Role of Monetary Policy in Financial Crisis

Role of Monetary Policy in Financial Crisis 1. Introduction To begin with, it is noted that over the last year or so, financial institutions in the major economies have reported losses on a large scale. Some of these have become insolvent, or have had to be taken over or rescued by their governments. The 2008 Global Financial Crisis Credit Crisis has affected millions of Americans specifically and others around the World in general terms. Associated with all of that has been a massive swing in the appetite of the World financial markets for risk, and in their capacity to accept risk. Thus, the result has been a shift from an easily available credit to tight credit. This crisis which began in industrialized countries has shifted dramatically spread to emerging market and developing economies. Many wealthy investors or so have pulled their capital from countries, even those with small levels of perceived risk, and hence causing values of stocks and domestic currencies to plunge. Moreover, the crisis has now moved from containing the contagion to coping with the global recession and changing regulations to prevent a reoccurrence of such a problem. Some security and foreign policy effects of the crisis also are beginning to appear. In addition, policy proposals to change specific regulations as well as the structure of regulation and supervision at both domestically and internationally levels have been coming forth through the legislative process. As one can bear in mind, In June 2009, the Obamas administration announced its plan for regulatory reform of the U.S. financial system. For example, in Congress, numerous bills have been introduced that deal with issues such as establishing a commission or selecting a committee to investigate causes of the financial crisis, provide oversight and greater accountability of the Federal Reserve and Treasury lending activity, acting towards the problems in the housing and mortgage markets, provide funding for the International Monetary Fund, address problems with consumer credit cards and establish a systemic risk monitor. Therefore, the transmission of the crisis from the U.S. and Europe to the rest of the world came through a number of channels. The financial institutions in most emerging market economies had not been involved in practices that are seen in the institutions that populate the financial centers in the major industrial countries. To that extent, financial institutions in the emerging economies either shied away from the more exotic instruments, including such things as credit default swaps and collateralized debt obligations, or were prevented by regulation from holding or trading such instruments. Banking had to come of the most à ¢Ã¢â€š ¬Ã…“boringà ¢Ã¢â€š ¬?, old fashioned ever! (The New York Times has reported on last September 2009 about the moves to replace the bust securitized mortgage market with a similar scheme dealing in life insurance policies, products that are as distasteful as they are foolhardy). The question is, can anything be done to ensure more responsible financial practice? If we are suppose to talk about the US economy, we would notice that President Barak Obama marked the anniversary of Lehman collapse with a plea to bankers to not get complacent, telling them to get their house in order, or else face further regulation. We can indicate that over the past year, the financial male storm has battered the global information and communication technology industry, affecting profits and pushing down the industry in a manner reminiscent of the 2001 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2002 dotcom busts. It is gradually finding its feet again, but it isnt out of the woods yet. The global financial tumult has forced a number of companies to reanalyze their cost benefit analysis, ensure efficiency and improve productivity. Companies in sectors such as telecom and finance have already realized the need of IT outsourcing as a solution in the changed market dynamics. Therefore, this research paper provides a review of how the financial crisis has affected many regions of the world, proposals for a regulatory change, indication about the role of Monetary Policy the level of Political Economics that have been intervening in the Financial Crisis. It also identifies some basic challenges facing the globe suggests possible solutions for the Banking Field to overcome the crisis. 2. Literature Review The financial crisis was triggered by the bursting of a credit-fuelled bubble. Regulation and regulators did not cause this fatal bubble, but they did indirectly help it to grow by fostering the illusion of financial security. Many developing country economies are yet growing strongly, though the forecasts have been downgraded in the space of few a few months. What does the turmoil mean for such developing countries? And for how much longer can growth persist? What are the channels through which the crisis could spread to and how are the effects being felt and in what cases? What is the role for development policy and what do policy-makers need to know? Brooke Masters (2009) claimed: So far, most countries are avoiding a regulatory race to the bottom à ¢Ã¢â€š ¬Ã¢â‚¬Å" if anything, they are going the other way. The UK, for example, is pressing ahead with its own liquidity rules, while the Netherlands has pushed through curbs on bankers bonuses. Even Singapore, which has long been favored by financiers for its à ¢Ã¢â€š ¬Ã…“light-touchà ¢Ã¢â€š ¬? regulatory regime, considering tightening up its rules. However, Joshua Aizenman (2009) indicated that costly regulation can mitigate the probability of the crisis. We identify conditions where the regulation level supported by the majority is positive after the reform, but below the socially optimal level. A big portion of the financial crisis has had to do with under regulation and regulator duplicity with malefactors. If we look at the banking rules, we shall discover that allowing investment and commercial banks to merge, without a specification of a tighter capital rules, and hence, these new mega banks became overleveraged without examining their loans or the instruments that derived from the bad loans these banks made in the first place. In his writings about Liberalism Ludwig von Mises (1927) indicated that government intervention in markets would lead inevitably to unintended consequences that resulted in further government intervention. It is difficult to correct a problem when the cause of the problem is misunderstood. The presidential and vice-presidential candidates in the United States have all said that à ¢Ã¢â€š ¬Ã…“Wall Street greedà ¢Ã¢â€š ¬? has led to the financial mess we are in. On the very face of it, this does not seem likely. Even if greed leads to problems, is it possible that greed has suddenly become much greater than before? To raise an interest rate at some a time is a mistake and is likely to make a bad situation even worse. In many respects, central banks, including the Federal Reserve, have drawn heavily on important threads of monetary policy research in responding to the financial crisis. Lang Wang (2005) had explained with a binding capital requirement, the effects on bank lending supply depend on the size, the capital level, the balance sheet liquidity of banks and the capital distribution and market structure in the banking sector. In a similar context, Thorbecke (1997) finds that expansive monetary policy tends to increase ex-post stock returns. He reported that small firms tend to be affected more severely by the change in monetary policy stance. In addition, Paul Krugman (1999) indicated But when a financial disaster struck Asia, the policies those countries followed in response were almost exactly the reverse of what the United States does in the fact of a slump. Currently the traditional monetary policy of the Federal Reserve is to focus on targeting the federal funds rate, now that this rate has approached the zero-bound; it has shifted to focus on other ways to lower the cost of credit in the marketplace. Federal Reserve programs have intended to offset disruptions to interbank lending short-term credit financing. Since the credit crunch is caused by conservative lending policies during periods of financial duress and reduced profitability, one may finds that monetary policy is somehow ineffective in alleviating the credit crunch. Instead loan regulation can erase it. George Macesich (1992) argued that the poor performance of monetary policy can be attributed historically to the ease with which money has so often been made a political issue. He stated that For Monetary Policy to be credible, and thus successful, the hands of the Monetary Policy- makers are better tied than left free. Sun Ruijun and Bao Erwen (2008) have reported The in-depth development of economic globalization has made economic ties and interdependence between countries even closer, boosting the sustained growth of world economy, and benefiting many countries. The global financial crisis is more than just an economic event: It puts pressure on the geopolitical system and is driving states to change their behavior. Taking a snap shot on the GCC states, one can clearly define how largely it has been insulated from the global credit crunch because they are the proud owners of some of the worlds largest oil deposits. Much of this has been caused by massive infrastructure and development projects such as Qatars liquefied natural gas facilities, Dubais fanciful real estate explosion and Bahrains attempts to convert itself into a financial Mecca. The economic system has an effect on the political outcomes. Well-functioning financial institutions, in turn, can increase the political support for anti-corruption measures. Kira Boerner Christa Hainz (2006) argued When banks possess a perfect screening technology that allows them to deny credit to those debtors who use the money for financing an entry fee, the corrupt officials will still borrow from their relatives. However, compared to the case without financial institutions, the interest of corrupt officials and relatives in corruption decreases: Both parties have the opportunity to save at a bank. In similar terms, Torsten Persson (2000) had explained Economic policy is the equilibrium outcome of a well defined no cooperative game under preemptive assumptions about economic political behavior. At all levels, the present financial crisis requires a co-ordinate response on a global scale. The real risk to the world economy is the temptation to revert to protectionism by each individual country in order to solve their own domestic problems. 3. Research Methodology In choosing the correct research method to be used in this research paper, the survey research method by Questionnaires will be the basic research design. Each respondent will be supplied with a questionnaire titled How banks can overcome the Global Financial Crisis? The questionnaire is estimated to take no longer than 6 minutes for each reached individual regardless of the age. A survey of 68 individuals located in many counties throughout the country will provide the database for this study. The sample was selected on a probability basis from as much decision maker playing role individuals as possible in Bahrain. The questionnaire took place in Bahrain the response from the respondents took almost one week. Questionnaires were distributed randomly depending on many aspects such as: age, gender, employment condition most important of all, the level of knowledge regarding the topic under study. This research paper sampling volume totaled 68, out of which, males represented 38 and the rest 30 were for females. The original sample was 70, in which the researchers found that 2 individuals were students below the age of 18 and were unemployed. That made a quiet confusing decision to remove the two from the total sample, since at that age and being unemployed is not a truly decision maker respondent. 4. Challenges As the world look beyond the economic crisis, what are the most urgent challenges that are needed to be addressed? Gaining a proper perspective on the crisis itself is a first challenge. In recent decades, it has been demonstrated that a market which operates responsibly offers a more secure life and a best hope to people who seek a better standards of living wherever in the world they may live. This is absolutely fundamental. While it is true that the direct causes of the crisis the combustible mixture of excess leverage in both consumer and financial markets, the bank failures, the credit collapse have led to some painful consequences, it would be folly to conclude that the foundations of market economics have been irreparably damaged. A second challenge facing the Global is how to deal intelligently with the huge fiscal challenges ahead. The response of central banks and governments to the economic crisis may very well have averted a global catastrophe. However, massive fiscal obligations have been assumed by governments and this might take many years to unwind. What is needed is for countries to create and develop smart à ¢Ã¢â€š ¬Ã…“exità ¢Ã¢â€š ¬? strategies. Furthermore, as the private sector returns to some growth, this requires a determined pullback in government expenditure. Not an easy task: as we all know, the politics of unwinding government programs can be daunting. Here political courage and good public policy go hand in hand. The third challenge needs an urgent attention. It is acknowledged that the global economy is out of balance and that this is one of the reasons for the financial crisis. Massive reliance on external demand carries with it real consequences as does the excessive reliance on foreign investors to finance consumption and deficits for long periods of time. As one could realize, such imbalances can cause serious and long-lasting economic damage. There is also the challenge, or opportunity, of what to do with a countrys immense foreign exchange reserves. A Chinese think tank has come up with an exciting idea: that the reserves could be put to good use through the development of a Marshall Plan for Africa, Asia and Latin America. Such a development fund, or loan facility, would increase living standards in the targeted countries. The fifth challenge is enormously complex challenge that deserves attention. Sometimes we feel that we have loaded so many expectations onto the climate change agenda that it cannot help but fail. You would think that tackling this issue will give us infinite new sources of cleaner energy, and allow for the transfer of substantial amounts of financial and technological support to emerging economies. On the global side, No existing architecture is found to be proficient in preventing global crises from erupting. Since financial crises occur even in relatively tightly regulated economies, the likelihood that a supranational influence could prevent an international crisis from occurring is questionable. The financial crisis has been characterized as a à ¢Ã¢â€š ¬Ã…“wake-up callà ¢Ã¢â€š ¬? for investors who had put their faith confidence in. For example, credit ratings placed on securities by credit rating agencies operating under what some have referred to as à ¢Ã¢â€š ¬Ã…“wicked incentives and conflicts of interest.