Music as Cultural Criticism Essays -- Music Musical Culture History Es

Music as Cultural Criticism Works Cited Not Included In his article â€Å"Daily Life in Black Africa: Elements for a Critique,† author Paulin Houtondji offers his perceptions of several aspects of life in Africa. His statements are explicit, observant, harsh, and backed up with examples and anecdotes. Many African pop musicians provide similarly critical assessments of various aspects of African life, but they choose to do so in a much subtler way. Houtondji’s criticism of Africa for its serious failure is similar to that of artists like musician E.T. Mensah, who uses upbeat music to lessen the sting of his subversive lyrics. In fact, so deceivingly happy is the sound of the music that missing the entire message of the song is highly possible. His candor and blatancy in expressing his opinion, however, also parallels the work of artists like Fela Kuti, Unsung Heroes, and Prophets of Da City. Though Houtondji and many musicians share the common goal of improving society, or at least highlighting its flaws, the parties focus on different aspects of society, and probably garner different results. To a Western reader, Houtondji and his writings may seem more serious, scholarly, and even competent, even for such a simple reason as a societal bias towards the written word over the spoken. On the other hand, taking into account the low literacy rates in much of Africa, as well as the aural language, the situation may be the opposite in Africa. The spoken, or sung, word should prove highly effective in addressing social wrongs, suggesting societal change, or calling people to action. Using words as weapons is not uncommon, and they are effective both set to music and written. A preliminary reading of Houtondji’s article leads to a c... ...such injustices. Words are often used as effective weapons in written and verbal war. Though seemingly non-violent, these conflicts contain elements of violence, and can thus prove highly painful. In his article â€Å"Daily Life in Black Africa: Elements for a Critique,† author Paulin Houtondji criticizes superficial problems in daily life in Africa, while hinting at the issues of the bigger picture. Similar to this approach, E.T. Mensah uses music to soften the blow of his loaded words. Other pop musicians, such as Fela Kuti, choose not to be sensitive to their audiences, and instead assault them with politically charged lyrics, calling them to action and demanding social change. Both approaches and styles are effective, but an audience’s receptiveness and perception may be the most important determining factors of an artist’s success in issuing a call for change.

A Midsummer Nights Dream by William Shakespeare :: A Midsummer Nights Dream, William Shakespeare

William Shakespeare's A Midsummer Night's Dream is very unique because there is a play within a play. Shakespeare uses the interesting qualities of the characters to narrate the play. The characters can be divided into four groups: The Athenian Court (The Duke, Hippolyta, Egeus, and Philostrate); the young lovers (Hermia, Lysander, Helena, and Demetrius); the fairy kingdom (Oberon, Titania, Puck, and the lesser fairies); and the workmen (Bottom, Quince, Flute, Snout, Starveling, and Snug). The Athenian court is the obvious upper class division of scoiety in Athens. Theseus is head of the Athenian state and his role is to maintain justice. Hippolyta is Theseus's new bride and shows sympathy to the young lovers. Both Theseus and Hippolyta are classified as legendary characters and collectively show their maturity and commitment to marriage. Egeus is a stubborn father whose character loses worth toward the end of the plot, while Philostrate's part is short and undeveloped. Despite being a group, the young lovers are more interesting than the Athenian court. 2 The male young lovers are somewhat similar in qualities. They are young and fall in and out of love quickly. For example Demetrius and Lysander both reject a girl they once loved; they fight over a one girl and then over the other. On the other hand, Hermia and Helena are not as similar because Hermia is short and Helena is tall. These characters are more interesting than the Athenian court because they provide the theme of commitment and being unfaithful. The young lovers are touched by magic by the fairy kingdom members. A member of the fairy kingdom, Oberon is resentful and generous at that the same time. Case in point, Oberon is resentful toward Titania refuses to hand over her boy, and generous in his attempt to make things go well for the the young lovers. Titania is a strong individual and stands up for herself against Oberon. But Titania too also is generous showing love for Bottom. Lastly, Puck is as servant for Oberon and does exactly what he says. Unfortunately he does not do everything correctly. For instance, Oberon requests that Puck use magic on Demetrius to return Helena's love, however he employs the magic upon Lysander instead. Puck means well but isn't necessarily given the respect due to him.

