Alfie Kohn Bad Signs

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Alfie Kohn Bad Signs

Alfie Khon “bad signs” is an in insightful article that embodies different themes to emphasis on the importance and influence that learning environment plays to students in a school. Alfie addresses the misconception held by most institutions’ on the importance of signs on the wall of schools as a motivational and inspirational aspect to facilitate a better learning environment.

Kohn clearly reiterates on his belief about the magnitude signs have to the psyche of students. The author believes that teachers do not consider the effects that the signs have to students and how they deprive students of any form of freedom considering that they already go through the process of education by adhering to other numerous rules. Under the section emphasising on the sign “no whining”, the author tries to reverse the role of the sign and picture the same message addressed to teachers claiming that they would not be as inclined to adhering to the message as they expect from students (Kohn 1). Kohn uses this perception to outline how students are denied freedom of expression while at school through issuance of such commands in a statement “We don’t let them hit, scream, or curse.  Now we’re insisting that they can’t even use a tone of voice that’s, well, insistent?” (Kohn 1).

Kohn also disapproves of the use of inspirational posters regardless of what context they are meant to embody. He states, “At this point I should probably confess that I don’t much care for posters on school walls, period” where he insists that posters often stretch the truth beyond a limit students mostly if not all the time cannot achieve (Kohn 1). In a statement he questions the though process that goes to deciding the importance of the signs and who should be responsible for putting the signs on the wall when he claims “What should go on the walls….Who decides what goes on the walls?” (Kohn 1).

Work Cited

Kohn, Alfie. “Bad Signs.” KAPPA DELTA PI RECORD (2010) : n. pag. Web. 01 Nov. 2013

Alfred Kinsey History and Contributions to Psychology

Alfred Kinsey: History and Contributions to Psychology

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Biographic Overview of Alfred Kinsey

Alfred Kinsey was born in 1894 in Hoboken, New Jersey, to a father who was an engineering teacher at Stevens Institute of Technology. His family was poor in the greater parts of his childhood and therefore he basically had a humble upbringing. After graduating from Columbia High School, Kinsey was faced with a hard decision since his father insisted that he should pursue a course in engineering at Stevens Institute. Nevertheless, two years into his degree course, Kinsey considered engineering to be outside his passion. For that reason, he got a transfer to Bowdoin College, Maine to pursue a course in biology, specifically entomology. The choice to take entomology would later prove to have been instrumental in the contributions Kinsey made in sexology (Brown & Fee, 2003). Kinsey married in 1921 and the marriage resulted to four children. In terms of his sexuality, Kinsey was bisexual and his relationship with his wife Clara McMillen included the understanding that they could both have sexual relationships with other people and with each other.

Widely regarded as the most significant sex researcher in the history of sexual development education, the entomologist Alfred Kinsey wrote two prominent books on the nature and characteristics of human sexuality. The first was Sexual Behavior in the Human Male published in 1948 and the other one was Sexual Behavior in the Human Female published in 1953. Kinsey also played a major role in the founding of the Institute for Research in Sex, Gender, and Reproduction (now named in his honor) at Indiana University.

The release of the Sexual Behavior in the Human Female in 1953 almost brought to a halt Kinsey’s research work because he had allegedly offended thousands of Americans and the U.S. congress put Dean Rusk (the in-charge of the Rockefeller Foundation) under immense pressure to unilaterally terminate the monetary support of the institute.

After being unsuccessful in reaching the necessary level of funding from other sources, Kinsey regrettably gave up his amazing efforts that transformed sexuality research. Nevertheless, the institute carried on and is still running as an autonomous organization under Indiana University and it currently named ion honor of Alfred Kinsey. Alfred Kinsey passed on at the age of 62 years on August 25, 1956 due to a combination of a heart ailment and pneumonia.

Contributions

In 1916, Alfred Kinsey earned a B.S in biology and psychology which further earned him a listing in a doctoral program in zoology at the Harvard University where he earned Sc.D. in 1919. After taking a teaching position at Indiana University’s department of zoology, he continued there for the rest of his career. While Kinsey mainly focused in and even carried out researches that became a pivotal point in the field of entomology, he also developed interest in the field of psychology, more so human sexuality, which bore fruit when Indiana University publication (the Daily Student) through an editorial called for extensive information relating to and testing for sexually transmitted infections. Venereal diseases were a serious problem that had then just stormed the United States.

Kinsey applied for permission design noncredit course on the subject of marriage with approximately hundred registered participants, in which a number of issues with reference to sexuality were dealt with. Almost immediately he stopped his research on gall wasps and focused entirely on human sexuality. His projects and research studies obtained funding from the Rockefeller Foundation. Following this, the National Research Council set up the Institute for Research in Sex, Gender, and Reproduction at Indiana in 1942 to enable the continued research in human sexuality. He carried out interviews from 5,300 males and 5,940 females which became the basis of his revolutionary works. His study findings about male sexuality was published and released in 1948 which sold over a half million copies. The study findings for female sexuality were printed five years later in 1953, nevertheless to a less warm reception.

Through the various interviews Kinsey conducted in conjunction with his associates, he was able to gather about 18,000 individual records between 1938 and 1956. Through the application of personal interviews Kinsey and his associates were to intermingle directly with the participants thus enabling him to gather an extensive record of their sexual account and background. The span of the information collected during these interviews was bolstered for the reason that Kinsey and his associates had the ability of encouraging subjects to elaborate on and divulge the whole of their past sexual experiences (Brown & Fee, 2003). However, Kinsey mainly focused on sexual behaviors as opposed to the motivation or meaning of the sexual behaviors to the participants or interviewees (Brown & Fee, 2003). This mirrors the behaviorist strategy that Kinsey employed in examining sexuality.

Through the numerous interviews he conducted, Kinsey was able to dispute the notion that women were asexual beings. In its place, his findings on women established that women were sexual beings who had the ability of enjoying sexual activity and eventually achieve orgasm. Among the female participants that went through his interviews, 25% of the sample had attained orgasm by age 15, more than 50% had achieved orgasm by age 20, and 64% had achieved orgasm before marriage (Brown & Fee, 2003). Kinsey also involved married women in the interviews to establish the amount of time they considered necessary in order to attain orgasm with their husband. From the findings, about 2 in every 5 married women (about 40%) had achieved orgasm within the initial months of marriage whereas 67% had realized it within the first six months. By the end of the first year of marriage, three-quarters of married women had realized or experienced orgasm.

Another issue that Kinsey gave substantial focus in human psychology is the impact social class has on the various types of sexual activities that women engaged in. He established that an individual’s social class had a significant effect on the types of sexual behaviors that would be showed by women hence the nature of activities these women would participate in (Brown & Fee, 2003). Women’s social class was found to have an impact on two areas of sexuality: extramarital sexual activity and homosexual relations. Women in the lower-class cadres had less likelihood of engaging in extramarital affairs than their upper-class counterparts. On the other hand, women in the upper-class cadres had higher likelihood of engaging in same sex affairs (homosexual relations) than women in the lower-class cadres (Brown & Fee, 2003). Moreover, Kinsey’s research undertakings greatly contributed to the understanding and findings that social class did not have any significant impact on other areas of women’s sexuality such as premarital sex, night-time sex dreams, masturbation, and matrimonial coitus.

