Singapore's Macroeconomy Essay Example | Topics and Well Written Essays - 3000 words

Singapore's Macroeconomy - Essay Example Singapore as a country is devoid of natural resources. In its foreign policy, Singapore has incorporated polices to strengthen its relation with the members of Association of South East Asian Nations (ASEAN). Singapore also maintains a strong association with the United Nations Forum for East Asia-Latin America Cooperation (FEALAC) to improve trade relations with Latin America and East Asia. So, from the very beginning, it had focused on the development of capital intensive methodologies for further growth (Australian Government, n.d.). The Nominal GDP of Singapore in the year 2012 was recorded as 276.52 billion dollars (International Monetary Fund, n.d.). This has even surpassed the prediction by IMF, which had forecasted the GDP to be around 270 billion dollars. Analysis of the country’s business cycle The GDP of the country is tabulated in the following table. Table 1: Real GDP of Singapore Year GDP current prices in US Dollars Growth Rate 2000 94.31 9.04 2001 87.70 -1.154 2002 90.64 4.202 2003 95.96 4.58 2004 112.70 9.159 2005 125.43 7.37 2006 145.75 8.764 2007 177.58 8.857 2008 189.96 1.701 2009 185.64 -0.98 2010 227.38 14.76 2011 259.85 4.889 Source: (Econ Stats, n.d.) The above table shows the GDP of Singapore at current prices in US Dollars. This paper has considered the GDP growth over the last ten years. The formula that has been used for the calculation of growth is: Rate of Growth of GDP in current year = (GDP value in current year – GDP value in base year)/ GDP value in year base year It can be clearly seen from the table that Singapore’s GDP has been following an upward trend throughout, except a little slump in 2009. The slump can be explained because of the adverse external environment in the World economy. Since then, the economy of Singapore has made a steady progress as can be seen from the rising trend in the GDP. Figure 1: Graphical presentation of GDP Source: (Authors creation) The graph above gives a visual representa tion of the GDP values. It can be seen from the figure that the economy of Singapore had faced a slump in the GDP growth in 2001. This is primarily because of the fact that the country went into recession in the middle of 2001. The chief reason behind this was the slower growth of the US economy, particularly in the electronic sector, which had slowed down the exports from Singapore to not only the US, but also the rest the European countries (Arnold, 2001). Since then, the economy of Singapore had shown a consistent performance. The main reason behind this exceptional growth was not the increase in total factor productivity, which had mainly driven the growth for other Asian countries. The root of growth and a stellar performance for the Singapore economy was the high level of capital accumulation. The growth can be mainly attributed to the mobilization of resources. The development strategies adopted by the government were strategic and vibrant which had mainly propelled the econo my to its growth. In a research conducted by Professor Vu he, it was found that the contribution of the capital-input in the growth process has been around 47%, while labor contributed to around 36% of

Literature Review: Looked After Children

Literature Review: Looked After Children Looked after children is the legislative term for children and young people in public care introduced in the 1989 Children Act and includes children who are subject to supervision and live with family members as well as looked after and accommodated children who live with foster carers or in residential schools or care homes. (Scottish Executive 2007) The Children (Scotland) Act 1995 adopted the term looked after, taking a lead from the earlier Children Act 1989 in England and Wales, because the expression in care had become pejorative and stigmatising. (Connelly, Seibelt and Furnivall 2008) These children have a right to expect to achieve the same educational outcomes the Government want for every child -to develop the knowledge, skills and attributes they will need if they are to succeed in life, learning and work, now and in the future. (Scottish Executive 2004 to date) (Department For Children, Schools And Families 2010) To allow LAC to achieve these outcomes successfully, local authorities as corporate parents (meaning the formal and local partnerships needed between all local authority departments and services, and associated agencies, who are responsible for working together to meet the needs of looked after children and young people) should demonstrate the strongest commitment to helping every child to achieve the highest educational standards he or she possibly can. (Scottish Executive 