The Morgan Report 1991: Crime prevention strategies

The Morgan Report 1991: Crime prevention strategies The Morgan report of 1991 identified the local authority as being central to the delivery of crime prevention strategy. How successful have local authorities in fact proved to be in implementing this strategy? There can be little doubt that crime and crime prevention strategies are two of the most socio-political important issues facing Britain in the contemporary era. The crime prevention strategies that were in place for the vast majority of the twentieth century were established to deal with nineteenth century social and political problems pertaining to urban expansion – itself a direct cause of industrialisation and the expansion of technology in the Victorian era (Elmsley, 2003:66-84). Yet the social and political problems facing late twentieth century and early twenty first century pose new logistical problems that old and outmoded crime prevention strategies have proved unable to solve. Globalisation, migration and the triumph of liberal political ideology have all conspired to radically alter the concept not only of policing but also of human rights. This, in turn, has had a major effect upon the implementation of crime prevention strategies – most notably with regard s to the de-centralisation of policing. It is the aim of the following essay to analyse the consequences of this shift from central to local control with regards to the delivery of crime prevention strategies in modern Britain. Before we can commence our analysis, though, we need to look at the specific policy context in order to establish a conceptual framework for the remainder of the discussion. Although the de-centralisation of policing was officially enshrined in the Crime and Disorder Act of 1998, the impetus behind this reform was located in the Morgan Report of 1991, which was set up by the Home Office to look at the delivery of local crime prevention strategies. The subsequent report made two recommendations that have since formed the backbone of the central government’s anti-crime and disorder approach. Firstly, the report recommended the implementation of â€Å"the two concepts of community safety and (increasingly) crime and disorder reduction to signify a comprehensive and targeted local approach to crime control† (Hughes and Edwards, 2005:19). Secondly, the report recommended that the state establish a clear statutory responsibility for local authorities – constituting the genesis of the multi-agency, ‘partnership’ approach to crime prevention. This, then, is the birth of the de-centralisation of policing and crime prevention with local authorities being charged with taking a more ‘hands-on’ role with regards to policing in the context of less high-risk crime such as youth crime and social disorder with the state remaining responsible for the policing of more high-risk crimes such as the contemporary ‘war’ against terrorism. As Anthony Giddens (the chief social policy advisor to the Blair government after New Labour first came to power in 1997) duly notes, â€Å"professional policing involves mainly concentrating on serious issues† (Giddens, 1998:88). Thus, although the kind of policing envisaged for local authorities remained very professional in focus after 1998, we should also be aware that the local authority was expected to deal with the less serious issues facing contemporary crime. As such while we should interpret local authorities as indeed being central to crime prevention we shoul d take care to understand the nature of the crimes that these authorities were expected to assist preventing. It should also be noted that this development did not constitute a United States style federal or quasi-federal approach to crime prevention in modern day Britain. Rather, the Home Office and the Home Secretary remain the key centres of arbitrary legal and political power with regards to the implementation of crime prevention strategies in the UK and decisions taken by these centralised bodies remain the definitive ruling in all criminal proceedings. This is an important point to remember when attempting to deduce the ultimate success or failure of local authorities in reducing crime and social disorder. As is the case with education and health care, the New Labour government can be seen to have presided over a situation best characterised as ‘policy overkill’ – creating conflicting spheres of interest and influence with regards to social policy without necessarily offering anything substantial or ‘new’ (Fulbrook, 2001:243-259). It is essential, therefore, to understand that the increased relevance that has been attached to statutory local authorities is part of the government’s broader strategy of initiating multi-agency partnerships between public sector services (such as local authorities), private enterprises and public initiatives (such as community watch or neighbourhood management). In theory, these multi-agency partnerships should involve a free exchange of ideas between each of the public, private and voluntary sectors, mirroring the democratic environment in which they have all been conceived. In this way, it is hoped crime can be tackled by utilising the logistical resources of the state, the financial resources of business and the knowledge-based resources of local communities. However, as Gordon Hughes (1998:76) observes, the reality has tended to be less a reflection of democratic ideals and more a manifestation of corporate ethos with the concept of both ‘multi-agency’ and the ‘community’ lost within the broader parameters of the de-centralisation of policing and anti-crime powers. â€Å"This slippage between the terms ‘multi-agency’ and ‘community’ is somewhat problematic. It glosses over the key feature of multi-agency crime prevention which is that it is chiefly a ‘top-down’, neo-corporatist strategy from both central and local state regimes. In this strategy situational crime prevention techniques predominate and there is minimal ‘bottom-up’ communal participation and minimal popular democratic ownership.† This is an important point to remember and one that has a direct impact upon the limitations of local authorities with regards to effectively delivering crime prevention measures. Because of the two-tier structure of the multi-agency partnerships – whereby the capital of private enterprise and the political capital of the public sector are elevated over and above the ‘grass roots’ advice of community leaders and neighbourhood managers – local authorities are frequently unable to formulate local policies that are devised to combat crime within any one specific local authority. Dialogue between the agencies is in many cases limited. This clearly impacts upon the ability of local authorities with regards to fighting crime as the impetus behind crime prevention strategies remains rooted in the top tier of decision and policy making, located at central government and think-tank level. Moreover, where there is dialogue between the often competing agencies involve d within the multi-agency framework, the language is shrouded in protocol characterised by excessive paperwork, red tape and bureaucracy. The Crime and Disorder Reduction Partnerships (CDRP) initiative, for instance, dedicates little attention to implementing crime prevention strategies, preferring to donate more time to analysing and developing ‘strategic assessments’ to use as theoretical ‘toolkits’ in the fight against crime and social disorder (Home Office, 2007). We should consequently note the way in which the existence of the partnership strategies themselves, coupled with the policy overkill of the New Labour government, has directly contributed to excessive red tape and bureaucracy at the exact moment when greater initiative needs to be taken at a grass roots level. Until this underlying chasm between theory and practice has been bridged, we ought to expect local authorities to continue to deliver crime prevention strategies that are wholly out of synch with the social realities of policing everyday life in a diverse, multicultural society (Clements, 2008). None of this, we should note, is to conclusively state that the decentralisation of crime prevention strategies has been a failure throughout Britain. Rather, the point being highlighted above has been that the partnership scheme comes with inherent structural weaknesses that cannot help but hinder the broader initiative of tackling crime. However, measuring in real terms the ultimate success or failure of local authorities’ drives to reduce crime is also an inherently difficult task. Not only are facts and figures manipulated by both the local authorities themselves, the mass media’s intense interest in crime and social disorder as a mainstream journalistic story means that facts and figures are similarly manipulated by the media in order to sensationalise a story (Jewkes, 2004). The mass media’s over-riding commercial desire to ‘sell’ a story completely negates any sense of unbiased, impartial journalistic integrity. Thus, much in the same way as t he neo-corporatist undercurrent pervades through the two-tier structure of multi-agency partnerships in the community so the same corporatist, capitalist dimension affects the measurement of success or failure with regards to crime prevention strategies. We must also take note of the way in which statistics can trick the spectator outside of the ideological parameters of political engineering and outside of the sphere of influence of the global mass media. For instance, the statistics for ‘all crime’ committed in England and Wales appears to show a clear reduction in the number of crimes being committed per one thousand persons with the figure falling from 26.4 per one thousand people between April and June 2005 to 24.9 per one thousand people between January and March 2006 (Home Office Website; first accessed 10.06.08). These crimes, though, cover the entire spectrum of criminality with many of these crimes falling within the jurisdiction of the Home Office and the Home Secretary. Specific target groups such as young offenders, on the other hand, have witnessed vast increases in the numbers of crimes being committed since the Morgan Report and the implementation of the Crime and Disorder Act. The UK charity TheSite.org (first accessed 11.06.08) notes how the number of fifteen to seventeen year olds currently being held in custody has doubled in the last ten years. All of these figures are easy to manipulate and rather than offering conclusive evidence as to the success or failure of the multi-agency initiative, these figures only serve to further cloud the reality of devolution of crime prevention strategies in contemporary Britain. Conclusion The recommendations contained with the Morgan Report, in addition to the Crime and Disorder Act in which these recommendations were encapsulated, were correct in citing the need to expand the concept of crime prevention to incorporate local authorities. Furthermore, because of the nature of power in a social democracy in the contemporary era, this shift from voluntary to statutory status, incorporating a multi-agency approach, was also a necessary move (Phillips, 2001:163-181). However, as we have seen, this multi-agency approach has predominantly conspired to further cloud what were