à ¢Ã¢â€š ¬? Moving forward to a sixth challenge, the Council on Foreign Relations explained the problem in a report on systemic regulation, as follows: One regulatory organization in each country should be responsible for overseeing the health and stability of the overall financial system. The role of the systemic regulator should include gathering, analyzing, and reporting information about significant interactions between and risks among financial institutions; designing and implementing systemically sensitive regulations, including capital requirements; and coordinating with the fiscal authorities and other government agencies in managing systemic crises. We argue that the central bank should be charged with this important new responsibility. Centers of financial activity such as New York, London, and Tokyo, race with each other and multinational firms can determine where to carry out particular financial transactions. This is to be addresses as one of the considerations in policy making. A seventh challenge is that a large financial institution that may be defined as large to fail represents the heavy arm that the world economy depends greatly on. If an institution is considered to be à ¢Ã¢â€š ¬Ã…“unsuccessful too big to fail,à ¢Ã¢â€š ¬? its bankruptcy would cause a major risk collapse to the system as a whole. Yet, if there is an implicit promise of governmental support in case of failure, the government may create a moral hazard, which is the motivation for an entity to be engaged in somewhat risky behavior, knowing that the government will rescue it if it fails. A further challenge is that the nature and size of accumulating financial and systemic risks have not been well identified by the existing micro regulation. It even didnt impose appropriate remedial actions. Even though some analysts and institutions were sounding alarms before the crisis erupted, there were hardly any regulatory tools available to handle with the increase of risk in the system as a whole or the risks being forced by other firms either in the same or different sectors. It seemed to be an insufficient response to some of these risks either by the authorities responsible for the mistake of individual financial institutions or specific market segments. A last fundamental challenge deals with the nature of regulation and supervision. Banking regulation tends to be specific and detailed and places requirements and limits on bank behavior. Federal securities regulation, however, is based primarily on disclosure. Registration with the Securities and Exchange Commission is required, but that registration does not imply that an investment is safe or secured, only that the risks have been fully disclosed! 5. Analysis Discussion When the U.S financial System falls down, it may bring major parts of the rest of the world down with it. The global financial crisis has opened the World eye on an important point: that the United States is still a major center of the financial world. Hence, Regional financial crises (such as the Asian financial crisis, Japans banking crisis or even the current Dubais Credit Crisis) can occur without seriously infecting the rest of the global financial system as does the United States economy. The reason behind, is that the United States is the main guarantor of the international financial system, the provider of dollars widely used as currency reserves and as an international intermediate for exchange, besides being a contributor to much of the financial capital that around the world seeking higher yields. The rest of the world may not appreciate it, but a financial crisis in the United States often takes on a global hue. To analyze the questionnaire, the researchers have used the SPSS program and the regression analysis in order to define some relationships that best help identify the problem under study. The descriptive statistical analyses questionnaire will be used, including calculations of sampling error, and statistical adjustments for unequal selection probabilities. Cross-classification analyses with demo-graphic, ANOVA, linear regression and T-Test is much more applied in order to explain some judgments. Since the researchers think that the gender is one of the independent variables that could test many hypothesis, three hypothesis were applied based on the dependant variable: First Hypothesis: There is no relationship between gender and understanding what is going on in the current financial news. Second Hypothesis: There is no relationship between gender and being informed about the à ¢Ã¢â€š ¬Ã…“Global Financial Crisisà ¢Ã¢â€š ¬?. Third Hypothesis: There is no relationship between gender and the decision that thinks of governments around the world should take in the financial sector towards their economies. The table below, represents the Statistical Data Analysis of the designed questionnaire: Table 1: SPSS Statistics for all questionnaire questions One-Sample Test    Question No.    Test Value = 0 Test Value = 0 N t df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the Difference t df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the Difference    Lower Upper Lower Upper Question_1 68 23.758 67 0 1.441 1.32 1.56 23.758 67 0 1.441 1.32 1.56 Question_2 68 17.636 67 0 4.206 3.73 4.68 17.636 67 0 4.206 3.73 4.68 Question_3 68 21.715 67 0 1.706 1.55 1.86 21.715 67 0 1.706 1.55 1.86 Question_4 68 22.401 67 0 3.868 3.52 4.21 22.401 67 0 3.868 3.52 4.21 Question_5 68 13.683 67 0 2.074 1.77 2.38 13.683 67 0 2.074 1.77 2.38 Question_6 68 8.596 67 0 2.029 1.56 2.5 8.596 67 0 2.029 1.56 2.5 Question_7 68 10.618 67 0 3.5 2.84 4.16 10.618 67 0 3.5 2.84 4.16 Question_8 68 17.868 67 0 2.191 1.95 2.44 17.868 67 0 2.191 1.95 2.44 Question_9 68 23.953 67 0 2.676 2.45 2.9 23.953 67 0 2.676 2.45 2.9 Question_10 68 15.557 67 0 5.059 4.41 5.71 15.557 67 0 5.059 4.41 5.71 Question_11_1 68 14.691 67 0 3.529 3.05 4.01 14.691 67 0 3.529 3.05 4.01 Question_11_2 68 18.302 67 0 4.809 4.28 5.33 18.302 67 0 4.809 4.28 5.33 Question_11_3 68 21.056 67 0 5.029 4.55 5.51 21.056 67 0 5.029 4.55 5.51 Question_11_4 68 17.835 67 0 4.426 3.93 4.92 17.835 67 0 4.426 3.93 4.92 Question_11_5 68 20.978 67 0 4.897 4.43 5.36 20.978 67 0 4.897 4.43 5.36 Question_12 68 16.241 67 0 2.735 2.4 3.07 16.241 67 0 2.735 2.4 3.07 Question_13 68 14.707 67 0 2.676 2.31 3.04 14.707 67 0 2.676 2.31 3.04 Question_14 68 26.329 67 0 2.765 2.56 2.97 26.329 67 0 2.765 2.56 2.97 Anova Model Sum of Squares df Mean Square F Sig. 1 Regression 4.074 1 4.074 4.173 .045a Residual 64.440 66 .976       Total 68.515 67          a. Predictors: (Constant), Question_1          b. Dependent Variable: Question_8          Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) 1.481 .368    4.025 .000 Question_1 .493 .241 .244 2.043 .045 a. Dependent Variable: Question_8          Table 2: Anova statistics coefficients relationship Q1 Q8 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Hypothesis. From the Questionnaire, we have selected the relationship among the following questions. However, Gender will always be constant. Question (1): Please indicate your gender: Male Female Question (8): In general, how knowledgeable do you consider yourself to be when it comes to understanding what is going on in the current financial news? I know enough to be able to explain whats happening in the financial industry to other people. I understand enough to make sense of the detail behind the financial news stories. I just follow the headlines but my understanding of financial news is fairly vague. I dont really understand whats going on in the financial news. Question_8: On the One-Sample Test it is showed that the Significance is = 0.00 which is less than 0.05, so we reject any initial premise that the average Question_8 is not equal to 0. Since the answer to this question fell where the value of t = 17.868, positive, meaning that people have a significant understanding and knowledge about the current financial news. About 35.3 % of the answers to question 8 went in to that both, males females find themselves having enough understanding to make sense of the detail behind the financial news stories. On lower confidence levels, 29.4% find themselves confident enough to answer bitterly regarding the financial crisis. Question (9): How informed are you about the à ¢Ã¢â€š ¬Ã…“Global Financial Crisisà ¢Ã¢â€š ¬? that is said to be impacting the U.S. economy the rest of the Globe? Very informedà ¢Ã¢â€š ¬Ã¢â‚¬ I have actively sought additional information on this story. Somewhat informedà ¢Ã¢â€š ¬Ã¢â‚¬ I know a bit about it, but wouldnt be able to hold my own in a conversation about it. Informedà ¢Ã¢â€š ¬Ã¢â‚¬ Ive read/seen stories about it when Ive come across them in the news. Not informed at allà ¢Ã¢â€š ¬Ã¢â‚¬ I dont know anything about this story. Question_9: The mean for this particular sample is 2.68, which is statistically significantly different from the test value of Zero.  34 out of 68 sample volume representing almost 50% who have been really informed to have read/seen stories about the global financial crisis when coming across it in the news. The researchers find that the relationship between gender and being informed about the à ¢Ã¢â€š ¬Ã…“Global Financial Crisisà ¢Ã¢â€š ¬? is positive with (.493) and based on the t-value of (2.043) and p-value of (0.045), this relationship is statistically significant.   Hence, there is a statistically significant positive linear relationship between people gender being informed and know ledged enough about the crisis. Question (13): What role, if any, do you think that governments around the world should take in the financial sector towards their economies? Hands onà ¢Ã¢â€š ¬Ã¢â‚¬ the government should intervene whenever the financial sector is at risk. Intermediaryà ¢Ã¢â€š ¬Ã¢â‚¬ the government should act as an intermediary between concerned parties. Laissez Faireà ¢Ã¢â€š ¬Ã¢â‚¬ the government should not interfere with economic affairs beyond the minimum. Completely hands offà ¢Ã¢â€š ¬Ã¢â‚¬ the government should let Wall Street solve its problems on its own. Case by caseà ¢Ã¢â€š ¬Ã¢â‚¬ the government should take a case-by-case approach. ANOVAb Model Sum of Squares df Mean Square F Sig. 1 Regression 14.714 1 14.714 7.132 .010a Residual 136.168 66 2.063       Total 150.882 67          a. Predictors: (Constant), Question_1          b. Dependent Variable: Question_13          Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) 1.326 .535    2.480 .016 Question_1 .937 .351 .312 2.671 .010 a. Dependent Variable: Question_13          Table 3: Anova statistics coefficients relationship Q1 Q13 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Hypothesis. The relationship between gender and the choice to think of the role that governments around the world should take in the financial sector towards their economies is positive (.937). Based on the t-value (2.671) and p-value (0.010), it is to be clarified that this relationship is statistically significant.   Hence, there is a statistically significant positive linear relationship. Most of the questionnaires answer to question 13 went to choose that the role of government can be best suggested as to: Hands onà ¢Ã¢â€š ¬Ã¢â‚¬ the government should intervene whenever the financial sector is at risk. Question (4) Which of the following best describes the highest level of education you have attained? Some high school High school graduate Some college College graduate Some post graduate studies Post graduate degree Question (13): What role, if any, do you think that governments around the world should take in the financial sector towards their economies? 1 Hands onà ¢Ã¢â€š ¬Ã¢â‚¬ The government should intervene whenever the financial sector is at risk.    3 1 7 1 8 2 Intermediaryà ¢Ã¢â€š ¬Ã¢â‚¬ The government should act as an intermediary between concerned parties.    2 7 3 1 2 3 Laissez Faireà ¢Ã¢â€š ¬Ã¢â‚¬ The government should not interfere with economic affairs beyond the minimum.    3 7 4 -   1 4 Completely hands offà ¢Ã¢â€š ¬Ã¢â‚¬ The government should let Wall Street solve its problems on its own.    1    2    -   5 Case by caseà ¢Ã¢â€š ¬Ã¢â‚¬ The government should take a case-by-case approach. 