Computer Maintenance Agency’s Organizational chart Essay

I have worked in a private organization called as Computer Maintenance Agency (CMA) as a junior customer engineer for a period of one year. CMA is linked with a government organization called as National Remote Sensing Centre (NRSC). NRSC is popularly known as wing of Indian space research organization. CMA mainly works with network maintenance and system administration by signing an annual contract with NRSC. The CMA organization consists of director, customer support manager, team leaders and engineers. For every two years, NRSC invites the tenders for annual contract maintenance services for their system administrations and network maintenances. My organization, CMA actively participates in the tenders and prepares a low quotation for getting the tender contract. The director is mainly responsible for taking the decisions on the tenders and organizes the company policies in a systematic manner. The customer support manager is the one who helps the director in estimating a suitable quotation for the tenders and informs the director about the tender handling process. The customer support manager responsibilities include customer satisfaction, recruiting and training the employees, implementing the organization strategic policies, resolving problems and monitoring the objectives of tenders. The team leaders under the customer support manager work with the clients of different zones, typically three zones (zone1, zone 2 and zone 3). The zone 1 is known as NRSC Data Center, the zone 2 is known as NRSC Data Processing and the zone 3 is known as NRSC Software Division. The team leader of a particular zone consists of a set of engineers who were divided as senior customer engineers and junior customer engineers. The team leader job duties include reporting the technical issues to the customer support manager, leading and motivating the engineers, tracking the daily work performance and providing the feedback to the customer support manager. The engineers under a team leader works on issues like system administration, network issues, troubleshooting  problems, and hardware and software issues. The engineers will have a direct contact with the clients through web application. The whole organization performance and progress depends upon the efficiency of the engineers. Failure in the performance of the engineers may lead to the organization loss. The main internal problems in CMA include the organization budget issues, system performance, lack of communication between the senior customer engineers and the junior customer engineers, and mostly time management issues.

Analysis of A Different History by Sujata Bhatt Essay

A Different History written by Sujata Bhatt portrays the loss of language and cultures after colonization in India. This poem describes the bitterness and sadness Bhatt felt about her mother tongue and cultures. Bhatt explores the idea of history, culture and language throughout the poem. Bhatt uses two enjambments in the poem. The first enjambment talks about the book, which represents the culture and the way people should treat the books. The tone of voice used in the second enjambment is more aggressive and critical, as it described the period of colonization when the cultures and language were taken away by the conquerors. There is no rhyme utilized throughout the poem. This shows that Bhatt wants to show how serious and complex the problem is, wanting the readers to think of the loss of mother tongue and one’s culture. Moreover, an irony is used throughout the whole poem. Bhatt, who cries for the loss of language, used English to write the poem. This indicates that she is one of those ‘unborn grandchildren’ who ‘grow to love that strange language’ creating a sense of sadness, because even the author herself cannot speak Indian but uses English – the ‘strange language’. ‘Great Pan is not dead; he simply emigrated to India’ tells that the cultures and religions are transmitted across the globe. ‘Great pan’ symbolizes the pantheism existing in Indian religion where everything has a god in charge of it, even human. Bhatt talks about the culture and lifestyle moving with people by implying that God Pan is not seized to exist but simply moved to India. This also indicates the similarity between the religions of the Eastern and the Western due to the constant transmitting of cultures and lifestyles. ‘The god roams freely, disguised as snakes and monkeys’ portrays the acceptance of new religion and cultures in India. ‘God’ represents the new cultures and lifestyles. Snakes and monkeys were worshipped during the past time, as Indians believed that there were gods laying on them. This indicates that Indians welcomed and worshipped the new culture and lifestyles. This also exhibits the innocence of Indians w ho allowed foreign religion to enter and ‘roam freely’ in India. There is a repetition of ‘sin’ when the author lists the way people should treat the books. The word ‘sin’ reinforces the negative commentary and intensifies the critical tone of the poem. Bhatt uses book as an example to show people that the cultures must be appreciated and treated carefully by mentioning the tradition and custom of India in how to treat the book. Pantheism is, again, underscored in ‘you must not learn how to turn the pages gently without disturbing Sarasvati’. Sarasvati is a goddess of knowledge and art, who Indians believed to be laying on the book. Bhatt is telling the people that people should treat books just as the way people treat the goddess of knowledge, highlighting the importance of god and the way people should treat them. It also depicts the emancipation of freedom in valuing one’s culture but not liberating oneself with selfishness. There is a sudden change in the tone of voice in the second enjambment; it is more hostile and aggressive. This change is supported by the rhetorical questions: ‘which language has not been the oppressor’s tongue? Which language truly meant to murder someone?’ This creates a sense of uncertainty and infuriation, which the author felt about the colonization. Bhatt describes her depressions as she realizes that there are neither the oppressors not the oppressed. No one means to be any of those – no one can be blamed. In addition, the repetition of ‘which language’ enhances the sense of criticalness and uncertainty in her expression. The repetition and rhetorical questions lead the readers to feel the shamefaced of human history. Further sense of torment is created in ‘and how does it happen that after the torture, after the soul has been cropped with a long scythe swooping out of the conqueror’s face’. ‘Soul’ symbolizes the self-esteem of Indians for being able to speak Indian and follow the Indian culture. Scythe is a tool used to harvest crops by hand, which obviously takes much longer time than by machine. ‘Scythe’ in this phrase represents the colonization and injustice. This shows that the colonization has cut out the ‘soul’ of Indian by forbidding the cultures and language. This also reveals that Indians suffered long time during the colonization. Final tone of the poem is made in the last two lines: ‘the unborn grandchildren grow to love that strange language’. Sense of sadness and uncertainty are enhanced as it described Bhatt’s realization of cultural consequences such as the colonization does not ruin one’s history but begins a new era where a new generation of ‘unborn grandchildren’ grow ‘to love that strange language’ – the inevitability of cultural change. Sujata Bhatt explores the theme of cultural consequence and the loss of language and cultures throughout the poem by describing he feeling about her lost mother tongue and culture. This poem leads the readers to think back about their own history, which may either be painful or happy.