already murky issues with regards to responsibility, accountability and the implementation of the broader anti-crime strategy. Not only has bureaucratic procedure hampered the process of cooperation and conciliation between the private, pubic and voluntary sectors that make up these multi-agencies, there has also been a lack of foresight with regards to the arbitration of political and judicial power. For instance, where the local authorities are expected to initiate measures to tackle such measures as anti-social behaviour, it is the centralised state that continues to set the quotas with regards to immigration figures, housing as well as setting the budget which decides the amount of policemen that are able to patrol the streets. The recent strike over police pay highlights the extent to which local authorities’ hands are tied when it comes to tackling crime at a regio nal level. Furthermore, the lack of communication recently exposed with regards to the police and hospitals over the release of the number of victims being admitted with stab wounds further underscores the ground that needs to be made up before we can say that the local authorities are truly in charge of tackling crime in contemporary, decentralised Britain. Consequently, we need to acknowledge first and foremost the structural weaknesses inherent in the multi-agency approach to crime prevention. Furthermore, we need to acknowledge the rapidly changing nature not only of crime but also of society in the twenty first century and the impact that this is bound to continue to have upon contemporary policing methods. It is, in the final analysis, much too soon to attempt proclaim the ultimate success or failure of a project that should still be understood as being in its embryonic stage. References All Crime Statistics for England and Wales, April 2005 to March 2006, in, Home Office Website; http://www.crimestatistics.org.uk/tool/ Clements, P. (2008) Policing a Diverse Society: Second Edition Oxford: Oxford University Press Developing a Strategic Assessment: An Effective Practice Toolkit for Crime and Disorder Reduction Partnerships and Community Safety Partnerships (2007) London: The Home Office Elmsley, C. (2003) The Birth and Development of the Police, in, Newburn, T. (Ed.) A Handbook of Policing Uffculme: Willan Publishing Fulbrook, J. (2001) New Labour’s Welfare Reforms: Anything New? , in, The Modern Law Review, Volume 64, Number 2, 243-259 Giddens, A. (1998) The Third Way: The Renewal of Social Democracy Cambridge: Polity Press Hughes, G. (1998) Understanding Crime Prevention: Social Control, Risk and Late Modernity Maidenhead: The Open University Press Hughes, G. and Edwards, A. (2005) Crime Prevention in Context, in, Tilly, N. (Ed.) A Handbook of Crime Prevention and Community Safety Uffculme: Willan Publishing Jewkes, Y. (2004) Media and Crime: A Critical Introduction London and New York: Sage Phillips, C. (2001) From Voluntary to Statutory Status: Reflecting on the Experience of Three Partnerships Established under the Crime and Disorder Act 1998, in, Hughes, G., McLaughlin, E. and Muncie, J. (Eds.) Crime Prevention and Community Safety: New Directions London and New York: Sage Young Offenders, in, The Site.Org Website; http://www.thesite.org/homelawandmoney/law/introuble/youngoffenders

Bartok And His Musical Language Film Studies Essay

Bartok And His Musical Language Film Studies Essay Bartoks music showed signs of a rejection of traditional tonality and growth in his individual harmonic language, giving a new rendition to tonal principles. This characteristic was very much due to the influence of Debussy, and also affected other composers such as Stravinsky. Additionally, after his several years of studying the German tradition at the conservatory in Budapest, he had picked up a manneristic sympathy towards this German late-Romantic style of composers like Wagner, Richard Strauss and Brahms. His earliest works show several stylistic influences present, for example his Piano Quintet (1904-5) which has a finale unquestionably modelled on that of Brahmss Second Piano Concerto. In time, Bartoks music was somewhat liberated from such influences due to his encounter with Magyar folk music in 1905. In spite of this, some influences remained, like the discovery of new harmonic possibilities in Debussys music which came about in 1907. Bartoks researches, which eventually encompassed the folk music not only of Hungary but the Slavic regions, Turkey, and North Africa, convinced him that the essential folk traditions were those having frequent contact with other cultures, allowing a mutually enriching exchange of ideas1. Bartoks compositional style reveals this outlook, which draws upon various, even seemingly contrasting, sources yet he manages to integrate them within a fully coherent frame while keeping in touch with his personal expression. 4.1.1 Tonal Language in his Piano Music 1 Morgan, Robert P. Twentieth-Century Music (W.W.Norton Company Inc., 1991). p.109Works like the Fourteen Bagatelles and Ten Easy Pieces were described by Bartok himself as experimental, reflecting this influence and revealing a certain affinity with Debussy like the use of parallel dissonant chords; except that the quality and colour of the dissonances in Bartoks music differs significantly from that of Debussy. Moreover, the Fourteen Bagatelles and the Ten Easy Pieces, small and early composed as they are, show stylistic homogeneity within each of the pieces and are more adventurous than, for example, the Debussy Preludes. The first composition which brings to light Bartoks research on folksong is shown in his series of piano pieces called For Children, based on Hungarian and Slovakian folksongs. Harmonies are usually simple but never predictable and conventional, making use of Aeolian, Dorian, Phrygian, Lydian and Mixolydian melodies, pentatonic and other modal tunes. Bartok comp osed three Burlesques, all of which were composed in different years, and these bring out the typical style of his development. They are slightly unpleasant in mood, with harsh clashes of dissonance and bizarre accents. In his Allegro Barbaro, he had established a complete assimilation of folk elements with authentic Magyar style, unrelated to the pianism of Hungarian characteristics found in Liszt and no signs of the impressionist keyboard music like Ravels. This work had brought out an immensely percussionistic sound through the martellato chords and the hammering rhythms. It marks Bartoks becoming of age, from whence his stylistic progress is outspoken, without trial and no going back to the earlier style in his music. He had recognized the piano as a percussion instrument, with works such as the Sonata, his Concertos, and the Sonata for Two Pianos and Percussion abiding by this idea. In his answer to a questionnaire about the Piano problem (1927), Bartok had stated the following : The neutral character of the piano tone has long been recognized. Yet it seems to me that its inherent nature becomes really expressive only by means of the present tendency to use the piano as a percussion instrument. Indeed, the piano always plays the part of universal instrument. It has not lost its importance for concert performances.2 4.2 Mikrokosmos Bartok was quite the innovator when it comes to writing what he wanted on the score, and in his Volumes of the Mikrokosmos, one might encounter special musical notation which indicate a specific sound that he had in mind such as newly devised key signatures (also including the use of two different key signatures at the same time), use of  ½ pedal, and the use of the  ¯ for the effect of harmonics, an effect generated by playing the selected keys without sounding them and producing harmonics as the other notes are played. Figure 4.1 First 10 Bars from No.102, Vol.4 2 Bartok, Bà ©la. Bà ©la Bartok Essays ed. Benjamin Suchoff. (University of Nebraska Press, 1976) p.288The first four books of the Mikrokosmos were specifically written for pedagogical reasons as they propose specific tasks which should prepare students as they take on new problems step by step in their first years of learning. Albeit this, Benjamin Suchoff had stated that: Evidence indicates that the Mikrokosmos was not conceived of as a piano method in 1926, the year of its origin, but as recital pieces to fill the need Bartok had of such material due to the increase in his concert bookings3. The exercises are supposedly put in progressive order according to technical and musical demands, although this order might be manipulated by the tutor with each individual student according to their abilities. Despite this, the value of these volumes lies not so much in the technical demands themselves, but it provides the opportunity for the player to encounter essential characteristics of twentieth-century music, for instance, harmonic practices like: bitonality, whole-tone scale, chords in fourths and major and minor seconds, or counterpoint methods such as: inversion, mirror and free canon, not to mention other devices like syncopation and irregular rhythms. 4.3 Six Dances in Bulgarian Rhythm Bartok ends his 153 pieces called Mikrokosmos with a set of six dances which he composed and dedicated to the British pianist Miss Harriet Cohen. As the title suggests, they are comprised of dances with folk flavour dominant throughout, containing a variety of rhythms commonly found in Bulgarian folk music. Bartok had already made use of the Bulgarian elements in No.113 and No.115 from the fourth Volume of Mikrokosmos, and he aptly named them Bulgarian rhythm I and Bulgarian rhythm II. This rhythm is frequently found in folk music from Bulgaria, and refers to a rhythm in which the beats within each bar are of dissimilar length, so that the subdivisions of each beat change in number. This set, all composed with quavers as the main beat, would therefore represent the Bulgarian rhythm grouped like this: qzzz qz qzz- corresponding to the time signature of 4+2+3/8, although the whole set of these last six dances exhibits a wide variety of possible groupings. The different rhythmic groupin gs give each of the dances a contrasting character, but still give a sense of a unified work, mostly due to a chromatic characteristic appearing in each piece and the fact that all six dances are full of energy. Figure 4.2 3 Suchoff, Benjamin. History of Bela Bartoks Mikrokosmos from the Journal of Research in Music Education, Vol. 7, No. 2 (Sage Publications Inc., 1959) p.196The first dance opens with a mildly temperate mood, but still full of life as it introduces the main theme. The dance is polymodal, based mainly on the E-Phrygian/Lydian scale, occurring in the two main elements present, which are the melody (Fig. 4.2) using notes of the E-pentatonic scale and the accompanying scalar ostinato passages based on the E major scale (Fig. 4.3). Figure 4.3 This first dance makes consistent use of the 4+2+3 Bulgarian rhythm throughout the piece, and is the only work from the set of six that has the most distinct tempo changes. A variation of the main folk motif (Fig. 4.2) occurs in the slower section marked Meno Vivo (Fig. 4.4), which builds up towards a transitional energetic area, leading to yet another calm variation of the main theme with a sense of direction leading towards the closing of the dance which