, Interest Payments $ Market Mechanisms or Market Makers (Stock Exchanges, Banks, Investment Funds, †¦) $ $ Firms Issue Stock Certificates and Bonds $ $$$ Invested in Stocks and Bonds Investors (Providers of Capital) Investment Banks help firms make transactions Brokers/Dealers help investors make transactions Reference: Alex MacKay 113 Hedge Fund Strategies Dedicated ShortSource: AIMA Canada Further Reading Hedge Funds – Emerging Market Strategy †¢ Emerging Markets (American Depository Receipts – ADRs vs. Foreign Securities) http://www. sec. gov/pdf/ininvest. pdf (Page 12) (SAP) Hedge Fund – Quants †¢ Jim Simons (Renaissance Technologies) – Commodities/Futures – (Rapid Fire Trading) – (computer and system specialists, researchers and traders) (computational linguists–speech recognition/investing) †¢ http://chinese-school. netfir ms. com/abacus-hedge-funds-Jim-Simons. html †¢ †¢ Kenneth Griffin (Citadel Investment Group) – Convertible Bonds –> Long-Short †¢ http://money. cnn. om/2008/12/08/news/companies/citadel_vickers. boyd. fortune/index. htm The Quants (Scott Patterson – Wall Street Journal Reporter) †¢ †¢ http://www. businessweek. com/magazine/content/10_09/b4168070829612. htm http://online. wsj. com/article/SB10001424052748704509704575019032416477138. html Steven Palmer (AlphaNorth Asset Management Inc) (Microcap – Tech) †¢ http://www. theglobeandmail. com/globe-investor/funds-and-etfs/funds/top-hedge-fund-manager-turns-to-techmicro-caps/article1884049/ House Dems propose taxing equity trades to fund new federal programs †¢ †¢ †¢ Financial transaction tax on all stock (0. 5%), bond (0. %) and derivatives (0. 005%) trades Protects financial markets from speculation Make high-frequency trading â€Å"unprofitable† http://thehi ll. com/blogs/floor-action/house/249893-house-dems-propose-taxing-equity-trades-to-fund-new-federal-programs Harsh HFT curbs could sneak into MiFID †¢ †¢ †¢ †¢ Introduction of minimum resting times between trades Could force HFT firms out of the market, widening spreads and making trading more costly Meetings held with the European Parliament’s Economic and Monetary Affairs Committee (ECON) MiFID (Markets in Financial Instruments Directive) – European Union Law http://www. hetradenews. com/news/Regions/Europe/Harsh_HFT_curbs_could_sneak_into_MiFID_II. aspx CAPITAL MARKET THEORY RSM 332 – Week 2 Week 1 – Introduction – Financial Accounting (Review) Week 2 – Financial Markets and Net Present Value Week 3 – Present Value Concepts Week 4 – Bond Valuation and Term Structure Theory Week 5 – Valuation of Stocks Week 6 – Risk and Return – Problem Set #1 Due Week 7* – Midterm (Tuesday*) We ek 8 – Portfolio Theory Week 9 – Capital Asset Pricing Model Week 10 – Arbitrage Pricing Theory Week 11 – Operation and Efficiency of Capital Markets Week 12 – Course Review – Problem Set #2 DueContact: otto. [email  protected] utoronto. ca THANK YOU SEE YOU NEXT WEEK! OFFICE HOURS WEDNESDAYS – 4:00PM-6:00PM ROOM 413 OR 417 105 ST. GEORGE STREET ROTMAN (NORTH BUILDING)