Narrative of the Life of Frederick Douglass Essay

In the autobiography, the Narrative of the Life of Frederick Douglass, an American Slave, there is an underlying theme of knowledge as the path to freedom. During Douglass’ time, slave owners deprived slaves of an education and as a result, the slaves were thus deprived of freedom. Knowledge among slaves is what the white men feared the most, as knowledge not only â€Å"spoiled† slaves, it also provided them with the insight that ultimately paved their road to freedom. Knowledge corrupts, or â€Å"spoils† slaves, as it happened with Frederick Douglass. Because uneducated slaves could not think for themselves, they were thus forced to obey their masters, or â€Å"thinkers† who made their decisions for them. After Douglass learned to read The Columbian Orator, a book that boldly denounced the immorality of slavery and the whites, he began to harbor such bitter resentment toward his masters that he â€Å"wishes [him]self dead.† Knowledge emboldened Douglass, and gave him the courage to rebel against his masters. As a result, Douglass vowed to â€Å"run away† from the â€Å"band of successful robbers †¦ that reduced him to slavery.† Indeed, wisdom had â€Å"spoiled† Douglass; he has now gained a keen insight that allowed him to fully articulate the inhumanities of his masters. Knowledge gave Douglass the ability to recognize the enormities of the corrupt white slave owners. Douglass, for instance, points out that it was the white man who â€Å"shut [Douglass’] mouth, and then ask why [he doesn’t] speak,† thus proving that slave owners neither allow slaves to think for themselves, nor do they allow the slaves a voice in that decision. Furthermore, slave owners had previously instilled in their slaves the idea that any man who is independent is doomed to fall; consequently, slaves were misled to believe that freedom is slavery. However, Douglass, an educated slave, was able to realize that he too was created equal, that he too had rights, and also that he was not a slave, but a free man. In this way, Douglass managed to set into motion the gears of his emancipation. For Frederick Douglass, education was his â€Å"pathway from slavery to freedom.† With his wisdom, he not only dispersed his experiences to other slaves but also stirred up sentiments within the white abolitionists as well. Unlike  their ignorant fellows, educated slaves can band together and finally reach for freedom. Works Cited 1. Douglass, Frederick. â€Å"The Church and Prejudice.† Plymouth County Anti-Slavery Society. Massachusetts, Plymouth County. 14 Nov. 1841. 2. Douglass, Frederick, Houston A. Baker, and William Lloyd Garrison. Narrative of the Life of Frederick Douglass : An American Slave. New York: Penguin Books, Limited, 1982.

Organisation Learning Essay

Where Argyris and Schon were the first to propose models that facilitate organizational learning, the following literatures have followed in the tradition of their work: Argyris and Schon (1978) distinguish between single-loop and double-loop learning, related to Gregory Bateson’s concepts of first and second order learning. In single-loop learning, individuals, groups, or organizations modify their actions according to the difference between expected and obtained outcomes. In double-loop learning, the entities (individuals, groups or organization) question the values, assumptions and policies that led to the actions in the first place; if they are able to view and modify those, then second-order or double-loop learning has taken place. Double loop learning is the learning about single-loop learning. ?March and Olsen (1975) attempt to link up individual and organizational learning. In their model, individual beliefs lead to individual action, which in turn may lead to an organizational action and a response from the environment which may induce improved individual beliefs and the cycle then repeats over and over. Learning occurs as better beliefs produce better actions. ?Kim (1993), as well, in an article titled â€Å"The link between individual and organizational learning†, integrates Argyris, March and Olsen and another model by Kofman into a single comprehensive model; further, he analyzes all the possible breakdowns in the information flows in the model, leading to failures in organizational learning; for instance, what happens if an individual action is rejected by the organization for political or other reasons and therefore no organizational action takes place? ?Nonaka and Takeuchi (1995) developed a four stage spiral model of organizational learning. They started by differentiating Polanyi’s concept of â€Å"tacit knowledge† from â€Å"explicit knowledge† and describe a process of alternating between the two. Tacit knowledge is personal, context specific, subjective knowledge, whereas explicit knowledge is codified, systematic, formal, and easy to communicate. The tacit knowledge of key personnel within the organization can be made explicit, codified in manuals, and incorporated into new products and processes. This process they called â€Å"externalization†. The reverse process (from explicit to implicit) they call â€Å"internalization† because it involves employees internalizing an organization’s formal rules, procedures, and other forms of explicit knowledge. They also use the term â€Å"socialization† to denote the sharing of tacit knowledge, and the term â€Å"combination† to denote the dissemination of codified knowledge. According to this model, knowledge creation and organizational learning take a path of socialization, externalization, combination, internalization, socialization, externalization, combination . . . etc. in an infinite spiral. ?Nick Bontis et al. (2002) empirically tested a model of organizational learning that encompassed both stocks and flows of knowledge across three levels of analysis: individual, team and organization. Results showed a negative and statistically significant relationship