is contrastingly loud and decisive in mood compared to the previous soothing variations, but it rounds off the dance bringing it well into balance and aims directly towards the complementing second dance. Figure 4.4 Variation of the main melodic motif is marked with the brackets The second dance is lively and bright in mood, introducing itself with the main rhythmic element appearing throughout the piece which is based on the 2+2+3 meter (Fig.4.5). Figure 4.5 Bb.1-3 The first three bars of ostinato-like chords are immediately followed by another motif (Fig. 4.6a) containing a syncopated melody on the C-pentatonic scale which repeats soon afterwards; this time it is transposed a 4th higher on F-pentatonic scale and it is half the length of the previous phrase, almost as if it is getting slightly impatient and increasing in tension (Fig. 4.6b). Figure 4.6a Figure 4.6b Figure 4.7Subsequently, running scales appear (Fig. 4.7), which give a reminiscing sense of some parts from the first dance. This is followed by developing material of both the initial melodic material and of the running scales once again. The scale passages keep occurring against a thick chordal bass until eventually coming to a halt and transitioning to the coda which concludes with the introductory dance rhythm, slowly drifting away to the last to chords. The third dance acts like an extension to the second dance, with a similar energetic drive but with more added force to it. Its meter is marked as 5/8 and the rhythm is subdivided into two groups: 2+3. The first rhythmic motif is divided as shown (Fig. 4.8), using notes from the E-Lydian pentachord with a minor and major seventh degree4. Figure 4.8 The second thematic material that follows is based on a symmetrical 3-bar phrase:  Ã‚ ±Ã‚ Ã‚ ±. |  Ã‚ ±Ã‚ Ã‚ ¥Ã‚ Ã‚ ± |  Ã‚ ±Ã‚ Ã‚ ±. lasting until Bar 19, leading to four bars of ostinato rhythm using chords a 5th apart, based on the dominant (V) of the A-major pentachord5, employed in the second thematic material. Variations with development on both first and second motifs appear following each other with chromatic elements throughout, leading to the close which starts off with the same introduction as the beginning, followed by a short closure using the main dance rhythmic theme, rounded off by the concluding chord (Fig. 4.9). Figure 4.9 The next dance is more upbeat and cheery in mood compared to the previous dances. It has the form of a rondo-variation with the parts generally subdivided into four-bar sections. According to Bartok, this piece is Very much in the style of Gershwins tonality, rhythm, and colour. The American folk song feeling.5 The additive 3+2+3/8 meter grouped as such (Fig. 4.10), occurs in the first movement, second theme, of Gershwins Concerto in F for Piano and Orchestra as 4/4  Ã‚ ¥ q  Ã‚ ±  Ã‚ ±  Ã‚ ¥.6 The first theme (Fig. 4.10), consists of harmonies from the C-Lydian/Phrygian polymode, and the motif is soon repeated an octave higher. The same ideas soon answer in different registers transposed into the left hand almost upside down. Figure 4.10 In discussion to the Gershwin-related tonality as described by Bartok himself, there is a section in this dance where the same melodic motif appears in a slower area (as indicated by the composer; Meno mosso) with a jazzy colour added to it, accompanied by triads ascending in stepwise motion (Fig. 4.11). This area is followed by a brief recapitulation of the melodic introductory motif played in octaves with a small ritardando at the end of the phrase which jumps to a short but very energetic Coda that concludes the dance. 6 ibid. 5 ibid. p.158 4 ibid. 3 Suchoff, Benjamin. Bartoks Mikrokosmos: Genesis, Pedagogy, and Style (Rowman Littlefield, 2004) p.157 Figure 4.11 The fifth Bulgarian dance has a more varied rhythmic schemata, in the sense that it has at least three different sections which consist of diverse rhythmic groupings (Fig. 4.12a; 4.12b; 4.12c), but all under the same meter i.e. 2+2+2+3/8. Figure 4.12a i.e. qz  Ã‚ ±z  Ã‚ ±z  Ã‚ ±zz Figure 4.12b i.e.  Ã‚ ±  Ã‚ ±  Ã‚ ±  Ã‚ ±  Ã‚ ¥ Figure 4.12c i.e.  Ã‚ ±zzz  Ã‚ ±  Ã‚ ±zz Like the second dance, it has brisk, light steps, but is more playful, slightly more colourful in tonality but less ostentatious in character. The introductory material starts with a short passage of alternating chords between the two hands, eventually leading to a clearer melodic line in bar 7 which serves as the basic material for the entire piece. The middle section consists of brief dense phrases occurring in between short staccato areas, with the thick areas having a fundamental chromatic melodic line which corresponds to the whole element of the six dances. The sixth and final dance of the whole Mikrokosmos automatically shoots off with a jump start as a kind of reaction to the strong intervallic ending of the previous dance. The chordal motifs reflect a Debussy-like influence, with the striking rhythmic elements proving the underlying thoughts of having the piano regarded as a percussive instrument. The chords against a repeated 3+3+2 quaver movement grouped as such: qZZ qZZ qZ switch hands, increasing in thickness of sound the third time it appears, due to the lower register of the keyboard. The chords are the holders of the main melodic line in this dance. Repeated eighth notes occur throughout most of the dance with abrupt accentuated phrasings. Corresponding to the chromatic element of the whole set which links them together is an area full of melodic motifs displaying chromatic movement in both hands, with the phrases running on top of each other constantly, keeping a rhythmic flow (Fig. 4.13). Figure 4.13 The only section in this piece where there are not any running rhythms is in the extremely aggressive chordal area marked fortissimo (Fig. 4.14), halting abruptly on a dissonant chord which is followed by several bars of repeated notes, soon to have the other voice join in once again, both charging towards the flamboyant ending of the piece. Figure 4.14

In this essay I will be investigating the fate and characteristics of

In this essay I will be investigating the fate and characteristics of a tragic hero in a play A View From The Bridge written by Arthur Miller. The character discussed in this essay is a longshoreman named Eddie Carbone. In this essay I will be investigating the fate and characteristics of a tragic hero in a play "A View From The Bridge" written by Arthur Miller. The character discussed in this essay is a longshoreman named Eddie Carbone - a responsible family man living in the rough neighborhoods of Red hook, Brooklyn, New York. A Sicilian community bound by a strict social code. Eddie's credentials are compared against Aristotle's view of a tragic hero " one who is neither villainous or virtuous, moving from a high happy status to a miserable one through some frailty or error in judgment." Through out the play we witness the development of this as we see Eddie fall from his high status in the community to losing everything, his family, respected name in the community and even his life. By witnessing his downfall (nemesis) the audience is moved to pity (pathos) because he suffers from a frailty that we recognize which could have happen to us. This is what makes him a tragic hero. Although fate plays a large part in his downfall, much of the events conspiring against him are caused by his flawed characteristics and wrong doings. So in this essay I will be determining whether Eddie Carbone disserves our pity. Eddie Carbone is respected in his community, seen as a reliable dominant longshoreman who "was as good as a man he had to be in a life that was hard and even." His name represents a lot in his community and brings pride back home. He is a caring family man, Beatrice usually gives in to his dema... ...he cruel reality of the society. Being an uncle, the level of incest is not as strong compared to father and daughter relationship. The gap between illegal family laws is smaller creating a stronger temptation for Eddie which makes his incestuous feeling difficult to ignore. And after all "Eddie was never meant to have a destiny" Eddie has lost everything, his family, his confidence in the community, friends etcetera. Basically eddie has already been paid back for all the faults he uncontrollably committed. I believe miller has succeeded in making us feel pity for Eddie. I think Eddie has represented a lot of individuals with incest problems, shown us how easily it was to be a victim and how emotionally difficult it is to free yourself. Finding your own daughter sexually attractive is an easy thing. He has made us wonder " Is incest really that bad?"

Critical Analysis of Research Papers -- Research Methods, Qualitative,

In this paper I will critically analyse the strength and weakness of using 'qualitative and quantitative' to a specific area of social work practice. The area of choice is children's services with focus on two research findings in the area of performance measurement within social work, with special emphasis on quality services and stability of placements for children looked after away from home. The two documents will be referred as Paper one titled 'Performance Targets and stability of Placement for children Long looked After away from home' Harriet Wardan and Tricia Skuse (2002) and Paper two titled 'Defining Quality care for looked After Children: Front line Workers Perspective's on Standards and all that'(David Watson (2003). I have chosen to use nursing framework because Quantitative and Qualitative studies are different approaches to research and therefore need to be approach different with regard to critiquing' Frances Ryan et al (2007) However, there has been considerable debate concerning whether qualitative and quantitative research can be assessed using the same criteria May & Pope (2000). The critique will focus on issues like, title, theoretical framework, research design, methodology, data collection, methods, data analysis, rigour, findings, ethics, generalisability and flexibility. The title clearly indicates the focus of the study in both papers, but for paper two did not say the meaning of 'all that'. According to Smith (1983) quantitative research is to explain, predict and develop laws that can be universally applied and Qualitative research is the interpretation and understanding of what people give to their situation. The researchers clearly stated the purpose of their studies, aim, objectiv... ...tative method because are interested in how ordinary people observe and describe their Silverman (1993). There are debates on why qualitative and quantitative can be combined because the two approaches share the goal of understanding the world in which we live Haase & Myers (1980). However, Reichath &Rallis (1994) argued that the two paradigms are incompatible if the qualitative paradigm assumes that there are no external referents for understanding reality. Howe (1988) suggests that researchers should forge ahead with what works. Quantitative research makes no attempt to have personal relationship with the people being studied and to account of their view. The accounts include feelings, beliefs these being concept of feminist work. Feminism holds on to qualitative method because are interested in how ordinary people observe and describe their Silverman (1993).