1 2 3 4    5 Table 4: Cross Checking Analysis between Q4 Q13. To provide a better understanding of a cross classification, the table below indicates that, most of people holding a college degree, agreed with the choice that governments should intervene whenever the financial sector is at risk and in need for its support. Therefore, we see that the Global Financial Crisis can be broken down into major phases. Although each phase has a policy focus, it seemed that until t Role of Monetary Policy in Financial Crisis Role of Monetary Policy in Financial Crisis 1. Introduction To begin with, it is noted that over the last year or so, financial institutions in the major economies have reported losses on a large scale. Some of these have become insolvent, or have had to be taken over or rescued by their governments. The 2008 Global Financial Crisis Credit Crisis has affected millions of Americans specifically and others around the World in general terms. Associated with all of that has been a massive swing in the appetite of the World financial markets for risk, and in their capacity to accept risk. Thus, the result has been a shift from an easily available credit to tight credit. This crisis which began in industrialized countries has shifted dramatically spread to emerging market and developing economies. Many wealthy investors or so have pulled their capital from countries, even those with small levels of perceived risk, and hence causing values of stocks and domestic currencies to plunge. Moreover, the crisis has now moved from containing the contagion to coping with the global recession and changing regulations to prevent a reoccurrence of such a problem. Some security and foreign policy effects of the crisis also are beginning to appear. In addition, policy proposals to change specific regulations as well as the structure of regulation and supervision at both domestically and internationally levels have been coming forth through the legislative process. As one can bear in mind, In June 2009, the Obamas administration announced its plan for regulatory reform of the U.S. financial system. For example, in Congress, numerous bills have been introduced that deal with issues such as establishing a commission or selecting a committee to investigate causes of the financial crisis, provide oversight and greater accountability of the Federal Reserve and Treasury lending activity, acting towards the problems in the housing and mortgage markets, provide funding for the International Monetary Fund, address problems with consumer credit cards and establish a systemic risk monitor. Therefore, the transmission of the crisis from the U.S. and Europe to the rest of the world came through a number of channels. The financial institutions in most emerging market economies had not been involved in practices that are seen in the institutions that populate the financial centers in the major industrial countries. To that extent, financial institutions in the emerging economies either shied away from the more exotic instruments, including such things as credit default swaps and collateralized debt obligations, or were prevented by regulation from holding or trading such instruments. Banking had to come of the most à ¢Ã¢â€š ¬Ã…“boringà ¢Ã¢â€š ¬?, old fashioned ever! (The New York Times has reported on last September 2009 about the moves to replace the bust securitized mortgage market with a similar scheme dealing in life insurance policies, products that are as distasteful as they are foolhardy). The question is, can anything be done to ensure more responsible financial practice? If we are suppose to talk about the US economy, we would notice that President Barak Obama marked the anniversary of Lehman collapse with a plea to bankers to not get complacent, telling them to get their house in order, or else face further regulation. We can indicate that over the past year, the financial male storm has battered the global information and communication technology industry, affecting profits and pushing down the industry in a manner reminiscent of the 2001 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2002 dotcom busts. It is gradually finding its feet again, but it isnt out of the woods yet. The global financial tumult has forced a number of companies to reanalyze their cost benefit analysis, ensure efficiency and improve productivity. Companies in sectors such as telecom and finance have already realized the need of IT outsourcing as a solution in the changed market dynamics. Therefore, this research paper provides a review of how the financial crisis has affected many regions of the world, proposals for a regulatory change, indication about the role of Monetary Policy the level of Political Economics that have been intervening in the Financial Crisis. It also identifies some basic challenges facing the globe suggests possible solutions for the Banking Field to overcome the crisis. 2. Literature Review The financial crisis was triggered by the bursting of a credit-fuelled bubble. Regulation and regulators did not cause this fatal bubble, but they did indirectly help it to grow by fostering the illusion of financial security. Many developing country economies are yet growing strongly, though the forecasts have been downgraded in the space of few a few months. What does the turmoil mean for such developing countries? And for how much longer can growth persist? What are the channels through which the crisis could spread to and how are the effects being felt and in what cases? What is the role for development policy and what do policy-makers need to know? Brooke Masters (2009) claimed: So far, most countries are avoiding a regulatory race to the bottom à ¢Ã¢â€š ¬Ã¢â‚¬Å" if anything, they are going the other way. The UK, for example, is pressing ahead with its own liquidity rules, while the Netherlands has pushed through curbs on bankers bonuses. Even Singapore, which has long been favored by financiers for its à ¢Ã¢â€š ¬Ã…“light-touchà ¢Ã¢â€š ¬? regulatory regime, considering tightening up its rules. However, Joshua Aizenman (2009) indicated that costly regulation can mitigate the probability of the crisis. We identify conditions where the regulation level supported by the majority is positive after the reform, but below the socially optimal level. A big portion of the financial crisis has had to do with under regulation and regulator duplicity with malefactors. If we look at the banking rules, we shall discover that allowing investment and commercial banks to merge, without a specification of a tighter capital rules, and hence, these new mega banks became overleveraged without examining their loans or the instruments that derived from the bad loans these banks made in the first place. In his writings about Liberalism Ludwig von Mises (1927) indicated that government intervention in markets would lead inevitably to unintended consequences that resulted in further government intervention. It is difficult to correct a problem when the cause of the problem is misunderstood. The presidential and vice-presidential candidates in the United States have all said that à ¢Ã¢â€š ¬Ã…“Wall Street greedà ¢Ã¢â€š ¬? has led to the financial mess we are in. On the very face of it, this does not seem likely. Even if greed leads to problems, is it possible that greed has suddenly become much greater than before? To raise an interest rate at some a time is a mistake and is likely to make a bad situation even worse. In many respects, central banks, including the Federal Reserve, have drawn heavily on important threads of monetary policy research in responding to the financial crisis. Lang Wang (2005) had explained with a binding capital requirement, the effects on bank lending supply depend on the size, the capital level, the balance sheet liquidity of banks and the capital distribution and market structure in the banking sector. In a similar context, Thorbecke (1997) finds that expansive monetary policy tends to increase ex-post stock returns. He reported that small firms tend to be affected more severely by the change in monetary policy stance. In addition, Paul Krugman (1999) indicated But when a financial disaster struck Asia, the policies those countries followed in response were almost exactly the reverse of what the United States does in the fact of a slump. Currently the traditional monetary policy of the Federal Reserve is to focus on targeting the federal funds rate, now that this rate has approached the zero-bound; it has shifted to focus on other ways to lower the cost of credit in the marketplace. Federal Reserve programs have intended to offset disruptions to interbank lending short-term credit financing. Since the credit crunch is caused by conservative lending policies during periods of financial duress and reduced profitability, one may finds that monetary policy is somehow ineffective in alleviating the credit crunch. Instead loan regulation can erase it. George Macesich (1992) argued that the poor performance of monetary policy can be attributed historically to the ease with which money has so often been made a political issue. He stated that For Monetary Policy to be credible, and thus successful, the hands of the Monetary Policy- makers are better tied than left free. Sun Ruijun and Bao Erwen (2008) have reported The in-depth development of economic globalization has made economic ties and interdependence between countries even closer, boosting the sustained growth of world economy, and benefiting many countries. The global financial crisis is more than just an economic event: It puts pressure on the geopolitical system and is driving states to change their behavior. Taking a snap shot on the GCC states, one can clearly define how largely it has been insulated from the global credit crunch because they are the proud owners of some of the worlds largest oil deposits. Much of this has been caused by massive infrastructure and development projects such as Qatars liquefied natural gas facilities, Dubais fanciful real estate explosion and Bahrains attempts to convert itself into a financial Mecca. The economic system has an effect on the political outcomes. Well-functioning financial institutions, in turn, can increase the political support for anti-corruption measures. Kira Boerner Christa Hainz (2006) argued When banks possess a perfect screening technology that allows them to deny credit to those debtors who use the money for financing an entry fee, the corrupt officials will still borrow from their relatives. However, compared to the case without financial institutions, the interest of corrupt officials and relatives in corruption decreases: Both parties have the opportunity to save at a bank. In similar terms, Torsten Persson (2000) had explained Economic policy is the equilibrium outcome of a well defined no cooperative game under preemptive assumptions about economic political behavior. At all levels, the present financial crisis requires a co-ordinate response on a global scale. The real risk to the world economy is the temptation to revert to protectionism by each individual country in order to solve their own domestic problems. 3. Research Methodology In choosing the correct research method to be used in this research paper, the survey research method by Questionnaires will be the basic research design. Each respondent will be supplied with a questionnaire titled How banks can overcome the Global Financial Crisis? The questionnaire is estimated to take no longer than 6 minutes for each reached individual regardless of the age. A survey of 68 individuals located in many counties throughout the country will provide the database for this study. The sample was selected on a probability basis from as much decision maker playing role individuals as possible in Bahrain. The questionnaire took place in Bahrain the response from the respondents took almost one week. Questionnaires were distributed randomly depending on many aspects such as: age, gender, employment condition most important of all, the level of knowledge regarding the topic under study. This research paper sampling volume totaled 68, out of which, males represented 38 and the rest 30 were for females. The original sample was 70, in which the researchers found that 2 individuals were students below the age of 18 and were unemployed. That made a quiet confusing decision to remove the two from the total sample, since at that age and being unemployed is not a truly decision maker respondent. 4. Challenges As the world look beyond the economic crisis, what are the most urgent challenges that are needed to be addressed? Gaining a proper perspective on the crisis itself is a first challenge. In recent decades, it has been demonstrated that a market which operates responsibly offers a more secure life and a best hope to people who seek a better standards of living wherever in the world they may live. This is absolutely fundamental. While it is true that the direct causes of the crisis the combustible mixture of excess leverage in both consumer and financial markets, the bank failures, the credit collapse have led to some painful consequences, it would be folly to conclude that the foundations of market economics have been irreparably damaged. A second challenge facing the Global is how to deal intelligently with the huge fiscal challenges ahead. The response of central banks and governments to the economic crisis may very well have averted a global catastrophe. However, massive fiscal obligations have been assumed by governments and this might take many years to unwind. What is needed is for countries to create and develop smart à ¢Ã¢â€š ¬Ã…“exità ¢Ã¢â€š ¬? strategies. Furthermore, as the private sector returns to some growth, this requires a determined pullback in government expenditure. Not an easy task: as we all know, the politics of unwinding government programs can be daunting. Here political courage and good public policy go hand in hand. The third challenge needs an urgent attention. It is acknowledged that the global economy is out of balance and that this is one of the reasons for the financial crisis. Massive reliance on external demand carries with it real consequences as does the excessive reliance on foreign investors to finance consumption and deficits for long periods of time. As one could realize, such imbalances can cause serious and long-lasting economic damage. There is also the challenge, or opportunity, of what to do with a countrys immense foreign exchange reserves. A Chinese think tank has come up with an exciting idea: that the reserves could be put to good use through the development of a Marshall Plan for Africa, Asia and Latin America. Such a development fund, or loan facility, would increase living standards in the targeted countries. The fifth challenge is enormously complex challenge that deserves attention. Sometimes we feel that we have loaded so many expectations onto the climate change agenda that it cannot help but fail. You would think that tackling this issue will give us infinite new sources of cleaner energy, and allow for the transfer of substantial amounts of financial and technological support to emerging economies. On the global side, No existing architecture is found to be proficient in preventing global crises from erupting. Since financial crises occur even in relatively tightly regulated economies, the likelihood that a supranational influence could prevent an international crisis from occurring is questionable. The financial crisis has been characterized as a à ¢Ã¢â€š ¬Ã…“wake-up callà ¢Ã¢â€š ¬? for investors who had put their faith confidence in. For example, credit ratings placed on securities by credit rating agencies operating under what some have referred to as à ¢Ã¢â€š ¬Ã…“wicked incentives and conflicts of interest.