Personal Branding

â€Å"I've come to believe that each of us has a personal calling that's as unique as a fingerprint – and that the best way to succeed is to discover what you love and then find a way to offer it to others in the form of service, working hard, and also allowing the energy of the universe to lead you. † Oprah Winfrey Most of us know how important our brand is but we don’t always consider all the components that constitute our brand. When birthing your brand, you must consider the total user experience. Your personal brand should be extended into all aspects of your business. As image professionals, we are walking advertisements of our services so our business brand begins with us. A personal assessment should be the first step in building your brand. There are numerous ways to conduct a personal assessment. Consider and honestly answer the questions: What am I good at? How do I want others to describe me? What do I have to offer others? In other words, what is your value proposition that adds measurable, remarkable, distinctive value? You have to understand what makes you unique and what you have to offer then exemplify that in your business in every way. Once you take inventory and understand what it is you bring to the table as an individual you can work on bringing out the positives and improving the negatives. Continuously perfect your craft by participating in educational seminars, meetings, webinars, and other networking events. It has been said that it takes at least 10 years to be considered an expert at anything. Start as early as possible honing your skills and continue to sharpen them by regularly reading and trying new things. Just being the best is not good enough if you can’t communicate why this makes a difference to others. If you cannot articulate your brand effectively to the world, it will overlook you so careful communication of your brand is paramount. This is done in many ways, including verbally telling people and by writing about your brand or unique selling proposition in the form of articles or online postings. Online and social media are vital forms of communicating your message and should certainly be a part of your personal branding strategy. But be careful that the information you put out is aligned with your goals, audience needs, and your genuine style. All elements of your personal image have to be consistent in all aspects of your life to have the strongest effect. The final part of the process will be a matter of applying your brand in all areas of your life. Not only with your appearance, communication, and etiquette but also in the other extensions of your own personal brand, which include the house you live in, the car you drive, the company you keep, the events you attend, the work space you maintain, to the documents you disseminate. All of these represent you and make an impression, good or bad. Remember that personal branding refers to the images and ideas evoked when you think of a particular person. It is the purposeful method of shaping those images and ideas people have of you. The term personal branding has become more popular in the last decade but as Tom Peters, management guru, famously wrote â€Å"Big companies understand the importance of brands. Today, in the age of the individual, you have to be your own brand. †

To Kill a Mokingbird Journals

Never kill a mocking bird A mockingbird is a harmless bird that makes the world more pleasant. In To Kill A Mockingbird by Harper Lee, the mockingbird symbolizes Boo Radley and Tom Robinson, who were both peaceful people who never did any harm. To kill or harm them would be a sin. Scout's father, Atticus, tells Scout and Jem, â€Å"I'd rather you shoot at tin cans in the backyard, but I know you'll go after birds. Shoot all the blue jays you want, if you can hit'em, but remember it's a sin to kill a mockingbird. â€Å"(p. 69) The mockingbird symbolizes these two characters because it does not have its own song.Whereas, the blue jay is loud and obnoxious, the mockingbird only sings other birds' songs. Therefore, the mockingbird is seen through the other birds. The people of Maycomb only knew Boo Radley and Tom Robinson by what others said about them. Both of these characters do not really have their own â€Å"song† in a sense, and therefore, are characterized by other people' s viewpoints. This statement is a great metaphor and comparison of Boo and Tom. They keep to themselves and only want to help out the community. Personally I do have a Boo Radley in my life. My mom likes to keep to herself and doesn’t really like to go out places.She always says that she is fine where she lives and she would never try to change the people around her. She really is a mockingbird she loves to cook and care for us. I know that if it was on her hands to save us and god forbid her being harmed in return, she is the angel of the family and even though she tries to keep to herself we and she knows that e love her very much. She is a very calm person and only cares for those around her. First day of school Scout had a really bad first day of school. She started off with the wrong foot with her teacher. Although she wanted to go to school, Scout had a horrific day.Her teacher was upset because Scout could read. She also tells her that she is not allowed to read out lo ud. The teacher loans the Cunningham money for his lunch. He says he can pay her back tomorrow, Scout explains that he won't be able to because he is from a poor family. Scout then gets her hands hit with a ruler. And at the end of hat school day, scout meets the Cunningham and beats him up in attempt to get back at him for making her start off the school on the wrong foot. I’m not a big fan of school. But then again, who is? I remember my first day of school, in America.It was bad I had no idea how to speak English due to that I was raised in Mexico. Kids would make fun and taunt me. It was really frustrating for me up through middle school until I â€Å"mastered† the language. I really do thank the kids that made fun of me though. It helped me try harder and harder. I don’t like to fight, and it’s kind of ironic because my dad always said â€Å"fight with your brain. Show them that you are in fact better than them. † And so I did I tried my harde st to be where I am now. Dead bird In to kill a mocking bird, Tom Robinson was convicted of a crime he did not commit.He was accused and convicted of raping Mayella Ewell, but the truth was that he never raped Mayella. It was all a cover up for Bob Ewell, Mayella’s father, for beating Mayella. The shown above is a mockingbird. As you can see it has been shot and it is dead, in the novel Atticus states that you should never kill a mocking bird because it is a sin. But this foreshadow for Tom Robinson. Tom Robinson is convicted purely because he is a black man and his accuser is white. The evidence is in his favor, that race is clearly the single defining factor in the jury's decision.Atticus fights against racism, and a few other townspeople are on his side, including Miss Maudie and Judge Taylor. Jem and Scout also believe in racial equality, but are obviously in the minority because they’re kids. After the trial, Tom was taken to Enfield Prison Farm, which was about 7 0 miles away. This is where he would attempt to escape and be shot to death. This is a very ugly side of the world. Tom was killed for a crime he did not commit. It was al because he was balck and he lived on the south. Going back to his rights there were no blacks on the jury. Also he stated that he felt sorry for the girl. he helped when she asked for it.He was only there to help and he ot stabbed in the back by them. Victory without winning. Well, the question is how Atticus is victorious, not whether or not he won the case. Think about it, if you read the book. He got to bring out the truth, and he stood for right against everyone, even though it might cost him his place in the society of that small town. Ultimately, people respected him. Racism such as in To Kill a Mockingbird sometimes goes on because individuals do not feel racist but they continue in fear of their neighbors thoughts. Atticus stood for the moral high ground regardless of people and his defense was flawless.Ev en though the jury still voted out of fear and ignorance. Atticus really shows what the right thing to do is and that help the community as much as you can. Miss Maudie considers this as progress and a positive step towards real justice, although it may be a small, it is still â€Å"one in the right direction†. Atticus adds that although he cannot be sure who it was, at least one person on the jury took an initial stance for Tom's innocence, and he thinks that person was Mr. Cunningham. He guesses this from the awkward writing on the slip of paper used to write the verdict.Atticus makes a great fight for justice in this case and is respected in his whole town. I think that now people will start to respect the African americans in their community because they’ve been mistreated for so long and Atticus makes the first step in that town. Tree Findings One day Scout finds gum in the tree near the Radley home. On the last day of school the Jem and Scout walked home together in their way, they find a package covered with foil and containing two scrubbed, Indian-head pennies and two Soap Dolls of a boy and a girl  that looked like them in the tree near the Radley Place.They think Boo put them there for them to find. Throughout the story the kids try to get a peek at Boo but they never can, but in many pccasion Boo helps the kids and protects them. Near the end of the story Boo saves Jem And Scout from nearly being killed. He kills Bob Ewell by stabbing him, thus saving the Finches. Boo Radley really remind me of my grandparents. When I was a kid they would always hide gifts around the house, and told us to find them, once year they hid stuff on the trees in or back yard and it took us 2 days to find them all.They really knew how to make us waste time and play around. Another similarity between them is that they always tried to protect us even if had done something bad. They would always tell my mom not to yell us for doing bad stuff, but she still did . My grandparents really took care of us when we were young and I’m really thankful for it. Role Model. Atticus can be described as a calm, courageous, intelligent and intellectual man, who understands human nature and f moral values in life. Jem makes it clear that he is his role model. He wants to be just like him.They both show their need for each other. Throughout the novel, their relationship continually grows stronger as they remain supportive for each other. In the beginning He felt humiliated because Atticus was different from other parents. Atticus was a lot older and did not fish and hunt like other parents. Jem’s feelings towards Atticus change. When, the mad dog was coming towards the finch’s home and Atticus is called immediately. To Jem’s greatest surprise, Atticus shoots the dog without any hesitation. My role model Is my father. He has been though a lot during his life.From him getting married when he was 16. He has made it this far in lif e with 3 kids that look up to him. He has had 2 vertebral operation and an arm operation and he is still o top of his â€Å"game†. My father is the strongest man in the world and I respect him for being who he is. He Is a straight forward man and isn’t afraid to speak his mind. He would always tell me to â€Å"fight with my brain and not my arms† which I find very ironic due to that that is what is said in the novel. he has helped me through so much and I thank god for giving me the best father of them all.No offence to all other fathers but mine is the best. Growing up. Scout and Jem grew up in a small town where everyone knew everyone, and everybody followed the same costumes. But her family was different. They didn’t follow the costumes they adopted Atticus’ way of life and way to see it. Most of the people from Maycomb were arrogant, racist, ignorant man from the south. Atticus was different he didn’t believe in racism he stood for what was right at all times and taught his children this way. Scout and Jem had not sin in their hearts but they knew right from wrong.They knew that the people of Maycomb were ignorant and were treating not only Tom Robinson but the other blacks and boo the same way. The way I was raised I was always told to not look down on people. My parents always said that everyone is going to be better than you at some things and you have to deal with it and if you don’t want to, well then try harder. I was always told not to discriminate others because I would be discriminated too, for being Hispanic. The one thing I really never want to lose is respect. Respect is the most important feature to have if you have respect you have trust and everything derives from respect.If you don’t have respect you don’t have anything, Atticus had a lot of respect from other he was the talk of the town. He and his family gained a lot of respect because of Atticus and how he made a step forward and set an example in his town. Don’t judge a book by its cover. Susan Boyle is a Scottish singer who came to public attention when she appeared as a contestant on the TV show Britain's Got Talent singing â€Å"I Dreamed a Dream†. At the beginning she seemed unimpressive she seemed like she was just going to embarrass herself. People thought she had no talent and that she was goober.Simon the judge from Britain’s got talent was very skeptical and even laughed at her so did many people from the audience. But to their surprise Susan shut them and up and showed them who was boss. She was an extraordinary singer. Claps and cheers were heard from the stands. When you watch the video of the performance it will sure give you goose bumps. Jem and scout were also skeptical about Atticus. He never played football or went hunting like all the other parents. He wouldn’t even teach them how to use the air rifles when he bought them for them. They were ashamed of him because he wasn’t very manly or outdoorsy.But one day when a mad dog was heading towards the finch’s house Atticus was called home from the city in attempt to protect his kids. To everyone’s surprise Atticus shot the dog in the head with one bullet, while the dog was running. This really shocked Scout and Jem because they had never seen this side of their father. Heck Tate told the kids that his father was nicknamed â€Å"one shot finch† for his great accuracy with guns. Both Atticus and Susan surprised the people around them because they didn’t appear to have the required abilities to do what did, but they ended up being pretty darn good at it.