Dogs as Best Pet Essay

Dogs as best pets have been contentious argument among scholars with center of debate consistently shifting from basic roles of dogs in homes to scientific roles they play in research. It is not fallacious to argue for instance, that in recent decades, there has been social, economic and cultural changes that have brought fundamental shift in the attitude and values of people to an extent that dogs are not only reared as best pets but fulfill a given vacuum left due to a sense of isolation. Scholars such as Tapper (2007) have provided evidence-based researches showing that dogs as pets provide unconditional companionship which equates effective therapeutic options that improve quality of life. However, what Tapper presents in his study should not be considered as the pinnacle in this argument. That is, debate on dogs as the best pet is so rich that argument as made by Tapper is admittedly an introductory one and only represents a research that is clearly in progress. Looking at recen t studies such as Serpell and Paul (2010), it is clear that there are still a number of avenues which beg this assessment to explore regarding benefits of gods as pets and such cannot be explored in the confines of what Tapper argues about. In support of studies that have looked at dogs in a wider perspective, this argument begins, as all proper researches should, that dogs are not only the best pets but work animal. As pets, they are not just fawning but seem to live with people and take their work outside seriously —they are to be found at table and at the gate watching steadily for any intruder. This is not to forget the fact that families use dog as ‘guide dogs for the blind’ or ‘hearing dogs for the blind.’ Though some arguments such as Vivian (2001) have postulated that as pets, dogs can sometime tear their best friends asunder, it is possible to counter this claim in the sense that these pets could only attack their master in situations psychologist term as ‘fight or flight.’ That is, dogs as pets are have feelings and when cornered or threatened, they either fight back or run away from the danger. In fact, close study of these animals as pets brings a number of such contradictions (that dogs can aimlessly attack their masters) (Lloyd-Jones, 2003). Arguments on whether dogs are the best pet stretches back to the early times of Greek civilization where it was, at the very best, liminal, human’s best friend compared to other animals that were domesticated (Tapper, 2007). Contrariwise, this statement remains uncertain owing to the fact that the animal is just a few steps from the wolf. In addition to this, in a confined argument, the theory continues, that dogs as pets are not as important as other animals reared as pets. The thesis statement of this school of thought lies on the premise that the animal contributes nothing to the common good compared to other pets. In as much as there may be truth in this theoretical framework, comparative studies as cited above have succinctly indicated that such a view is fraught with inherent dangers especially if they are pursued overly simplistically. The reason as to why this argument refutes opposing arguments that is strongly is due to the fact that the obvious relationship existing between people and dogs as pets is rarely that simple, regardless of the level of society the dog is reared as a pet. To argue that dogs as pets are economically worthless is fallacious in the sense that young people in the house and dogs as pets are categorized as creatures put near or in the house, fed but with return or meaningless economic services the owner. References Lloyd-Jones, H. (2003), ‘Females of the species and dogs rearing in the upper families.’ ParkRidge, NJ 2003. Serpell, T. & Paul, E. (2010), ‘Pets and the development of positive attitudes towards dogs’, inAnimals and society. Changing perspectives, eds. A. Manning & James Serpell,Routledge, NY 2010, 127-156.Tapper, R. (2007), ‘Animality, humanity, morality, society’, in What is an animal? Ed. T. Ingold,Routledge, NY 2010, 42-72. Vivian, K. (2001), ‘In the company of animal. A study of human-animals relationship.’Routledge, NY 2001, 390-412. Source document

Investment Avenues

INVESTMENT AVENUES 1. 1 INTRODUCTION TO INVESTMENT The money one earns is partly spent and the rest is saved for meeting future expenses, instead of keeping savings idle one may like to use savings in order to get returns on it in the future, this is called as investment. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth.In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price. Mere earning will not help one to secure the future, so it becomes important to invest. One of the important reasons why one needs to invest wisely is to meet the cost of Inflation. Inflation is the rate at which the cost of living increases. The cost of living is simply what it costs to buy the goods and services you need to live.Inflation causes money to lose value because it will not buy the same amount of a good or a ser vice in the future as it does now or did in the past. The sooner one starts investing the better. By investing early one allow one’s investments more time to grow, whereby the concept of compounding increases one’s income, by accumulating the principal and the interest or dividend earned on it, year after year. The dictionary meaning of investment is to commit money in order to earn a financial return or to make use of the money for future benefits or advantages.People commit money to investments with expectations to increase their future wealth by investing money to spend in future years. For example, if you invest Rs. 1000 today and earn 10% over the next year, you will have Rs. 1100 one year from today. An investment can be described as perfect if it satisfies all the needs of all investors. So, the starting point in searching for the perfect investment would be to examine investor needs.If all those needs are met by the investment, then that investment can be terme d the perfect investment. Most investors and advisors spend a great deal of time understanding the merits of the thousands of investments available in India. Little time, however, is spent understanding the needs of the investor and ensuring that the most appropriate investments are selected for him. Before making any investment, one must ensure to: ? ? ? ? ? ? ? ? ? ? ? ? Obtain written documents xplaining the investment Read and understand such documents Verify the legitimacy of the investment Find out the costs and benefits associated with the investment Assess the risk-return profile of the investment Know the liquidity and safety aspects of the investment Ascertain if it is appropriate for your specific goals Compare these details with other investment opportunities available Examine if it fits in with other investments you are considering or you have already made Deal only through an authorized intermediary Seek all clarifications about the intermediary and the investment Expl ore the options available to you if something were to go wrong, and then, if satisfied, make the investment. 1. 2 INVESTMENT NEEDS OF AN INVESTOR Investing money is a stepping stone to manage spending habits and prepare for the future expenses. Most people recognize the need to put their money away for events or circumstances that may occur in future. People invest money to manage their personal finances some of them invest to plan for retirement, while others invest to accumulate wealth. Each one has a different need and each of them expect something from their money in future. By and large, most investors have eight common needs from their investments: i. ii. iii. iv. v.Security of original capital Wealth accumulation Tax Advantages Life cover Income 1. 3 TYPES OF INVESTMENT AVENUES Fi gure 1. 1: Various investment alternatives Source: Investment analysis and portfolio management Author: Prasanna Chandra Figure 1. 1 shows various investment alternatives which are explained below. One can invest money in different types of Investment instruments. These instruments can be financial or non-financial in nature. There are many factors that affect one’s choice of investment. Millions of Indians buy fixed deposits, post office savings certificates, stocks, bonds or mutual funds, purchase gold, silver, or make similar investments. They all have a reason for investing their money.Some people want to supplement their retirement income when they reach the age of 60, while others want to become millionaires before the age of 40. We will look at various factors that affect our choice of an investment alternative, let us first understand the basics of some of the popular investment avenues. 1. 3. 1 Non marketable Financial Assets: A good portion of financial assets is represented by non-marketable financial assets. These can be classified into the following broad categories: ? Bank Deposits: The simplest of investment avenues, by opening a bank account and depositi ng money in it one can make a bank deposit. There are various kinds of bank accounts: current account, savings account and fixed deposit account.The interest rate on fixed deposits varies with the term of the deposit. In general, it is lower for fixed deposits of shorter term and higher for fixed deposits of longer term. Bank deposits enjoy exceptionally high liquidity. ? ? Post Office Savings Account: A post office savings account is similar to a savings bank account. The interest rate is 6 percent per annum. Post Office Time Deposits (POTDs): Similar to fixed deposits of commercial banks, POTD can be made in multiplies of 50 without any limit. The interest rates on POTDs are, in general, slightly higher than those on bank deposits. The interest is calculated half-yearly and paid annually. Monthly Income Scheme of the Post Office (MISPO): A popular scheme of the post office, the MISPO is meant to provide regular monthly income to the depositors. The term of the scheme is 6 years. T he minimum amount of investment is 1,000. The maximum investment can be 3, 00,000 in a single account or 6, 00,000 in a joint account. The interest rate is 8. 0 percent per annum, payable monthly. A bonus of 10 percent is payable on maturity. ? Kisan Vikas Patra (KVP): A scheme of the post office, for which the minimum amount of investment is 1,000. There is no maximum limit. The investment doubles in 8 years and 7 months. Hence the compound interest rate works out to 8. 4 percent. There is a withdrawal facility after 2 ? years. National Savings Certificate: Issued at the post offices, National Savings Certificate comes in denominations of 100, 500, 1,000, 5,000 and 10,000. It has a term of 6 years. Over this period Rs. 100 becomes Rs. 160. 1. Hence the compound rate of return works out to 8. 16 percent. ? Company Deposits: Many companies, large and small, solicit fixed deposits from the public. Fixed deposits mobilized by manufacturing companies are regulated by the Company Law Boa rd and fixed deposits mobilized by finance company (more precisely non-banking finance companies) are regulated by the Reserve Bank of India. The interest rates on company deposits are higher than those on bank fixed deposits, but so is risk. ?Employee Provident Fund Scheme : A major vehicle of savings for salaried employees, where each employee has a separate provident fund account in which both the employer and employee are required to contribute a certain minimum amount on a monthly basis. ? Public Provident Fund Scheme: One of the most attractive investment avenues available in India. Individuals and HUFs can participate in this scheme. A PPF account may be opened at any branch of State Bank of India or its subsidiaries or at specified branches of the other public sector banks. The subscriber to a PPF account is required to make a minimum deposit of 100 per year. The maximum permissible deposit per year is 70,000. PPF deposits currently earn a compound interest rate of 8. 0 perc ent per annum, which is totally exempt from taxes. 1. 3. Bonds: Bonds are fixed income instruments which are issued for the purpose of raising capital. Both private entities, such as companies, financial institutions, and the central or state government and other government institutions use this instrument as a means of garnering funds. Bonds issued by the Government carry the lowest level of risk but could deliver fair returns. Many people invest in bonds with an objective of earning certain amount of interest on their deposits and/or to save tax. Bonds are considered to be a less risky investment option and are generally preferred by risk-averse investors. Bond prices are also subject to market risk. Bonds may be classified into the following categories: ? Government ecurities: Debt securities issued by the central government state government and quasi government agencies are referred as gilt edge securities. It has maturities ranging from 3-20 years and carry interest rate that u sually vary between 7 to 10 percent. ? Debentures of private sector companies: Debentures are viewed as a mixture of having a shareholding and a fixed interest loan. Debenture holders are normally entitled to a return equivalent to a fixed percentage of their initial investment. The security inherent in debentures makes them a safer investment than shares. ? ? Preference shares: Investing in shares is safer and dividends are assured every year. Savings bonds 1. 