à ¢Ã¢â€š ¬? Moving forward to a sixth challenge, the Council on Foreign Relations explained the problem in a report on systemic regulation, as follows: One regulatory organization in each country should be responsible for overseeing the health and stability of the overall financial system. The role of the systemic regulator should include gathering, analyzing, and reporting information about significant interactions between and risks among financial institutions; designing and implementing systemically sensitive regulations, including capital requirements; and coordinating with the fiscal authorities and other government agencies in managing systemic crises. We argue that the central bank should be charged with this important new responsibility. Centers of financial activity such as New York, London, and Tokyo, race with each other and multinational firms can determine where to carry out particular financial transactions. This is to be addresses as one of the considerations in policy making. A seventh challenge is that a large financial institution that may be defined as large to fail represents the heavy arm that the world economy depends greatly on. If an institution is considered to be à ¢Ã¢â€š ¬Ã…“unsuccessful too big to fail,à ¢Ã¢â€š ¬? its bankruptcy would cause a major risk collapse to the system as a whole. Yet, if there is an implicit promise of governmental support in case of failure, the government may create a moral hazard, which is the motivation for an entity to be engaged in somewhat risky behavior, knowing that the government will rescue it if it fails. A further challenge is that the nature and size of accumulating financial and systemic risks have not been well identified by the existing micro regulation. It even didnt impose appropriate remedial actions. Even though some analysts and institutions were sounding alarms before the crisis erupted, there were hardly any regulatory tools available to handle with the increase of risk in the system as a whole or the risks being forced by other firms either in the same or different sectors. It seemed to be an insufficient response to some of these risks either by the authorities responsible for the mistake of individual financial institutions or specific market segments. A last fundamental challenge deals with the nature of regulation and supervision. Banking regulation tends to be specific and detailed and places requirements and limits on bank behavior. Federal securities regulation, however, is based primarily on disclosure. Registration with the Securities and Exchange Commission is required, but that registration does not imply that an investment is safe or secured, only that the risks have been fully disclosed! 5. Analysis Discussion When the U.S financial System falls down, it may bring major parts of the rest of the world down with it. The global financial crisis has opened the World eye on an important point: that the United States is still a major center of the financial world. Hence, Regional financial crises (such as the Asian financial crisis, Japans banking crisis or even the current Dubais Credit Crisis) can occur without seriously infecting the rest of the global financial system as does the United States economy. The reason behind, is that the United States is the main guarantor of the international financial system, the provider of dollars widely used as currency reserves and as an international intermediate for exchange, besides being a contributor to much of the financial capital that around the world seeking higher yields. The rest of the world may not appreciate it, but a financial crisis in the United States often takes on a global hue. To analyze the questionnaire, the researchers have used the SPSS program and the regression analysis in order to define some relationships that best help identify the problem under study. The descriptive statistical analyses questionnaire will be used, including calculations of sampling error, and statistical adjustments for unequal selection probabilities. Cross-classification analyses with demo-graphic, ANOVA, linear regression and T-Test is much more applied in order to explain some judgments. Since the researchers think that the gender is one of the independent variables that could test many hypothesis, three hypothesis were applied based on the dependant variable: First Hypothesis: There is no relationship between gender and understanding what is going on in the current financial news. Second Hypothesis: There is no relationship between gender and being informed about the à ¢Ã¢â€š ¬Ã…“Global Financial Crisisà ¢Ã¢â€š ¬?. Third Hypothesis: There is no relationship between gender and the decision that thinks of governments around the world should take in the financial sector towards their economies. The table below, represents the Statistical Data Analysis of the designed questionnaire: Table 1: SPSS Statistics for all questionnaire questions One-Sample Test    Question No.    Test Value = 0 Test Value = 0 N t df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the Difference t df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the Difference    Lower Upper Lower Upper Question_1 68 23.758 67 0 1.441 1.32 1.56 23.758 67 0 1.441 1.32 1.56 Question_2 68 17.636 67 0 4.206 3.73 4.68 17.636 67 0 4.206 3.73 4.68 Question_3 68 21.715 67 0 1.706 1.55 1.86 21.715 67 0 1.706 1.55 1.86 Question_4 68 22.401 67 0 3.868 3.52 4.21 22.401 67 0 3.868 3.52 4.21 Question_5 68 13.683 67 0 2.074 1.77 2.38 13.683 67 0 2.074 1.77 2.38 Question_6 68 8.596 67 0 2.029 1.56 2.5 8.596 67 0 2.029 1.56 2.5 Question_7 68 10.618 67 0 3.5 2.84 4.16 10.618 67 0 3.5 2.84 4.16 Question_8 68 17.868 67 0 2.191 1.95 2.44 17.868 67 0 2.191 1.95 2.44 Question_9 68 23.953 67 0 2.676 2.45 2.9 23.953 67 0 2.676 2.45 2.9 Question_10 68 15.557 67 0 5.059 4.41 5.71 15.557 67 0 5.059 4.41 5.71 Question_11_1 68 14.691 67 0 3.529 3.05 4.01 14.691 67 0 3.529 3.05 4.01 Question_11_2 68 18.302 67 0 4.809 4.28 5.33 18.302 67 0 4.809 4.28 5.33 Question_11_3 68 21.056 67 0 5.029 4.55 5.51 21.056 67 0 5.029 4.55 5.51 Question_11_4 68 17.835 67 0 4.426 3.93 4.92 17.835 67 0 4.426 3.93 4.92 Question_11_5 68 20.978 67 0 4.897 4.43 5.36 20.978 67 0 4.897 4.43 5.36 Question_12 68 16.241 67 0 2.735 2.4 3.07 16.241 67 0 2.735 2.4 3.07 Question_13 68 14.707 67 0 2.676 2.31 3.04 14.707 67 0 2.676 2.31 3.04 Question_14 68 26.329 67 0 2.765 2.56 2.97 26.329 67 0 2.765 2.56 2.97 Anova Model Sum of Squares df Mean Square F Sig. 1 Regression 4.074 1 4.074 4.173 .045a Residual 64.440 66 .976       Total 68.515 67          a. Predictors: (Constant), Question_1          b. Dependent Variable: Question_8          Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) 1.481 .368    4.025 .000 Question_1 .493 .241 .244 2.043 .045 a. Dependent Variable: Question_8          Table 2: Anova statistics coefficients relationship Q1 Q8 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Hypothesis. From the Questionnaire, we have selected the relationship among the following questions. However, Gender will always be constant. Question (1): Please indicate your gender: Male Female Question (8): In general, how knowledgeable do you consider yourself to be when it comes to understanding what is going on in the current financial news? I know enough to be able to explain whats happening in the financial industry to other people. I understand enough to make sense of the detail behind the financial news stories. I just follow the headlines but my understanding of financial news is fairly vague. I dont really understand whats going on in the financial news. Question_8: On the One-Sample Test it is showed that the Significance is = 0.00 which is less than 0.05, so we reject any initial premise that the average Question_8 is not equal to 0. Since the answer to this question fell where the value of t = 17.868, positive, meaning that people have a significant understanding and knowledge about the current financial news. About 35.3 % of the answers to question 8 went in to that both, males females find themselves having enough understanding to make sense of the detail behind the financial news stories. On lower confidence levels, 29.4% find themselves confident enough to answer bitterly regarding the financial crisis. Question (9): How informed are you about the à ¢Ã¢â€š ¬Ã…“Global Financial Crisisà ¢Ã¢â€š ¬? that is said to be impacting the U.S. economy the rest of the Globe? Very informedà ¢Ã¢â€š ¬Ã¢â‚¬ I have actively sought additional information on this story. Somewhat informedà ¢Ã¢â€š ¬Ã¢â‚¬ I know a bit about it, but wouldnt be able to hold my own in a conversation about it. Informedà ¢Ã¢â€š ¬Ã¢â‚¬ Ive read/seen stories about it when Ive come across them in the news. Not informed at allà ¢Ã¢â€š ¬Ã¢â‚¬ I dont know anything about this story. Question_9: The mean for this particular sample is 2.68, which is statistically significantly different from the test value of Zero.  34 out of 68 sample volume representing almost 50% who have been really informed to have read/seen stories about the global financial crisis when coming across it in the news. The researchers find that the relationship between gender and being informed about the à ¢Ã¢â€š ¬Ã…“Global Financial Crisisà ¢Ã¢â€š ¬? is positive with (.493) and based on the t-value of (2.043) and p-value of (0.045), this relationship is statistically significant.   Hence, there is a statistically significant positive linear relationship between people gender being informed and know ledged enough about the crisis. Question (13): What role, if any, do you think that governments around the world should take in the financial sector towards their economies? Hands onà ¢Ã¢â€š ¬Ã¢â‚¬ the government should intervene whenever the financial sector is at risk. Intermediaryà ¢Ã¢â€š ¬Ã¢â‚¬ the government should act as an intermediary between concerned parties. Laissez Faireà ¢Ã¢â€š ¬Ã¢â‚¬ the government should not interfere with economic affairs beyond the minimum. Completely hands offà ¢Ã¢â€š ¬Ã¢â‚¬ the government should let Wall Street solve its problems on its own. Case by caseà ¢Ã¢â€š ¬Ã¢â‚¬ the government should take a case-by-case approach. ANOVAb Model Sum of Squares df Mean Square F Sig. 1 Regression 14.714 1 14.714 7.132 .010a Residual 136.168 66 2.063       Total 150.882 67          a. Predictors: (Constant), Question_1          b. Dependent Variable: Question_13          Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) 1.326 .535    2.480 .016 Question_1 .937 .351 .312 2.671 .010 a. Dependent Variable: Question_13          Table 3: Anova statistics coefficients relationship Q1 Q13 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Hypothesis. The relationship between gender and the choice to think of the role that governments around the world should take in the financial sector towards their economies is positive (.937). Based on the t-value (2.671) and p-value (0.010), it is to be clarified that this relationship is statistically significant.   Hence, there is a statistically significant positive linear relationship. Most of the questionnaires answer to question 13 went to choose that the role of government can be best suggested as to: Hands onà ¢Ã¢â€š ¬Ã¢â‚¬ the government should intervene whenever the financial sector is at risk. Question (4) Which of the following best describes the highest level of education you have attained? Some high school High school graduate Some college College graduate Some post graduate studies Post graduate degree Question (13): What role, if any, do you think that governments around the world should take in the financial sector towards their economies? 1 Hands onà ¢Ã¢â€š ¬Ã¢â‚¬ The government should intervene whenever the financial sector is at risk.    3 1 7 1 8 2 Intermediaryà ¢Ã¢â€š ¬Ã¢â‚¬ The government should act as an intermediary between concerned parties.    2 7 3 1 2 3 Laissez Faireà ¢Ã¢â€š ¬Ã¢â‚¬ The government should not interfere with economic affairs beyond the minimum.    3 7 4 -   1 4 Completely hands offà ¢Ã¢â€š ¬Ã¢â‚¬ The government should let Wall Street solve its problems on its own.    1    2    -   5 Case by caseà ¢Ã¢â€š ¬Ã¢â‚¬ The government should take a case-by-case approach. 1 2 3 4    5 Table 4: Cross Checking Analysis between Q4 Q13. To provide a better understanding of a cross classification, the table below indicates that, most of people holding a college degree, agreed with the choice that governments should intervene whenever the financial sector is at risk and in need for its support. Therefore, we see that the Global Financial Crisis can be broken down into major phases. Although each phase has a policy focus, it seemed that until t

Apa Style Guide