2007) Looked after children and young people face many barriers to their success in education. We take these children into care to improve their life chances, though some do well, despite the difficulties faced in other aspects of their lives, the educational achievement of looked after children as a group remains unacceptably low. (Department For Children, Schools And Families 2010) (Scottish Executive 2007)(Connelly and Chakrabarti 2008) (Department For Children, Schools And Families 2009)(Coulling 2000) Table 1 shows both information about the expected levels for most children at different school stages and also a comparison between the assessed levels for looked after children and non-looked after children nationally in 2003. This information has only been made available publicly once and is no longer collected as a result of the developments associated with Curriculum for Excellence. The table shows clearly the overall low achievement of looked after pupils compared with their non-looked after peers. Table 1: National Assessment Data 2003 (Scottish Government 2004) School stage Level attained English Reading English Reading English Writing English Writing Maths Maths Not LAC LAC Not LAC LAC Not LAC LAC P2 A or above 52% 29% 42% 20% 76% 57% P3 A or above 88% 74% 85% 69% 95% 89% P4 B or above 81% 56% 75% 50% 79% 52% P5 B or above 92% 73% 88% 64% 92% 73% P6 C or above 86% 59% 75% 40% 80% 46% P7 D or above 73% 34% 60% 20% 69% 24% However, as stated by the Scottish Government, this information is not complete. It only contains information from two thirds of local authority areas. Lack of complete data on Looked after Children is an issue spoken about frequently in articles and reports. (Jacklin, Robinson, and Torrance 2006) However, it is believed that the overall trends, which show a widening of the attainment gap between children who are and are not looked after, with each school stage, are accurate. The Social Exclusion Units report A Better Education for Children in Care (2003) identified five key reasons why looked after children underachieve in education: their lives are characterised by instability; they spend too much time out of school; they do not have sufficient help with their education if they fall behind; primary carers are not expected or equipped to provide sufficient support and encouragement for learning and development; and they have unmet emotional, mental and physical health needs that impact on their education These reasons are mirrored in other reports (Scottish Executive date unknown)(Scottish Government 2008)(Connelly, Seibelt and Furnivall 2008) but these also suggest that some LAC face so many difficulties in their lives that schooling seems to be of low priority to them and to the agencies providing support. They suggest that schooling is also often given insufficient priority when making and reviewing care plans. Despite the common perception in society that children in care are simply uninterested in learning, the vast majority (97 per cent) consider education important, with nearly two-thirds (61 per cent) giving future employment as the reason8. Many enjoy school, with around a third (35 per cent) identifying specific subjects or learning as their favourite aspect. (Social Exclusion Unit 2003) The stigma of being looked after can cause isolation, low self-esteem, difficulty in making friends, and bullying. Frequent moves of placement and school disrupt education. Difficult life events can affect concentration and the ability to make relationships. School can, potentially, be a very good and consistent experience for a looked after child or young person. (Scottish Executive date unknown) The children and young people themselves invariably say that education and educational attainment are important to them. They understand that how well they do at school with have an impact in their achievements in adulthood. (Scottish Government 2008) However, not all children in care have good experiences of school. They are 10 times more likely than others to be permanently excluded from school. Over a third say they have been excluded at some point. Six out of 10 say they have been bullied at school compared to roughly one in six of all children. One in eight missed five or more weeks schooling in 2001-2. (Social Exclusion Unit 2003) We believe the current levels of educational attainment can be transformed if the system is changed so that the joint efforts of all those who care about the learning of these children can have their maximum effect. (Department For Children, Schools And Families 2009) Executive, S., 2007. Looked after Children Young People : We can and must do Better. (Scottish Executive 2004 to date) Department For Children, S.A.F., 2010. Promoting the Educational Achievement of Looked After