3. Mutual funds: A mutual fund allows a group of people to pool their money together and have it professionally managed, in keeping with a predetermined investment objective. This investment avenue is popular because of its cost-efficiency, risk-diversification, professional management and sound regulation. There are three broad types of mutual fund schemes classified on basis of investment objective: ? Equity schemes: The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes norma lly invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences.Growth schemes are good for investors having a longterm outlook seeking appreciation over a period of time. ? Debt schemes: The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short ru n and vice versa.However, long term investors may not bother about these fluctuations. ? Balanced schemes: The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure equity funds. 1. 3. 4 Real Estate: Residential real estate is more than just an investment.There are more ways than ever before to profit from real estate investment. Real estate is a great investment option. It can generate an ongoing income source. It can also rise in value overtime and prove a good investment in the cash value of the home or land. Many advisors warn against borrowing money to purc hase investments. The best way to do this is to save up and pay cash for the home. One should be able to afford the payments on the property when the property is vacant, otherwise the property may end up being a burden instead of helping to build wealth. 1. 3. 5 Equity Shares: Equities are a type of security that represents the ownership in a company. Equities are traded (bought and sold) in stock markets.Alternatively, they can be purchased via the Initial Public Offering (IPO) route, i. e. directly from the company. Investing in equities is a good long-term investment option as the returns on equities over a long time horizon are generally higher than most other investment avenues. However, along with the possibility of greater returns comes greater risk. 1. 3. 6 Money market instruments: The money market is the market in which short term funds are borrowed and lent. These instruments can be broadly classified as: ? Treasury Bills: These are the lowest risk category instruments fo r the short term. RBI issues treasury bills [T-bills] at a prefixed day and for a fixed amount. There are 4 types of treasury bills: 4-day T-bill, 91-day T-bill, 182-day T-bill and 364-day T-bill. ? Certificates of Deposits: After treasury bills, the next lowest risk category investment option is certificate of deposit (CD) issued by banks and financial Institution (FI). A CD is a negotiable promissory note, secure and short term, of up to a year, in nature. Although RBI allows CDs up to one-year maturity, the maturity most quoted in the market is for 90 days. ? Commercial Papers: Commercial papers are negotiable short-term unsecured promissory notes with fixed maturities, issued by well-rated organizations. These are generally sold on discount basis. Organizations can issue CPs either directly or through banks or merchant banks.These instruments are normally issued for 30/45/60/90/120/180/270/364 days. ? Commercial Bills: Bills of exchange are negotiable instruments drawn by the se ller or drawer of the goods on the buyer or drawee of the good for the value of the goods delivered. These are called as trade bills and when they are accepted by commercial banks they are called as commercial bills. If the bill is payable at a future date and the seller needs money during the currency of the bill then the seller may approach the bank for discounting the bill. 1. 3. 7 Life insurance policies: Insurance is a form of risk management that is primarily used to hedge the risk of a contingent loss.Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. An insurer is a company that sells insurance; insured or the policyholder is a person or entity buying the insurance. The insurance rate is a factor that is used to determine the amount which is to be charged for a certain amount of insurance coverage, and is called the premium. It can be classified as: ? Money-back Insurance: Money-back Insurance schemes are used as investment avenues as they offer partial cash-back at certain intervals. This money can be utilized for children’s education, marriage, etc. ? Endowment Insurance: These are term policies.Investors have to pay the premiums for a particular term, and at maturity the accrued bonus and other benefits are returned to the policyholder if he survives at maturity. 1. 3. 8 Bullion Market: Precious metals like gold and silver had been a safe haven for Indian investors since ages. Besides jewellery these metals are used for investment purposes also. Since last 1 year, both Gold and Silver have highly appreciated in value both in the domestic as well as the international markets. In addition to its attributes as a store of value, the case for investing in gold revolves around the role it can play as a portfolio diversifier. 1. 3. 9 Financial Derivatives: Derivatives are contracts and can be used as an underlying asset. Various types of Derivatives are: ? Forwards: A forward contract is a customized contract between two entities, where settlement takes place on a specific date in the future at today’s pre-agreed price. Futures: A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Futures contracts are special types of forward contracts in the sense that the former are standardized exchange traded contracts ? Options: Options are of two types – calls and puts. Calls give the buyer the right but not the obligation to buy a given quantity of the underlying asset, at a given price on or before a given future date. Puts give the buyer the right, but not the obligation to sell a given quantity of the underlying asset at a given price on or before a given date. Swaps: Swaps are private agreements between two parties to exchange cash flows in the future according to a prearranged formula. They can be regarded as portfolios of forward contracts. E. g. Currency swaps, inte rest swaps. 1. 3 EVALUATION OF VARIOUS INVESTMENT AVENUES Table 1. 1: Summary evaluation of various investment avenues Investment Avenues Return Current yield Equity shares Non convertible debentures Equity schemes Debt schemes Moderate Low Low High No tax on Very High Low High High High High Very High High Negligible Low Average Nil High Low Capital appreciation High High Fairly High High High Risk Marketability/ Liquidity Tax Shelter Convenience ividend Bank deposits Public provident fund Life insurance policies Residential Moderate Moderate Gold and Silver Source: Investment analysis and portfolio management Author: Prasanna Chandra Table 1. 1 shows the evaluation of various investment avenues. From this table we can say that risk, liquidity and return are the so called factors which are considered before making an investment. But there is a trade off between risk and return. Higher the risk higher is the return. Lower the risk and lower is the return. The decision of which mode of investment to choose largely depends upon the investors necessity and the factors which according to him is the most vital one. People with more security concern choose fixed investment like bank deposits and investments in government securities and various post office savings.The main reason for choosing such an investment mode is that the amount invested in the above stated securities seems to be very secure and hence they seemed to be more preferred one where security is the prime concern. People whom returns are most important are ready to take risk to earn fairer risk. The preferred mode of investment over here is equity shares and mutual fund. The risk factor in these modes of investment is basically the returns are basically performance based. If the company performs well the investors can accept fairer returns but if the company fails to perform then there can be a threat to the invested amount. Hence the returns are very volatile with the changes in the market conditions .Nil Moderate Negligible Low Average Average Nil Moderate Nil Average Nil Moderate Nil Average Section 80 C benefit Section 80 C benefit High Nil Fair Average Very High Very High Moderate Nil Negligible High Low Very High 1. 4 ATTRIBUTES OF INVESTMENT Investment can be said to be an art. Many people invest money without knowing what they are doing. Only a few people really understand the art of investing money. They invest according to certain principles. There are also certain factors that affect the investment decisions. All these are done mainly to increase the return on the investment and also to keep the risk to a minimum. The various factors that affect the investment decisions are given below. For evaluating an investment avenue, the following attributes are relevant. ) Rate of Return: The rate of return on an investment for a period (which is usually a period of one year) is defined as follows: Rate of return = Annual income + (Ending price – Beginning price) Beginnin g price Yield: Yield is the annual rate of return for any investment and is expressed as a percentage. With stocks, yield can refer to the rate of income generated from a stock in the form of regular dividends. This is often represented in percentage form, calculated as the annual dividend payments divided by the stock's current share price. Current yield= Annual cash inflows Market price Capital Appreciation: It’s the rise in the market price of an asset. Capital appreciation is one of two major ways for investors to profit from an investment in a company. The other is through dividend income. ) Risk: The risk of investment refers to the variability of its rate of return. A simple measure of dispersion is the range of values, which is simply the difference between the highest and the lowest values. Figure 1. 2: Relationship between Expected Return and Risk Figure 1. 2 shows the relationship between expected return and risk. From this figure it is clear that with higher risk the returns also increases while it decrease as the risk decreases. High variance indicates high degree of risk and low variance indicates lesser risk. Expected returns increases when investors is willing to take risk. Other measures commonly used in finance are as follows: ?Variance: This is the mean of the squares of deviations of individual returns around their average values ? Standard deviation: This is the square root of variance ? Beta: This reflects how volatile the return from an investment is, in response to market swings. ? Risk = Actual Return – Expected Returns If, Actual Return = Expected Return = Risk Free Investment If, Actual Return ; or ; Expected Return is risky investment c) Marketability: An investment is highly marketable or liquid if: ? ? ? It can be transacted quickly The transaction cost is low; and The price change between two successive transactions is negligible. The liquidity of a market may be judged in terms of its depth, breadth, and resilience .Depth refers to the existence of buy as well as sells orders around the current market price. Breadth implies the presence of such orders in substantial volume. Resilience means that new orders emerge in response to price changes. Generally, equity shares of well established companies enjoy high marketability and equity shares of small companies in their formative years have low marketability. High marketability is a desirable characteristic and low marketability is an undesirable one. d) Tax Shelter: Tax benefits are of the following three kinds: ? ? ? Initial Tax Benefit: An initial tax benefit refers to the tax relief enjoyed at the time of making the investment.Continuing Tax Benefit: A continuing tax benefits represent the tax shield associated with the periodic returns from the investment. Terminal Tax Benefits: A terminal tax benefit refers to relief from taxation when an investment is realized or liquidated. e) Convenience: Convenience broadly refers to the ease with which the investment can be made and looked after. The degree of convenience associated with investments varies widely. At one end of the spectrum is the deposit in a savings bank account that can be made readily and that does not require any maintenance effort. At the other end of the spectrum is the purchase of a property that may involved a lot of procedural and legal hassles at the time of acquisitions and a great deal of maintenance effort subsequently. 