Another issue that Kinsey investigated was how sexual behavior of humans was susceptible to changes or dynamics in the historical atmosphere. In his research undertakings, Kinsey established that the susceptibility of women’s sexual behavior to dynamics in the historical atmosphere was greater than men’s sexual behavior hence men’s sexuality changed less as a result of changes in the historical atmosphere than women. Moreover, Kinsey also developed a way of comparing female participants’ sexuality with that of their mothers; by focusing on comparison of women who became of age after World War I to their mothers. In that kind of comparison, Kinsey established that the women who entered adulthood after the war exhibited a greater prevalence of extramarital sexual affairs, premarital sex, night-time sex, dreams, masturbation, and marital coitus (Brown & Fee, 2003). Homosexuality emerged as the only area of sexuality that did not have a considerable incidence rate. Even though women were exhibiting an increased participation rate in a range of sexual activities, they did not illustrate an improved frequency of taking part in these activities. To explain this, Kinsey attributed the higher prevalence to a number of factors which included the Progressive campaign to counter prostitution, the notions developed by sexual modernists such as Ellis and Freud, and the liberalizing impacts of World War I.

Conclusion

Alfred Kinsey had a fascinating childhood that transformed into an individual interested in biology hence the focus on studying mating habits of gull wasps. After changing focus to primarily concentrate on sexual behavior of humans, the greatest achievement and contribution Kinsey made in psychology was broadening the understanding of human sexuality with specific reference to how he transformed the understanding of a woman’s sexuality and sexual behavior. The research undertakings Kinsey carried out were instrumental in psychology because at that time not there was little understanding of what human sexuality was all like and more so on the basis of sexual behavior of women.

References

Brown, T.M. & Fee, E. (2003). Alfred C. Kinsey: A pioneer of sex research.  American Journal of Public Health, 93 (6), 896-897

Everyone has a dream job in mind, a certain someone they hope to be someday

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Everyone has a dream job in mind, a certain someone they hope to be someday, and if that job is to become an anthropologist no one has the right to stand in any certain field’s way and stop that from happening, not even a state GOV, As Florida’s Governor Rick Scott tried to do. He mentioned how the state’s money should not fund the liberal arts degrees including or rather specifying anthropology and should only go to degrees that matter, and those degrees in his point of view were Science, Technology, Engineering and Math.

What Rick Scott might have not realized was the importance of liberal arts degrees in every society since these degrees can help the public in ways that people with an Engineering or math degree can’t. Liberal arts play major role in the society and the neglect of the societal importance is a major concern. Argument by Governor Rick Scott that liberal art degrees is unproductive do not contribute to the growth of the economy means that he is focusing on only one purpose of learning but there are major reasons why people go to school. What is then the main reason why people go to school? Is it to boost the economy alone? What of the already wealthy guys who greatly contribute to the economy of the country but still undertake liberal arts? Liberal arts and all other disciplines are interrelated and their benefits towards the economy can be hardly separated (Harris Web).

Liberal arts education helps in developing strength of mind and ones intellect which in turn enables an individual to use his brain properly in other fields of life. What is important is organized thinking and development of an ordered mind for someone to excel in any field. It is important to note that liberal arts greatly boosts an individual’s intellect since they involve a lot of thinking which helps in exercising the brain in readiness to achieve anything in life. Liberal arts entail many areas of study and therefore equip the learner with diverse body of knowledge that can be applied in many areas based on the learners worthy apprehension. An individual pursuing liberal arts is capable of differentiating between ideas and philosophies as well as achieving good judgmental skills acquired from extensive acquaintance with many areas of study (Harris Web).

Liberal arts help in understanding various dimensions of life and further make it possible to understand the world much easier by giving context that is very crucial for full understanding of various phenomena. It is worth appreciating that liberal arts intends to explain and clarifies the new knowledge based on the old ideas learnt by intellectually developing the brain from what it had already been fed. Knowledge of many subjects acquired from the liberal arts enhances creativity due to the conscious thought acquired from the liberal arts and this greatly boosts economy.

It is worth noting that liberal arts give an edge in every career due to its broadness as well as understanding many cross cultural experience which is vital in many businesses worldwide. The fact that a particular community’s culture can be understood boosts the morale of the employee due to the deep appreciation of their culture and this creates room for improvement of the economy. Indeed, liberal arts involve a lot of things that are useful in the current and future society. Economy is not only about job creation but how the job is done and the diverse knowledge of the worker and the employer is equally important in this competitive world. For sure, liberal arts do not need to be attacked as Governor Rick deed since it is the basis of all other disciplines.

Works Cited

Harris Robert. “On the Purpose of a Liberal Arts Education.” Virtual Salt. October 15, 2010: Web. 22 Apr. 2013. <http://www.virtualsalt.com/libarted.htm>.

Everyone is endowed with a talent in one or more fields of activity.

Creative writing

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Introduction

Everyone is endowed with a talent in one or more fields of activity. Some have hobbies in physically-demanding activities such as boxing, playing basketball or soccer while others prefer mentally challenging activities such as computer games among others. Different people have varied hobbies depending on individual’s personality as well as influence from the society they live in (Miller, 2010). I am engrossed in soccer. Soccer is the world’s most loved sports and I am proud to be part of this fascinating group. I not only like watching soccer but playing it too. To me soccer is everything.

Having been brought up in a soccer-loving country of England, I started having strong desire and passion for the game while I was just four. I used to visit football academies during my free time against the will of both my parents. I learnt about the sport by watching TV where I admired world’s finest players such as Romario, and Zidane. I got so engrossed in the game that studying almost became unbearable. I started playing soccer at the age of ten having joined one of the football academies in the neighborhood. Since then, soccer has become part of me and nobody can ever convince me otherwise. I train for the sport on a daily basis having pursued my studies earlier in the day (Miller, 2010). I have stayed physically fit and as young as ever!

Soccer gives me the fulfillment I would want in a sport especially when playing a competitive match. To begin with, soccer is watched by many fans across the world and any time a bounce onto the pitch to display my skills I realize that a sizeable crowd is behind me. This becomes even enthralling when I score a goal. I always feel very excited when I entertain such high magnitude of people who turn up to watch their favorite sport. Soccer has a lot of benefits to the life of an individual. To begin with, it helps one relieve stress and frustrations especially after being engaged in a mentally-challenging task such as reading or studying in general ( HYPERLINK “http://www.google.com/search?tbs=bks:1&tbo=p&q=+inauthor:%22Robert+D.+Mootz%22&source=gbs_metadata_r&cad=10” Mootz & HYPERLINK “http://www.google.com/search?tbs=bks:1&tbo=p&q=+inauthor:%22Kevin+A.+McCarthy%22&source=gbs_metadata_r&cad=10” McCarthy, 1999). In such situation, an individual relaxes thereby eliminating the exhaustion s/he had experienced before. Moreover, soccer is important for improving the health status of an individual. Playing soccer involves thorough training which is recommended for the well functioning of body systems. According to HYPERLINK “http://www.google.com/search?tbs=bks:1&tbo=p&q=+inauthor:%22Robert+D.+Mootz%22&source=gbs_metadata_r&cad=10” Mootz & HYPERLINK “http://www.google.com/search?tbs=bks:1&tbo=p&q=+inauthor:%22Kevin+A.+McCarthy%22&source=gbs_metadata_r&cad=10” McCarthy (1999) soccer is an enjoyable sport that provides an all-round fitness for participants and can be used as therapy for lifestyle-related diseases.