Children Statutory Guidance for Local Authorities, Connelly, G. Chakrabarti, M., 2008. Improving the educational experience of children and young people in public care: a Scottish perspective. International Journal of Inclusive Education, 12(4), pp.347-361 Department For Children, S.A.F., 2009. Improving the Educational Attainment of Children in care ( Looked after Children ) Attainment of Children in Care ( Looked after Children ), Social Exclusion Unit, 2003. Social Exclusion Unit Report A better education for children in care., Scottish Executive (date unknown) About looked after children. http://www.lookedafterchildrenscotland.org.uk/about/index.asp [accessed on 7th October 2010] Scottish Government, 2008. Count Us In. Improving the Education of our Looked after Children., Scottish Government (2004) Childrens Social Work Statistics 2003-04. Available online at: http://www.scotland.gov.uk/Publications/2004/10/20121/45478 [accessed 11th January 2011] Connelly, G., Seibelt, L. Furnivall, J., 2008. Glasgow Project Report Supporting Looked After Children and Young People at School : A Scottish Case Study. Assessment. Jacklin, A., Robinson, C. Torrance, H., 2006. When lack of data is data: do we really know who our lookedà ¢Ã¢â€š ¬Ã‚ after children are? European Journal of Special Needs Education, 21(1), pp.1-20. Coulling, N., 2000. Definitions of Successful Education for the Looked After Child: a Multi-agency Perspective. Support for Learning, 15(1), pp.30-35. Therapies for Cancer Treatment: An Analysis Therapies for Cancer Treatment: An Analysis Immunotherapy Better understanding of the biology of cancer cells has led to the development of biologic agents that mimic some of the natural signals that the body uses to control cell growth. Clinical trials have shown that this cancer treatment, called  biological response modifier (BRM) therapy,  biologic therapy,  biotherapy, or  immunotherapy, is effective for several cancers. Some of these biologic agents, which occur naturally in the body, can now be made in the lab. Examples are interferons, interleukins, and other cytokines. These agents imitate or influence the natural immune response of the body. By altering the cancer cell growth or by acting indirectly to help healthy cells control the cancer. One of the most exciting applications of biologic therapy has come from identifying certain tumor targets, called antigens, and aiming an antibody at these targets. This method was first used to find tumors and diagnose cancer and more recently has been used to treat cancer cells. Scientists produce monoclonal antibodies that are specifically targeted to chemical components of cancer cells. Refinements to these methods, using recombinant DNA technology, have improved the effectiveness and decreased the side effects of these treatments. The first therapeutic monoclonal antibodies, rituximab (Rituxan) and trastuzumab (Herceptin) were approved during the late 1990s to treat lymphoma and breast cancer, respectively. Monoclonal antibodies are now routinely used to treat certain cancers. Scientists are also studying vaccines that boost the body’s immune response to cancer cells. For instance, a 2009 lymphoma study looked at personalized vaccines made from tissue from each patient’s tumor. Encouraging results showed that patients who received the vaccine lived longer disease-free than those who did not. In 2010, the FDA approved Sipuleucel-T (Provenge), a cancer vaccine for metastatic hormone-refractory prostate cancer (prostate cancer that has spread and is no longer responding to hormone treatment). Unlike a preventive vaccine, which is given to prevent disease, Provenge boosts the body’s immune system’s ability to attack cancer cells in the body. This treatment helps certain men with prostate cancer live longer, though it does not cure the disease. Targeted therapy Until the late 1990s nearly all drugs used in cancer treatment (with the exception of hormone treatments) worked by killing cells that were in the process of replicating their DNA and dividing to form 2 new cells. These chemotherapy drugs also killed some normal cells but had a greater effect on cancer cells. Targeted therapies work by influencing the processes that control growth, division, and spread of cancer cells, as well as the signals that cause cancer cells to die naturally (the way normal cells do when they are damaged or old). Targeted therapies work in several ways. Growth signal inhibitors: Growth factors are hormone-like substances that help to tell cells when to grow and divide. Their role in fatal growth and repair of injured tissue was first recognized in the 1960s. Later it was realized that abnormal forms of growth factors or abnormally high levels of growth factors contribute to the growth and spread of