Film Report Movie Review Example | Topics and Well Written Essays - 1000 words - 1

Film Report - Movie Review Example Its theme revolves around an unconventional form of love, in which the other person involved does not see his mysterious admirer. At first, the audience cannot see romance as a theme in the movie because the film opened with the unveiling of a monument only to find out that the Tramp is relaxingly cradled in its arms, plus his pants got hooked by the monument’s sword when he was asked to leave. The audience can see the theme when Tramp saw the blind woman selling flowers in a corner. It was conceived that he liked the woman the first time he met her. In emphasizing the theme, the film used Tramp’s gaze and fondness for the blind woman that obviously tell the audience he likes her at the first encounter. 2) What were the choices made by the main characters and what were the consequences of those choices? First, Tramp’s helping of a drunk millionaire when he was about to commit suicide in a river resulted to a newly-formed friendship. Because of that, Tramp was abl e to see the millionaire’s house and was offered a drink, aside from the friendship. Moreover, the Tramp was also able to find out the condition of the blind woman he met on the street when he decided to find her. As a result of the growing affection he has for the woman, the Tramp decided to help finance her costly eye operation, and even pay for their rent. The Tramp decided to be a street cleaner and a boxer. He was not successful, though, in winning the fight. Accidentally, he met with his millionaire friend in a street. His friend, likewise, decided to help his friend, and gave him the money he needed. Despite the odds (thieves sent his millionaire friend to sleep while they were talking in the living room), the Tramp was able to give the money to the blind woman, and she had her operation successfully. In the end, the cured woman acknowledged the Tramp when they met for the first time after he was imprisoned. The woman accepted the Tramp when she first saw him, and the Tramp’s love was also requited. 3) What three or four sequences are most important in the film? Why? First, it was during the time when the Tramp met the blind woman in the street, and immediately falls in love with her. It gave him someone to look forward to. Second, when he tried to stop the drunk millionaire from committing suicide. That started their friendship, even though the millionaire is hostile when he is not drunk. Their friendship paved way for his access to various parties, and even driving the millionaire’s car. Third, the Tramp’s surprise visit to the blind woman’s house made him know her condition and the need for a costly eye operation. It was because of knowing her situation that made him determined to help her. His friendship with the millionaire also helped the blind woman to be cured through his money given to him. Because of their acquaintance also, he was imprisoned and spent his life in jail for stealing the millionaire’s mo ney (apparently, the millionaire did not remember anything after the thieves hit him on the head). The final sequence was when the Tramp and the cured woman finally met, and their love was proven in the end. 4) Did the ?lm surprise you with anything unusual in its story, style, technique, or implications? The film

Aspects of Psychology Essay Example | Topics and Well Written Essays - 1000 words

Aspects of Psychology - Essay Example t on emotions. If the emotions were to be further classified as positive and negative emotions it may be said that my weekend was great. However I must recognise the role played by the people and situations in eliciting the emotions I expressed. For example, although my Friday began on a high note with a lot of expectation the misplacement of a bag threatened the day until friends stepped in supportively and with understanding were able to tolerate my negative emotions. I find the link in my emotional expressions to various theories explaining the origin and function of emotions in humans. For example James-Lange’s theory posits that physiological arousal in emotional expression is a result of stimulus from events around an individual and the expression is the conscious interpretation of the experience. This was expressed on Saturday when events seeme to work against my expected plan (Coon, 2009). Cannon-Bard in his theory on the other hand proposes that simulteneous emotional and physiological responses are caused by stimuli in the environment. I was surprised at the power of emotional support from people close to me because more than once in the three days it was able to restore me from negative emotions when things seemed not to favor me. The deloay of the bus elicited great anger that physiologically made me cry at the feeling of being let down and also letting down a friend. It may not be possible to explain with all theories but the theory by Schachter and Singer cannot be ignored because of its role in emotional classification. Although emotional and physiological responses are simultenous it may not be easy to manage them unless they are classified based on the arousal agent. This is best described in the diary from the notes indicated against each emotional response because I believe that the activities (stimuli) were responsible for the emotions. This is because of the subconscious and occasionally conscious cognitive appraisals I made from the events unfolding around me as put in the Lazarus theory. In overall assessment of aspects of my emotional expression in the three days can be best classified as cognitive, physiological and behavioral (Brannon, 1999). This classification may help shade more light on the exact meaning in the emotions, whether negative or positive. The table below summarizes a few of them: Emotion Cognitive Physiological Behavioral Joy When things were very pleasurable usually from positive surprises Shade tears I tended to talk a lot or simply whistle a tune or Anxiety Positively when I anticipated interesting experience Negatively when I anti

Fighting for Four Freedoms and the Cold War and the United States Essay

Fighting for Four Freedoms and the Cold War and the United States - Essay Example Peace is far better tool rather than war. The cold war was a hostile rivalry between the US and Soviet Union which started from 1940’s and continued till the Soviet Union broke in 1991.The main reasons of the Cold war was the difference of ideologies. Soviet union which was basically a communist country was ruled by a dictator .this idea was not appreciated by the Americans. Both the nations believed that the other would harm the other nation beliefs. Stalin wanted other countries to come forward to help protect the Soviet Union from being invaded again on the other hand, US and Britain were worried that most of the areas of Eastern Europe were falling under Soviet Union. So lack of trust weakened these nations and they fell apart. Who was responsible for this Cold war? Some blame America some USSR. America tried to show their power and attacked Japan with an atom bomb which was very harmful for the upcoming of generations. During the reign of Eisenhower, most of the populatio n wanted to live a luxurious life. Â   It was a period of prosperity and most of the people started purchasing material things which did not happen ever before. Consequently, Eisenhower put forward the idea that the government should come forward and help in building roads and highways that were to connect to the suburbs.

Reflective Practice Essay Example | Topics and Well Written Essays - 2500 words

Reflective Practice - Essay Example The critical incident review, modeling excellence and proactive learning are the ways that are being covered in this paper. The process of reflective learning is very considerable for the students as it serves in personal growth, professional growth along with bringing an important change in the lives of the people. Therefore, all sections of the paper cover an in-depth analysis of the situations, where my personal learning acquired from the events and situations are also highlighted and discussed (Morrison, 1996; Feldman, 2005). Critical Incident Analysis The incident that I find significant for me is the learning experience I have acquired from my class PPT. My experience is based on the reflection that I gained from the PPT slides that served me great deal in understanding the phenomenon of learning. The slides helped to reflect on my experiences with using best approaches. ‘Reflection’ is one of my class PPTs that I have found too important for me, as it initiates wi th a suggestion that one needs to have an experience, which later should be observed keenly. Based on the observation, one needs to reflect upon the experience, in which there is a need to make analyses too. I also learnt that while reflecting upon an experience we need to generate new ideas. Before experiencing these slides, I had a limited thinking about the reflection on any incident. Thus, it can be said that the experience was amazing because it served to facilitate understanding of the psychological phenomenon of direct and indirect learning processes (Boud, 1985). Throughout experiencing the class PPT, I acquired a great deal of knowledge and also became aware of some of the universal facts. I learnt that when two people interact with each other, their conversation may bring significant change either on the perception of one of them or it may serve both to extract out a new conclusion. My learning through such informative slides is worth for me because now I have become quite conscious when I m experiencing a learning process. Moreover, I have also analyzed that my previous state of unconsciousness towards psychological phenomenon has transformed noticeably, because the class slides have enhanced my view to feel the transformation and revolution in human being. The significant part of the class PPT was its initial general discussion about the simple concept of learning, which was later followed by the details of the learning processes. On the other hand, I have also analyzed that it is not necessary to teach someone with giving descriptive explanation; however, if few important and concise bullets points are taught, the result could be effective to serve the learning (Brockbank & Mcgill, 2012). The class slides has cleared many fundamental concepts such as, they define the difference between coaching and counseling in a precise way that it cannot be forgotten. My experience with PPT slides is not only effective for me; however, the experience has also s erved me understanding the process of learning when we work in team. Furthermore, I have realized that the effects of learning I acquired from the class PPT are effectual for me in every walk of life. The reason behind keeping the class PPT experience among the significant incidents is the modification in my behavior when it comes to experience a learning process. The changing between my past perception and the new one developed by class PPT is quite vital for my professional life too because the learning is such a process that remains

Technological Artifact Analysis Essay Example | Topics and Well Written Essays - 1000 words

Technological Artifact Analysis - Essay Example The only slightly raised features are the square directional pad in the middle, the three dividing bars between the keypad rows and the lens insert for the camera on the back. At first glance this artefact looks impressive. There is nothing elaborate or fussy about the design, and every visual aspect tends towards simplicity and sleekness. There are no garish colors, and so it would not appeal to young children. One notable review of the product observes that it is an adaptation of the earlier, popular Nokia 6300 model and highlights the styling as its best feature: â€Å"the 6700 is a beauty, made in the same style but with a more attractive and much daintier face† (PhoneArena Team, 2009, p. 1). This is an interesting comment to make in connection with a cell phone, since this artefacts is a functional object, and one might assume that it would be marketed on its technical features rather than the design of the casing. It is evident to anyone familiar with recent developments in mobile technology that this cell phone is not one of the most advanced models in terms of performance, even considering that it is now at least three years old. There is no wifi capability or touch screen functionality. The artefact’s title of â€Å"Nokio 6700 classic† is a clue to its niche and significance in the fast moving world of cell phone design. This artefact is intended to be the best of its class, and one which will go down in history as a market leader in cell phone design when it was produced in 2009. The two most striking features of the artefact are the shiny, metal surface which covers most of the back of the phone and one third of the front, and the gently curving corners. These two features suggest quite different things in most cultures. Silver metal of this kind is usually connected with engineering and technology. It is not the soft, glowing silver of a piece of