Besides, soccer inculcates teamwork and togetherness among players as well as the funs. Through soccer, I have managed to connect with other players and make friends. Soccer is a game of teamwork that requires the participation of all people in the game hence teammates treats one another as close friends for the betterment of the game (Young, 2007). Moreover, the sport act as a unifying factor for all the people in the world irrespective of their race or religion as witnessed in the world cup tournaments. Such positive correlations strengthen my passion for the game. However, I sometimes get disappointed by players who brush-off other players from a different team when playing due to some minor misunderstandings during a match. Discipline is elemental to the well being of players, fans as well as the sport itself.

Generally, sports are vital for the both the physical as well as psychological well being of people in any society. Individual’s personality as well as other factors such as the society where s/he has been brought up determines to a larger extent the activity of interest (Young, 2007). I have been a soccer loving individual and will continue to do so since soccer is superb!

Conclusion

Every individual in the society is involved in one or more kinds of activities either to explore their talents in those activities or just for fun during their time of relaxation. Some activities demand a lot of energy while others require little energy to pursue. Despite the aforementioned factors, all the people involved in such activities as pursuant of their hobbies do enjoy to the fullest. Since I realized my passion for soccer, i have always loved the game as both hobby and talent and will never abandon the game even at my old age.

References:

Miller, T., (2010). Soccer Conquers the World. Washington. The Chronicle of Higher

Education. Retrieved on 1st Oct, 2010 at: h HYPERLINK “ttp://chronicle.com/article/Soccer-Conquers-t” ttp://chronicle.com/article/Soccer-Conquers-the-World/65681/

HYPERLINK “http://www.google.com/search?tbs=bks:1&tbo=p&q=+inauthor:%22Robert+D.+Mootz%22&source=gbs_metadata_r&cad=10” Mootz, D. R., & HYPERLINK “http://www.google.com/search?tbs=bks:1&tbo=p&q=+inauthor:%22Kevin+A.+McCarthy%22&source=gbs_metadata_r&cad=10” McCarthy, K. A., (1999). Sports Chiropractic. London. Jones & Bartlett

Learning.

Young, T. P., (2007). Motivation of Behavior – The Fundamental Determinants of Human and

Animal Activity. London. READ BOOKS.

Algal Growth and Global Warming

Algal Growth and Global Warming

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Algal Growth and Global Warming

Global warming has occurred due to the adverse effects of climate change globally. In a bid to control the phenomenon, scientists and environmentalists have proposed various approaches geared at decreasing carbon dioxide levels in the air. Phytoplankton such as algae use up carbon dioxide for photosynthesis, and increasing the algal population is thought to increase the natural carbon sink. The algal bloom will utilize carbon dioxide in high amounts; thus, reducing its amounts in the environment.

Algae require iron as a micronutrient for essential biological processes such as photosynthesis, nitrogen fixation and assimilation, porphyrin biosynthesis, and respiration. Oceans generally have low levels of iron that do not favor the growth of large populations of plants, which explains why the ocean waters are blue and clear. Thus, fertilizing the oceans with iron will spur the growth of the algae and other phytoplankton. This is a good solution to reduce the amount of atmospheric carbon dioxide significantly, but it has its downside (Choi, 2010).

Boosting algal growth using iron fertilization in the ocean could trigger the growth of harmful algae such as Pseudo-nitschia. Large populations of the algae emit toxins such as domoic acid, which are hazardous to the marine population. The toxin contaminates the marine biodiversity, poses a risk to the mammals and birds that feed on the contaminated fish, and closes the sardines and shellfish fisheries. The Pseudo-nitschia is a naturally rare species in the oceans, but thrives well in areas rich in iron. Thus, an iron input significantly increases the algal bloom since they are overly responsive to iron. Overgrowth of the toxic algae is hazardous to the human and animal health because its blooms can easily contaminate the food chain, causing poisoning. Iron fertilization increases the population of phytoplankton such as algae, significantly reducing the amount of carbon dioxide by creating natural sinks that help in curbing global warming (Choi, 2010). Conversely, enriching the oceans with iron could lead to the growth of harmful algal species that could poison the food chain of both animals and humans.

My reservation in the approach is the impending danger of the growth of harmful algae that may cause the death of marine life and other animals feeding on contaminated animals and plants. However, the approach is commendable since it aims at reducing the excess carbon dioxide in the air by boosting the algal population that utilizes the carbon dioxide during photosynthesis. Scientists should devise ways of ensuring that only the useful algae grow in the oceans for ecological benefit.

The video gave insight on the structure of the diatoms and their adaptive features. It has highlighted some of the various forms of algae and their distinctive features. The structure of the diatom is elaborated by giving the various features that adapt it to survive. Its cell is enclosed in silica, which is a transparent protecting case that also allows light to penetrate the chloroplasts for photosynthesis. The protective casing is so heavy that the diatom has to find ways of maintaining buoyancy. One of the ways of regulating buoyancy is by producing oil droplets, which are lighter than water and serve as storage for energy acquired through photosynthesis. The diatoms can regulate the amount of oil produced, enabling them to control their balance in the open waters. The other adaptive feature of the diatom is the shape of the protective casing that has two, long spines that serve as stabilizers and protect the planktons from sinking (Scivee-team, 2007).

Some algae swim by the help of flagella that spin them through the waters towards light for photosynthesis. Other algae such as Netrium are bottom dwellers, which are large unicellular algae. The algae are an essential part of the lake ecosystem because they convert energy into food through photosynthesis. The alga, sea palm or Postelsia palmaeformis is an intertidal brown alga able to withstand strong waves enabling it to inhabit less competitive areas of the seashores. In the open waters, most algae have to compete for food and light with other microscopic organisms, making them develop adaptive features for survival. Some have adopted a different ecological niche by living on an animal host while others live inside the host. For example, some algae live inside flatworm tissues and develop a symbiotic relationship. The algae share food produced via synthesis with the worm while the worm swims in well-lit areas to expose the algae to maximum sunlight for photosynthesis (Scivee-team, 2007).

Prokaryotes are animals whose cells lack a nucleus and their DNA is distributed across the cell. They include the blue-green algae and cyanobacteria. The prokaryotes inhabit low-oxygen areas rich in organic matter such as in a slimy coat of an unattended aquarium and ponds. The prokaryotes locomote via a gliding mechanism; the bacterium glides through the strands of the blue-green alga. Prokaryotes constitute of only the blue-green algae and the bacterium while the eukaryotes, which have nucleated cells, are composed of the higher forms of life including all other types of algae. Cells with a nucleus and those that lack one form the basic distinction of all life forms on earth.