between the misalignment of stocks and flows and organizational performance. ?Flood (1999) discusses the concept of organizational learning from Peter Senge and the origins of the theory from Argyris and Schon. The author aims to â€Å"re-think† Senge’s The Fifth Discipline through systems theory. The author develops the concepts by integrating them with key theorists such as Bertalanffy, Churchman, Beer, Checkland and Ackoff. Conceptualizing organizational learning in terms of structure, process, meaning, ideology and knowledge, the author provides insights into Senge within the context of the philosophy of science and the way in which systems theorists were influenced by twentieth-century advances from the classical assumptions of science. ?Imants (2003) provides theory development for organizational learning in schools within the context of teachers’ professional communities as learning communities, which is compared and contrasted to teaching communities of practice. Detailed with an analysis of the paradoxes for organizational learning in schools, two mechanisms for professional development and organizational learning, (1) steering information about teaching and learning and (2) encouraging interaction among teachers and workers, are defined as critical for effective organizational learning. ?Common (2004) discusses the concept of organisational learning in a political environment to improve public policy-making. The author details the initial uncontroversial reception of organisational learning in the public sector and the development of the concept with the learning organization. Definitional problems in applying the concept to public policy are addressed, noting research in UK local government that concludes on the obstacles for organizational learning in the public sector: (1) overemphasis of the individual, (2) resistance to change and politics, (3) social learning is self-limiting, i.e. individualism, and (4) political â€Å"blame culture. † The concepts of policy learning and policy transfer are then defined with detail on the conditions for realizing organizational learning in the public sector. Organizational knowledge What is the nature of knowledge created, traded and used in organizations? Some of this knowledge can be termed technical ? knowing the meaning of technical words and phrases, being able to read and make sense of economic data and being able to act on the basis of law-like generalizations. Scientific knowledge is ?propositional’; it takes the form of causal generalizations ? whenever A, then B. For example, whenever water reaches the temperature of 100 degrees, it boils; whenever it boils, it turns into steam; steam generates pressure when in an enclosed space; pressure drives engines. And so forth. A large part of the knowledge used by managers, however, does not assume this form. The complexities of a manager’s task are such that applying A may result in B, C, or Z. A recipe or an idea that solved very well a particular problem, may, in slightly different circumstances backfire and lead to ever more problems. More important than knowing a whole lot of theories, recipes and solutions for a manager is to know which theory, recipe or solution to apply in a specific situation. Sometimes a manager may combine two different recipes or adapt an existing recipe with some important modification to meet a situation at hand. Managers often use knowledge in the way that a handyman will use his or her skills, the materials and tools that are at hand to meet the demands of a particular situation. Unlike an engineer who will plan carefully and scientifically his or her every action to deliver the desired outcome, such as a steam engine, a handyman is flexible and opportunistic, often using materials in unorthodox or unusual ways, and relies a lot on trial and error. This is what the French call ? bricolage’, the resourceful and creative deployment skills and materials to meet each challenge in an original way. Rule of thumb, far from being the enemy of management, is what managers throughout the world have relied upon to inform their action. In contrast to the scientific knowledge that guides the engineer, the physician or the chemist, managers are often informed by a different type of know-how. This is sometimes referred to a ? narrative knowledge’ or ? experiential knowledge’, the kind of knowledge that comes from experience and resides in stories and narratives of how real people in the real world dealt with real life problems, successfully or unsuccessfully. Narrative knowledge is what we use in everyday life to deal with awkward situations, as parents, as consumers, as patients and so forth. We seek the stories of people in the same situation as ourselves and try to learn from them. As the Chinese proverb says â€Å"A wise man learns from experience; a wiser man learns from the experience of others. † Narrative knowledge usually takes the form of organization stories (see organization story and organizational storytelling). These stories enable participants to make sense of the difficulties and challenges they face; by listening to stories, members of organizations learn from each other’s experiences, adapt the recipes used by others to address their own difficulties and problems. Narrative knowledge is not only the preserve of managers. Most professionals (including doctors, accountants, lawyers, business consultants and academics) rely on narrative knowledge, in addition to their specialist technical knowledge, when dealing with concrete situations as part of their work. More generally, narrative knowledge represents an endlessly mutating reservoir of ideas, recipes and stories that are traded mostly by word or mouth on the internet. They are often apocryphal and may be inaccurate or untrue – yet, they have the power to influence people’s sense making and actions. Individual versus organizational learning Learning by individuals in an