Journal 5 Essay Example | Topics and Well Written Essays - 500 words - 3

Journal 5 - Essay Example rated are referred to as focal point and it is this part of art that greatly draws the viewer’s attention unlike incomplete lines which leaves the viewer with lots of imagination. Lines also give objects outlines which are known as contour lines as well as compositional lines that reflect the shape of an object which eventually conveys a sense of the movement or the character of the object. Thin lines usually seem delicate and weak while the thick lines usually seem aggressive and strong. Additionally, flat lines portrays calmness while the wavy lines show roughness and angular lines tend to climb upwards. The COLOR WHEEL is an important and widely used instrument for artists and designers with a circular arrangement of the hues/colors of the light spectrum. Color is very important with regard to implying EMOTIONAL content in a work of art such as advancing hues are most often thought to have less visual weight than the receding hues while warm, saturated, light value hues are "active" and visually advance. There exist a number of different color wheels, serving different purposes and therefore there is no standard color wheel. The different color wheels serve different purposes such as mixing colors, determining colors and selecting colors. There are lots of information existing about color theory such as the affect over how we feel, behave and how we react to objects. Degree of contrast of colors that range from light to dark creates melodramatic graphical affect that present the monochromatic color scheme. There are three groupings of colors which are primary, secondary and tertiar y colors and all the colors are perceived to be created by the mixing of certain basic colors. Space is the distance or area around, between or within components of a piece and can either be positive or negative, open or closed, shallow or deep and two-dimensional or three-dimensional. The sense of space in an artwork is usually an impression and artists meticulously syndicate

Jackson and The Cherokee ( The Trail of Tears ) Essay

Jackson and The Cherokee ( The Trail of Tears ) - Essay Example His tribe is almost becoming extinct (Cherokee, para 2). The state of Georgia, our neighbors, is forcing us to relinquish our possessions for their benefit. It is unfortunate that also the President of the United States has failed to come to our aid, and has instead ruled in favor of the Georgians. We are left wondering what other rights do we enjoy if we cannot allowed to enjoy living peacefully on our God-given land, the land we inherited from our forefathers (Cherokee, para 4). The Cherokees have always fulfilled their engagements with the United States and have never reclaimed the portions of sovereignty which was surrendered by the treaties of Hopewell and Holston. Our people have always trusted their country to the guaranty of the United States. If this guaranty fails, we do not have anybody to trust, and we do not even know where to look for protection (Cherokee, para 6) Out of these atrocities and insecurity, we are pleading to the General Government to offer us new homes, and should also propose to pay the whole expense of the removal and settlement. We hope our pleas will be acted

The Law of Healthcare Administration Essay Example for Free

The Law of Healthcare Administration Essay 1) Compare and contrast the Stark Self-Referral Laws and the Anti-Kickback Statute.   Both the Stark Self-Referral Laws and the Anti-Kickback Statute were enacted to prevent healthcare providers from improperly benefiting from their referrals.   The Stark Self-Referral Laws are three separate provisions which govern physician self-referral for Medicaid and Medicare patients. The Stark Law states in essence that a physician wouldn’t be allowed to refer a patient to a place where the physician has either a compensation arrangement or ownership interest if payments for services will be made by the Medicaid or the Medicare programs.   The Anti-Kickback Statute prohibits anyone from willfully and knowingly from soliciting or offering any type of payment or gift to give referrals of services or items Medicaid, Medicare or most any federally funded program (excludes Federal employees Health Benefits Program). A defendant would have to be proven by the government to have specific intent to be disobedient to this law.   Unlike the Anti-Kickback Statute which gives the U.S. Dept. of Health and Human Services the ability to make exceptions, the Stark Law came with the exceptions already in place. Also, unlike the Anti-Kickback Statute, the Stark Law doesn’t allow referrals for specific health services.   The Anti-Kickback Statute is a criminal statute whereas the Stark Self-Referral Laws are civil statutes. Therefore, violations of the Anti-Kickback Statute would be considered felonies with penalties up to $25,000 and five years in prison. Also, civil penalties could be up to $50,000 and dismissal from the Federal Program. Whereas, violations of the Stark Law could result in penalties and non-payment, however, violators of the Stark Law wouldn’t be threatened with imprisonment.   Although they both can be confusing, the Stark Self-Referral Laws are more confusing because of how they came with numerous exceptions in place. 2) In examining the relationship between hospitals and physicians, under what conditions can the hospital be held liable for the physicians negligence? Under what conditions will the hospital not be liable for the physicians` negligence? If the hospital has prior knowledge of or should reasonably be expected to have knowledge of the incompetency of said physician and the hospital failed to protect the patient(s), the hospital could reasonably be held liable for that physician’s negligence. I would turn that around then and state that if it is reasonable that the hospital had no prior knowledge of incompetency on the physician’s part, and it could not be proven that the hospital was aware of any past incompetent actions of said physician, they would not be held liable. However, there is another complication to this which I will just include as a quote because I could make it more complicated in my own words, â€Å"The entity employing independent contractors is generally not liable for the negligence of such independent contractors, since the employing entity does not control the means and methods of the work to be accomplished by the independent contractors. However, hospitals may remain liable for actions performed by independent contractors on a variety of grounds† (Scott, 1998). 3) Discuss your perspective on whether a hospital should revoke a physician`s privileges. provide examples in your discussion. Are your examples â€Å"ethical and/or Legal in nature†?   I feel that a hospital should revoke a physician’s privileges if his license to practice is suspended, revoked or restricted. Also, if the physician loses Medicaid or Medicare privileges, their board certification or loses their Drug Enforcement Administration. In addition, I feel a hospital has the right to revoke a physician’s privileges if the physician is found to use illegal drugs or alcohol and if the physician is convicted of a criminal act. Having said that, I also support the physician’s request for a cure period which could be negotiated between the hospital and the physician. However, the hospital should have this in writing so that staff are aware of it prior to any revocations. Most of the examples I list can be considered as both ethical and legal in nature. 4) As the chief executive officer of a hospital and a member of its executive board, what are some of the key attributes you and your board should consider when hiring physicians and other clinical personnel? Could one actually deny a physician to a hospital without receiving backlash?   I would look for leadership qualities and if there is any experience or volunteer work in their past to indicate they have been in a leadership position in some respect. I would also look for good to excellent communication skills. This can be beneficial for a physician and clinical personnel in many ways. If there is something to indicate they are a strategic thinker, I would value this in regards to those positions. Of course, being a team player would be a valued attribute I would look for also. In addition to those attributes, physicians and clinical personnel considered for these areas need to demonstrate that they handle stressful situations well.   I feel one could absolutely deny a physician to the hospital and whether or not they receive backlash will depend on the staff involved in the interview process and how their morale is and trust in the final judgment of whoever it is that makes that judgment. 5) Please discuss your perspective on U.S. hospitals admitting illegal immigrants as patients? I am not opposed to U.S. hospitals admitting illegal immigrants as patients, however, just like U.S. residents, they need to be contractually and financially obligated to pay for their medical expenses or pay repercussions, which could and possibly should include deportation. Although I believe in humane treatment for all, we cannot allow the financial obligations created by illegal immigrants to fall on U.S. citizens or be absorbed by the U.S. health care system which in turn makes it more difficult and more expensive for U.S. citizens to receive affordable health care. 6) Healthcare organizations in the USA have been impacted with personnel turnover leading to such issues as closures of clinical units or diversion of patients to other hospital emergency departments. Based on your reading of hospital admission, please discuss your perspective of hospitals diverting patients to other facilities. Is this a Legal act? What can we do to effectively address the diversion issue in the US?   It is not illegal to divert patients to other facilities. This is often a necessary move especially if a hospital is full, too busy, if the patient is more critical than the hospital is rated for and a â€Å"for profit† hospital may divert non-paying patients. The hospital should make sure the patient is stable prior to doing any transfer or diversion. However, there are methods of effectively addressing the diversion issue in the U.S. For example, one cause of this diversion is patient-flow problems. Some hospitals have begun installing bed-tracking and patient-tracking systems that are aimed at reducing this patient-flow problem. United Hospital’s emergency department in Minneapolis used to have one of the highest divert rates in that area. However, a year after implementing a bed-tracking system, United Hospital had the lowest patient diversion rate in the Twin Cities metro area (Going, 2003). 7) Discuss a hospital’s process for ensuring it is in compliance with â€Å"HIPAA† of 1996. The hospital needs to have meetings to address the HIPAA and any modifications, and revisions to all of its affected staff. The staff then is given the information and must sign off on having read and understood it. The personnel needs to be able to direct staff to the site or person(s) that can answer additional questions pertaining to HIPAA. â€Å"HIPAA consultants who were intimately familiar with the details of the legislation and offered their services to ensure that physicians and medical centers were fully in compliance† (Health, 2007). 8) Identify a negative aspect of HIPAA, then develop a 200-300 word memo to the Centers for Medicare and Medicaid Services that addresses the identified concern and your suggestion for improving it. July 03, 2007 Centers for Medicare and Medicaid Services:   Ã‚  Ã‚  Ã‚   In all due respect, many other physicians including myself are finding lack of clarity in what needs to be basic issues the Health Insurance Portability and Accountability Act (HIPAA). Because we must attempt to understand laws and new health care data on an ongoing basis, it is important that it be written as clearly as possible for we very much want to be compliant in this.   Ã‚  Ã‚  Ã‚   Having said this, in speaking with many of my colleagues, we are unclear of who all can have access to the privacy medical records in regards to how this is written up in HIPAA. At first I felt I possibly was the only one having this difficulty, however, after speaking with my colleagues it appears to be an item that is unclear for all of us.   Ã‚  Ã‚  Ã‚   When you update or revise this, please address this issue and let it be known that I represent many others in this field who are having difficulty with this. If it were just myself, I wouldn’t take the time to compose this letter. I do sincerely appreciate your time and effort in this matter. I will be looking forward to reading and understanding your revised copy of the Health Insurance Portability and Accountability Act. Sincerely, Your Name 9) Can a physician who is receiving a large increase in Medicaid patients legally dissolve the physician-patient relationship with these patients because of the poor reimbursement rate? Explain your position. No.   By federal law a physician cannot dissolve a patient due to poor reimbursement of their Medicaid payment. One cannot pick and choose patients dependent upon the time it takes for the Medicaid reimbursement to arrive. 10) Discuss your perspective of physician-patient relationship and physician assisted suicide in your discussion, include whether a physician has the legal and ethical right to dissolve the relationship because of the patient wishes to end his/her life. Also, discuss your perspective if the physician honors this patient`s request. A physician has the right to tell the patient that he could not perform that particular procedure dependent upon the procedures they are expected to perform and recommend alternatives to the patient. If the patient is serious about what they want, the patient could then initiate the dissolution of the relationship and go elsewhere. However, I don’t believe the physician should dissolve the relationship because that puts the patient in too vulnerable a position. As a physician, I would follow the guidelines of where I work. I would also inquire as to those guidelines in such an area as this and make my decision as to whether that would be a place I would want to be employed by dependent upon matters and required procedures such as these. 11) How can the US contain the high cost of professional liability insurance? One way would be in changing the laws the way they currently address liability issues in the area of medicine. Other countries don’t even allow for this, however, even modifications in the current laws could help. As mentioned in one of the previous answers, going towards independent contractor physicians takes some of the cost away in that the hospital is not made responsible in most of these cases. References (2003, December). Going with the flow: tracking system helps Midwest hospital   Ã‚  Ã‚  Ã‚   streamline patient flow and lower emergency room divert rate. Retrieved July 2, 2007,   Ã‚  Ã‚  Ã‚   from findarticles.com Web site:   Ã‚  Ã‚  Ã‚   http://findarticles.com/p/articles/mi_m0DUD/is_12_24/ai_111646161 Health Insurance Portability and Accountability Act. (2007, June 27). In Wikipedia, The   Ã‚  Ã‚  Ã‚   Free Encyclopedia. Retrieved 02:37, July 2, 2007, from  Ã‚  Ã‚   http://en.wikipedia.org/w/index.php?title=Health_Insurance_Portability_and_Accountability_Actoldid=141030639 Scott, R (1998, June 4). Hospital liability for negligence of independent contractor   Ã‚  Ã‚  Ã‚   physicians. Retrieved July 2, 2007, from Healthlaw Web site:   Ã‚  Ã‚  Ã‚   http://www.law.uh.edu/healthlaw/perspectives/Tort/980604Hospital.html Showalter, J (2003). The law of healthcare administration. Chicago, IL: Health   Ã‚  Ã‚  Ã‚   Administration Press. Watnik, R (2000, March 1). Antikickback versus Stark: Whats the difference?. Retrieved   Ã‚  Ã‚  Ã‚   July 2, 2007, from AllBusiness.com Web site: http://www.allbusiness.com/health-   Ã‚  Ã‚  Ã‚   care-social-assistance/468779-1.html