References

Choi, C. Q. (2010). Adding Iron to ocean would backfire, algae study suggests. Live Science. Retrieved on 3 May 2014 from http://www.livescience.com/11112-adding-iron-ocean-backfire-algae-study-suggests.html

Scivee-team. (Producer). (2007). The biology of algae [Motion picture]. (Available from Sci Vee).

Albert Cohens Theory of Delinquent Subcultures

Running Head: Albert Cohen’s Theory of Delinquent Subcultures

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Since time immemorial, crimes have been committed in the world societies. In the recent past, crime rate has increased significantly. Different theories have been put in place to explain these crimes. The functionalist theory is one of the strain theories that attempts to deeply explain crime and deviance as they occur in the societies. Albert Cohen’s theory of delinquent subcultures focuses on mainstream cultural objectives and goals in the vast range of societies. In addition, the theory centralizes on the reasons why the lower class people in the world societies have failed to attain theory desired goals and objective thus replacing them with deviant behavior which often give rise to criminal activities. According to Cohen, the criminal acts that individuals often engage after failing to achieve their objectives leads to development of delinquent subcultures whose objectives and goals sharply contrast with those associated with achieving success in the society.

Focusing on delinquents as ooposed to adults, the theory explains that occurrence of crimes in the society is associated with poor upbringing of young children. Shortly after World War II, Cohen discovered that high number of baby boomers engage in criminal activities in the societies. This is profound in the lower class societies. Everyone in the society holds the same goals but the opportunity to achieve them differs. The lower class have limited opportunities to fulfill their objectives hence some have resorted to criminal activities as away of nursing these frustrations. According to Cohen, the disparity in the accessibility of opportunities for achieving goals has resulted directly to criminal activities. The mainstream goals and objectives are replaced with criminal activities as the alternative of achieving success.

Delinquent behavior among the young people in the societies is uprising against what people in the upper class and the middle class believe should be. The poor conditions experienced by the poor class in the societies, the youths encounter another form of culture that sociologist has labeled status frustration. So what actually happens is that, because these individuals do not fit the existing culture and norm, they ended up forming gangs in an attempt to support each other. The formed gangs are very rebellious and engage in opposing the rules, processes, systems, goals and objectives of the society. These individuals take norms from the larger society or culture, but turn them upside down. Therefore, the delinquent conducts among the young people in the society is right by the standards and rules of the subculture precisely since it is against the norms of the larger society and culture.

The lower class people have been sidelined in the society. They do not acquire necessary communication skills, which in the modern societies is a very crucial skill. Cohen theory explains that delinquent subcultures do no occur as result individual deviant behavior only but by societal factors that pressurize these individuals into forming them.

One flaw that children face in the lower class society is that they are not capable of producing a positive image in the eyes of the responsible authorities. They cannot conform to what Cohen calls “authority figures middle-class measuring tools.” Unlike positive evaluations of individuals, negative evaluations follow individuals for the rest of their lives unless a corrective action is taken to change it. Fundamentally, the lower-class boys in the society suffer rejection by the upper and the middle-class decision makers. On condition of such situations, these boys will opt to being corner boys, the college boys or the delinquent boys. In this respect, the corner boys refer to those portrayed as those not accepted by the middle class counterparts. The corner boys would not engage in delinquent acts but will commit minute offenses. Those praised by their peers often gain sense of comfort and boost individual’s self-esteem. Since they cannot compete with those in the middle and the upper class, these boys will resort to staying in the neighborhood where they compete their lives there. They will compete for their lives in the neighborhood within the lower class by engaging in minute offenses which can often give rise to serious criminal acts especially in the later stages of their lives. The college boys are the next group of lower-class boys. They praise everything that occurs in the middle class societies and they have the tendency of going down the road to fight for their lives. Their actions often lead to dead-end and this is normally caused by the fact that these individuals do not posses have the necessary skills to pursue their lives in the middle and the upper class. The delinquent boys represent the most rebellious groups that flip the values and the norms observed by the middle and the upper class people. In order to achieve their goals and means, they engage in short run hedonism, where they assume that “living for today and letting tomorrow take care of itself.” They are very careless hence do not consider what will happen in the future. They do not weight the consequences of their actions. They do not take heed of the societal teachings; do not observe the behaviors of the authorities hence their behaviors are difficult to control. The only thing they do is to form gangs in an attempt to persuade others that they can make by their own. Boys who are incapable of achieving success in the society often resort to a process that Cohen termed it as reaction formation. This implies that the affected victims react with extremely violent responses to various situations as they occur in the society. These victims do not realize that they on the wrong when break the laws.

Arguably, the focal concerns of the lower class people include trouble, excitement, fate, smartness, toughness and autonomy. People get into trouble by breaking the common laws, and this has the effect of creating image on the subject. In cases where the subject fights and win, people in the class will respect and honor i.e. reputation increases. Therefore, people would not try to fight that individual. As revealed by the Cohen theory, excitement has contributed to range criminal activities in the society. Excitement makes individuals want to know an activity that is out of the societal norm. Autonomy makes individuals desire to become independent. Since they do no have adequate opportunities of achieving this, they resorted to gang involvement.

The lower class people do not feel the impact of policy implementations made by the government or local authorities. This is because they are sidelined during the decision making. The young children do not engage in educational programs that could modify their behaviors and they cannot get the special needs. Due to idleness and the attempt to meet their needs, the subject resort to criminal activities.

Strain theories have tried to explain the occurrence of crimes in the world societies. Objectively, Cohen theory offers the best answer as to why there are cases of crimes in the society. The environment within which an individual is reared helps shape behavior.

ALDI Strategy Case Study

ALDI Strategy – Case Study

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Introduction

Business enterprises employ various initiatives to maximize returns and achieve competitive advantage over competitors in there respective industries (Kafalas, 1981). On this note, ALDI Australia has adopted unique strategic management principles that have helped it to gain and maintain competitiveness amidst various challenges faced in the industry. This paper examines in brief the concepts of strategic management and strategic competitiveness in relation to ALDA Australia. Further, it explores the external and internal environments as well as the Business Level Strategy (BLS) of ALDI. Finally, a conclusion and several recommendations to the current strategies of this company are made.

Strategic management and strategic competitiveness

Strategic management refers to coordinated and integrated set of actions and commitments by an organization’s leadership designed to steer the organization to maximize returns and to gain competitive advantage over competitors (Rogers & Caswell, 1988). On the other hand, strategic competitiveness describes a situation where an enterprise successfully develops and implements a value-adding strategy (Hitt et al, 1994). As – noted, the level of competitive rivalry in Australian food and grocery industry is high due to high level of similarity in the products offered by different prayers. However, different retailers have developed different strategies to enable them gain competitive edge in the market while others compete along similar dimensions. For instance, Woolworths, IGAall and Coles-Myer focus on product and market differentiation strategies. ALDI’s strategy involves offering high quality products at lower prices in comparison with those offered by competitors (Kleeman, 2012).