APA Publication Manual Crib Sheet This document is a summary of rules from the APA Publication Manual 5th Edition. For Further Information visit APA Writing Style at: http://www. apastyle. org June 2008 APA STYLE GUIDE 5th Edition APA requires a hanging indent for its citations. Also, PLEASE BE SURE TO DOUBLE SPACE CITATIONS. For space saving reasons, the citations below are single spaced. APA requires double spacing of citations. Citation Rules A. Books Typical book entry — single author Arnheim, R. (1971). Art and visual perception. Berkeley: University of California Press.Publishing information – Spell out the publishing names of associations and university presses, but omit superfluous terms such as â€Å"Publishers,† â€Å"Co. ,† or â€Å"Inc. † If two or more locations are given, give the location listed first or the publisher's home office. When the publisher is a university and the name of the state (or province) is included in the universit y name, do not repeat the name of the state/province in the publisher location. When the author and publisher are identical, use the word â€Å"Author† as the name of the publisher. American Psychiatric Association. (1994).Diagnostic and statistical manual of mental disorders (4th ed. ). Washington, D. C. : Author Multiple authors When a work has up to (and including) six authors, cite all authors. When a work has more than six authors cite the first six followed by â€Å"et al. † Festinger, L. , Riecken, H. , ; Schachter, S. (1956). When prophecy fails. Minneapolis: University of Minnesota Press. Roeder, K. , Howdeshell, J. , Fulton, L. , Lochhead, M. , Craig, K. , Peterson, R. , et. al. (1967). Nerve cells and insect behavior. Cambridge, MA:  Ã‚   Harvard University Press. Corporate authorship Institute of Financial Education. 1982). Managing personal funds. Chicago:  Midwestern. No author identified Experimental psychology. (1938). New York: Holt. Citing items i n an anthology/chapter in edited book Rubenstein, J. P. (1967). The effect of television violence on small children. In B. F. Kane (Ed. ), Television and juvenile psychological development (pp. 112-134). New York: American Psychological Society. Reprinted or republished chapter Freud, S. (1961). The ego and the id. In J. Strachey (Ed. and Trans. ), The standard edition of the complete psychological works of Sigmund Freud (Vol. 19, pp. 3-66). London: Hogarth Press. Original work published 1923) Following the entry, enclose â€Å"Original work published† in parentheses, noting the original date. Chapter in a volume in a series Maccoby, E. E. , ; Martin, J. (1983). Socialization in the context of the family: Parent-child interaction. In P. H. Mussen (Series Ed. ) ; E. M. Hetherington (Vol. Ed. ), Handbook of child psychology: Vol. 4. Socialization, personality, and social development (4th ed. , pp. 1-101). New York: Wiley. Citing multivolume works Wilson, J. G. , ; Fraser, F. C. (Eds. ). (1977-1978). Handbook of teratology (Vols. 1-4). New York: Plenum Press.In listing a multivolume work, the publication dates should be inclusive for all volumes. The volumes should be identified, in parentheses, immediately following the book title. Do not use a period between the title and the parenthetical information; close the entire title, including the volume information, with a period. Edited collections Higgins, J. (Ed. ). (1988). Psychology. New York: Norton. or Grice, H. P. , ; Gregory, R. L. (Eds. ). (1968). Early language development. New York: McGraw-Hill. Citing specific editions of a book Brockett, O. (1987). History of the theatre (5th ed. ). Boston: Allyn and Bacon.Immediately after the book's title, note the edition information in parentheses (for example, â€Å"5th ed. † or â€Å"rev. ed. â€Å"). Do not use a period between the title and the parenthetical information. Translated works Freud, S. (1970) An outline of psychoanalysis (J. Strachey, Trans. ). New York: Norton. (Original work published 1940) The original publication date is the last portion of the entry and should be in parentheses with the note â€Å"Original work published† followed by the date. Proceedings Deci, E. L. , & Ryan, R. M. (1991). A motivational approach to self: Integration in personality. In R. Dienstbier (Ed. , Nebraska Symposium on Motivation: Vol. 38. Perspectives on motivation (pp. 237-288). Lincoln: University of Nebraska Press. or Cynx, J. , Williams, H. , & Nottebohm, F. (1992). Hemispheric diffences in avian song discrimation. Proceedings of the National Academy of Sciences, USA, 89, 1372-1375. B. Journals Citing articles in journals with continuous pagination Passons, W. (1967). Predictive validities of the ACT, SAT, and high school grades for first semester GPA and freshman courses. Educational and Psychological Measurement, 27, 1143-1144. Citing articles in journals with non-continuous paginationSawyer, J. (1966). Measurement an d prediction, clinical and statistical. Psychological Bulletin, 66 (3), 178-200. Because pagination begins anew with each issue of this journal, it is necessary to include the issue number in parentheses after the volume number. Note that there is a comma between the issue number and the page numbers, but no comma between the italized volume number and the issue number. If the periodical does not use volume numbers, include â€Å"pp. † before the page numbers so the reader will understand that the numbers refer to pagination. Use â€Å"p. † if the source is a page r less long. Citing articles in monthly periodicals Chandler-Crisp, S. (1988, May) â€Å"Aerobic writing†: a writing practice model. Writing Lab Newsletter, pp. 9-11. Citing articles in weekly periodicals Kauffmann, S. (1993, October 18). On films: class consciousness. The New Republic, p. 30. Newspaper articles Monson, M. (1993, September 16). Urbana firm obstacle to office project. The Champaign-Urba na News-Gazette, pp. A1,A8. No author identified Clinton puts ‘human face' on health-care plan. (1993, September 16). The New York Times, p. B1. Reprinted or republished articles Clark, G. & Zimmerman, E. (1988). Professional roles and activities as models for art education. In S. Dobbs (Ed. ), Research readings for discipline-based art education. Reston, VA: NAEA. (Reprinted from Studies in Art Education, 19 (1986), 34-39. ) Following the entry, enclose â€Å"Reprinted from† in parentheses, noting the original publication information. Close with a period. ERIC Documents (Report available from the Educational Resources Information Center) Mead, J. V. (1992). Looking at old photographs: Investigating the teacher tales that novice teachers bring with them   (Report No. NCRTL-RR-92-4).East Lansing, MI: National Center for Research on Teacher Learning. (ERIC Document Reproduction Service No. ED346082) C. Dissertations Dissertation obtained from Dissertation Abstracts Inte rnational (DAI) Bower, D. L. (1993). Employee assistant programs supervisory referrals: Characteristics of referring and non-referring supervisors. Dissertation Abstracts International, 54 (01), 534B. (UMI No. 9315947) Dissertation obtained from the university: Ross, D. F. (1990). Unconscious transference and mistaken identity: When a witness misidentifies a familiar but innocent person from a lineup (Doctoral dissertation, Cornell University, 1990).Dissertation Abstracts International, 51, 417. Give the university and year of the dissertation as well as the volume and page numbers from the Dissertation Abstract International. D. Other Media Citing interviews Archer, N. (1993). [Interview with Helen Burns, author of Sense and Perception]. Journal of Sensory Studies, 21, 211-216. In this example, the interview lacks a title, so a description of the interview is given in brackets. If the interview has a title, include the title (without quotation marks) after the year, and then give a further description in brackets if necessary.Unpublished interviews do not need a reference page entry because they are what the Publication Manual of the APA calls â€Å"personal communications† and so â€Å"do not provide recoverable data. † Here, the entry consists of the first initial and last name of the interviewee, the type of communication, and the date of the interview. (N. Archer, personal interview, October 11, 1993) Citing films or videotapes [Motion picture] replaces Film and Videotape as a bracketed descriptor. Weir, P. B. (Producer), & Harrison, B. F. (Director). (1992). Levels of consciousness [Motion picture]. Boston, MA: Filmways.Here, the main people responsible for the videotape are given, with their roles identified in parentheses after their names. After the title, the medium is identified (here, a motion picture). The distributor's name and location comprises the last part of the entry. Citing recordings Writer, A. (Date of copyright). Title of song [Recorded by artist if different from writer]. On Title of album [Medium of recording: CD, record, cassette, etc. ]. Location: Label. (Recording date if different than copyright) McFerrin, Bobby (Vocalist). (1990). Medicine music [Cassette Recording]. Hollywood, CA: EMI-USA.E. Electronic Information The type of medium can be, but is not limited to the following: aggregated databases, online journals, Web sites or Web pages, newsgoups, Web- or e-mail based discussion groups or Web or e-mail based newsletters. Pagination in electronic references is unavailable in many cases, thus left out of the citation. The APA Manual has a short section demonstrating the format for electronic references on pp. 268-281. For other examples, visit http://www. apastyle. org/elecref. html Citing computer software Arend, Dominic N. (1993). Choices (Version 4. 0) [Computer software].Champaign, IL: U. S. Army Corps of Engineers Research Laboratory. (CERL Report No. CH7-22510) If an individual(s) has p roprietary rights to the software, their name(s) are listed at the head of the entry, last names first, followed by a period. Otherwise, treat such references as unauthored. Do not italize the title. Specify in brackets that the source is computer software, program or language. List the location and the organization's name that produced the program. Add any other necessary information for identifying the program (in this example, the report number) in parentheses at the entry's conclusion.To reference a manual, follow the same as above but add â€Å"manual† as the source in the bracketed information. Do not add a period at the end of a citation if it ends in a web address. Full-Text Database (i. e. , book, magazine, newspaper article or report) The second date which follows is the date the user retrieved the material. No period follows an Internet Web address. Schneiderman, R. A. (1997). Librarians can make sense of the Net. San Antonio Business Journal, 11, 58+. Retrieved Ja nuary 27, 1999, from EBSCO Masterfile database. Article in an Internet-only journal Kawasaki, J. L. , ; Raven, M. R. 1995). Computer-administered surveys in extension. Journal of Extension, 33, 252-255. Retrieved June 2, 1999, from http://joe. org/joe/index. html Article in an Internet-only newsletter Waufton, K. K. (1999, April). Dealing with anthrax. Telehealth News, 3(2). Retrieved December 16, 2000, from http://www. telehearlth. net/subscribe/newslettr_5b. html#1 Internet technical or research reports University of California, San Francisco, Institute for Health and Aging. (1996, November). Chronic care in America: A 21st century challenge. Retrieved September 9, 2000, from the Robert Wood Foundation Web site: http://www. wjf. org/library/chrcare Document created by private organization, no page numbers, no date Greater Hattiesburg Civic Awareness Group, Task Force on Sheltered Programs. (n. d. ). Fund-raising efforts. Retrieved November 10, 2001, from http://www. hattiesburgcag . org Sometimes authors are not identified, and there is no date showing for the document. Date website was accessed should be used and efforts should be made to identify the sponsoring author/organization of the website. If none is found, do not list an author. Document from university program or department McNeese, M. N. (2001).Using technology in educational settings. Retrieved October 13, 2001, from University of Southern Mississippi, Educational Leadership and Research Web site: http://www-dept. usm. edu/~eda/ E-Mail, newsgroups, online forums, discussion groups and electronic mailing lists Personal communications, which are not archived, should not included in reference lists and cited within the text only: Smith, Fred (â€Å"personal communication,† January 21, 1999) Citations Within Text Use of Authors' Names In APA style, only the author's last name is used in the document as a whole and within in-text citations in particular.If the author's name is mentioned in the text Most often, an author's last name appears in the text with the date of publication immediately following in parentheses: Bolles (2000) provides a practical, detailed approach to job hunting. If the author's name is not mentioned in the text When the author's name does not appear in the text itself, it appears in the parenthetical citation followed by a comma and the date of publication: Interactive fiction permits readers to move freely through a text and to participate in its authorship (Bolter, 2001).Note: If you cite the same source a second time within a paragraph, the year of publication may be omitted. If there are two authors When a work has two authors, always cite both names every time the source is cited in the text: Katzenbach and Smith (1993) define a team as â€Å"a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable† (p. 45).If the authors ' names appear in the text itself, connect the names with the word and; however, if the authors' names appear parenthetically, connect the names with an ampersand (;): A team is defined as â€Å"a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable† (Katzenbach ; Smith, 1993, p. 45). If there are three, four, or five authorsWhen you cite for the first time a work with three, four, or five authors, cite all authors: Cogdill, Fanderclai, Kilborn, and Williams (2001) argue that â€Å"making backchannel overtly available for study would require making its presence and content visible and its content persist, affecting the nature of the backchannel and raising social and ethical issues† (p. 109). (Again, if the authors' names appear parenthetically rather than in the text itself, connect the final two names with a comma and an ampersand). In all subsequent citations, include only the name of the first author followed by et al. the abbreviation for the Latin phrase meaning â€Å"and others†): Cogdill et al. (2001) assert that â€Å"backchannel is multithreaded, substantial, and governed by many social conventions† (p. 109). Again, if the authors' names appear parenthetically rather than in the text itself, connect the final two names with a comma and an ampersand. If there are six or more authors If a work has six or more authors, cite the last name of the first author followed by et al. in all citations: Adkins et al. (2001) studied the use of collaborative technology during a multinational, civil-military exercise. If two authors have the same last nameIf a document includes sources by two authors with the same last name, include the first and middle initial of each author in all text citations: R. P. Allen (1994) and D. N. Allen (1998) have both studied the effects of email monitoring in the workplace. If two or more sources are cited When citing two or more sources by different authors within the same citation, place the authors' names in parentheses in alphabetical order, followed by the year of publication and separated by a semicolon: Hypertext significantly changes the process of information retrieval (Bolter 2001; Bush, 1945; Landow 1997).If