organizational context is a well understood process. This is the traditional domain of human resources, including activities such as: training, increasing skills, work experience, and formal education. Given that the success of any organization is founded on the knowledge of the people who work for it, these activities will and, indeed, must continue. However, individual learning is only a prerequisite to organizational learning. Others take it farther with continuous learning. The world is orders of magnitude more dynamic than that of our parents, or even when we were young. Waves of change are crashing on us virtually one on top of another. Change has become the norm rather than the exception. Continuous learning throughout one’s career has become essential to remain relevant in the workplace. Again, necessary but not sufficient to describe organizational learning. What does it mean to say that an organization learns? Simply summing individual learning is inadequate to model organizational learning. The following definition outlines the essential difference between the two: A learning organization actively creates, captures, transfers, and mobilizes knowledge to enable it to adapt to a changing environment. Thus, the key aspect of organizational learning is the interaction that takes place among individuals. A learning organization does not rely on passive or ad hoc process in the hope that organizational learning will take place through serendipity or as a by-product of normal work. A learning organization actively promotes, facilitates, and rewards collective learning. Creating (or acquiring) knowledge can be an individual or group activity. However, this is normally a small-scale, isolated activity steeped in the jargon and methods of knowledge workers. As first stated by Lucilius in the 1st century BC, â€Å"Knowledge is not knowledge until someone else knows that one knows. † Capturing individual learning is the first step to making it useful to an organization. There are many methods for capturing knowledge and experience, such as publications, activity reports, lessons learned, interviews, and presentations. Capturing includes organizing knowledge in ways that people can find it; multiple structures facilitate searches regardless of the user’s perspective (e. g. , who, what, when, where, why,and how). Capturing also includes storage in repositories, databases, or libraries to insure that the knowledge will be available when and as needed. Transferring knowledge requires that it be accessible to everyone when and where they need it. In a digital world, this involves browser-activated search engines to find what one is looking for. A way to retrieve content is also needed, which requires a communication and network infrastructure. Tacit knowledge may be shared through communities of practice or consulting experts. It is also important that knowledge is presented in a way that users can understand it. It must suit the needs of the user to be accepted and internalized. Mobilizing knowledge involves integrating and using relevant knowledge from many, often diverse, sources to solve a problem or address an issue. Integration requires interoperability standards among various repositories. Using knowledge may be through simple reuse of existing solutions that have worked previously. It may also come through adapting old solutions to new problems. Conversely, a learning organization learns from mistakes or recognizes when old solutions no longer apply. Use may also be through synthesis; that is creating a broader meaning or a deeper level of understanding. Clearly, the more rapidly knowledge can be mobilized and used, the more competitive an organization. An organization must learn so that it can adapt to a changing environment. Historically, the life-cycle of organizations typically spanned stable environments between major socioeconomic changes. Blacksmiths who didn’t become mechanics simply fell by the wayside. More recently, many fortune 500 companies of two decades ago no longer exist. Given the ever-accelerating rate of global-scale change, the more critical learning and adaptation become to organization relevance, success, and ultimate survival. Organizational learning is a social process, involving interactions among many individuals leading to well-informed decision making. Thus, a culture that learns and adapts as part of everyday working practices is essential. Reuse must equal or exceed reinvent as a desirable behavior. Adapting an idea must be rewarded along with its initial creation. Sharing to empower the organization must supersede controlling to empower an individual. Clearly, shifting from individual to organizational learning involves a non-linear transformation. Once someone learns something, it is available for their immediate use. In contrast, organizations need to create, capture, transfer, and mobilize knowledge before it can be used. Although technology supports the latter, these are primarily social processes within a cultural environment, and cultural change, however necessary, is a particularly challenging undertaking. Learning organization The work in Organizational Learning can be distinguished from the work on a related concept, the learning organization. This later body of work, in general, uses the theoretical findings of organizational learning (and other research in organizational development, system theory, and cognitive science) in order to prescribe specific recommendations about how to create organizations that continuously and effectively learn. This practical approach was championed by Peter Senge in his book The Fifth Discipline. Diffusion of innovations Diffusion of innovations theory explores how and why people adopt new ideas, practices and products. It may be seen as a subset of the anthropological concept of diffusion and can help to explain how ideas are spread by individuals, social networks and organizations.