External Environment

According to Porter (as cited in Kourteli, 2005), the purpose of external analysis on a firm’s structure is to understand the effectiveness of its sources of competitive advantage. This analysis is based on the Porter’s five forces Model. As mentioned earlier, the level of competitive rivalry in Australian food and grocery industry is high as there are numerous global and local retailers offering similar products and services to those that are provided by ALDI. The bargaining power of customers for ALDI can be said to be moderate. Buyers are able to switch from one retailer to another due to close similarities of products offered by different retailers (Kleeman, 2012). However, they are price sensitive and this is an added advantage to ALDI since the buyers have a notion that this enterprise offers quality and cheaper goods.

The bargaining power of suppliers for ALDI is low since there are numerous suppliers offering similar products. ALDI has different options and goes for suppliers with cheapest prices. However, ALDI Australia currently sources its products from local suppliers, which are more expensive than imported products. The lack of strong preference for specific brands by consumers makes it easy for new entrants to survive in the industry (Kleeman, 2012). According to Cardwell (2008), this threat is heightened by the fact that it is easy for a competitor to copy the strategies of another competitor and to implement them in the market. The threat of substitutes in his industry is considerably high due to high level of similarity of products offered by different competitors. Consumers can easily switch from one retailer to another.

Internal Environment

According to Chen, and Mohamed (2008), the strength of the internal environment of an enterprise is determined by the effectiveness of its current strategies and how well resources are mobilized in support of the strategies. ALDI has adopted simple and less complicated organization structure which has contributed effectively in cost saving. The company focuses on core operations only in locations that are deemed to be profitable; limits the number of personnel in each store; their store layouts are designed in a simple manner; and adheres to restricted opening and closing hours (Haberer, 2010). This enables the enterprise to offer high quality products at low costs. The enterprise produces its own products and brands, making it to have a high control over them. Apart from this, this organization has listed all of its products and their prices online (Kleeman, 2012). This has made it easy for the consumers to gain useful information about the firm. However, the reliance on a small number of trained workers can be considered a weakness. Also, the limited range of products offered by the enterprise can also be deemed as a weakness since it limits consumer choices (Haberer, 2010).

BLS

BLS refers to a set of actions taken by an enterprise in order to satisfy the needs of customers and hence, achieve competitive advantage in the future. Hua et al (2011) explains that, “a business enterprise can benefit from BSL by exploiting core competences in specific, individual product or service markets.” ALDI’s BLS focuses on offering quality products at lower costs to their customers. This is achieved through adopting an organizational structure that minimizes costs. They are also able to conduct a quality control of their products due to the narrow range of product categories (Haberer, 2010). This strategy can be considered as a sustainable source of competitive advantage for this enterprise.

Recommendations and Conclusion

Based on the above analysis, various recommendations can be made. First, ALDI needs to focus more on product diversification in order to add more choices for customers. Secondly, they should focus on expanding its operations within Australia through a store rollout program. As well, this company should maintain its strategy that focuses on offering high quality products at lower prices. Another suggestion is to increase percentage of imported supplies and hence, raise profits. It is essential for this firm to catch up with the developing technology by developing an online system that includes a platform for transaction and delivery.

In conclusion, this paper has addressed the current strategies adopted by ALDI. The paper has examined the competitive position ALDI’s, internal and external environments and its business level strategies. As noted in the paper, it is necessary for ALDI to reconsider its strategies and take into account the recommendations stated above in order to gain and maintain competitive edge over competitors in the long–run.

References

Cardwell, P. (2008), Adwatch.(ALDI Group’s brand strategy overview). Marketing. 23

Chen, L. & Mohamed, S., (2008), Impact of the internal business environment on knowledge

management within construction organisations. Construction Innovation 8(1), pp. 61 – 81, DOI 10.1108/14714170810846521

Haberer, J. (2010), Strategic management, Sydney: GRIN Verlag

Hitt, M. A., Hoskisson, R. E., Harrison, J. S. & Summers, T. P. (1994), Human Capital and

Strategic Competitiveness in the 1990s. Journal of Management Development. 13(1), pp. 35 – 46

Hua, S., Chatterjee, S. R.,& Jingliang, C., (2011) Achieving competitive advantage in service

supply chain: evidence from the Chinese steel industry, Chinese Management Studies, 5( 1), pp.68 – 81

Kafalas, A. G., (1981), Analyzing changes in the external business environment, Strategy &

Leadership, 9(4), pp. 26 – 46, DOI: 10.1108/eb053956

Kleeman, F. C., (2012), Supply Chain Strategy Analysis for Aldi: Supply Chain Management Im

Kourteli, L., (2005), Scanning the business external environment for information: evidence fromGreece. Information Research: An international electronic journal. 11(1), Pp. 242-257

Einzelhandel: Eine Strategische Analyse Des Discounters ALDI. Sydney: GRIN Verlag

Rogers, T. T. & Caswell, J. A., (1988), Strategic management and the internal organization of

food marketing firms, Agribusiness. 4 (1), pp. 3 – 10, DOI: 10.1002/1520-6297(198801)4:1<3::AID-AGR2720040103>3.0.CO;2-S

Event analysis of BP and shell

Name

Professor

Institution

Event analysis of BP and shell

Date

Event analysis

Introduction

According to Dreman & Berry, (1995, pp21-36), There are multiple argument concerning the effects of announcement on the stock prices, such events usually attract a lot of attention. There are also arguments that such events attract the attention of speculators thereby increasing stock volatility. Events may mean a lot to the shareholder and the potential investors. Such events usually lead to increased activity in the stock of the companies in question and may either mean convenience or detrimental depending on the nature of the company (Harris, 1986; Ho, 1998; Jaffe, 1974).

Company information

BP and shell are both global; company dealing in oil and gas, with its presence in 80 countries around the world. The companies’ main products include gasoline, energy and other petrochemical products. The companies are operating two main segments in the petrochemical sector: Exploration & Production. And Refining & Marketing. Under exploration and production, the company explores for oil and natural gas, develops oil nd gas fields, midstream transportation, storage and processing., The company trades natural gas, liquefied natural gas, power and natural gas liquids. However, on the refining and marketing segments, the company supply and trades, refining, manufactures, markets and transports crude oil, petroleum and petrochemicals products. Recent activities include the acquisition of 83% of Companhia Nacional de Acucar e Alcool in April 2011, as well as the acquisition of Verenium’s lignocellulosic biofuels business in 2010

The company financials report as at 3rd march include:

Prev Close: 47.84

Open: 47.42

Bid: 46.26 x 100

Ask: 55.00 x 1000

1y Target Est: 52.93

Beta: 1.8

Next Earnings Date: N/A

Day’s Range: 47.28 – 47.69

52wk Range: 33.62 – 49.09

Volume: 6,740,414

Avg Vol (3m): 7,587,520

Market Cap: 150.24B

P/E (ttm): 5.89

EPS (ttm): 8.06

Div & Yield: 1.92 (4.00%

Shell

DETAILS

Previous Close 73.62

Open 72.90

Day’s High 73.00

Day’s Low 72.51

Volume 1.87 Mil

Avg Daily Vol (13 Wks) 2.71 Mil

Bid 72.01

Bid Size 1,000

Ask 73.78

Ask Size 1,000

52-Wk High 77.97

52-Wk Low 57.97

Dividend Rate 3.36

Yield 4.62

Normality plot of the bp shares

Descriptive statistics for the bp data

Anderson-Darling A-Squared 2.802

p 0.000

95% Critical Value 0.787

99% Critical Value 1.092

Mean 604.298

Mode 581.1, 579, 587, 573.7, 641.1

Standard Deviation 25.909

Variance 671.280

Skewedness 0.194

Kurtosis -1.314

N 116.000

Minimum 560.000

1st Quartile 581.100

Median 600.800

3rd Quartile 628.503

Maximum 655.400

Confidence Interval 4.765

for Mean (Mu) 599.533

0.95 609.063

For Stdev (sigma) 22.950

29.752

for Median 588.700

612.000

Objectives of the study:

The main objectives of this study are:

To examine the effects of announcement on underlying stock prices

To determine whether the companies’ announcement are legitimate news or terrible news

Data and Technique

The data for the two companies are used are based on a number of common assumptions about the

T test for Shell

t-Test 1-sample Test Mean 1889.75 Confidence Level 0.95 N 112 Average 1889.75 Test Stdev p 1-sample Stdev Stdev 151.0336 151.0336 0.964 SE Mean 14.27133 T 0.000 TINV 1.658697 p – One sided 0.5 Accept Null Hypothesis because p > 0.05 (Means are the same)

p – two sided 1 Accept Null Hypothesis because p > 0.05 (Means are the same)

T test bp

t-Test 1-sample Test Mean 604.2978 Confidence Level 0.95 N 116 Average 604.2978 Test Stdev p 1-sample Stdev Stdev 25.90908 25.90908 0.965 SE Mean 2.405598 T 0.000 TINV 1.658212 p – One sided 0.5 Accept Null Hypothesis because p > 0.05 (Means are the same)

p – two sided 1 Accept Null Hypothesis because p > 0.05 (Means are the same)

It is imperative to know that the standards levels of t statistics are as shown below:

level One tailed Two tailed

1% 2.33 2.55

5% 1.66 1.95

10% 0.97 1.25

We set the day that the company released the information’s defined as day zero, then the daily returns for the first 30 days is calculated to determine the linearity of the data. This is as shown below:

Rit the 30 days around the first day “zero”: t = -30, -29,…-1, 0, 1,…, 29, 303

Then it is also advisable to calculate the total daily returns Rmt, for these days on the market of another firms, either Shall or BP. However, this may be done to compare group of companies having the same risk or operating in the same industry. The returns can however, be easily adjusted for market performance as well as risks. This will help in getting the excess returns for both Shell and BP during the period. For example, when the CAP model (capital assets pricing model) was used for controlling risk (Aitken, 2000, p 5)

Then the abnormal returns are defined as differences ARit= Rit–Rmt5

Then finally the average of the abnormal returns is calculated overall the N events in the whole sample:

The Cumulate the returns that are given for the first T days to CAAR are calculated:

From mother studies, there is enough proof that during the pre announcement the reaction from then investors varies in form from the reaction of the investors during post announcements. The preannouncement drifts that occur prior to the earning are usually because of insider trading. This is always against the strong for efficiency. However during the post announcement drift the reaction of the investors are against the semi strong form (MacKinlay, 1997).

Kabir, & Vermaelen (1996, pp 1591–160) states that, the t statistics is useful for determining if the excess returns during the announcements are very different from zero. This was arrived at by getting the t statistics for all the values of n and dividing the average excess returns by some predetermined standard error

T statistic (excess return/day t) = Average Excess Return / Standard Error

If the t statistics are statistically significant, the event affects returns; the sign of the excess return determines whether the effect is positive or negative.

Abnormal returns

When announcement are made most investors try to determine whether announcement are good for the company or bad for the same company: in the case we should determine whether the company had registered returns on the day of the announcements (Manne, 1966).

We assume that then return of the company on the day of announcements was 0.5. Further investigation finds that the returns for the same companies over the past 3 months were 0.3 on the business day. And the S&P INDEX had risen by 0.4%. Additionally, the CAPM estimated coefficient was found to be a=-0.1% and b=1.1.what was the response of the investors on the announcements (Barber, Griffin, and Baruch, 1994, p 23: Lorie, &. Neiderhoffer, 1968, pp 35-51: Kwong, &, Wong, (1984, pp, 905–917).

Market-adjusted abnormal returns

086995

First we compute the original abnormal return for the announcement using the market-model, this is based on a number of factors amongst them the date of announcement, the nature of the company and performance of the company in prior events

11176018415

31222956350Then we use the market market-adjusted model:

1963420271145Then the mean adjusted model:

Conclusion

Is the market efficient?

Accordion to Grigori et al, (2008, p3), an efficient market is the market in which the market price is actually the unbiased estimate of the true value of the real investment. In this regard, it is healthy to say that the market is efficient. It also important to note that the market prices of the two companies are biased. Kyle, (1985, pp 1315–1335) enthuses that, this is because the prices are either low or high than the true value. However, it is important to note that the deviation are random and are not easy to determine the degree of randomness, based on the fact that when the stock of BP had more ratios they were overvalued than the stocks of Shell. Finally i would like to say that market efficiency is difficult to state because it depends on the risk adjustment procedure, magnitude of the issues and selection bias, (Dreman, 1998; Ball, 1978, pp 103-126).

Herring, et al, (2010, p 347), argues that, market efficiency is relative as there is likelihood that the market may be efficient o a group of investors and not efficient to other, this explains why the shareholder of BP may view the market as efficient while the investors of shell do not hold the same view. This may only be attributed to the differential tax and transaction cost. These factors confer advantages to some shareholders relative to other.

The efficient of the market makes it difficult for any group of shareholder to beat the market through the same strategy despite the availability of the precise information tom the investors. They cannot consistent find the undervalued stocks. The efficiency of the market makes it difficult for investors to use the price information both current and past to beat the market putting them at disadvantages land leaving them speculating.

From the three analyses, the abnormal return was positive, meaning that the announcement was a good for the investors. In most cases, the abnormal returns and the final cumulative returns for the past 12 months are usually measures of just averages. They are also the cumulative effects of the announcements on the made by the company; this is also same to the dividend and earnings announcements

Bibliography

Grigori Erenburg, Janet Kiholm Smith, and Richard L. Smith, (2008). “The Paradox of‘Fraud-on-the-Market Theory’: Who Relies on the Efficiency of Market Prices?”, Working Paper, 12.

Brad M. Barber, Paul A. Griffin, and Baruch Lev1994., “The Fraud-on-the-Market Theory and Indicators of Common Stocks’Efficiency,” The Journal of Corporation Law,

Aitken C.G.G. (2000), “Interpretation of Evidence, and Sample Size Determination,” in Joseph L. Gastwirth, ed., Statistical Science in the Courtroom,

Lorie, J., and V. Neiderhoffer (1968): “Predictive and Statistical Properties of Insider Trading,” Journal of Law and Economics, 11, 33–51.

MacKinlay, A. C. (1997): “Event Studies in Economics and Finance,” Journal of Economic Literature, 35, 13–39.