1. APPROACHES TO INVESTMENT DECISION MAKING The stock market is thronged by investors pursuing diverse investment strategies which may be subsumed under four broad approaches: i. Fundamental Approach: The basic tenets of the fundamental approach, which is perhaps most commonly advocated by investment professionals, are as follows: ? There is an intrinsic value of a security, which depends upon underlying economic (fundamental) factors. The intrinsic value can be established by a penetrating analysis of the fundamental factors relating to the company, industry, and economy. ? At any given point of time, there are some securities for which the existing market price will differ from the intrinsic value.Sooner or later, of course, the market price will fall in line with the intrinsic value. ? Superior returns can be earned by buying under-valued securities (securities whose intrinsic value exceeds the market price) and selling over-valued securities (securities whose intrinsic value is less than the market price). ii. Psychological Approach: The psychological approach is based on the premise that stock prices are guided by emotion rather than reason. Stock prices are believed to be influenced by the psychological mood of investors. When greed and euphoria sweep the market, prices rise to dizzy heights. On the other hand, when fear and despair envelop the market, prices fall to abysmally low levels.Since psychic values appear to be more important than intrinsic values, the psychological approach suggests that it is m ore profitable to analyze how investors tend to behave as the market is swept by waves of optimism and pessimism, which seem to alternate. The psychological approach has been described vividly as the ‘castles in the air’ theory Burton G. Malkiel. Those who subscribe to the psychological approach or the ‘castles in the air’ theory generally use some form of technical analysis which is concerned with a study of internal market data, with a view to developing trading rules aimed at profit making. The basic premise of technical analysis is that there are certain persistent and recurring patterns of price movements, which can be discerned by analyzing market data.Technical analysts use a variety of tools like bar chart, point and figure chart, moving average analysis, breadth of market analysis, etc. iii. Academic Approach: Over the last five decades or so, the academic community has studied various aspects of the capital market, particularly in the advanced cou ntries, with the help of fairly sophisticated methods of investigation. ? Stock markets are reasonably efficient in reacting quickly and rationally to the flow of information. Hence, stock prices reflect intrinsic value fairly well. Put differently, Market price = Intrinsic value ? Stock price behaviour corresponds to a random walk. This means that successive price changes are independent. As a result, past price behaviour cannot be used to predict future price behaviour. ?In the capital market, there is a positive relationship between risk and return. More specifically, the expected return from a security is linearly related to its systematic risk iv. Eclectic Approach: The eclectic approach draws on all the three different approaches discussed above. The basic premises of the eclectic approach are as follows: ? Fundamental analysis is helpful in establishing basic standards and benchmarks. However, since there are uncertainties associated with fundamental analysis, exclusive relia nce on fundamental analysis should be avoided. Equally important, excessive refinement and complexity in fundamental analysis must be viewed with caution. Technical analysis is useful in broadly gauging the prevailing mood of investors and the relative strengths of supply and demand forces. However, since the mood of investors can vary unpredictably excessive reliance on technical indicators can be hazardous. More important, complicated technical systems should ordinarily be regarded as suspect because they often represent figments of imagination rather than tools of proven usefulness. ? The market is neither as well-ordered as the academic approach suggest, nor as speculative as the psychological approach indicates. While it is characterized by some inefficiencies and imperfection, it seems to react reasonably efficiently and rationally to the flow of information.Likewise, despite many instances of mispriced securities, there appears to be a fairly strong correlation between risk a nd return. ? Level of return often necessitates the assumption of a higher level of risk. 1. 7 COMMON ERRORS IN INVESTMENT MANAGEMENT Investments always do not generate wealth sometimes it fail do so because of some conditions. The reason for this failure is either the market condition or some mistakes made by the investors. We cannot control market condition but errors made by investors could be avoided. Investors appear to be prone to the errors in managing their investments. Some of the errors made by investors are discussed below: 1. 7. Inadequate Comprehension of Return and Risk Many investors have unrealistic and exaggerated expectations from investments, in particular from equity shares and convertible debentures. One often comes across investors who say that they hope to earn a return of 25 to 30 percent per year with virtually no risk exposure or even double their investment in a year or so. They have apparently been misled by one or more of the following; (a) tall and unju stified claims made by people with vested interests; (b) Exceptional performance of some portfolio they have seen or managed, which may be attributable mostly to fortuitous factors; and (c) Promises made by tipsters, operators, and others. In most of the cases, such expectations reflect investor inexperience and gullibility. 1. 7. Vaguely Formulated Investment Policy Often investors do not clearly spell out their risk disposition and investment policy. This tends to create confusion and impairs the quality of investment decisions. Ironically, conservative investors turn aggressive when the bull market is near its peak in the hope of reaping a bonanza; likewise, in the wake of sharp losses inflicted by a bear market, aggressive investors turn unduly cautions and overlook opportunities before them. Ragnar D. Naess put it this way: â€Å"The fear of losing capital when prices are low and declining, and the greed for more capital gains when prices are rising, are probably, more than an y other factors, responsible for poor performance. if you know what your risk attitude is and why you are investing, you will learn how to invest well. A well articulated investment policy, adhered to consistently over a period of time, saves a great deal of disappointment. 1. 7. 3 Naive Extrapolation of the Past Investors generally believe in a simple extrapolation of past trends and events and do not effectively incorporate changes into expectations. As Arthur Zeikel says: â€Å"People generally, and investors particularly, fail to appreciate the working of countervailing forces; change and momentum are largely misunderstood concepts. Most investors tend to cling to the course to which they are currently committed, especially at turning point. † `The apparent comfort provided by extrapolating too far, however, is dangerous. As Peter Bernstein says: â€Å"Momentum causes things to run further and longer than we anticipate. They very familiarity of a force in motion reduces our ability to see when it is losing its momentum. Indeed, that is why extrapolating the present into the future so frequently turns out to be the genesis of an embarrassing forecast. † 1. 7. 4 Cursory Decision Making Investment decision making is characterized by a great deal of cursoriness. Investors tend to: ? ? ? Base their decisions on partial evidence, unreliable hearsay, or casual tips given by brokers, friends, and others.Cavalierly brush aside several of investment risk (market risk, business risk, and interest rate risk) as greed overpowers them. Uncritically follow others because of the temptation to ride the bandwagon or lack of confidence in their own judgment. 1. 7. 5 Untimely entries and exits Investors tend to follow an irrational start and stop approach to the market characterized by untimely entries (after a market advance has long been underway) and exit (after a long period of stagnation and decline). 1. 7. 6 High costs Investors trade excessively and spend a lot on investment management. A good proportion of investors indulge in day trading in the hope of making quick profits.However more often transaction cost wipes out whatever profits they may generate from frequent trading. 1. 7. 7 Over-Diversification and Under-Diversification Many individuals have portfolios consisting of thirty to sixty, or even more, different stocks. Managing such portfolios is an unwieldy task and as R. J. Jenrette put it: Overdiversification is probably the greatest enemy of portfolio performance. Most of the portfolios we look at have too many names. As a result, the impact of a good idea is negligible. † Perhaps as common as over-diversification is under-diversification. Many individuals do not apparently understand the principle of diversification and its benefit in term of risk reduction.A number of individual portfolios seem to be highly under-diversified, carrying an avoidable risk exposure. 1. 7. 8 Wrong Attitude towards Losses and Profits An investor has an aversion to admit his mistake and cut losses short. If the price falls, contrary to his expectation at the time of purchase, he somehow hopes that it will rebound and he can break even. Surprisingly, such a belief persists even when the prospects look dismal and there may be a greater possibility of a further decline. If the price recovers due to favourable conditions, there is a tendency to dispose of the share when its price more or less equals the original purchase price, even though there may be a fair chance of further increases.The psychological relief experienced by an investor from recovering losses seems to motivate such behaviour. This means the tendency is to let the losses run and cut profits short, rather than to cut the losses short and let the profits run. 1. 8 RISKS IN INVESTMENT Risk is uncertainty of the income /capital appreciation or loss or both. Every investment (equity, debt, property, etc. ) carries an element of risk that is unique to it. Tho ugh risk cannot be totally eliminated, it can be managed by undertaking effective risk management. To manage risk, one first need to identify different kinds of risks involved in investing and then take appropriate steps to reduce it.Risk and return share a direct relationship with one another. Therefore, an investment which carries negligible risk, will offer a low return (viz. bonds issued by the Reserve Bank of India) while an investment which carries a higher risk, also offers the potential of higher returns (stocks). All investments are a ‘trade off’ between risk and returns. Let us first discuss the types of risks. 1. 8. 1 Types of Risks All investments carry their unique set of risks. Though there are several types of risks, the important ones are – market risk, credit risk, interest rate risk, inflation risk, currency risk and liquidity risk. These are briefly explained below: ) Market Risk: A share may rise or fall depending on the fortunes of the compan y, the industry it is in, or in response to investor sentiment. b) Credit Risk: This risk is attributed to debt investments wherein the borrower may default on interest and/or principal repayment. c) Interest Rate Risk: When interest rates rise, fixed income investments lose value. This is because the investor will continue to earn the same (lower) interest rate until the investment matures while market interest rates have already gone up. In order to compensate for a lower interest rate compared to the market rate, the fixed income investment will thus have to be priced at a lower rate. ) Inflation Risk: Rising inflation will erode the value of your income and asset. Due to inflation, the cost of products and services will rise and consequently, your future income and assets will be worth less than what they are worth today. e) Currency Risk: Changes in exchange rates between currencies could lead to decline in value of your investments. With Indian investors now being allowed to i nvest in other countries, you will now be exposed to currency risk i. e. a fall in the value of the currency in which you are investing vis-a-vis your home currency i. e. the Rupee. f) Liquidity Risk: Certain investments carry the risk of poor liquidity either due to the nature of the asset or regulatory reasons.For example, property is inherently an illiquid investment as it cannot be sold as simply as selling stocks. Certain investments like the Reserve Bank of India bonds are not transferable till maturity. Investments in Equity Linked Savings Schemes are illiquid for a period of 3 years and in case you redeem from such schemes, your tax benefit is withdrawn. 1. 8. 