Ch 2 Solution

CHAPTER 2 Mechanics of Futures Markets Practice Questions Problem 2. 8. The party with a short position in a futures contract sometimes has options as to the precise asset that will be delivered, where delivery will take place, when delivery will take place, and so on. Do these options increase or decrease the futures price? Explain your reasoning. These options make the contract less attractive to the party with the long position and more attractive to the party with the short position. They therefore tend to reduce the futures price. Problem 2. 9. What are the most important aspects of the design of a new futures contract?The most important aspects of the design of a new futures contract are the specification of the underlying asset, the size of the contract, the delivery arrangements, and the delivery months. Problem 2. 10. Explain how margins protect investors against the possibility of default. A margin is a sum of money deposited by an investor with his or her broker. It acts a s a guarantee that the investor can cover any losses on the futures contract. The balance in the margin account is adjusted daily to reflect gains and losses on the futures contract. If losses are above a certain level, the investor is required to deposit a further margin.This system makes it unlikely that the investor will default. A similar system of margins makes it unlikely that the investor’s broker will default on the contract it has with the clearinghouse member and unlikely that the clearinghouse member will default with the clearinghouse. Problem 2. 11. A trader buys two July futures contracts on frozen orange juice. Each contract is for the delivery of 15,000 pounds. The current futures price is 160 cents per pound, the initial margin is $6,000 per contract, and the maintenance margin is $4,500 per contract. What price change would lead to a margin call?Under what circumstances could $2,000 be withdrawn from the margin account? There is a margin call if more than $1 ,500 is lost on one contract. This happens if the futures price of frozen orange juice falls by more than 10 cents to below 150 cents per lb. $2,000 can be withdrawn from the margin account if there is a gain on one contract of $1,000. This will happen if the futures price rises by 6. 67 cents to 166. 67 cents per lb. Problem 2. 12. Show that, if the futures price of a commodity is greater than the spot price during the delivery period, then there is an arbitrage opportunity.Does an arbitrage opportunity exist if the futures price is less than the spot price? Explain your answer. If the futures price is greater than the spot price during the delivery period, an arbitrageur buys the asset, shorts a futures contract, and makes delivery for an immediate profit. If the futures price is less than the spot price during the delivery period, there is no similar perfect arbitrage strategy. An arbitrageur can take a long futures position but cannot force immediate delivery of the asset. The d ecision on when delivery will be made is made by the party with the short position.Nevertheless companies interested in acquiring the asset will find it attractive to enter into a long futures contract and wait for delivery to be made. Problem 2. 13. Explain the difference between a market-if-touched order and a stop order. A market-if-touched order is executed at the best available price after a trade occurs at a specified price or at a price more favorable than the specified price. A stop order is executed at the best available price after there is a bid or offer at the specified price or at a price less favorable than the specified price. Problem 2. 14. Explain what a stop-limit order to sell at 20. 0 with a limit of 20. 10 means. A stop-limit order to sell at 20. 30 with a limit of 20. 10 means that as soon as there is a bid at 20. 30 the contract should be sold providing this can be done at 20. 10 or a higher price. Problem 2. 15. At the end of one day a clearinghouse member is long 100 contracts, and the settlement price is $50,000 per contract. The original margin is $2,000 per contract. On the following day the member becomes responsible for clearing an additional 20 long contracts, entered into at a price of $51,000 per contract. The settlement price at the end of this day is $50,200.How much does the member have to add to its margin account with the exchange clearinghouse? The clearinghouse member is required to provide 20 ? $2, 000 = $40, 000 as initial margin for the new contracts. There is a gain of (50,200 ? 50,000) ? 100 = $20,000 on the existing contracts. There is also a loss of (51, 000 ? 50, 200) ? 20 = $16, 000 on the new contracts. The member must therefore add 40, 000 ? 20, 000 + 16, 000 = $36, 000 to the margin account. Problem 2. 16. On July 1, 2010, a Japanese company enters into a forward contract to buy $1 million with yen on January 1, 2011.On September 1, 2010, it enters into a forward contract to sell $1 million on January 1, 2011 . Describe the profit or loss the company will make in dollars as a function of the forward exchange rates on July 1, 2010 and September 1, 2010. Suppose F1 and F2 are the forward exchange rates for the contracts entered into July 1, 2010 and September 1, 2010, and S is the spot rate on January 1, 2011. (All exchange rates are measured as yen per dollar). The payoff from the first contract is (S ? F1 ) million yen and the payoff from the second contract is (F2 ? S ) million yen.The total payoff is therefore ( S ? F1 ) + ( F2 ? S ) = ( F2 ? F1 ) million yen. Problem 2. 17. The forward price on the Swiss franc for delivery in 45 days is quoted as 1. 1000. The futures price for a contract that will be delivered in 45 days is 0. 