no author is identified If no author is identified, use an abbreviated title instead, followed by the date. Use quotation marks around article or chapter titles, and underline book, periodical, brochure, and report titles: The use of Customer Relationship Management (CRM) systems has grown substantially over the past five years as companies attempt to adapt to customer needs and to improve their profitability (â€Å"Making CRM Work†). Placement of Citations for Quoted MaterialSpecific page numbers for paraphrased or quoted material appear within the parenthetical citation following the abbreviation for page (p. ). The location of the parenthetic al citation for a quote depends upon the placement of quoted material within the sentence: * If the quotation appears in midsentence, insert the final quotation mark, followed by the parenthetical citation; then complete the sentence. Branscomb (1998) argues that â€Å"it's a good idea to lurk (i. e. read all the messages without contributing anything) for a few weeks, to ensure that you don't break any of the rules of netiquette† (p. 7) when you join a listserv. * If the quotation appears at the end of the sentence, insert the final quotation mark, followed by the parenthetical citation and the end punctuation: Branscomb (1998) argues that when you join a listserv, â€Å"it's a good idea to lurk (i. e. , read all the messages without contributing anything) for a few weeks, to ensure that you don't break any of the rules of netiquette† (p. 7). If the quotation is long (40 words or more), it should be formatted as a block quotation, and the parentheses should appear aft er the final punctuation mark: Bolles (2000) argues that the most effective job hunting method is what he calls the creative job hunting approach: figuring out your best skills, and favorite knowledges, and then researching any employer that interests you, before approaching that organization and arranging, through your contacts, to see the person there who has the power to hire you for the position you are interested in.This method, faithfully followed, leads to a job for 86 out of every 100 job-hunters who try it. (57) Citing Electronic Sources See http://www. apastyle. org for additional information * Sample reference Page (Next Page) | The Publication Manual of the American Psychological Association (5th ed. , 2001) provides a comprehensive reference guide to writing using APA style, organization, and content. To order a copy of the Publication Manual online, go to http://www. apa. org/books/4200060. html. To view â€Å"PDF† documents referenced on this APA Style Essentia ls page, you need Adobe Acrobat Reader.To download the free Acrobat Reader, go to http://www. adobe. com/products/acrobat/readstep2. html. | The purpose of this document is to provide a common core of elements of APA style that all members of an academic department can adopt as minimal standards for any assignment that specifies APA style. This Web document is itself not a model of APA style. For an example of a complete article formatted according to APA style, go to http://www. vanguard. edu/uploadedfiles/faculty/ddegelman/prayer. pdf. For an example of an undergraduate research proposal, go to http://www. anguard. edu/uploadedfiles/faculty/ddegelman/psychproposal. pdf. To download a Microsoft Word template of an APA-style paper, go to http://www. vanguard. edu/uploadedFiles/Faculty/DDegelman/psychapa. doc I. General Document Guidelines A. Margins: One inch on all sides (top, bottom, left, right) B. Font Size and Type: 12-pt. font (Times Roman or Courier are acceptable typefaces) C. Line Spacing: Double-space throughout the paper, including the title page, abstract, body of the document, references, appendixes, footnotes, tables, and figure captions. D.Spacing after Punctuation: Space once after all punctuation. This includes using one space (not two! ) following punctuation marks at the ends of sentences. E. Alignment: Flush left (creating uneven right margin) F. Paragraph Indentation: 5-7 spaces G. Pagination: The page number appears one inch from the right edge of the paper on the first line of every page (except Figures), beginning with the title page H. Manuscript Page Header: The first two or three words of the paper title appear five spaces to the left of the page number on every page (except Figures), beginning with the title page.Manuscript page headers are used to identify manuscript pages during the editorial process. Using most word processors, the manuscript page header and page number can be inserted into a header, which then automatically appe ars on all pages. I. Active voice: As a general rule, use the active voice rather than the passive voice. For example, use â€Å"We predicted that †¦ † rather than â€Å"It was predicted that †¦ † J. Order of Pages:  Title Page, Abstract, Body, References, Appendixes, Footnotes, Tables, Figure Captions, Figures II. Title Page K. Pagination: The Title Page is page 1.L. Key Elements: Paper title, author(s), author affiliation(s), and running head. M. Paper Title: Uppercase and lowercase letters, centered on the page. N. Author(s): Uppercase and lowercase letters, centered on the line following the title. O. Institutional affiliation: Uppercase and lowercase letters, centered on the line following the author(s). P. Running head: The running head is typed flush left (all uppercase) following the words â€Å"Running head:† on the line below the manuscript page header. It should not exceed 50 characters, including punctuation and spacing.The running head i s a short title that appears at the top of pages of published articles. Q. Example of APA-formatted Title Page:  http://www. vanguard. edu/uploadedFiles/psychology/titlepage. pdf III. Abstract: The abstract is a one-paragraph, self-contained summary of the most important elements of the paper. R. Pagination: The abstract begins on a new page (page 2). S. Heading: Abstract (centered on the first line below the manuscript page header) T. Format: The abstract (in block format) begins on the line following the Abstract heading. The abstract should not exceed 120 words.All numbers in the abstract (except those beginning a sentence) should be typed as digits rather than words. U. Example of APA-formatted Abstract:  http://www. vanguard. edu/uploadedFiles/psychology/abstract. pdf IV. Body V. Pagination: The body of the paper begins on a new page (page 3). Subsections of the body of the paper do not begin on new pages. W. Title: The title of the paper (in uppercase and lowercase letters ) is centered on the first line below the manuscript page header. X. Introduction: The introduction (which is not labeled) begins on the line following the paper title.Y. Headings: Headings are used to organize the document and reflect the relative importance of sections. For example, many empirical research articles utilize Method, Results, Discussion, and References headings. In turn, the Method section often has subheadings of Participants, Apparatus, and Procedure. For an example of APA-formatted headings, go to http://www. vanguard. edu/uploadedFiles/psychology/headings. pdf   1. Main headings (when the paper has either one or two levels of headings) use centered uppercase and lowercase letters (e. g. , Method, Results, Discussion, nd References). 2. Subheadings (when the paper has two levels of headings) are italicized and use flush left, uppercase and lowercase letters (e. g. , Participants, Apparatus, and Procedure as subsections of the Method section). V. Text citations: Source material must be documented in the body of the paper by citing the author(s) and date(s) of the sources. The underlying principle is that ideas and words of others must be formally acknowledged. The reader can obtain the full source citation from the list of references that follows the body of the paper.Z. When the names of the authors of a source are part of the formal structure of the sentence, the year of publication appears in parentheses following the identification of the authors. Consider the following example: Wirth and Mitchell (1994) found that although there was a reduction in insulin dosage over a period of two weeks in the treatment condition compared to the control condition, the difference was not statistically significant. [Note:  and is used when multiple authors are identified as part of the formal structure of the sentence.Compare this to the example in the following section. ] [. When the authors of a source are not part of the formal structure of the se ntence, both the authors and year of publication appear in parentheses. Consider the following example: Reviews of research on religion and health have concluded that at least some types of religious behaviors are related to higher levels of physical and mental health (Gartner, Larson, & Allen, 1991; Koenig, 1990; Levin & Vanderpool, 1991; Maton & Pargament, 1987; Paloma & Pendleton, 1991; Payne, Bergin, Bielema, & Jenkins, 1991). Note:  & is used when multiple authors are identified in parenthetical material. Note also that when several sources are cited parenthetically, they are ordered alphabetically by first authors' surnames and separated by semicolons. ] . When a source that has two authors is cited, both authors are included every time the source is cited. ]. When a source that has three, four, or five authors is cited, all authors are included the first time the source is cited. When that source is cited again, the first author's surname and â€Å"et al. are used. Conside r the following example: Reviews of research on religion and health have concluded that at least some types of religious behaviors are related to higher levels of physical and mental health (Payne, Bergin, Bielema, & Jenkins, 1991). Payne et al. (1991) showed that †¦ ^. When a source that has six or more authors is cited, the first author's surname and â€Å"et al. † are used every time the source is cited (including the first time). _. Every effort should be made to cite only sources that you have actually read.When it is necessary to cite a source that you have not read (â€Å"Grayson† in the following example) that is cited in a source that you have read (â€Å"Murzynski & Degelman† in the following example), use the following format for the text citation and list only the source you have read in the References list: Grayson (as cited in Murzynski ; Degelman, 1996) identified four components of body language that were related to judgments of vulnerabilit y. `. To cite a personal communication (including letters, emails, and telephone interviews), include initials, surname, and as exact a date as possible.Because a personal communication is not â€Å"recoverable† information, it is not included in the References section. For the text citation, use the following format: B. F. Skinner (personal communication, February 12, 1978) claimed †¦ a. To cite a Web document, use the author-date format. If no author is identified, use the first few words of the title in place of the author. If no date is provided, use â€Å"n. d. † in place of the date. Consider the following examples: Degelman and Harris (2000) provide guidelines for the use of APA writing style.Changes in Americans' views of gender status differences have been documented (Gender and Society, n. d. ). b. To cite the Bible, provide the book, chapter, and verse. The first time the Bible is cited in the text, identify the version used. Consider the following exam ple: â€Å"You are forgiving and good, O Lord, abounding in love to all who call to you† (Psalm 86:5, New International Version). [Note: No entry in the References list is needed for the Bible. ] VI. Quotations: When a direct quotation is used, always include the author, year, and page number as part of the citation. c.A quotation of fewer than 40 words should be enclosed in double quotation marks and should be incorporated into the formal structure of the sentence. Example: Patients receiving prayer had â€Å"less congestive heart failure, required less diuretic and antibiotic therapy, had fewer episodes of pneumonia, had fewer cardiac arrests, and were less frequently intubated and ventilated† (Byrd, 1988, p. 829). d. A lengthier quotation of 40 or more words should appear (without quotation marks) apart from the surrounding text, in block format, with each line indented five spaces from the left margin.VII. References: All sources included in the References section must be cited in the body of the paper (and all sources cited in the paper must be included in the References section). e. Pagination: The References section begins on a new page. f. Heading: References (centered on the first line below the manuscript page header) g. Format: The references (with hanging indent) begin on the line following the References heading. Entries are organized alphabetically by surnames of first authors. Most reference entries have three components: 3.Authors: Authors are listed in the same order as specified in the source, using surnames and initials. Commas separate all authors. When there are seven or more authors, list the first six and then use â€Å"et al. † for remaining authors. If no author is identified, the title of the document begins the reference. 4. Year of Publication: In parentheses following authors, with a period following the closing parenthesis. If no publication date is identified, use â€Å"n. d. † in parentheses following the authors. 5. Source Reference: Includes title, journal, volume, pages (for journal article) or title, city of publication, publisher (for book).Italicize titles of books, titles of periodicals, and periodical volume numbers. h. Example of APA-formatted References: Go to http://www. vanguard. edu/uploadedFiles/psychology/references. pdf i. Official APA â€Å"Electronic Reference Formats† document: Go to http://www. apastyle. org/elecref. html j. Examples of sources 6. Journal article Murzynski, J. , & Degelman, D. (1996). Body language of women and judgments of vulnerability to sexual assault. Journal of Applied Social Psychology, 26, 1617-1626. 7. Book Paloutzian, R. F. (1996). Invitation to the psychology of religion (2nd ed. ). Boston: Allyn and Bacon. 