2 Risk Management Once different kinds of risks associated with investments are identified appropriate steps can be taken to reduce these risks. Some of these steps are: a) Diversification: Most types of risks can be managed by diversifying your investments across asset classes (stocks, bonds, properties etc. ), indust ry, currencies etc.Diversification spreads the risk and reduces the adverse impact that any one investment might have on a portfolio. b) Research and Monitor: Rigorous research and continuous monitoring will help in controlling the market and credit risk of your investments. This will caution beforehand to avoid an investment and alert in case the risk is increasing on an investment already undertaken. 1. 8. 3 Risk Tolerance Level: Risk includes the possibility of losing money. However, extra considerations should be made in addition to the safety of the principal and the potential for growth. These considerations include the likelihood of achieving the financial goals you have established.Additionally, one should consider whether he/she is willing and able to accept a higher level of risk in order to achieve further rewards. Before starting on the setting of the investment portfolio, every investor should establish his/her risk tolerance level. Only after this he/she is ready to bu ild strategies for the accomplishment of his/her financial goals. The higher the degree of risk involved in the investment portfolio the greater the chances of higher returns and failures. The setting of the risk tolerance level is very subjective issue. However, younger investors can afford more risk taking since they have more time to fix the losses. On the other hand older investors should apply more conservative approach since they have less time in front of them.But, they should keep in mind that they greatly decrease their chances of faster achieving their financial goals. A portfolio that carries more bonds is considered more conservative and risk averse. However, the one that includes a greater percentage of stocks is more risk taking with higher potential of rewards. Many financial experts recommend the diversification between investments with different degrees of risk. This is a good idea since your portfolio will benefit from the rises and falls of the different investmen ts and will alleviate the potential of losing money. Risk Personalities: Based on the risk capacity and risk tolerance, risk appetite can be decided. This is the level of risk that one is ready to bear.Broadly risk personalities can be categorised at 3 levels – Conservative, Balanced and Aggressive. Each risk personality has a different objective which it aims to achieve through the investment portfolio. These personalities are explained below: ? ? ? Conservative personality: For investors having this personality preservation of the capital invested is the ultimate goal, even if it means compromising on the returns. Balanced personality: People with this type of personality wish to strike a balance between high-risk and low-risk investments. Aggressive personality: Investors with such personality do not wish to compromise at all on the returns, even if their capital erodes. 2. 1 INTRODUCTIONIndian investor today have to endure a slow-moving economy, the steep market declines prompted by declining revenues, alarming reports of scandals ranging from illegal corporate accounting practices like that of Satyam to insider trading to make investment decisions. Stock market’s performance is not simply the result of intelligible characteristics but also due to the emotions that are still baffling to the analysts. Despite loads of information coming from all directions, it is not the calculations of financial wizards, or company’s performance or widely accepted criterion of stock performance but the investor’s irrational emotions like overconfidence, fear, risk aversion, etc. seem to decisively drive and dictate the fortunes of the market. The market is so volatile that its behaviour is unpredictable. In the past couple of years, the movement of share prices exceeded all the limits and had gone remarkably low and high levels. These dramatic prices of the shares ruin the concept of intrinsic value and rational investment behaviour. The traditi onal finance theories assume that investors are rational but they are unable to explain the behaviour and pricing of the stock market completely. Many research studies have validated the relationship between a dependent variable i. e. , risk tolerance level and independent variables such as demographic characteristics of an investor.Most of the Indian investors are from high income group, well educated, salaried, and independent in making investment decisions and from the past trends it is also seen that they are conservative in nature. Television is the media that is largely influencing the investor’s decisions. Hence, in the present project report an attempt has been made to study the relationship between risk tolerance level and demographic characteristics of Indian investors. 2. 2 STATEMENT OF THE PROBLEM This study on investor’s behaviour is an attempt to know the profile and the characteristics of the investors so as to understand their preference with respect to their investments. The main focus of the study is to discover the influence of demographic factors like gender and age on risk tolerance level of the investor.The study mainly concentrates on the factors that influence an individual investor before making an investment. It also studies the various patterns in which investors like to invest their money based on their risk tolerance level and other demographic factors like income level, occupation etc. 2. 3 REVIEW OF LITERATURE The literature review section examines the importance of research studies, company data or industry reports that serve as a foundation for the setup of study. The research dimension of the related literature and the relevant information begins from an explanatory perspective, approaching towards specific studies which do related to judge the limitations and informational gaps in data from the secondary sources.This analysis may reveal conclusions from past studies to realize the reliability of the secondary so urces and their credibility. This in turn enables one to rely on a comprehensive review for the study. Literature suggests that major research in the area of investor’s behaviour has been done by behavioural scientists such as Weber (1999), Shiller (2000) and Shefrin (2000). Shiller (2000) who strongly advocated that stock market is governed by the market information which directly affects the behaviour of the investors. Several studies have brought out the relationship between the demographics such as Gender, Age and risk tolerance level of individuals. Of this the relationship between Age and risk tolerance level has attracted much attention.Horvath and Zuckerman (1993) suggested that one’s biological, demographic and socioeconomic characteristics; together with his/her psychological makeup affects one’s risk tolerance level. Malkiel (1996) suggested that an individual’s risk tolerance is related to his/her household situation, lifecycle stage and subje ctive factors. Mittra (1995) discussed factors that were related to individuals risk tolerance, which included years until retirement, knowledge sophistication, income and net worth. Guiso, Jappelli and Terlizzese (1996), Bajtelsmit and VenDerhei (1997), Powell and Ansic (1997), Jianakoplos and Bernasek (1998), Hariharan, Chapman and Domain (2000), Hartog, Ferrer-I-Carbonell and Jonker (2002) concluded that males are more risk tolerant than females.Wallach and Kogan (1961) were perhaps the first to study the relationship between risk tolerance and age. Cohn, Lewellen et. al found risky asset fraction of the portfolio to be positively correlated with income and age and negatively correlated with marital status. Morin and Suarez found evidence of increasing risk aversion with age although the households appear to become less risk averse as their wealth increases. Yoo (1994) found that the change in the risky asset holdings were not uniform. He found individuals to increase their inves tments in risky assets throughout their working life time, and decrease their risk exposure once they retire. Lewellen et. l while identifying the systematic patterns of investment behaviour exhibited by individuals found age and expressed risk taking propensities to be inversely related with major shifts taking place at age 55 and beyond. Indian studies on individual investor’s were mostly confined to studies on share ownership, except a few. The RBI's survey of ownership of shares and L. C. Gupta's enquiry into the ownership pattern of Industrial shares in India were a few in this direction. The NCAER's studies brought out the frequent form of savings of individuals and the components of financial investments of rural households. The Indian Shareowners Survey brought out a volley of information on shareowners.Rajarajan V (1997, 1998, 2000 and 2003) classified investors on the basis of their demographics. He has also brought out the investor’s characteristics on the b asis of their investment size. He found that the percentage of risky assets to total financial investments had declined as the investor moves up through various stages in life cycle. Also investor’s lifestyles based characteristics has been identified. The above discussion presents a detailed picture about the various facets of risk studies that have taken place in the past. In the present study, the findings of many of these studies are verified and updated. Latha Krishnan (2006) explained as Investments come in many forms.While some people consider hard assets such as land, house, gold and platinum as investments, others look to monetary instruments such as stocks and bonds as ways to make their money grow. A cautious or conservative investor is unlikely to play carelessly with his hard-earned money. So he keeps to safe investments that guarantee the return of his capital and still earn good returns in a stipulated period if the product in which he invested gains in that pe riod. In such an investment, even if the markets go down and he does not gain much, he also does not suffer a heavy loss. A wealthy person with more money to invest can take more risks and invest in a variety of products that major financial players provide.A wealth of information on these as well as comments and criticisms on their performances and profitability is readily available. â€Å"Perception of investors towards capital market instruments globally† by John Marshall and â€Å"Investment analysis and Portfolio management’† by Punithavathy Pandian. John Marshall’s study was at global scale and it explains the perception of people across globe towards capital market instruments and Pandian explains the theoretical aspects of capital market instruments and use of various investment avenues to build a strong portfolio. 2. 4 NEED FOR STUDY Investing money is a crucial and deciding the avenues where to invest needs a lot of planning. In India people are more conservative and hence prefer investments that are less risky.Similarly there are other demographic factors like age, income level, gender which affect their decision. As the availability of financial products increase, perception of investors towards such avenues changes over a period of time. It becomes important for a marketer to understand the perception of investors towards investment avenues to successfully pitch the product. Marketing is known as meeting needs profitably. If the marketer is able to understand the mindset of investor towards a product then he/she will be in a position to market the product. This report attempts to study the behavior of Indian investors while making an investment. Here we also look upon other factors that influence them while making investment decisions.Innovations in financial products like derivatives, unit linked insurance products, fund of funds likewise are not easily understood by the investor. Hence the need for this study arises t o understand what exactly an Indian investor thinks before investing his/her money and how much risk he/she is willing to take. This report gives the marketer and other peers to successfully market the financial products which are more popular, as it gives information regarding the perception of investors towards investment avenues in India. 2. 5 OBJECTIVES OF THE STUDY 2. 5. 1 Primary Objectives ? ? ? ? ? ? ? To study the investment characteristics of investors To study the objectives of investment plan of an investors To study the demographic information of investors 2. 5. Secondary Objectives To know the preferred investment avenues of investors To identify the preferred sources of information influencing investment decisions To understand the risk tolerance level of the investors and suggest a suitable portfolio To study the dependence/independences of the demographic factors (Gender, Age, income level) of the investor and his/her risk tolerance level 2. 