Multivariate Multilevel Modeling

Multivariate Multilevel Modeling Literature Review This chapter tying up the various similar studies related to modeling responses multivariately in a multilevel frame work. As a start, this chapter begins by laying out the recent history of univariate techniques for analyzing categorical data in a multilevel context. Then it gradually presents the literature available on fitting multivariate multilevel models for categorical and continuous data. More over this chapter reviews the evidence for imputing missing values for partially observed multivariate multilevel data sets. The Nature of Multivariate Multilevel models A multivariate multilevel model can be considered as a collection of multiple dependent variables in a hierarchical nature. Though the multivariate analysis increases the complexity in a multilevel context, it is an essential tool which facilitates to carry out a single test of the joint effects of some explanatory variables on several dependent variables (Snijders Bosker (2000). These models have the power of increasing the construct validity of the analysis for complex concepts in the real world. Consider a study on school effectiveness which can be measured on three different output variables math achievement, reading proficiency and well-being at school. These data are collected on students those who are clustered within schools by implying a hierarchical nature. Although it is certainly possible to handle three outcomes separately, it is unable to show the overall picture about school effectiveness. Therefore multivariate analysis would be more preferable in these types of scen arios since it has the capability of decreasing the type 1 error and increasing the statistical power (Maeyer, Rymenans, Petegem and Bergh) (Draft). Hierarchical natures of multivariate models are not like as the univariate response models. Let us focus on above example; it implies a two level multivariate model. But in reality it has three levels. In this case, the measurements are the level 1 units, the students the level 2 units and the schools the level three units. Importance of Multivariate Multilevel Modeling Multivariate multilevel data structures may itself present a greater complexity as it leads to focus the multilevel effects together with the multivariate context. Therefore the traditional statistical techniques would fail to face these kinds of areas since it can decrease the statistical efficiency by producing overestimated standard errors. On the other hand violation of independence assumption may cause to under estimate the standard errors of regression coefficients. Therefore multivariate multilevel approaches play an important role to get rid of these kinds of situations by allowing variation at different levels to be estimated. Furthermore Goldstein (1999) has shown that clustering provides accurate standard errors, confidence intervals and significance tests. Some amount of articles have been published on multilevel modeling based on a single response context. Multivariate multilevel concept comes into the field of statistics during the past few years. When people want to identify the effect of set of explanatory variables on a set of dependent variables and by considering these effects separately on response variables, then if it shows a considerable difference among those effects then it can be handled only by means of a multivariate analysis (Snijders Bosker, 2000). Software for Multivariate Multilevel Modeling In the past decades, due to the unavailability of the software for fitting multivariate multilevel data some researchers tend to use manual methods such as EM Algorithm (Kang et al., 1991). As a result of developing the technical environment, the software such as STATA, SAS and S plus are emerged in to the Statistical field by providing facilitates to handle the multilevel data. But none of those packages have a capability of fitting multivariate multilevel data. However there is evidence in the literature that nonlinear multivariate multilevel model can be fitted using packages such as GLLAMM (Rabe-Hesketh, Pickles and Skrondal, 2001) and aML (Lillard and Panis, 2000). But it was not flexible to handle this software. Therefore MlwiN software which has become the under development since late 1980’s was modified at the University of Bristol in UK in order to fulfill that requirement. However, the use of MlwiN for fitting multivariate multilevel models has been challenged by Goldstein, Carpenter and Browne (2014) who concluded that MlwiN was useful if only when fitting the model without imputing for the missing values. However REALCOM software was then came into the field of Statistics and provided the flexibility to impute the missing values in the MLwiN environment. MLwiN is a modified version of DOS MLn program which uses a command driven interface. MLwiN provides flexibility to fitting very large and complex models using both frequentist and Bayesian estimation along with the missing value imputation in a user friendly interface. Some particular advanced features which are not available in the other packages are included in this software. Univariate Multilevel Modeling vs. Multivariate Multilevel Modeling In general, data are often collected on multiple correlated outcomes. One major theoretical issue that has dominated the field for many years is modeling the association between risk factors and each outcome in a separate model. It may cause to statistically inefficient since it ignores outcome correlations and common predictor effects (Oman, Kamal and Ambler) (unpublished) Therefore most of the researches tend to include all related outcomes in a single regression model within a multivariate outcome framework rather than univariate. Recently investigators have examined the comparison between Univariate and Multivariate outcomes and they have proven that Multivariate models would be preferable than several univariate models. According to the Griffiths, Brown and Smith (2004), they conducted a study to compare univariate and multivariate multilevel models for repeated measures of use of antenatal care in Uttar Pradesh, India. In here, they examined many factors which may have a relationship to the mother’s decision to use ante-natal care services for a particular pregnancy. For that they compared Univariate multilevel logistic regression model vs. Multivariate multilevel logistic regression model. However as a result of fitting univariate models, model assumptions became violated and couldn’t get stable parameter estimates. Therefore they preferred the multivariate context rather than the univariate context after performing the analysis. Generalized Cochran Mantel Haenzel Tests for Checking Association of Multilevel Categorical Data. The history of arising the concepts related to Generalized Cochran Mantel Haenzel was streaming to the late 1950’s. Cochran (1958), one of a great Statistician has firstly introduced a test to identify the independence of multiple 2 Ãâ€" 2 tables by extending the general chi-square test for independence of a single 2-way table. In here, the each table consists of one or two additional variables for higher levels to detect the multilevel nature. The test statistic is based on the row totals of each table. The assumption behind is that the cell counts have binomial distribution. As an extension to Cochran’s work, Mantel and Haenzel (1959) extended the Cochran’s test statistic for both row and column totals by assuming the cell counts of each table follows a hypergeommetric distribution. Since Cochran Mantel Hanzel (CMH) statistic has a major limitation on binary data, Landis et al (1978) generalized this test into handle more than two levels. However there is a major drawback of the Generalized Cochran Mantel Haenzel (GCMH) test. This test was unable to handle clustered correlated categorical data. Liang (1985) was proposed a test statistic for get rid of this problem. However that test statistic itself had major problems and it was fail to use. As development of the statistics field, a need for a test statistic capable of handling correlated data and variables with higher levels arouse. Zhang and Boos (1995) coming in to the field and introduced three test statistics TEL TP and TU as a solution to the above problems. However among these three test statistics TP and TU are preferred to TEL since these two use the individual subjects as the primary sampling units while TEL use the strata as the primary sampling unit (De Silva and Sooriyarachchi, 2012). Furthermore, by a simulation study TP shows better performance than TE by maintaining its error values even when the strata are small and it uses the pooled estimators for variance. Therefore it provides a guideline to select TP as the most suitable statistic to perform this study. De Silva and Sooriyarachchi (2012) developed a R program to carry out this test. Missing Value Imputation in Multivariate Multilevel Framework The problem of having missing values is often arising in real world datasets. However it contains little or no information about the missing data mechanism (MDM). Therefore modeling incomplete data is a very difficult task and may provide bias results. Therefore this major problem address to a need of a proper mechanism to check the missingness. As a solution to that, Rubin (1976) presented three possible ways of arising misingness. These are classified as Missing At Random (MAR), Missing Completely At Random (MCAR) and Missing Not At Random (MNAR). According to the Sterne et. Al (2009), missing value imputation is necessary under the assumption of missing at random. However, it can also be done under the case missing complete at random. On nowadays most statistical packages have the capability of identifying the type of missingness. After identifying the type of missingness, the missing value imputation comes into the field and it requires a statistical package to perform this. Since the missing value imputation in a hierarchical nature is little bit more advanced and it cannot be done using usual statistical packages such as SPSS, SAS and R etc. Therefore Carpenter et. al (2009), developed the REALCOM software to perform this task. However latter version of REALCOM was not deal with multilevel data in a multivariate context. Therefore the macros related to perform this task was recently developed by the Bristol University team in order to facilitate under this case. Estimation Procedure The estimation procedures for multilevel modeling are starting late 1980’s. However For parameter estimation using Maximum Likelihood Method, an iterative procedure called EM algorithm was used by early statisticians (Raudenbush, Rowan and Kang, 1991). Later on the program HLM was developed to perform this algorithm. The most operational procedures for estimating multivariate multilevel models in the presence of Normal responses are Iterative Generalized Least Squares (IGLS), Reweighted IGLS (RIGLS) and Marginal Quasi Likelihood (MQL) while for discrete responses are MQL and Penalized Quasi Likelihood (PQL). According to Rasbash, Steele, Browne and Goldstein (2004) all of these methods are implemented in MLwiN along with including first order or second order Taylor Series expansions. However since these methods are likelihood based frequentist methods they tend to overestimate the precision. Therefore more recently the methods which are implemented in a Bayesian framework using Marcov Chain Monte Carlo methods (Brooks, 1998) also used for parameter estimation which allows capability to use informative prior distributions. These MCMC estimates executed in MLwiN provides consistent estimates though they require a large number of simulations to control of having highly correlated chains. Previous researches conducted using Univariate and Multivariate Multilevel Models Univariate multilevel logit models Before take a look at to the literature on multivariate multilevel analysis, the literature of univariate multilevel analysis is also be necessary to concerned since this thesis is based on some univariate multilevel models prior to fit multivariate multilevel models. In the past decades, many social Scientists used to apply multilevel models for binay data. Therefore it is very important to review how they have implemented their work with less technology. As a aim of that, Guo and Zhao (2000) was able to do a review of the methodologies, hypothesis testing and hierarchical nature of the data involve of past literature. Also they conducted two examples for justify their results. First of all they made a comparison between estimates obtained from MQL and PQL methods which was implemented by MLn and the GLIMMIX method implemented by SAS by using examples. They have shown that the differences in PQL 1 and PQL 2 are small when fitting binary logistic models. Furthermore, they have shown that PQL- 1 and PQL-2 and GLIMMIX are probable to be satisfactory for most of the past studies undertaken in social sciences. Noortgate, Boeck and Meulders (2003) uses multilevel binary logit models for the purpose of analyzing Item Response Theory (IRT) models. For that they carried out an assessment of the nine achievement targets for reading comprehension of students in primary schools in Belgium. They performed a multilevel analyses using the cross-classified logistic multilevel models and used the GLIMMIX macro from SAS, as well as the MLwiN software. However they found that there were some convergence problems arisen by using PQL methods in MLwiN. Therefore they used SAS to carryout analysis. Furthermore they have shown that the cross-classification multilevel logistic model is a very flexible to handle IRT data and the parameters can still be estimated even with the presence of unbalanced data. Multivariate Multilevel Models In the past two decades a very few of researches have sought to fit the multivariate multilevel models to the real world scenarios. Among those also all most all the researches trying to focus basically in educational sectors as well as socio economic sectors. None of them were able to focus these into the medical scenarios. However lack of multivariate multilevel analysis which presents in the field of health and medical sciences this chapter consists of the literatures of multivariate multilevel models in other fields. According to the previous studies of education, Xin Ma (2001) examined the association between the academic achievements and the background of students in Canada by considering three levels of interest. For that the three level Hierarchical Linear Model (HLM) was developed in order to achieve his goals. This work allows him to draw the conclusions that both students and schools were differentially successful in different subject areas and it was more obvious among students than among schools. However the success of this study is based on some strong assumptions about the priors of student’s cognitive skills. Exclusive of the field of education Raudenbush, Johnson and Sampson (2003) carried out a study in Chicago to determine the criminal behavior at person level as well as at neighborhood level with respect to some personal characteristics. For this purpose they use a Rasch model with random effects by assuming conditional independence along with the additives. Moreover, Yang, Goldstein, Browne and Woodhouse (2002) developed a multivariate multilevel analysis of analyzing examination results via a series of models of increasing complexity. They used examination results of two mathematics examinations in England in 1997 and analyzed them at individual and institutional level with respect to some students features. By starting from a simpler model of multivariate normality without considering the institutional random effects, they gradually increased the complexity of the model by adding institutional levels together with the multivariate responses. When closely looked at, there work shows that the choice of subject is strongly associated with the performance. Along with this growth of applications of multivariate multilevel models, researches may tend to apply those in to the other fields such as Forestry etc. Hall and Clutter (2004) presented a study regarding modeling the growth and yield in forestry based on the slash pine in U.S.A. In their work, they developed a methodology to fit nonlinear mixed effect model in a multivariate multilevel frame work in order to identify the effects of the several plot-level timber quantity characteristics for the yield of timber volume. In addition to that they also developed a methodology to produce predictions and prediction intervals from those models. Then by using their developments they have predicted timber growth and yield at the plot individual and population level. Grilli and Rampichini (2003) carried out a study to model ordinal response variables according to the students rating data which were obtained from a survey of course quality carried out by the University of Florence in 2000-2001 academic years. For that they developed an alternative specification to the multivariate multilevel probit ordinal response models by relying on the fact that responses may be viewed as an additional dummy bottom level variable. However they not yet assess the efficiency of that method since they were not implemented it using standard software. When considering the evidences of the recent applications of these models the literature shows that Goldstein and Kounali (2009) recently conducted a study on child hood growth with respect to the collection of growth measurements and adult characteristics. For that they extended the latent normal model for multilevel data with mixed response types to the ordinal categorical responses with having multiple categories for covariates. Since data consists of counts they gradually developed the model by starting a model with assuming a Poison distribution. However since the data are not follow exactly a Poisson distribution they treated the counts as an ordered categories to get rid of that problem. Frank, Cerda and Rendon (2007) did a study to identify whether the residential location have an impact to the health risk behaviors of Latino immigrants as they are increasing substantially in every year. For that they used a Multivariate Multilevel Rasch model for the data obtained by Los Angelis family and neighborhood survey based on two indices of health risk behaviors along with their use of drugs and participation for risk based activities. They starting this attempt by modeling the behavior of adolescents as a function of the characteristics related to both individual and neighborhood .According to the study they found that there is an association between increased health risk behaviors with the above country average levels of Latinos and poverty particularly for those who born in U.S.A. Another application of multivariate multilevel models was carried out Subramanian, Kim and Kawachi (2005) in U.S.A. Their main aim was to identify the individual and community level factors for the health and happiness of individuals. For that they performed a multivariate multilevel regression analysis on the data obtained by a survey which was held on 2000. Their findings reflect that those who have poor health and unhappiness have a high relationship with the individual level covariates By looking at the available literature, it can be seen that there are some amount of studies conducted on education and social sciences in other countries but none of the studies conducted regarding health and medical sciences. Therefore it is essential to perform a study by analyzing the mortality rates of some killing diseases which are spread in worldwide to understand risk factors and patterns associated with these diseases in order to provide better insights about the disease to the public as well as to the responsibly policy makers.