8.Web document on university program or department Web site Degelman, D. , & Harris, M. L. (2000). APA style essentials. Retrieved May 18, 2000, from Vanguard University, Department of Psychology Web site: http://www. van guard. edu/faculty/ddegelman/index. aspx? doc_id=796 9. Stand-alone Web document (no date) Nielsen, M. E. (n. d. ). Notable people in psychology of religion. Retrieved August 3, 2001, from http://www. psywww. com/psyrelig/psyrelpr. htm 10. Stand-alone Web document (no author, no date) Gender and society. (n. d. ). Retrieved December 3, 2001, from http://www. trinity. edu/~mkearl/gender. html 11.Journal article from database Hien, D. , & Honeyman, T. (2000). A closer look at the drug abuse-maternal aggression link. Journal of Interpersonal Violence, 15, 503-522. Retrieved May 20, 2000, from ProQuest database. 12. Abstract from secondary database Garrity, K. , & Degelman, D. (1990). Effect of server introduction on restaurant tipping. Journal of Applied Social Psychology, 20, 168-172. Abstract retrieved July 23, 2001, from PsycINFO database. 13. Journal article, Internet-only journal Bergen, D. (2002, Spring). The role of pretend play in children's cognitive development. Early Childho od Research ; Practice, 4(1).Retrieved February 1, 2004, from http://ecrp. uiuc. edu/v4n1/bergen. html 14. Article or chapter in an edited book Shea, J. D. (1992). Religion and sexual adjustment. In J. F. Schumaker (Ed. ), Religion and mental health (pp. 70-84). New York: Oxford University Press. 15. Diagnostic and Statistical Manual of Mental Disorders American Psychiatric Association. (2000). Diagnostic and statistical manual of mental disorders (4th ed. , text revision). Washington, DC: Author. VIII. Appendixes: A common use of appendixes is to present unpublished tests or to describe complex equipment or stimulus materials. k.Pagination: Each Appendix begins on a separate page. l. Heading:If there is only one appendix, Appendix is centered on the first line below the manuscript page header. If there is more than one appendix, use Appendix A (or B or C, etc. ). Double-space and type the appendix title (centered in uppercase and lowercase letters). m. Format: Indent the first line 5-7 spaces. n. Example of APA-formatted Appendix:  http://www. vanguard. edu/uploadedFiles/psychology/appendix. pdf IX. Footnotes: Content footnotes are occasionally used to support substantive information in the text.. o. Pagination: Footnotes begin on a separate page. . Heading: Footnotes is centered on the first line below the manuscript page header. q. Format: Indent the first line of each footnote 5-7 spaces and number the foonotes (slightly above the line) as they are identified in the text. r. Example of APA-formatted Footnotes:  http://www. vanguard. edu/uploadedFiles/psychology/footnote. pdf X. Tables: A common use of tables is to present quantitative data or the results of statistical analyses (such as ANOVA). See the Publication Manual (2001, pp. 147-176) for detailed examples. Tables must be referred to in the text. s. Pagination: Each Table begins on a separate page. . Heading:Table 1 (or 2 or 3, etc. ) is typed flush left on the first line below the manuscript pag e header. Double-space and type the table title flush left (italicized in uppercase and lowercase letters). u. Example of APA-formatted Tables:  http://www. vanguard. edu/uploadedFiles/psychology/table2. pdf XI. Figure Captions and Figures: A common use of Figures is to present graphs, photographs, or other illustrations (other than tables). See the Publication Manual (2001, pp. 176-201) for detailed examples. Figure Captions provide, on a single page, captions for the figures that follow. v.Pagination: The Figure Captions page is the final numbered page of the paper. The Figures that follow the Figure Captions page do NOT have page numbers or manuscript page headers. w. Heading for Figure Captions: Figure Caption(s) is centered on the first line below the manuscript page header. Double-space and type Figure 1. (or 2 or 3, etc. ) italicized and flush left, followed by the caption for the figure (not italicized), capitalizing only the first letter of the first word and any proper n ouns. x. Example of APA-formatted Figure Caption and Figure:  http://www. vanguard. edu/uploadedFiles/Faculty/DDegelman/psychfigure. pdf

Specific Investment Decisions

SPECIFIC INVESTMENT DECISIONSQ1. If a company leases rather than buy an asset, which of the following will not be a benefit to the purchaser? (MCQ)Avoiding Tax exhaustionExploiting a low cost of capital Attract lease customers Potential future scrap(2 marks) Q2. Willow Co has already decided to accept a project and is now considering how to finance the project. The asset could be leased over three years at a rental of $23,000 per annum, payable at the start of each year. Tax is payable at 25%, one year in arrears. The post-tax cost of borrowing is 8%. Calculate the net present value of the leasing option. (FIB)Years Cash flows ($)0 – 2 Rentals (23,000)2 – 4 Tax relief 5,75041084542545000NOTE: Negative answer should be shown with a negative sign (-)$(2 marks) Q3. Select the correct Lease option based on the statements given. (HA)It is a rental agreement OPERATING FINANCEMaintenance & Servicing cost of Lessee OPERATING FINANCEAgreement for the useful life of the asset OPERATING FINANCEIncluded in the balance sheet of the Lessor OPERATING FINANCE(2 marks) Q4. Tango Co. needs to decide about an asset that will be used in a project. The company has an option to either Buy the asset or Lease it. If Tango Co. opts for Buy option the following information is given: The asset is bought using a bank loan for $400,000 for a time period of three years. The scrap value of the asset is $30,000 & annual maintenance cost will be $12,000 per annum. Calculate the present value for year two using a cost of borrowing of 5% (ignoring taxation)? (MCQ)$30,000$(11,424)$(10,884)$15,552(2 marks) Q5. What are the relevant cash flows for Buy option? (MRQ)Investment and Disposal proceedsRepair & Maintenance costTax allowable depreciationTax saving on Servicing cost(2 marks) Q6. Beamer Co. wants to replace a Dyeing machine on 31st December 2017. The machine is expected to cost $360,000 if purchased immediately, payable on 31st December 2017. After four years company expects technological changes in the market making this machine redundant and leaving a scrap value of $20,000 on 31st December 2021. Capital allowance on 25% reducing balance basis. A full year allowance is given for acquisition but no writing down allowance in the year of disposal. If the maintenance cost is $15,000 per year payable at each year end & tax rate is 30%.What will be the Balancing Charge/Allowance? (MCQ)$28,172 Balancing Charge$27,000 Balancing Allowance$11,391 Balancing Charge$28,172 Balancing Allowance(2 marks) Q7. Putin Co has decided to invest in a new machine which has a ten-year life and no disposal proceeds. The machine can either be purchased now for $55,000, or it can be leased for ten years with lease rental payments of $10,000 per annum payable at the end of each year. The cost of capital to be applied is 11% and taxation should be ignored. What should be done? (MCQ)Purchase the machineLease the machineSale or LeasebackDo nothing(2 marks) Q8. A machine is leased using operating lease & the annual lease rental for six years will be $67,000 payable at each year-end. The first rental will be payable at the start of year one. Calculate net present value using a cost of capital of 13%? (FIB) 3816353683000$(2 marks) Q9. A machine is leased using finance lease & the annual lease rental for three years will be $95,000 payable at each year-end. The first rental will be payable at end of year zero in advance. The maintenance cost is $10,000 per annum for three years. Calculate net cash flow for year two using tax save rate of 30% recording in the year cash flow arises? (MCQ)$(66,500)$(73,500)$(7,000)$28,500(2 marks) Q10. â€Å"Assets with unequal lives cannot be compared to a comparison will not be like with like†. Which of the following option relates to the above statement? (MCQ)Equivalent annual costProfitability indexAsset Replacement decisionProbability analysis (2 marks) Q11. Project A with an NPV of $4m with six-year duration. Project B with an NPV of $5m with seven-year duration. Project C with NPV of $6m with a three-year duration. Cost of capital is 12%. Which of the following will be ranked second? (MCQ)Project AProject BProject CNone of the above(2 marks) Q12. The net present value of the costs of operating a machine for the next three years is $10,437 at a cost of capital of 16%. What is the equivalent annual cost of operating the machine? (FIB)4114806477000$ (2 marks) Q13. KD Co. is deciding to replace cargo planes every year or every two years. The initial cost of the plane is $200,000. The maintenance charges are as follows: First year it's Nil ; $25,000 at the end of the second year. The second-hand value would fall from $110,000 to $90,000 if it held on the plane for two years instead of a one year. KD Co. cost of capital is 4%. How often should KD Co. replace their cargo planes % what will be the equivalent annual cost of the option they choose? (MCQ)Replace every 1 year $(94,180)Replace every 1 year $(97,900)Replace every 2 years $(139,875)Replace every 2 years $(48,450)(2 marks) Q14. Which of the following statements is/are a limitation for Asset Replacement Decision? (MRQ)Replacement made every time is better than the previous assetAssets replaced have same cash inflows every yearAssumed that Machines replaced have different operational efficiencies than the previous assetIt ignores environmental damage(2 marks) Q15. Capital Rationing is the restriction on organizations ability to invest in all projects due to insufficient funds. Select the relevant statements whether they are true or false. (HA)Hard Capital Rationing is the limit on the amount of finance available imposed by the lending institutions TRUE FALSESoft Capital Rationing is the limit on the amount of finance available imposed by the lending institutions TRUE FALSEProfitability index is a solution applicable to divisible projects only TRUE FALSETrial ; Error method is the solution applicable to divisible projects only TRUE FALSE(2 marks) Q16. Riddle Co. is appraising three investment projects but is experiencing a capital rationing in Year 0. No capital rationing is expected in future, but all the projects are important for the company and cannot be delayed ; a decision needs to be taken. Riddle Co. cost of capital is 6%. Which order should the projects to be ranked? The following information is available: (MCQ)Project The outlay in year 0 ($) Present Value ($) Net Present Value ($)Jeremy 115,000 121,900 12,190James 43,000 45,580 13,674Richard 75,000 79,500 47,700Jeremy, Richard, JamesJames, Jeremy, RichardRichard, James, JeremyJeremy, James, Richard (2 marks) Q17. What is an indivisible project?It is the ratio of the NPV of a project to its investment costIt is the project that must be undertaken completely or not at allIt is the project that must be undertaken completely or partiallyIt is the project restriction due to insufficient funds(2 marks)The following information relates to Q18 ; Q19.Schneider Co. is facing a capital constraint of $150m immediately available for investment. The investments in possible projects are: Project Initial Cost ($m) NPV ($m)W 30 7X 70 12Y 60 12Z 40 16 Q18. If the projects are divisible, what is the NPV generated from the optimum investment programme? (FIB)35115524765 00 $ Million(2 marks) Q19. If the projects are indivisible, what is the NPV generated from the optimum investment programme? (MCQ)$19m$24m$28m$35m(2 marks) Q20. Place the calculation steps of Profitability index in the correct order. (P;D)Monitor the investment made in the project 1Calculate profitability index of each project 2Allocate the funds 3Rank the project 4(2 marks)SPECIFICINVESTMENT DECISIONS (ANSWERS)Q1. AAvoiding tax exhaustion is a benefit for lessee rather than the purchaser. Tax exhaustion is when a business has negative taxable income so cannot benefit from tax saving.Exploiting a low cost of capital is a benefit for the purchaserAttracting lease customers is a benefit to a lessorPotential future scrap is a benefit for the purchaser as the lessee is not entitled to future scrap proceeds Q2. $-50,289Years Cash flows ($) Discount Factor (8%) Present value ($)0 – 2 Rentals (23,000) 1 + 1.783 (64,009)2 – 4 Tax relief 5,750 3.312 – 0.926 13,720NPV (50,289) Q3. CIt is a rental agreement OPERATING Maintenance ; Servicing cost of Lessee FINANCEAgreement for the useful life of the asset FINANCEIncluded in the balance sheet of the Lessor OPERATING Q4. Year 0 1 2 3Investment / Scrap value (400,000) 30,000Maintenance (12,000) (12,000) (12,000)Net Cash flow (400,000) (12,000) (12,000) 18,000DF 5% 1 0.952 0.907 0.864Present value (400,000) (11,424) (10,884) 15,552 Q5. All cash flows are relevant for Buy option Q6. DYear 2017 2018 2019 2020 2021 2022Investment / Scrap value (360,000) 20,000 Tax save 27,000 20.250 15,188 11,391 28,172Workings:2017 (360,000 Ãâ€" 25%) = 90,000 Ãâ€" 30% = 27,0002018 (90,000 Ãâ€" 0.75) = 67,500 Ãâ€" 30% = 20,2502019 (67,500 Ãâ€" 0.75) = 50,625 Ãâ€" 30% = 15,1882020 (50,625 Ãâ€" 0.75) = 37,969 Ãâ€" 30% = 11,391Balancing Allowance (113,906 – 20,000) = $ 28,172 Q7. APresent value of leasing costs PV = Annuity factor at 11% for 10 years Ãâ€" $10,000 = 5.889 Ãâ€" $10,000 = $58,890 If the machine was purchased now, it would cost $55,000. The purchase is therefore the least-cost financing option, hence choosing the purchase option. Q8. $ – 267,866$67,000 Ãâ€" 3.998 (annuity factor for 6 years) = $ – 267,866 Q9. BYear 0 1 2 3Lease rentals (95,000) (95,000) (95,000) Maintenance (10,000) (10,000) (10,000)Tax save 30% (LR) 28,500 28,500 28,500 (M) 3,000 3,000 3,000Net cash flow (66,500) (73,500) (73,500) (7000) Q10. CEquivalent annual cost is method of converting asset lives to be like with likeProfitability index is the method to overcome capital rationingAsset Replacement decision is correctProbability analysis is method under risk ; uncertainty Q11. BProject A = $4 à · 4.111 (AF 6 years) = $0.973mProject B = $5 à · 4.564 (AF 7 years) = $1.096mProject C = $6 à · 2.402 (AF 3 years) = $2.498m Q12. $4,647EAC = $10,437 à · 2.246 (AF 3 years) = $4,647 Q13. DYear 1 Year Cash flow ($) DF (4%) PV ($)0 (200,000) 1 (200,000)1 110,000 0.962 105,820NPV (94,180)EAC = 94,180 à · 0.962 = 97,900Year 2 Year Cash flow ($) DF (4%) PV ($)0 (200,000) 