6 SCOPE OF STUDY Based o n previous research in related areas, a questionnaire was constructed to measure the investment pattern of individuals on the basis of demographic characteristics and the risk tolerance of investors was also calculated. It helped us to understand how an Indian investor behaves while investing.This study will be helpful to mutual fund companies and other investment companies to understand individual behaviour of investors so that they could build suitable investment options for them individually. Also this study will help the investor to decide the areas where they could invest. 2. 7 HYPOTHESIS A hypothesis describes the relationship between or among variables. A good hypothesis is one that can explain what it claims to explain, is testable and has greater range, probability and simplicity than its rivals. There are two approach of hypothesis testing: 1) Classical or sampling theory statistics and 2) The Bayesian approach In the present dissertation chi square test has been used to f ind out the dependence/independence of various factors that influence investment decision.Hypothesis has been found between following factors: ? ? ? ? ? Gender and risk tolerance of respondents Age and preferred investment avenues by the respondents Income and investment avenues preferred by the respondents Age of respondents and time horizon for investment Age and risk tolerance of the respondents 2. 8 RESEARCH DESIGN Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. ? Research type Many investors were reluctant to reveal their investment details especially the amount of money invested so, referral sampling method is used for this study. Sample description The sample was drawn from the population of the potential investors from Tamil Nadu. A survey was conducted to understand the investor’s behaviour with the help of questionnaire. It was carried out with a sample siz e of 100 investors. 2. 9 TOOLS FOR DATA COLLECTION Primary data: The data has been collected directly from respondent with the help of structured questionnaires. Secondary data: The secondary data has been collected from various magazines, journals, newspapers, text books and related websites. 2. 10 METHOD OF ANALYSIS Statistical techniques like Chi square test, simple percentage method are used to analyze and interpret raw data. Chi square was used to show the dependency/independency of various factors.After collecting the data its variable having defined character, it was tabulated and analyzed with the help of charts and graphs in Microsoft Excel 2007. 2. 11 LIMITATIONS OF STUDY †¢ †¢ †¢ †¢ Sample size is small because of the time constraint Respondent may be hesitant to provide their investment details Behaviour of investors doesn’t remain same for long time Time for the study is limited 3. 1 INDIAN FINANCIAL MARKET Money always flows from surplus sect or to deficit sector. That means persons having excess of money lend it to those who need money to fulfil their requirement. Similarly, in business sectors the surplus money flows from the investors or lenders to the businessmen for the purpose of production or sale of goods and services.So, we find two different groups, one who invest money or lend money and the others, who borrow or use the money. The financial markets act as a link between these two different groups. It facilitates this function by acting as an intermediary between the borrowers and lenders of money. So, financial market may be defined as ‘a transmission mechanism between investors (or lenders) and the borrowers (or users) through which transfer of funds is facilitated’. It consists of individual investors, financial institutions and other intermediaries who are linked by a formal trading rules and communication network for trading the various financial assets and credit instruments.Financial market talks about the primary market, FDIs, alternative investment options, banking and insurance and the pension sectors, asset management segment as well. India Financial market happens to be one of the oldest across the globe and is the fastest growing and best among all the financial markets of the emerging economies. The history of Indian capital markets spans back 200 years, around the end of the 18th century. It was at this time that India was under the rule of the East India Company. The capital market of India initially developed around Mumbai; with around 200 to 250 securities brokers participating in active trade during the second half of the 19th century. 3. 1. Scope of Indian Financial Market The financial market in India at present is more advanced than many other sectors as it became organized as early as the 19th century with the securities exchanges in Mumbai, Ahmedabad and Kolkata. In the early 1960s, the number of securities exchanges in India became eight – incl uding Mumbai, Ahmedabad and Kolkata. Apart from these three exchanges, there was the Madras, Kanpur, Delhi, Bangalore and Pune exchanges as well. Today there are 23 regional securities exchanges in India. The Indian stock markets till date have remained stagnant due to the rigid economic controls. It was only in 1991, after the liberalization process that the India securities market witnessed a flurry of IPOs serially. The market saw many new companies spanning across different industry segments and business began to flourish.The launch of the NSE (National Stock Exchange) and the OTCEI (Over the Counter Exchange of India) in the mid 1990s helped in regulating a smooth and transparent form of securities trading. The regulatory body for the Indian capital markets was the SEBI (Securities and Exchange Board of India). The capital markets in India experienced turbulence after which the SEBI came into prominence. The market loopholes had to be bridged by taking drastic measures. 3. 1. 2 Potential of Indian Financial Market India Financial Market helps in promoting the savings of the economy – helping to adopt an effective channel to transmit various financial policies.The Indian financial sector is welldeveloped, competitive, efficient and integrated to face all shocks. In the India financial market there are various types of financial products whose prices are determined by the numerous buyers and sellers in the market. The other determinant factor of the prices of the financial products is the market forces of demand and supply. The various other types of Indian markets help in the functioning of the wide India financial sector. 3. 1. 3 Features of Indian Financial Market ? ? India Financial Indices – BSE 30 Index, various sector indexes, stock quotes, Sensex charts, bond prices, foreign exchange, Rupee & Dollar Chart Indian Financial market news ?Stock News – Bombay Stock Exchange, BSE Sensex 30 index, S&P CNX-Nifty, company information, is sues on market capitalization, corporate earnings statements ? Fixed Income – Corporate Bond Prices, Corporate Debt details, Debt trading activities, Interest Rates, Money Market, Government Securities, Public Sector Debt, External Debt Service ? ? ? ? ? ? ? ? Foreign Investment – Foreign Debt Database composed by BIS, IMF, OECD,& World Bank, Investments in India & Abroad Global Equity Indexes – Dow Jones Global indexes, Morgan Stanley Equity Indexes Currency Indexes – FX & Gold Chart Plotter, J. P. Morgan Currency Indexes National and Global Market Relations Mutual Funds Insurance Loans Forex and Bullion The main functions of financial market are: ? ? ? It provides facilities for interaction between the investors and the borrowers. It provides pricing information resulting from the interaction between buyers and sellers in the market when they trade the financial assets. It provides security to dealings in financial assets. It ensures liquidity by provid ing a mechanism for an investor to sell the financial assets. It ensures low cost of transactions and information. 3. 2 CLASSIFICATION OF FINANCIAL MARKETS Figure 3. 1: Classification of financial markets Source: Investment analysis and portfolio management Author: Prasanna Chandra Figure 3. 1 shows the classification of financial markets.From this figure we can interpret that there are different ways of classifying financial market. ? One is to classify financial market by the type of financial claim. The debt market is the financial market foe fixed claims (debt instrument) and the equity market is the financial market for residual claims (equity instruments) ? The second way is to classify financial markets by the maturity of claims. The market for short term financial claims is referred to as the money market and the market for long term financial claims is referred to as the capital market. ? The third way to classify financial markets is based on whether the claims represent n ew issues or outstanding issues.The market where issues sell new claims is referred as primary market and the market where issues sell outstanding claims is referred as secondary market. ? The fourth way to classify financial markets is by the timing of delivery. A cash or spot market is one where the delivery occurs immediately and forward or futures markets are those markets where the delivery occurs at a pre determined time in future. ? The fifth way to classify financial markets is by the nature of its organizational structure. An exchange traded market is characterized by a centralized organization with standardized procedures and an over the counter market is a decentralized market with customized procedures.These markets are further explained in detail. 3. 3 MONEY MARKET The money market is a market for short-term funds, which deals in financial assets whose period of maturity is up to one year. It should be noted that money market does not deal in cash or money as such but s imply provides a market for credit instruments such as bills of exchange, promissory notes, commercial paper, treasury bills, etc. These financial instruments are close substitute of money. These instruments help the business units, other organizations and the Government to borrow the funds to meet their short-term requirement. Money market does not imply to any specific market place.Rather it refers to the whole networks of financial institutions dealing in short-term funds, which provides an outlet to lenders and a source of supply for such funds to borrowers. Most of the money market transactions are taken place on telephone, fax or Internet. The Indian money market consists of Reserve Bank of India, Commercial banks, Co-operative banks, and other specialized financial institutions. The Reserve Bank of India is the leader of the money market in India. Some Non-Banking Financial Companies (NBFCs) and financial institutions like LIC, GIC, UTI, etc. also operate in the Indian money market. 3. 4 CAPITAL MARKET Capital Market may be defined as a market dealing in medium and long-term funds.It is an institutional arrangement for borrowing medium and long-term funds and which provides facilities for marketing and trading of securities. So it constitutes all long-term borrowings from banks and financial institutions, borrowings from foreign markets and raising of capital by issue various securities such as shares debentures, bonds, etc. The market where securities are traded known as Securities market. It consists of two different segments namely primary and secondary market. The primary market deals with new or fresh issue of securities and is, therefore, also known as new issue market; whereas the secondary market provides a place for purchase and sale of existing securities and is often termed as stock market or stock exchange. 3. 4. PRIMARY MARKET The Primary Market consists of arrangements, which facilitate the procurement of longterm funds by companies by mak ing fresh issue of shares and debentures. You know that companies make fresh issue of shares and/or debentures at their formation stage and, if necessary, subsequently for the expansion of business. It is usually done through private placement to friends, relatives and financial institutions or by making public issue. In any case, the companies have to follow a well-established legal procedure and involve a number of intermediaries such as underwriters, brokers, etc. who form an integral part of the primary market.You must have learnt about many initial public offers (IPOs) made recently by a number of public sector undertakings such as ONGC, GAIL, NTPC and the private sector companies like Tata Consultancy Services (TCS), Biocon, Jet-Airways and so on. 3. 4. 2 SECONDARY MARKET The secondary market known as stock market or stock exchange plays an equally important role in mobilizing long-term funds by providing the necessary liquidity to holdings in shares and debentures. It provide s a place where these securities can be encashed without any difficulty and delay. It is an organized market where shares and debentures are traded regularly with high degree of transparency and security.In fact, an active secondary market facilitates the growth of primary market as the investors in the primary market are assured of a continuous market for liquidity of their holdings. The major players in the primary market are merchant bankers, mutual funds, financial institutions, and the individual investors; and in the secondary market you have all these and t