9000. Explain these two quotes. Which is more favorable for an investor wanting to sell Swiss francs? The 1. 1000 forward quote is the number of Swiss francs per dollar. The 0. 9000 futures quote is the number of dollars per Swiss franc. When quoted in the same way as the futures price the forward price is 1 / 1. 1000 = 0. 091 . The Swiss franc is therefore more valuable in the forward market than in the futures market. The forward market is therefore more attractive for an investor wanting to sell Swiss francs. Problem 2. 18. Suppose you call your broker and issue instructions to sell one July hogs contract. Describe what happens. Hog futures are traded on the Chicago Mercantile Exchange. (See Table 2. 2). The broker will request some initial margin. The order will be relayed by telephone to your broker’s trading desk on the floor of the exchange (or to the trading desk of another broker).It will be sent by messenger to a commission broker who will execute the trade according to your instructions. Confirmation of the trade eventually reaches you. If there are adverse movements in the futures price your broker may contact you to request additional margin. Problem 2. 19. â€Å"Speculation in futures markets is pure gambling. It is n ot in the public interest to allow speculators to trade on a futures exchange. † Discuss this viewpoint. Speculators are important market participants because they add liquidity to the market.However, contracts must be useful for hedging as well as speculation. This is because regulators generally only approve contracts when they are likely to be of interest to hedgers as well as speculators. Problem 2. 20. Identify the three commodities whose futures contracts in Table 2. 2 have the highest open interest. Based on the contract months listed, the answer is crude oil, corn, and sugar (world). Problem 2. 21. What do you think would happen if an exchange started trading a contract in which the quality of the underlying asset was incompletely specified?The contract would not be a success. Parties with short positions would hold their contracts until delivery and then deliver the cheapest form of the asset. This might well be viewed by the party with the long position as garbage! O nce news of the quality problem became widely known no one would be prepared to buy the contract. This shows that futures contracts are feasible only when there are rigorous standards within an industry for defining the quality of the asset. Many futures contracts have in practice failed because of the problem of defining quality.Problem 2. 22. â€Å"When a futures contract is traded on the floor of the exchange, it may be the case that the open interest increases by one, stays the same, or decreases by one. † Explain this statement. If both sides of the transaction are entering into a new contract, the open interest increases by one. If both sides of the transaction are closing out existing positions, the open interest decreases by one. If one party is entering into a new contract while the other party is closing out an existing position, the open interest stays the same. Problem 2. 23.Suppose that on October 24, 2010, you take a short position in an April 2011 live-cattle f utures contract. You close out your position on January 21, 2011. The futures price (per pound) is 91. 20 cents when you enter into the contract, 88. 30 cents when you close out your position, and 88. 80 cents at the end of December 2010. One contract is for the delivery of 40,000 pounds of cattle. What is your total profit? How is it taxed if you are (a) a hedger and (b) a speculator? Assume that you have a December 31 year end. The total profit is 40, 000 ? (0. 9120 ? 0. 8830) = $1,160 If you are a hedger this is all taxed in 2011.If you are a speculator 40, 000 ? (0. 9120 ? 0. 8880) = $960 is taxed in 2010 and 40, 000 ? (0. 8880 ? 0. 8830) = $200 is taxed in 2011. Further Questions Problem 2. 24 Trader A enters into futures contracts to buy 1 million euros for 1. 4 million dollars in three months. Trader B enters in a forward contract to do the same thing. The exchange (dollars per euro) declines sharply during the first two months and then increases for the third month to close at 1. 4300. Ignoring daily settlement, what is the total profit of each trader? When the impact of daily settlement is taken into account, which trader does better?The total profit of each trader in dollars is 0. 03? 1,000,000 = 30,000. Trader B’s profit is realized at the end of the three months. Trader A’s profit is realized day-by-day during the three months. Substantial losses are made during the first two months and profits are made during the final month. It is likely that Trader B has done better because Trader A had to finance its losses during the first two months. Problem 2. 25 Explain what is meant by open interest. Why does the open interest usually decline during the month preceding the delivery month?On a particular day there are 2,000 trades in a particular futures contract. Of the 2,000 traders on the long side of the market, 1,400 were closing out position and 600 were entering into new positions. Of the 2,000 traders on the short side of the market, 1 ,200 were closing out position and 800 were entering into new positions. What is the impact of the day's trading on open interest? Open interest is the number of contract outstanding. Many traders close out their positions just before the delivery month is reached. This is why the open interest declines during the month preceding the delivery month.The open interest went down by 600. We can see this in two ways. First, 1,400 shorts closed out and there were 800 new shorts. Second, 1,200 longs closed out and there were 600 new longs. Problem 2. 