cancer cells. Researchers also started to understand how cells recognize and respond to these factors, and how that can lead to signals inside the cells that cause the abnormal features found in cancer cells. Changes in these signal pathways have also been identified as a cause of the abnormal behaviour of cancer cells. During the 1980s, scientists found that many of the growth factors and other substances responsible for recognizing and responding to growth factor are actually products of oncogenes. Among the earliest targeted therapies that block growth signals are trastuzumab (Herceptin), gefitinib (Iressa), imatinib (Gleevec), and cetuximab (Erbitux). Current research has shown great promise for treatments in some of the more deadly and hard-to-treat forms of cancer, such as non-small cell lung cancer, advanced kidney cancer, and glioblastoma. Second-generation targeted therapies, like dasatinib (Sprycel) and nilotinib (Tasigna), have already been found to produce faster and stronger responses in certain types of cancer and were better tolerated. Angiogenesis inhibitors Angiogenesis is the creation of new blood vessels. The term comes from 2 Greek words: angio, meaning â€Å"blood vessel,† and genesis, meaning â€Å"beginning.† Normally, this is a healthy process. New blood vessels, for instance, help the body heal wounds and repair damaged tissues. But in a person with cancer, this same process creates new, very small blood vessels that give a tumor its own blood supply and allow it to grow. Anti-angiogenesis agents are types of targeted therapy that use drugs or other substances to stop tumors from making the new blood vessels they need to keep growing. This concept was first proposed by Judah Folk man in the early 1970s, but it wasn’t until 2004 that the first angiogenesis inhibitor, bevacizumab (Avastin), was approved. Currently used to treat advanced colorectal, kidney, and lung cancers, bevacizumab is being studied as treatment for many other types of cancer, too. Many new drugs that block angiogenesis have become available since 2004. Apoptosis-inducing drugs Apoptosis is a natural process through which cells with DNA too damaged to repair – such as cancer cells – can be forced to die. Many anti-cancer treatments (including radiation and chemotherapy) cause cell changes that eventually lead to apoptosis. But targeted drugs in this group are different, because they are aimed specifically at the cell substances that control cell survival and death. Novel Approaches for Cancer Treatment Liposomes: Liposomes were first introduced by Bangham in 1965 and afterwards became the most popular and versatile tool in controlled and targeted drug delivery.Since liposomes were first described 45 years ago [19] they have gained interests for a variety of applications including drug delivery [20].Liposomes used for drug delivery are usually about 100 nm in size and are made up of a single bilayer. As liposomes comprise an aqueous core sealed off by a PL membrane both hydrophilic and lipophilic drugs can be accommodated in their respective compartments [18].Liposomes consist of spherical lipid bilayers that can be produced from phospholipids and cholesterol. Liposomes can encapsulate a variety of molecules, such as small drug molecules, proteins and many other bioactive(s). These vesicles are generally considered as biodegradable and imperceptibly immunogenic,and can also be used for a large number of biomedical applications. Recently, DOX and fluoxetine encapsulated liposomes hav e been reported to be effective formulation against drug-resistant MCF-7 cells. It was observed that liposomes significantly reduced tissue bio distribution of anticancer agents with improvedcytotoxicity. Liposomes are simple colloidal vesicles with an aqueous interior enclosed by a membrane usually composed of phospholipid (PL) molecules. PLs, the major components of biological membrane are amphiphilic compounds with a polar head group and lipophilic acyl chains. PLs can be classified according to type of polar head group, fatty acid chain length and degree of saturation.When bilayer forming PLs are dispersed in aqueous media they will spontaneously align themselves in a manner to reduce interactions between the polar media and the hydrophobic fatty acid chains. Consequently, bilayer structures, i.e. liposomes, may be formed. Liposomes may consist of one or more bilayers (lamellae) and of sizes ranging from tens of nanometres to tens of micrometres in diameter. For a review see [17 ]. Liposomes are broadly classified into small unilamellar vesicles (SUV); single bilayer, size 10 100 nm), large unilamellar vesicles (LUV); single bilayer, size 100 1000 nm), multilamellar vesicles (MLV), several bilayers, size 100 nm 20 um and multivesicular vesicles (MVV), size 