World Trade Organisation Essay -- essays papers

World Trade Organisation The official World Trade Organisation web site, defines the WTO as â€Å"the only global international organisation dealing with the rules of trade between nations . . . [through] helping producers of goods and services, exporters, and importers (to) conduct their business†1. It was formed in 1995 after growing out of and extending the institution of the General Agreement on Tariffs and Trade. As of the thirtieth of November 2000, the WTO has 140 member-countries, over three-quarters of which are developing or least-developed countries. As the WTO implies, its current role is to serve as the lubrication for the joints in the engine of globalisation; although just how effective and fair this lubrication may be, is still a point of great contention. The WTO preaches that its purpose and effect are to â€Å"improve the welfare of the people of the member countries†2, and it claims that this is achieved by administering trade agreements, and monitoring and handling trade disputes. This essay will test the truth in this statement, of whether or not the actions taken by the WTO have failed to further enhance the welfare of the people of its member countries, and if so, whether the WTO therefore needs to be either reformed or even abolished. The criteria by which I will assess this truth, takes into account the three major arguments that are held against the WTO, with regard to its affect on the welfare of the people of its member countries. One of these arguments is that the international rules the WTO authors, consistently favour multinational corporations at the expense of workers and small farmers. Another argument is that by removing trade barriers as the WTO seeks to achieve, jobs are ‘exported’ to lower labour cost countries where the standards to which the labourers are subjected, are below what is internationally accepted. The final main argument against the WTO’s aims that is raised, is that if countries cannot make their industries globally competitive, they will experience a decline in their people’s standards of living. Judging the results of these arguments, will allow me to decide whether or not the WTO is in need of reform, abolishment, or if it should continue without alt eration. The basic premise of the WTO is to open up trade between nations, and one of its potential disadvantages is that its opera... ...) â€Å"Slow out of the blocs† The Australian February 1 p.28. Mitchell, A. (2001) â€Å"Let community have its say† The Australian Financial Review March 7 p.6. Steketee, M. (2000) â€Å"Unhappy days are here again† The Australian June 17 p.4. The Australian (2000) â€Å"Fabric of the fair go ripped to shreds† June 17 p.4. Internet: Ebeling, R. (2000) Free Trade Versus Protectionism [ON-LINE] http://www.freerepublic.com/forum/a3950b6be763d.htm S-11 Online (2001) Frequently Asked Questions: FAQ [ON-LINE] http://www.s11.org/s14/s11.html Sirico, R. (2000) Free Trade and Human Rights: The Moral Case For Engagement [ON-LINE] http://www.freerepublic.com/forum/a392420130b93.htm Wills, J. (2000) Multinationals and the Poverty Trap [ON-LINE] http://www.unfairtrade.co.uk/pov/articles.shtml WTO Online(1) (1999) 10 Benefits of the WTO Trading System [ON-LINE] http://www.wto.org/english/thewto_e/whatis_e/10ben_e/10b03_e.htm WTO Online(2) (1999) 10 Benefits of the WTO Trading System [ON-LINE] http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm WTO Online(3) (1999) What is the WTO? [ON-LINE] http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm

The Rise of the Individual Essay -- Enlightenment of the 18th Century

The transition from a condition of little autonomy to one that recognizes the individual is often gradual. This is evident in our own personal lives. When we were very young, our parents, in trying to guide us down the right path, pretty much dictated what we could and could not do and laid out all of our beliefs for us. As time passed and we worked our way from kindergarten to college, we were exposed to new ideas, providing us the motivation to seek more rights and allowing us to define and redefine ourselves as individuals. This same ideology is true of societal transitions. By substituting Old Regime ideals for kindergarten and various revolutions for grades in school, this can be seen. In the early 1700s, the practices and ideals of European government, which came to be known as the Old Regime, offered society little individual freedom. Gradually, as Europeans witnessed the Scientific Revolution, the Age of Enlightenment, the French Revolution, and the reign of Napoleon, they were exposed to new ideas. The people of Europe took these ideas and incorporated them into society, ultimately leading to the birth of individualism. The Old Regime was a time characterized by absolutism, both real and unreal, and an agrarian economy that grappled to produce enough to meet the needs of the general public. People felt they were powerless over nature. Because life was often "nasty, brutish, and short," family life centered on survival, and collective interest took priority over individual interest. Marriage, which took place at a young age, was normally the result of economic necessity rather than love, and after marriage, women became slaves to child bearing to ensure that they would have a male who lived until the age of inherit... ...versity of Illinois Press, 1979), 92-96. 12. Rogers, Aspects of Western Civilization, 67. 13. Rogers, Aspects of Western Civilization, 64. 14. Kagan, The Western Heritage, 466. 15. Rogers, Aspects of Western Civilization, 105. 16. Kagan, The Western Heritage, 468. -------------------------------------------------------------------------------- Additional Source Cooper, Barbara T., and Mary Donaldson-Evans. Modernity and the Revolution in Late Nineteenth-Century France. Newark: University of Delaware Press, 1992. This book includes historical essays about the ever-changing politics and society of nineteenth-century France. The essays were selected from papers presented at the fifteenth annual Colloquium in Nineteenth-Century French Studies, held at the University of New Hampshire in October 1989. They are relevant to the rise of the individual.