Manne, H. G. (1966): Insider Trading and the Stock Market. The Free Press, New York.

Harris, L. (1986): “Cross-Security Tests of the Mixture of Distributions Hypothesis,” Journal of Financial and Quantitative Analysis, p. 39.

Ho, B. M. (1998): Public Companies and their Equity Securities: Principles of Regulation under Hong Kong Law. Klumer Law International, London.

Jaffe, J. F. (1974): “Special Information and Insider Trading,” Journal of Business, 47, 410–428.

Kabir, R., and T. Vermaelen (1996): “Insider Trading Restrictions and the Stock Market: Evidence from the Amsterdam Stock Exchange,” European Economic Review, 40, 1591–1603.

Kwong, K. S., and K. A. Wong (1984): “The Behavior of Hong Kong Stock Prices,” Applied Economics, 16, 905–917.

Kyle, A. (1985): “Continuous Auctions and Insider Trading,” Econometrica, 53, 1315–1335.

Herring, Richard; Diebold, Francis X.; Doherty, Neil A. (2010). The Known, the Unknown, and the Unknowable in Financial Risk Management: Measurement and Theory Advancing Practice. Princeton, N.J: Princeton University Press. p. 347.

Dreman David N. & Berry Michael A. (1995). “Overreaction, Underreaction, and the Low-P/E Effect”. Financial Analysts Journal 51 (4): 21–30.

Ball R. (1978). Anomalies in Relationships between Securities’ Yields and Yield-Surrogates. Journal of Financial Economics 6:103-126

Dreman D. (1998). Contrarian Investment Strategy: The Next Generation. Simon and Schuster.

Event Reflections Concordia Action and Comedy Movie

Event Reflections: Concordia; Action and Comedy Movie

Name of Author

Institutional Affiliation

Event Reflections: Concordia; Action and Comedy Movie

Presented as an action and movie comedy, my experience at Concordia was probably one of the best I have ever had with movies. While the thrills of actions come alive and captivate the mind, one is able to relieve tension now and again. In this movie, the staring characters included Josh Hutcherson, Woody Harrelson, Liam Hemsworth, Elizabeth Banks, and Jennifer Lawrence. In most instances, they presented comic antics which were combined with witty acts and occasionally very audacious and brave steps. By attending this movie, I got to learn that action movies can be merged with comedy to produce an entirely wonderful piece. It is so entertaining when an individual causes you to laugh and on the other hand risks death, only to emerge a hero from the whole setup. Initially, I had believed action movies were simply action movies and comedy was comedy.

At the same time, I learnt so many things about myself as a result of attending Concordia. First, I like this type of movie so much. After I left the movie, I reviewed my attendance and I could remember that all through the movie, I was so consumed in emotions. Also coming to the fact that I am quite reactionary, I remember episodes when I felt extremely angry at people who were doing wrong and times when I felt happy about and probably sided with one of the heroes punishing an evil doer. Other than liking the genre, I have also learnt that I have good memory for adventures that please me. Although I may not have it word for word, I can recall the whole script, all points where notable activities took place, and most of the cast.

I believe I might participate in a similar experience again. This is because the whole episode was entertaining and refreshing. Although I had not interacted with this genre before, the attention it attracted from me has pushed me to the libraries to find out more about it. I have then come across bigger names in action comedy like Eddie Murphy, Jackie Chan, and other Superheroes. I look forward to meeting them at the theatres.

Event analysis

Name

Professor

Institution

Event analysis

Date

Event analysis

Introduction

According to Dreman & Berry, (1995, pp21-36), There are multiple argument concerning the effects of announcement on the stock prices, such events usually attract a lot of attention. There are also arguments that such events attract the attention of speculators thereby increasing stock volatility. Events may mean a lot to the shareholder and the potential investors. Such events usually lead to increased activity in the stock of the companies in question and may either mean convenience or detrimental depending on the nature of the company (Harris, 1986; Ho, 1998; Jaffe, 1974).

Company information

BP and shell are both global; company dealing in oil and gas, with its presence in 80 countries around the world. The companies’ main products include gasoline, energy and other petrochemical products. The companies are operating two main segments in the petrochemical sector: Exploration & Production. And Refining & Marketing. Under exploration and production, the company explores for oil and natural gas, develops oil nd gas fields, midstream transportation, storage and processing., The company trades natural gas, liquefied natural gas, power and natural gas liquids. However, on the refining and marketing segments, the company supply and trades, refining, manufactures, markets and transports crude oil, petroleum and petrochemicals products. Recent activities include the acquisition of 83% of Companhia Nacional de Acucar e Alcool in April 2011, as well as the acquisition of Verenium’s lignocellulosic biofuels business in 2010

The company financials report as at 3rd march include:

Prev Close: 47.84

Open: 47.42

Bid: 46.26 x 100

Ask: 55.00 x 1000

1y Target Est: 52.93

Beta: 1.8

Next Earnings Date: N/A

Day’s Range: 47.28 – 47.69

52wk Range: 33.62 – 49.09

Volume: 6,740,414

Avg Vol (3m): 7,587,520

Market Cap: 150.24B

P/E (ttm): 5.89

EPS (ttm): 8.06

Div & Yield: 1.92 (4.00%

Shell

DETAILS

Previous Close 73.62

Open 72.90

Day’s High 73.00

Day’s Low 72.51

Volume 1.87 Mil

Avg Daily Vol (13 Wks) 2.71 Mil

Bid 72.01

Bid Size 1,000

Ask 73.78

Ask Size 1,000

52-Wk High 77.97

52-Wk Low 57.97

Dividend Rate 3.36

Yield 4.62

Normality plot of the bp shares

Descriptive statistics for the bp data

Anderson-Darling A-Squared 2.802

p 0.000

95% Critical Value 0.787

99% Critical Value 1.092

Mean 604.298

Mode 581.1, 579, 587, 573.7, 641.1

Standard Deviation 25.909

Variance 671.280

Skewedness 0.194

Kurtosis -1.314

N 116.000

Minimum 560.000

1st Quartile 581.100

Median 600.800

3rd Quartile 628.503

Maximum 655.400

Confidence Interval 4.765

for Mean (Mu) 599.533

0.95 609.063

For Stdev (sigma) 22.950

29.752

for Median 588.700

612.000

Objectives of the study:

The main objectives of this study are:

To examine the effects of announcement on underlying stock prices

To determine whether the companies’ announcement are legitimate news or terrible news

Data and Technique

The data for the two companies are used are based on a number of common assumptions about the

T test for Shell

t-Test 1-sample Test Mean 1889.75 Confidence Level 0.95 N 112 Average 1889.75 Test Stdev p 1-sample Stdev Stdev 151.0336 151.0336 0.964 SE Mean 14.27133 T 0.000 TINV 1.658697 p – One sided 0.5 Accept Null Hypothesis because p > 0.05 (Means are the same)

p – two sided 1 Accept Null Hypothesis because p > 0.05 (Means are the same)