26 One orange juice future contract is on 15,000 pounds of frozen concentrate. Suppose that in September 2009 a company sells a March 2011 orange juice futures contract for 120 cents per pound. In December 2009 the futures price is 140 cents. In December 2010 the futures price is 110 cents. In February 2011 the futures price is 125 cents. The company has a December year end.What is the company's profit or loss on the contract? How is it realiz ed? What is the accounting and tax treatment of the transaction is the company is classified as a) a hedger and b) a speculator? The price goes up during the time the company holds the contract from 120 to 125 cents per pound. Overall the company therefore takes a loss of 15,000? 0. 05 = $750. If the company is classified as a hedger this loss is realized in 2011, If it is classified as a speculator it realizes a loss of 15,000? 0. 20 = $3000 in 2009, a gain of 15,000? 0. 30 = $4,500 in 2010 and a loss of 15,000? 0. 5 = $2,250 in 2011. Problem 2. 27. A company enters into a short futures contract to sell 5,000 bushels of wheat for 250 cents per bushel. The initial margin is $3,000 and the maintenance margin is $2,000. What price change would lead to a margin call? Under what circumstances could $1,500 be withdrawn from the margin account? There is a margin call if $1000 is lost on the contract. This will happen if the price of wheat futures rises by 20 cents from 250 cents to 270 ce nts per bushel. $1500 can be withdrawn if the futures price falls by 30 cents to 220 cents per bushel. Problem 2. 28.Suppose that there are no storage costs for crude oil and the interest rate for borrowing or lending is 5% per annum. How could you make money on August 4, 2009 by trading December 2009 and June 2010 contracts on crude oil? Use Table 2. 2. The December 2009 settlement price for oil is $75. 62 per barrel. The June 2010 settlement price for oil is $79. 41 per barrel. You could go long one December 2009 oil contract and short one June 2010 contract. In December 2009 you take delivery of the oil borrowing $75. 62 per barrel at 5% to meet cash outflows. The interest accumulated in six months is about 75. 2? 0. 05? 0. 5 or $1. 89. In December the oil is sold for $79. 41 per barrel which is more than the amount that has to be repaid on the loan. The strategy therefore leads to a profit. Note that this profit is independent of the actual price of oil in June 2010 or December 2009. It will be slightly affected by the daily settlement procedures. Problem 2. 29. What position is equivalent to a long forward contract to buy an asset at K on a certain date and a put option to sell it for K on that date? The equivalent position is a long position in a call with strike price K . Problem 2. 30. Excel file) The author’s Web page (www. rotman. utoronto. ca/~hull/data) contains daily closing prices for the December 2001 crude oil futures contract and the December 2001 gold futures contract. (Both contracts are traded on NYMEX. ) You are required to download the data and answer the following: a) How high do the maintenance margin levels for oil and gold have to be set so that there is a 1% chance that an investor with a balance slightly above the maintenance margin level on a particular day has a negative balance two days later (i. e. one day after a margin call). How high do they have to be for a 0. 1% chance.Assume daily price changes are normally distribu ted with mean zero. b) Imagine an investor who starts with a long position in the oil contract at the beginning of the period covered by the data and keeps the contract for the whole of the period of time covered by the data. Margin balances in excess of the initial margin are withdrawn. Use the maintenance margin you calculated in part (a) for a 1% risk level and assume that the maintenance margin is 75% of the initial margin. Calculate the number of margin calls and the number of times the investor has a negative margin balance and therefore an incentive to walk away.Assume that all margin calls are met in your calculations. Repeat the calculations for an investor who starts with a short position in the gold contract. The data for this problem in the 7th edition is different from that in the 6th edition. a) For gold the standard deviation of daily changes is $15. 184 per ounce or $1518. 4 per contract. For a 1% risk this means that the maintenance margin should be set at 1518 . 4 ? 2 ? 2. 3263 or 4996 when rounded. For a 0. 1% risk the maintenance margin should be set at 1518 . 4 ? 2 ? 3. 0902 or 6636 when rounded. For crude oil the standard deviation of daily changes is $1. 777 per barrel or $1577. 7 per contract. For a 1% risk, this means that the maintenance margin should be set at 1577 . 7 ? 2 ? 2. 3263 or 5191 when rounded. For a 0. 1% chance the maintenance margin should be set at 1577 . 7 ? 2 ? 3. 0902 or 6895 when rounded. NYMEX might be interested in these calculations because they indicate the chance of a trader who is just above the maintenance margin level at the beginning of the period having a negative margin level before funds have to be submitted to the broker. b) For a 1% risk the initial margin is set at 6,921 for on crude oil. This is the maintenance margin of 5,191 divided by 0. 75. ) As the spreadsheet shows, for a long investor in oil there are 157 margin calls and 9 times (out of 1039 days) where the investor is tempted to walk away. F or a 1% risk the initial margin is set at 6,661 for gold. (This is 4,996 divided by 0. 75. ) As the spreadsheet shows, for a short investor in gold there are 81 margin calls and 4 times (out of 459 days) when the investor is tempted to walk away. When the 0. 1% risk level is used there is 1 time when the oil investor might walk away and 2 times when the gold investor might do so.