Ariel and Allegory in The Tempest Essay examples -- Tempest essays

Ariel and Allegory in The Tempest      Ã‚  Ã‚   The temptation to regard The Tempest as an allegory has proved irresistible to critics, although opinions differ on what it might be an allegory of, and what the principal figures might represent. In this essay I wish to discuss the character of Ariel, who has received less attention than either Caliban or Prospero. If The Tempest is an allegory then each of its characters should fulfil some representative function. Prospero is generally associated with the playwright (or even, which amounts to much the same thing in some views, with God) as he controls the action on stage. Caliban is taken to represent the physical aspect of humanity, or the 'will', his uncivilised condition making him close to the beasts. In this view, Prospero represents intellect (in seventeenth-century terms 'wit', or 'reason'). The opposition of 'infected will' and 'perfected wit' is a common trope of Protestant discourse, as in Sir Philip Sidney's 'Defense of Poesie'. FN1 Ariel, then, ('an airy sp irit' in the 'Names of the Actors') might represent a third part of the self, the soul or spirit, but at this point the allegory seems to break down, in that Ariel is clearly not Prospero's immortal soul, or the divine part in man, as he is under the control of Prospero as intellect, and in fact performs the action of the play just as Prospero directs it.    Frank Kermode, in his introduction to the Arden edition, criticises the tendency to allegorical interpretation, and seems to have imbibed something of the late Shakespeare's insistence on the importance of Chastity. 'It is not surprising that The Tempest has sent people whoring after strange gods of allegory' (p.lxxx) and most modern attitudes to the play ar... ...s the barrier. If The Tempest is an allegory, then Nora Johnson is probably closest in describing Ariel as 'a delicate theatrical spirit' a figure representing the essence of theatre. If performing Ariel must have presented great technical challenges on the Jacobean stage, the problem for a modern production is to encourage the suspension of disbelief in the audience whilst avoiding comparison with the fairies and principal boys of Pantomime.    NOTES 1. Sometimes called 'Apology for Poetry'. 2. Nora Johnson, 'Body and Spirit, Stage and Sexuality in The Tempest' (in) Political Shakespeare, (eds) Stephen Orgel and Sean Keilen, Volume 9 of Shakespeare, the Critical Complex, Garland Publishing, New York and London, (1999), pp. 271-290. 3. Horace Howard Furness (ed.), The Tempest, A New Varorium Edition, J.P. Lippincott, Philadelphia, (1895).   