T test bp

t-Test 1-sample Test Mean 604.2978 Confidence Level 0.95 N 116 Average 604.2978 Test Stdev p 1-sample Stdev Stdev 25.90908 25.90908 0.965 SE Mean 2.405598 T 0.000 TINV 1.658212 p – One sided 0.5 Accept Null Hypothesis because p > 0.05 (Means are the same)

p – two sided 1 Accept Null Hypothesis because p > 0.05 (Means are the same)

It is imperative to know that the standards levels of t statistics are as shown below:

level One tailed Two tailed

1% 2.33 2.55

5% 1.66 1.95

10% 0.97 1.25

We set the day that the company released the information’s defined as day zero, then the daily returns for the first 30 days is calculated to determine the linearity of the data. This is as shown below:

Rit the 30 days around the first day “zero”: t = -30, -29,…-1, 0, 1,…, 29, 303

Then it is also advisable to calculate the total daily returns Rmt, for these days on the market of another firms, either Shall or BP. However, this may be done to compare group of companies having the same risk or operating in the same industry. The returns can however, be easily adjusted for market performance as well as risks. This will help in getting the excess returns for both Shell and BP during the period. For example, when the CAP model (capital assets pricing model) was used for controlling risk (Aitken, 2000, p 5)

Then the abnormal returns are defined as differences ARit= Rit–Rmt5

Then finally the average of the abnormal returns is calculated overall the N events in the whole sample:

The Cumulate the returns that are given for the first T days to CAAR are calculated:

From mother studies, there is enough proof that during the pre announcement the reaction from then investors varies in form from the reaction of the investors during post announcements. The preannouncement drifts that occur prior to the earning are usually because of insider trading. This is always against the strong for efficiency. However during the post announcement drift the reaction of the investors are against the semi strong form (MacKinlay, 1997).

Kabir, & Vermaelen (1996, pp 1591–160) states that, the t statistics is useful for determining if the excess returns during the announcements are very different from zero. This was arrived at by getting the t statistics for all the values of n and dividing the average excess returns by some predetermined standard error

T statistic (excess return/day t) = Average Excess Return / Standard Error

If the t statistics are statistically significant, the event affects returns; the sign of the excess return determines whether the effect is positive or negative.

Abnormal returns

When announcement are made most investors try to determine whether announcement are good for the company or bad for the same company: in the case we should determine whether the company had registered returns on the day of the announcements (Manne, 1966).

We assume that then return of the company on the day of announcements was 0.5. Further investigation finds that the returns for the same companies over the past 3 months were 0.3 on the business day. And the S&P INDEX had risen by 0.4%. Additionally, the CAPM estimated coefficient was found to be a=-0.1% and b=1.1.what was the response of the investors on the announcements (Barber, Griffin, and Baruch, 1994, p 23: Lorie, &. Neiderhoffer, 1968, pp 35-51: Kwong, &, Wong, (1984, pp, 905–917).

Market-adjusted abnormal returns

086995

First we compute the original abnormal return for the announcement using the market-model, this is based on a number of factors amongst them the date of announcement, the nature of the company and performance of the company in prior events

11176018415

31222956350Then we use the market market-adjusted model:

1963420271145Then the mean adjusted model:

Conclusion

Is the market efficient?

Accordion to Grigori et al, (2008, p3), an efficient market is the market in which the market price is actually the unbiased estimate of the true value of the real investment. In this regard, it is healthy to say that the market is efficient. It also important to note that the market prices of the two companies are biased. Kyle, (1985, pp 1315–1335) enthuses that, this is because the prices are either low or high than the true value. However, it is important to note that the deviation are random and are not easy to determine the degree of randomness, based on the fact that when the stock of BP had more ratios they were overvalued than the stocks of Shell. Finally i would like to say that market efficiency is difficult to state because it depends on the risk adjustment procedure, magnitude of the issues and selection bias, (Dreman, 1998; Ball, 1978, pp 103-126).

Herring, et al, (2010, p 347), argues that, market efficiency is relative as there is likelihood that the market may be efficient o a group of investors and not efficient to other, this explains why the shareholder of BP may view the market as efficient while the investors of shell do not hold the same view. This may only be attributed to the differential tax and transaction cost. These factors confer advantages to some shareholders relative to other.

The efficient of the market makes it difficult for any group of shareholder to beat the market through the same strategy despite the availability of the precise information tom the investors. They cannot consistent find the undervalued stocks. The efficiency of the market makes it difficult for investors to use the price information both current and past to beat the market putting them at disadvantages land leaving them speculating.

From the three analyses, the abnormal return was positive, meaning that the announcement was a good for the investors. In most cases, the abnormal returns and the final cumulative returns for the past 12 months are usually measures of just averages. They are also the cumulative effects of the announcements on the made by the company; this is also same to the dividend and earnings announcements

Bibliography

Grigori Erenburg, Janet Kiholm Smith, and Richard L. Smith, (2008). “The Paradox of‘Fraud-on-the-Market Theory’: Who Relies on the Efficiency of Market Prices?”, Working Paper, 12.

Brad M. Barber, Paul A. Griffin, and Baruch Lev1994., “The Fraud-on-the-Market Theory and Indicators of Common Stocks’Efficiency,” The Journal of Corporation Law,

Aitken C.G.G. (2000), “Interpretation of Evidence, and Sample Size Determination,” in Joseph L. Gastwirth, ed., Statistical Science in the Courtroom,

Lorie, J., and V. Neiderhoffer (1968): “Predictive and Statistical Properties of Insider Trading,” Journal of Law and Economics, 11, 33–51.

MacKinlay, A. C. (1997): “Event Studies in Economics and Finance,” Journal of Economic Literature, 35, 13–39.

Manne, H. G. (1966): Insider Trading and the Stock Market. The Free Press, New York.

Harris, L. (1986): “Cross-Security Tests of the Mixture of Distributions Hypothesis,” Journal of Financial and Quantitative Analysis, p. 39.

Ho, B. M. (1998): Public Companies and their Equity Securities: Principles of Regulation under Hong Kong Law. Klumer Law International, London.

Jaffe, J. F. (1974): “Special Information and Insider Trading,” Journal of Business, 47, 410–428.

Kabir, R., and T. Vermaelen (1996): “Insider Trading Restrictions and the Stock Market: Evidence from the Amsterdam Stock Exchange,” European Economic Review, 40, 1591–1603.

Kwong, K. S., and K. A. Wong (1984): “The Behavior of Hong Kong Stock Prices,” Applied Economics, 16, 905–917.

Kyle, A. (1985): “Continuous Auctions and Insider Trading,” Econometrica, 53, 1315–1335.

Herring, Richard; Diebold, Francis X.; Doherty, Neil A. (2010). The Known, the Unknown, and the Unknowable in Financial Risk Management: Measurement and Theory Advancing Practice. Princeton, N.J: Princeton University Press. p. 347.

Dreman David N. & Berry Michael A. (1995). “Overreaction, Underreaction, and the Low-P/E Effect”. Financial Analysts Journal 51 (4): 21–30.

Ball R. (1978). Anomalies in Relationships between Securities’ Yields and Yield-Surrogates. Journal of Financial Economics 6:103-126

Dreman D. (1998). Contrarian Investment Strategy: The Next Generation. Simon and Schuster.