1 (200,000)1 – 0.962 -2 (25,000) + 90,000 0.925 60,125NPV (139,875)EAC = 139,875 à · 2.887 = 48,450 Q14. Assets replaced have same cash inflows every year ; it ignores environmental damageReplacement made every time is like with likeAssets replaced have same cash inflows every year (limitation)Assumed that Machines replaced have same operational efficiencies like the previous assetIt ignores environmental damage, It ignores non-financial aspects (limitation) Q15.Hard Capital Rationing is the limit on the amount of finance available imposed by the lending institutions TRUE Soft Capital Rationing is the limit on the amount of finance available imposed by the lending institutions FALSE Profitability index is a solution applicable to divisible projects only TRUE Trial ; Error method is the solution applicable to divisible projects onlyFALSESoft Capital Rationing is the limit on the amount of finance available imposed by the company itself.Trial ; Error method is the solution applicable to indivisible projects only Q16. D. Jeremy, James, RichardProject The outlay in year 0 ($) Present Value($) Net Present Value ($) Profitability IndexJeremy 115,000 121,900 12,190 0.1James 43,000 45,580 13,674 0.3Richard 75,000 79,500 47,700 0.6Jeremy = (12,190 à · 121,900) = 0.1James = (13,674 à · 45,580) = 0.3Richard = (47,700 à · 79,500) = 0.6 Q17. BIt is the ratio of the NPV of a project to its investment cost (Profitability index)It is the project that must be undertaken completely or not at all (Indivisible project)It is the project that must be undertaken completely or partially (Divisible project) It is the project restriction due to insufficient funds (Capital rationing) Q18. $38.4mProject Profitability Index Ranking Investment ($) NPV ($)W ( 7 à · 30) = 0.23 2 30 Ãâ€"0.23 7X ( 12 à · 70) = 0.17 4 20 Ãâ€" 0.17 3.4Y ( 12 à · 60) = 0.2 3 60 Ãâ€" 0.2 12Z ( 16 à · 40) = 0.4 1 40 Ãâ€" 0.4 16Total 150 38.4 Q19. DCombination:W + X Cost $100m NPV $19mW + Y + Z Cost $130m NPV $35mX + Y Cost $130m NPV $24mX + Z Cost $110m NPV $28mY + Z Cost $100m NPV $28m Q20. Monitor the investment made in the project 4Calculate profitability index of each project 1Allocate the funds 3Rank the project 2

Drones and Homeland Security Essay Example

Drones and Homeland Security Essay Example Drones and Homeland Security Essay Drones and Homeland Security Essay Essay Topic: Zone One Increased security threats caused by heightened global terror actively, for Instance. Sectarian groups or Mexican drug empires, has prompted the development of decisive technologies, which will respond directly to the increased sophistication of these radical groups. A reliable technology Is the unmanned Aerial Vehicle (VA) commonly known as a drone. The drone not only Investigates a terror environment UT also conducts aerial strikes. The commencing research will analyze in detail the positive impacts of the drone to homeland security. Following the increased number of casualties in World War II, proxy cold wars, and Gulf War, It became necessary to Improvise military gear. Which would limit the direct Involvement of soldiers In a direct combat environment. Originally, a radical technology the tank- proved decisive since soldiers could be taken to the heart of the war. However, as much as this technology proved applicable in reducing direct combat, human casualties was till on the rise. For this reason, the International Civil Aviation Organization (CIAO) invented an aircraft that would not require an on-board human pilot. The flight was to be controlled autonomously by an integrated onboard computer by use of remote control. The technology has been deployed in most combat zones especially the recently concluded Iraq war (2003-201 1 As well, the drone has gained Influence In homeland security. Recently, gangs operating In most cycles closets are proving vicious. Some gangs in cities have evolved from gang activity to small armies with 1 OFF nag is more vigilant than rivaling gangs or the local authorities. These gangs are reputed to have operated complex armor that is enough to take an entire city down. Therefore, penetrating a gang-controlled environment requires a lucid strategy one that is observant on the degree of human casualties. Helicopters or any other military gear has proven costly and riskier. For this reason, it is necessary that, most police departments use the I-JAVA for its stretching advantages. Recently, Homeland Security Secretary Jew Johnson argued that, drones should be the chief elements of anomaly security investigation (Diana, 2014). Ideally, Johnson focused on the wider role of drones in conducting investigations and leading airstrips as way to improve federal security perimeter against the enemy. There are two ideologies that Johnson wanted to communicate; these include, investigations and striking. Essentially, to conduct optimal investigations and strikes, the CUP agency does not rely on a single technology or inspection process of direct combat. However, the agency enrolls a number of technologies to ensure that strikes are Justified. Goodyear (2013, up. 0) argues that, drones are fitted with latest technologies, for instance, an onboard computer, G technologies, night vision cameras and weaponry systems. Based on the above explanation, drones have made police departments efficient and safer to operate. The CUP drone program has tightened its grip to ensure that border security is emphasized. The system supports security relief efforts for its DASH partner by streamlining Federal Emergency Management Agency (FEM.) operations. AM further expects to employ Predator B drones to all border regions with the command ND control from a network of underground stations. Predator B is capable of providing high quality streaming video to first responders, and this is assessed through the proper usage of critical infrastructure. Secure Border Initiative (SIB) focuses on the role of operational requirements to support and document the acquisition efforts to develop, integrate technology and deploy tactical infrastructure to support CUP efforts to gain and maintain effective control of U. S land border areas (Goodyear, 2013, up. 61). The SIB is directly responsible in emphasizing surveillance and detection of tools such as unattended ground sensors, camera and radar by issuing comprehensive awareness of border situations. In fact, SIB gives agents the information they need to make deployment and interdiction decision on the area of responsibility. Consequently, the SIB ensures that communication infrastructure needed to transport sensor information from operational field elements on quarters is fit and updated to ensure that breakdowns do not exists (Goodyear, 2013). The nomad control and intelligence tools assists the CUP operators to manage a large volume of information through a common operating picture (COP), which facilitate the tactical decision making and coordination of law enforcement responses. Ideally, one will notice the integral application of communication and database management. Thus, when it comes to border security (Mexican drug empires or Sectarian terrorist activities), I-JAVA system have continuously offered lucrative technologies to ensure that the federal and state security agents are well supplied with information. Furthermore, a JAVA provides more vigilance as compared to human surveillance. For this reason, federal and state budgets in relation to security are optimally mitigated. Although the initial cost of placing a LAG system happens to be an uphill task, the most importantly, aerial drones have had a subsequent impact in minimizing of the number of homeland security operators casualties. A recent report established that the number of police casualties in El Paso have declined because of the reduced number of direct involvement with Mexican drug gangs. The I-JAVA supplies information and optimally provide direct combat mechanism at remote distances. This has made home guard security Jobs a lucrative involvement that has limited human casualty. The combination of reputable technologies enables a LAG to stay in the air for up to 30 hours, with an innate ability to perform repetitive raster scan of the region during the day, at night or in a fog without being noticed. This reduces the total human effort required to perform such activities. Additionally, the I-JAVA can perform visual, perform thermal imaging and can measure cell phone, T. V or radio coverage (Goodbye, 2013, up. 60). For this reason, a I-JAVA has had a subsequent impact on homeland since unlike before; homeland security guards and police are in a position to penetrate enemy perimeters coherently.

Analysis of Batter My Heart Essays

Analysis of Batter My Heart Essays Analysis of Batter My Heart Paper Analysis of Batter My Heart Paper In the poem â€Å"Batter my heart, three-personed God†, John Donne portrays a troubled speaker who is experiencing a spiritual disturbance in accepting his current faith and who is therefore expressing his desire to renew his faith in God and his religion. Throughout this religious sonnet, Donne employs the use of metaphors which provide clues as to what the speaker is feeling during the poem and paradoxes to exemplify the speaker’s request. Based on the first statement of the poem alone, it is clear that the lines to follow will involve some sort of religious conflict, as shown by the command said by the speaker, â€Å"Batter my heart, three-personed God†. In relation to the rest of the poem, one can conclude that the â€Å"three-personed God† to which the speaker is referring is a metaphor for the Holy Trinity of the Christian religion; the use of the word â€Å"batter† serves as a forerunner to the later violent requests of the speaker. The simile used in line 5 of the poem which compares the speaker to a usurped town shows that the speaker is in an undesired and vulnerable position, just as a city would be just after being appropriated by a foreign enemy. In this metaphorical sense, the speaker is asking God to defend him and reclaim him from this unknown enemy. This idea can be later confirmed in lines 7 and 8 where the speaker directly speaks of God’s attempt to â€Å"recapture† his soul. Although this acknowledgement of a divine intervention is evident to the speaker, he nonetheless states that â€Å"Reason, [God’s] viceroy in me†¦/ proves weak or untrue,† and that this instrument of God has itself been â€Å"captived†. As a result of this lack of faith, the speaker states that his efforts to accept God have been futile when faced with this â€Å"enemy†. The usage of metaphors and similes within the poem have the overall effect of helping to set up the condition of the speaker in order to provide reason for his request.

Design Thinking Research Paper Example | Topics and Well Written Essays - 2000 words

Design Thinking - Research Paper Example Typically, design thinking happens to be a great method for practical and creative resolutions to problems as well as for creating solutions. This mostly happens in an effort to improve the future with regard to the particular product or service (Rowe, 1987). It is an aspect of a kind of thinking focusing specifically on a solution to a particular problem. In this regard, a design thinker is found to be considering the prevailing and future conditions as well as the parameters of the particular problem. In such a case, alternative solutions are usually explored simultaneously (Rowe, 1987). This form of thinking mostly occurs within the built or the artificial environment, usually as artifact (Cross, 1982). Design thinking is based on various thinking theories such as dualism, relativism, subjective knowledge, procedural, knowledge, observation and reflection, and concrete experience among other. The dual process theory for instance gives an account of the possibility of an action occurring in two distinct ways. The critical thinker can make use of this theory to perceive the course of an action as leading to two possible and different outcomes. These outcomes may include an adverse result and good results concurrently or two good outcomes could result. An instance is a case the designing and production of a product would contribute to the desired solution, but at the same time lead to adverse issues like environmental pollution. A combination of more than one thinking theories, usually occurs during design thinking (Paivio, 2001). A standard design thinking process (Fig.1)is often incorporated to ensure success The steps illustrated in figure 1 may however differ significantly as explained further in the paper. The illustration only shows the basic steps that should be incorporated in the course of design thinking process. The application of Design

Chocolate Cake and Diet Essay Example | Topics and Well Written Essays - 1000 words

Chocolate Cake and Diet - Essay Example On the first half I gave up, I could not stop myself I just wanted more so I took a deep breath and the bitter and sweet smell filled my senses with happiness. The deep shades of brown covering the entire area around my mouth was quiet funny I could not believe myself that I could be that vulnerable regarding my obsession with chocolates and chocolate cakes. The most hateful aspect about being on a strict diet and one that was very painful was, not allowed to have chocolates. Especially on birthdays, over the years what made my birthdays so special were not the parties, balloons or the people but the dessert! On my every birthday I would have my favorite chocolate flourless, double layered with the thickest layer of chocolate fudge frosting. But all the wonderful sweet birthdays I had and despite all the fun I had in those birthdays, this day was simply the best. I took all my pent up frustration from having to eat veggies or organic foods over this luscious piece of cake. Although a slice of this cake meant hours and hours of workout and a day full of soups and only fruits but it was worth the sacrifice.It was the best slice of cake I had in my life, which changed the entire picture in my mind; I did not know that something could taste that heavenly. The ecstasy I felt when I took my first bite ended on remorse when I took the last so I finishes eating and dabbed my chocolate covered lips taking in the last remaining wisps and crumbs of the cake. It felt like one amazing experience.