Anomalies in Option Pricing

Anomalies in option pricing: the Black-Scholes model revisited New England Economic Review, March-April, 1996 by Peter Fortune This study is the third in a series of Federal Reserve Bank of Boston studies contributing to a broader understanding of derivative securities. The first (Fortune 1995) presented the rudiments of option pricing theory and addressed the equivalence between exchange-traded options and portfolios of underlying securities, making the point that plain vanilla options – and many other derivative securities – are really repackages of old instruments, not novel in themselves. That paper used the concept of portfolio insurance as an example of this equivalence. The second (Minehan and Simons 1995) summarized the presentations at â€Å"Managing Risk in the '90s: What Should You Be Asking about Derivatives? â€Å", an educational forum sponsored by the Boston Fed. Related Results Trust, E-innovation and Leadership in Change Foreign Banks in United States Since World War II: A Useful Fringe Building Your Brand With Brand Line Extensions The Impact of the Structure of Debt on Target Gains Project Management Standard Program. The present paper addresses the question of how well the best-known option pricing model – the Black-Scholes model – works. A full evaluation of the many option pricing models developed since their seminal paper in 1973 is beyond the scope of this paper. Rather, the goal is to acquaint a general audience with the key characteristics of a model that is still widely used, and to indicate the opportunities for improvement which might emerge from current research and which are undoubtedly the basis for the considerable current research on derivative securities. The hope is that this study will be useful to students of financial markets as well as to financial market practitioners, and that it will stimulate them to look into the more recent literature on the subject. The paper is organized as follows. The next section briefly reviews the key features of the Black-Scholes model, identifying some of its most prominent assumptions and laying a foundation for the remainder of the paper. The second section employs recent data on almost one-half million options transactions to evaluate the Black-Scholes model. The third section discusses some of the reasons why the Black-Scholes odel falls short and assesses some recent research designed to improve our ability to explain option prices. The paper ends with a brief summary. Those readers unfamiliar with the basics of stock options might refer to Fortune (1995). Box 1 reviews briefly the fundamental language of options and explains the notation used in the paper. I. The Black-Scholes Model In 1973, Myron Scholes and the late Fischer Black published their seminal paper on option pricing (Black and Scholes 1973). The Black-Scholes model revolutionized financial economics in several ways. First, it contributed to our understanding of a wide range of contracts with option-like features. For example, the call feature in corporate and municipal bonds is clearly an option, as is the refinancing privilege in mortgages. Second, it allowed us to revise our understanding of traditional financial instruments. For example, because shareholders can turn the company over to creditors if it has negative net worth, corporate debt can be viewed as a put option bought by the shareholders from creditors. The Black-Scholes model explains the prices on European options, which cannot be exercised before the expiration date. Box 2 summarizes the Black-Scholes model for pricing a European call option on which dividends are paid continuously at a constant rate. A crucial feature of the model is that the call option is equivalent to a portfolio constructed from the underlying stock and bonds. The â€Å"option-replicating portfolio† consists of a fractional share of the stock combined with borrowing a specific amount at the riskless rate of interest. This equivalence, developed more fully in Fortune (1995), creates price relationships which are maintained by the arbitrage of informed traders. The Black-Scholes option pricing model is derived by identifying an option-replicating portfolio, then equating the option's premium with the value of that portfolio. An essential assumption of this pricing model is that investors arbitrage away any profits created by gaps in asset pricing. For example, if the call is trading â€Å"rich,† investors will write calls and buy the replicating portfolio, thereby forcing the prices back into line. If the option is trading low, traders will buy the option and short the option-replicating portfolio (that is, sell stocks and buy bonds in the correct proportions). By doing so, traders take advantage of riskless opportunities to make profits, and in so doing they force option, stock, and bond prices to conform to an equilibrium relationship. Arbitrage allows European puts to be priced using put-call parity. Consider purchasing one call that expires at time T and lending the present value of the strike price at the riskless rate of interest. The cost is [C. sub. t] + X[e. sup. -r(T-t)]. (See Box 1 for notation: C is the call premium, X is the call's strike price, r is the riskless interest rate, T is the call's expiration date, and t is the current date. At the option's expiration the position is worth the highest of the stock price ([S. sub. T]) or the strike price, a value denoted as max([S. sub. T], X). Now consider another investment, purchasing one put with the same strike price as the call, plus buying the fraction [e. sup. -q(T-t)] of one share of the stock. Denoting the put premium by P and the stock price by S, then the cost of this is [P. sub. t] + [e. sup. -q(T-t)][S. sub. t], and, at time T, the value at this position is also max([S. sub. T], X). (1) Because both positions have the same terminal value, arbitrage will force them to have the same initial value. Suppose that [C. sub. t] + X[e. sup. -r(T-t)] [greater than] [P. sub. t] + [e. sup. -q(T-t)][S. sub. t], for example. In this case, the cost of the first position exceeds the cost of the second, but both must be worth the same at the option's expiration. The first position is overpriced relative to the second, and shrewd investors will go short the first and long the second; that is, they will write calls and sell bonds (borrow), while simultaneously buying both puts and the underlying stock. The result will be that, in equilibrium, equality will prevail and [C. sub. t] + X[e. sup. r(T-t)] = [P. sub. t] + [e. sup. -q(T-t)][S. sub. t]. Thus, arbitrage will force a parity between premiums of put and call options. Using this put-call parity, it can be shown that the premium for a European put option paying a continuous dividend at q percent of the stock price is: [P. sub. t] = -[e. sup. -q(T-t)][S. sub. t]N(-[d. sub. 1]) + X[e. sup. -r(T-t)]N(-[d. sub. 2]) where [d. sub. 1] and [d. sub. 2] are defined as in Box 2. The importance of arbitrage in the pricing of options is clear. However, many option pricing models can be derived from the assumption of complete arbitrage. Each would differ according to the probability distribution of the price of the underlying asset. What makes the Black-Scholes model unique is that it assumes that stock prices are log-normally distributed, that is, that the logarithm of the stock price is normally distributed. This is often expressed in a â€Å"diffusion model† (see Box 2) in which the (instantaneous) rate of change in the stock price is the sum of two parts, a â€Å"drift,† defined as the difference between the expected rate of change in the stock price and the dividend yield, and â€Å"noise,† defined as a random variable with zero mean and constant variance. The variance of the noise is called the â€Å"volatility† of the stock's rate of price change. Thus, the rate of change in a stock price vibrates randomly around its expected value in a fashion sometimes called â€Å"white noise. † The Black-Scholes models of put and call option pricing apply directly to European options as long as a continuous dividend is paid at a constant rate. If no dividends are paid, the models also apply to American call options, which can be exercised at any time. In this case, it can be shown that there is no incentive for early exercise, hence the American call option must trade like its European counterpart. However, the Black-Scholes model does not hold for American put options, because these might be exercised early, nor does it apply to any American option (put or call) when a dividend is paid. (2) Our empirical analysis will sidestep those problems by focusing on European-style options, which cannot be exercised early. A call option's intrinsic value is defined as max(S – X,0), that is, the largest of S – X or zero; a put option's intrinsic value is max(X – S,0). When the stock price (S) exceeds a call option's strike price (X), or falls short of a put option's strike price, the option has a positive intrinsic value because if it could be immediately exercised, the holder would receive a gain of S – X for a call, or X – S for a put. However, if S [less than] X, the holder of a call will not exercise the option and it has no intrinsic value; if X [greater than] S this will be true for a put. The intrinsic value of a call is the kinked line in Figure 1 (a put's intrinsic value, not shown, would have the opposite kink). When the stock price exceeds the strike price, the call option is said to be in-the-money. It is out-of-the-money when the stock price is below the strike price. Thus, the kinked line, or intrinsic value, is the income from immediately exercising the option: When the option is out-of-the-money, its intrinsic value is zero, and when it is in the money, the intrinsic value is the amount by which S exceeds X. Convexity, the Call Premium, and the Greek Chorus The premium, or price paid for the option, is shown by the curved line in Figure 1. This curvature, or â€Å"convexity,† is a key characteristic of the premium on a call option. Figure 1 shows the relationship between a call option's premium and the underlying stock price for a hypothetical option having a 60-day term, a strike price of $50, and a volatility of 20 percent. A 5 percent riskless interest rate is assumed. The call premium has an upward-sloping relationship with the stock price, and the slope rises as the stock p rice rises. This means that the sensitivity of the call premium to changes in the stock price is not constant and that the option-replicating portfolio changes with the stock price. The convexity of option premiums gives rise to a number of technical concepts which describe the response of the premium to changes in the variables and parameters of the model. For example, the relationship between the premium and the stock price is captured by the option's Delta ([Delta]) and its Gamma ([Gamma]). Defined as the slope of the premium at each stock price, the Delta tells the trader how sensitive the option price is to a change in the stock price. (3) It also tells the trader the value of the hedging ratio. (4) For each share of stock held, a perfect hedge requires writing 1/[[Delta]. ub. c] call options or buying 1/[[Delta]. sub. p] puts. Figure 2 shows the Delta for our hypothetical call option as a function of the stock price. As S increases, the value of Delta rises until it reaches its maximum at a stock price of about $60, or $10 in-the-money. After that point, the option premium and the stock price have a 1:1 relationship. The increasing Delta also means that th e hedging ratio falls as the stock price rises. At higher stock prices, fewer call options need to be written to insulate the investor from changes in the stock price. The Gamma is the change in the Delta when the stock price changes. (5) Gamma is positive for calls and negative for puts. The Gamma tells the trader how much the hedging ratio changes if the stock price changes. If Gamma is zero, Delta would be independent of S and changes in S would not require adjustment of the number of calls required to hedge against further changes in S. The greater is Gamma, the more â€Å"out-of-line† a hedge becomes when the stock price changes, and the more frequently the trader must adjust the hedge. Figure 2 shows the value of Gamma as a function of the amount by which our hypothetical call option is in-the-money. (6) Gamma is almost zero for deep-in-the-money and deep-out-of-the-money options, but it reaches a peak for near-the-money options. In short, traders holding near-the-money options will have to adjust their hedges frequently and sizably as the stock price vibrates. If traders want to go on long vacations without changing their hedges, they should focus on far-away-from-the-money options, which have near-zero Gammas. A third member of the Greek chorus is the option's Lambda, denoted by [Lambda], also called Vega. (7) Vega measures the sensitivity of the call premium to changes in volatility. The Vega is the same for calls and puts having the same strike price and expiration date. As Figure 2 shows, a call option's Vega conforms closely to the pattern of its Gamma, peaking for near-the-money options and falling to zero for deep-out or deep-in options. Thus, near-the-money options appear to be most sensitive to changes in volatility. Because an option's premium is directly related to its volatility – the higher the volatility, the greater the chance of it being deep-in-the-money at expiration – any propositions about an option's price can be translated into statements about the option's volatility, and vice versa. For example, other things equal, a high volatility is synonymous with a high option premium for both puts and calls. Thus, in many contexts we can use volatility and premium interchangeably. We will use this result below when we address an option's implied volatility. Other Greeks are present in the Black-Scholes pantheon, though they are lesser gods. The option's Rho ([Rho]) is the sensitivity of the call premium to changes in the riskless interest rate. (8) Rho is always positive for a call (negative for a put) because a rise in the interest rate reduces the present value of the strike price paid (or received) at expiration if the option is exercised. The option's Theta ([Theta]) measures the change in the premium as the term shortens by one time unit. (9) Theta is always negative because an option is less valuable the shorter the time remaining. The Black-Scholes Assumptions The assumptions underlying the Black-Scholes model are few, but strong. They are: * Arbitrage: Traders can, and will, eliminate any arbitrage profits by simultaneously buying (or writing) options and writing (or buying) the option-replicating portfolio whenever profitable opportunities appear. * Continuous Trading: Trading in both the option and the underlying security is continuous in time, that is, transactions can occur simultaneously in related markets at any instant. * Leverage: Traders can borrow or lend in unlimited amounts at the riskless rate of interest. Homogeneity: Traders agree on the values of the relevant parameters, for example, on the riskless rate of interest and on the volatility of the returns on the underlying security. * Distribution: The price of the underlying security is log-normally distributed with statistically independent price changes, and with constant mean and constant variance. * Continuous Prices: No discontinuous jumps occur in the price of the underlying security. * Transactions Costs: The cost of engaging in arbitrage is negligibly small. The arbitrage assumption, a fundamental proposition in economics, has been discussed above. The continuous trading assumption ensures that at all times traders can establish hedges by simultaneously trading in options and in the underlying portfolio. This is important because the Black-Scholes model derives its power from the assumption that at any instant, arbitrage will force an option's premium to be equal to the value of the replicating portfolio. This cannot be done if trading occurs in one market while trading in related markets is barred or delayed. For example, during a halt in trading of the underlying security one would not expect option premiums to conform to the Black-Scholes model. This would also be true if the underlying security were inactively traded, so that the trader had â€Å"stale† information on its price when contemplating an options transaction. The leverage assumption allows the riskless interest rate to be used in options pricing without reference to a trader's financial position, that is, to whether and how much he is borrowing or lending. Clearly this is an assumption adopted for convenience and is not strictly true. However, it is not clear how one would proceed if the rate on loans was related to traders' financial choices. This assumption is common to finance theory: For example, it is one of the assumptions of the Capital Asset Pricing Model. Furthermore, while private traders have credit risk, important players in the option markets, such as nonfinancial corporations and major financial institutions, have very low credit risk over the lifetime of most options (a year or less), suggesting that departures from this assumption might not be very important. The homogeneity assumption, that traders share the same probability beliefs and opportunities, flies in the face of common sense. Clearly, traders differ in their judgments of such important things as the volatility of an asset's future returns, and they also differ in their time horizons, some thinking in hours, others in days, and still others in weeks, months, or years. Indeed, much of the actual trading that occurs must be due to differences in these judgments, for otherwise there would be no disagreements with â€Å"the market† and financial markets would be pretty dull and uninteresting. The distribution assumption is that stock prices are generated by a specific statistical process, called a diffusion process, which leads to a normal distribution of the logarithm of the stock's price. Furthermore, the continuous price assumption means that any changes in prices that are observed reflect only different draws from the same underlying log-normal distribution, not a change in the underlying probability distribution itself. II. Tests of the Black-Scholes Model. Assessments of a model's validity can be done in two ways. First, the model's predictions can be confronted with historical data to determine whether the predictions are accurate, at least within some statistical standard of confidence. Second, the assumptions made in developing the model can be assessed to determine if they are consistent with observed behavior or historical data. A long tradition in economics focuses on the first type of tests, arguing that â€Å"the proof is in the pudding. It is argued that any theory requires assumptions that might be judged â€Å"unrealistic,† and that if we focus on the assumptions, we can end up with no foundations for deriving the generalizations that make theories useful. The only proper test of a theory lies in its predictive ability: The theory that consistently predicts best is the best theory, regardless of the assumptions required to generate the theory. Tests based on assumptions are justified by the principle of â€Å"garbag e in-garbage out. † This approach argues that no theory derived from invalid assumptions can be valid. Even if it appears to have predictive abilities, those can slip away quickly when changes in the eThe Data The data used in this study are from the Chicago Board Options Exchange's Market Data Retrieval System. The MDR reports the number of contracts traded, the time of the transaction, the premium paid, the characteristics of the option (put or call, expiration date, strike price), and the price of the underlying stock at its last trade. This information is available for each option listed on the CBOE, providing as close to a real-time record of transactions as can be found. While our analysis uses only records of actual transactions, the MDR also reports the same information for every request of a quote. Quote records differ from the transaction records only in that they show both the bid and asked premiums and have a zero number of contracts traded. nvironment make the invalid assumptions more pivotal. The data used are for the 1992-94 period. We selected the MDR data for the S&P 500-stock index (SPX) for several reasons. First, the SPX options contract is the only European-style stock index option traded on the CBOE. All options on individual stocks and on other indices (for example, the S&P 100 index, the Major Market Index, the NASDAQ 100 index) are American options for which the Black-Scholes model would not apply. The ability to focus on a European-style option has several advantages. By allowing us to ignore the potential influence of early exercise, a possibility that significantly affects the premiums on American options on dividend-paying stocks as well as the premiums on deep-in-the-money American put options, we can focus on options for which the Black-Scholes model was designed. In addition, our interest is not in individual stocks and their options, but in the predictive power of the Black-Scholes option pricing model. Thus, an index option allows us to make broader generalizations about model performance than would a select set of equity options. Finally, the S&P 500 index options trade in a very active market, while options on many individual stocks and on some other indices are thinly traded. The full MDR data set for the SPX over the roughly 758 trading days in the 1992-94 period consisted of more than 100 million records. In order to bring this down to a manageable size, we eliminated all records that were requests for quotes, selecting only records reflecting actual transactions. Some of these transaction records were cancellations of previous trades, for example, trades made in error. If a trade was canceled, we included the records of the original transaction because they represented market conditions at the time of the trade, and because there is no way to determine precisely which transaction was being canceled. We eliminated cancellations because they record the S&P 500 at the time of the cancellation, not the time of the original trade. Thus, cancellation records will contain stale prices. This screening created a data set with over 726,000 records. In order to complete the data required for each transaction, the bond-equivalent yield (average of bid and asked prices) on the Treasury bill with maturity closest to the expiration date of the option was used as a riskless interest rate. These data were available for 180-day terms or less, so we excluded options with a term longer than 180 days, leaving over 486,000 usable records having both CBOE and Treasury bill data. For each of these, we assigned a dividend yield based on the S&P 500 dividend yield in the month of the option trade. Because each record shows the actual S&P 500 at almost the same time as the option transaction, the MDR provides an excellent basis for estimating the theoretically correct option premium and evaluating its relationship to actual option premiums. There are, however, some minor problems with interpreting the MDR data as providing a trader's-eye view of option pricing. The transaction data are not entered into the CBOE computer at the exact moment of the trade. Instead, a ticket is filled out and then entered into the computer, and it is only at that time that the actual level of the S&P 500 is recorded. In short, the S&P 500 entries necessarily lag behind the option premium entries, so if the S&P 500 is rising (falling) rapidly, the reported value of the SPX will be above (below) the true value known to traders at the time of the transaction Test 1: An Implied Volatility Test A key variable in the Black-Scholes model is the volatility of returns on the underlying asset, the SPX in our case. Investors are assumed to know the true standard deviation of the rate of return over the term of the option, and this information is embedded in the option premium. While the true volatility is an unobservable variable, the market's estimate of it can be inferred from option premiums. The Black-Scholes model assumes that this â€Å"implied volatility† is an optimal forecast of the volatility in SPX returns observed over the term of the option. The calculation of an option's implied volatility is reasonably straightforward. Six variables are needed to compute the predicted premium on a call or put option using the Black-Scholes model. Five of these can be objectively measured within reasonable tolerance levels: the stock price (S), the strike price (X), the remaining life of the option (T – t), the riskless rate of interest over the remaining life of the option (r), typically measured by the rate of interest on U. S. Treasury securities that mature on the option's expiration date, and the dividend yield (q). The sixth variable, the â€Å"volatility† of the return on the stock price, denoted by [Sigma], is unobservable and must be estimated using numerical methods. Using reasonable values of all the known variables, the implied volatility of an option can be computed as the value of [Sigma] that makes the predicted Black-Scholes premium exactly equal to the actual premium. An example of the computation of the implied volatility on an option is shown in Box 3. The Black-Scholes model assumes that investors know the volatility of the rate of return on the underlying asset, and that this volatility is measured by the (population) standard deviation. If so, an option's implied volatility should differ from the true volatility only because of random events. While these discrepancies might occur, they should be very short-lived and random: Informed investors will observe the discrepancy and engage in arbitrage, which quickly returns things to their normal relationships. Figure 3 reports two measures of the volatility in the rate of return on the S&P 500 index for each trading day in the 1992-94 period. (10) The â€Å"actual† volatility is the ex post standard deviation of the daily change in the logarithm of the S&P 500 over a 60-day horizon, converted to a percentage at an annual rate. For example, for January 5, 1993 the standard deviation of the daily change in lnS&P500 was computed for the next 60 calendar days; this became the actual volatility for that day. Note that the actual volatility is the realization of one outcome from the entire probability distribution of the standard deviation of the rate of return. While no single realization will be equal to the â€Å"true† volatility, the actual volatility should equal the true volatility, â€Å"on average. † The second measure of volatility is the implied volatility. This was constructed as follows, using the data described above. For each trading day, the implied volatility on call options meeting two criteria was computed. The criteria were that the option had 45 to 75 calendar days to expiration (the average was 61 days) and that it be near the money (defined as a spread between S&P 500 and strike price no more than 2. 5 percent of the S&P 500). The first criterion was adopted to match the term of the implied volatility with the 60-day term of the actual volatility. The second criterion was chosen because, as we shall see later, near-the-money options are most likely to conform to Black-Scholes predictions. The Black-Scholes model assumes that an option's implied volatility is an optimal forecast of the volatility in SPX returns observed over the term of the option. Figure 3 does not provide visual support for the idea that implied volatilities deviate randomly from actual volatility, a characteristic of optimal forecasting. While the two volatility measures appear to have roughly the same average, extended periods of significant differences are seen. For example, in the last half of 1992 the implied volatility remained well above the actual volatility, and after the two came together in the first half of 1993, they once again diverged for an extended period. It is clear from this visual record that implied volatility does not track actual volatility well. However, this does not mean that implied volatility provides an inferior forecast of actual volatility: It could be that implied volatility satisfies all the scientific requirements of a good forecast in the sense that no other forecasts of actual volatility are better. In order to pursue the question of the informational content of implied volatility, several simple tests of the hypothesis that implied volatility is an optimal forecast of actual volatility can be applied. One characteristic of an optimal forecast is that the forecast should be unbiased, that is, the forecast error (actual volatility less implied volatility) should have a zero mean. The average forecast error for the data shown in Figure 3 is -0. 7283, with a t-statistic of -8. 22. This indicates that implied volatility is a biased forecast of actual volatility. A second characteristic of an optimal forecast is that the forecast error should not depend on any information available at the time the forecast is made. If information were available that would improve the forecast, the forecaster should have already included it in making his forecast. Any remaining forecasting errors should be random and uncorrelated with information available before the day of the forecast. To implement this â€Å"residual information test,† the forecast error was regressed on the lagged values of the S&P 500 in the three days prior to the forecast. 11) The F-statistic for the significance of the regression coefficients was 4. 20, with a significance level of 0. 2 percent. This is strong evidence of a statistically significant violation of the residual information test. The conclusion that implied volatility is a poor forecast of actual volatility has been reached in several other studies using different methods and data. For example, Canina and Figlewski (1993), using data for the S&P 100 in the years 1983 to 1987, found that implied volatility had almost no informational content as a prediction of actual volatility. However, a recent review of the literature on implied volatility (Mayhew 1995) mentions a number of papers that give more support for the forecasting ability of implied volatility. Test 2: The Smile Test One of the predictions of the Black-Scholes model is that at any moment all SPX options that differ only in the strike price (having the same term to expiration) should have the same implied volatility. For example, suppose that at 10:15 a. m. on November 3, transactions occur in several SPX call options that differ only in the strike price. Because each of the options is for the same interval of time, the value of volatility embedded in the option premiums should be the same. This is a natural consequence of the fact that the variability in the S&P 500's return over any future period is independent of the strike price of an SPX option. One approach to testing this is to calculate the implied volatilities on a set of options identical in all respects except the strike price. If the Black-Scholes model is valid, the implied volatilities should all be the same (with some slippage for sampling errors). Thus, if a group of options all have a â€Å"true† volatility of, say, 12 percent, we should find that the implied volatilities differ from the true level only because of random errors. Possible reasons for these errors are temporary deviations of premiums from equilibrium levels, or a lag in the reporting of the trade so that the value of the SPX at the time stamp is not the value at the time of the trade, or that two options might have the same time stamp but one was delayed more than the other in getting into the computer. This means that a graph of the implied volatilities against any economic variable should show a flat line. In particular, no relationship should exist between the implied volatilities and the strike price or, equivalently, the amount by which each option is â€Å"in-the-money. † However, it is widely believed that a â€Å"smile† is present in option prices, that is, options far out of the money or far in the money have higher implied volatilities than near-the-money options. Stated differently, deep-out and far-in options trade â€Å"rich† (overpriced) relative to near-the-money options. If true, this would make a graph of the implied volatilities against the value by which the option is in-the-money look like a smile: high implied volatilities at the extremes and lower volatilities in the middle. In order to test this hypothesis, our MDR data were screened for each day to identify any options that have the same characteristics but different strike [TABULAR DATA FOR TABLE 1 OMITTED] prices. If 10 or more of these â€Å"identical† options were found, the average implied volatility for the group was computed and the deviation of each option's implied volatility from its group average, the Volatility Spread, was computed. For each of these options, the amount by which it is in-the-money was computed, creating a variable called ITM (an acronym for in-the-money). ITM is the amount by which an option is in-the-money. It is negative when the option is out-of-the-money. ITM is measured relative to the S&P 500 index level, so it is expressed as a percentage of the S&P 500. The Volatility Spread was then regressed against a fifth-order polynomial equation in ITM. This allows for a variety of shapes of the relationship between the two variables, ranging from a flat line if Black-Scholes is valid (that is, if all coefficients are zero), through a wavy line with four peaks and troughs. The Black-Scholes prediction that each coefficient in the polynomial regression is zero, leading to a flat line, can be tested by the F-statistic for the regression. The results are reported in Table 1, which shows the F-statistic for the hypothesis that all coefficients of the fifth-degree polynomial are jointly zero. Also reported is the proportion of the variation in the Volatility Spreads, which is explained by variations in ITM ([R. sup. 2]). The results strongly reject the Black-Scholes model. The F-statistics are extremely high, indicating virtually no chance that the value of ITM is irrelevant to the explanation of implied volatilities. The values of [R. sup. 2] are also high, indicating that ITM explains about 40 to 60 percent of the variation in the Volatility Spread. Figure 4 shows, for call options only, the pattern of the relationship between the Volatility Spread and the amount by which an option is in-the-money. The vertical axis, labeled Volatility Spread, is the deviation of the implied volatility predicted by the polynomial regression from the group mean of implied volatilities for all options trading on the same day with the same expiration date. For each year the pattern is shown throughout that year's range of values for ITM. While the pattern for each year looks more like Charlie Brown's smile than the standard smile, it is clear that there is a smile in the implied volatilities: Options that are further in or out of the money appear to carry higher volatilities than slightly out-of-the-money options. The pattern for extreme values of ITM is more mixed. Test 3: A Put-Call Parity Test Another prediction of the Black-Scholes model is that put options and call options identical in all other respects should have the same implied volatilities and should trade at the same premium. This is a consequence of the arbitrage that enforces put-call parity. Recall that put-call parity implies [P. sub. t] + [e. sup. -q(T – t)][S. sub. t] = [C. sub. t] + [Xe. sup. -r(T – t)]. A put and a call, having identical strike prices and terms, should have equal premiums if they are just at-the-money in a present value sense. If, as this paper does, we interpret at-the-money in current dollars rather than present value (that is, as S = X rather than S = [Xe. sup. -r(t – q)(T – t)]), at-the-money puts should have a premium slightly below calls. Because an option's premium is a direct function of its volatility, the requirement that put premiums be no greater than call premiums for equivalent at-the-money options implies that implied volatilities for puts be no greater than for calls. For each trading day in the 1992-94 period, the difference between implied volatilities for at-the-money puts and calls having the same expiration dates was computed, using the [+ or -]2. 5 percent criterion used above. (12) Figure 5 shows this difference. While puts sometimes have implied volatility less than calls, the norm is for higher implied volatilities for puts. Thus, puts tend to trade â€Å"richer† than equivalent calls, and the Black-Scholes model does not pass this put-call parity test.