100 nm – 20um). Today there are about 15 liposomal based formulationdrugs approved for clinical applications or undergoing clinical evaluation,Liposomes in cancer treatment Conventional cytostatic used in cancer treatment are small molecular weight molecules [4]. Such molecules distribute non-specifically to both healthy and tumour tissue resulting in therapy limiting toxicities. To increase the therapeutic-to-toxicity ratio cytostatic can be encapsulated into small liposomes (~100 nm), which accumulate in tumours due to the 14enhanced permeability and retention effect [21]. Here, leaky tumour vessels allow macromolecules to extravagate into tumour tissue, whilst reduced lymphatic tumour drainage results in particle accumulation. First generation liposomes used for drug delivery suffered from fast clearance by cells of the monocyte phagocyte system (MPS). By coating liposomes with polyethylene glycol (PEG), i.e. PEGylated liposomes, adhesion of plasma proteins and opsonin to liposomes are decreased. Consequently, immune system recognition is reduced, decreasing MPS uptake and prolongs circulation time [22]. Today, most liposomes used for drug delivery are PEGylated. Cancer is a class of diseases. Which is characterized by out-of-control cell growth.There are over 100 different types of cancer, and each is classified by the type of cell that is initially affected. Nanotechnology has been extensively exploited to improve conventional cancer therapy in the recent years [1–5]. The designed nanocarriers for achieving precise drug delivery to cancer cells are expected to be non-cytotoxic, efficiently load the drugs, enhance the circulation time in bloodstream, and actively target the cancer cells[6]. The nanocarriers currently under intensive investigation can be divided into two categories in generalise. The lipid-based and the polymer-based with liposomes and polymeric nanoparticle as their typical representative respectively. Liposomes, the spherical vesicles formed by single or multiple lipid bilayer, have been widely used due to their high biocompatibility, favourable pharmacokinetic profile, high delivery efficiency and ease of surface modification. In the recent years, several liposomal drug formulations have been approved for clinical use [7]. Limitations of liposomal drug delivery: include insufficient drug loading, fast drug release, and instability in storage [8]. Historically, lipids have been used for several decades in various drug delivery systems including liposomes solid lipid NPs, nano structured lipid carriers, andlipid–drug conjugates. Over the last decade, lipid based nano carriers are viewed as potential tool to encapsulate and deliver variety of pharmaceutical actives[44,45]. The solid lipid nanoparticles (SLNs) and nanostructured lipid carriers (NLCs) are the first and second generation of lipid nanoparticles, respectively. The SLNs are composed of solid lipid or a blend of solid lipids while NLCs contain a mixed lipid core (solid fat and oil)[45]. generally regarded as safe [GRAS] nature of lipid and the structural integrity of the polymer. Thus far, the polymers such as polylactic-co-glycolic acid (PLGA) [46,47], hydrolysed polymer of epoxidized soybean oil (HPESO) [48,49], dextran [50], polyethyleneimine (PEI) [51], LPNs, are prepared by at least three main components are i.e., the lipid, the polymer, and a drug. The fir st way to prepare the LPNPs is to mix the polymeric NPs with liposomes to form the lipid-shell and polymer-core nanoparticles such as lipoparticles where the lipid bilayer or lipid multilayer of the liposomes fuses on the surface of the polymeric NPs.[52–53] The second way to prepare the LPNPs has advantage over the first way in formulating the structured NPs in a single step and thus provides a simpler technology, which combines the nanoprecipiation method and the self-assembly technique to produce the desired structured NPs of lipid shell and polymer core [54,55]Folic acid is selected as the model molecular probe for targeted delivery of the drug to the cancer cells of folate overexpression such as certain breast cancer and ovarian cancer cells. Poly (lactide-co-glycolide) (PLGA), one of the most popular FDA approved non-cytotoxic and biodegradable polymers,is used to form the polymer core matrix, which is wrapped by the mixed lipid monolayer shell of three distinct functio nal components:(i) 1,2-dilauroylphosphatidylocholine (DLPC), a phospholipid of an appropriate hydrophilic-lipophilic balance (HLB) value which is employed to stabilize the NPs in the aqueous phase;(ii) 1,2-distearoyl-sn-glycero-3-phosphoethanolamine-N-[methoxy(polyethylene glycol)-2000] (DSPE-PEG2k), a PEGlyated DSPE to facilitate stealth NPs formulation to escape from recognition by the reticuloendothelial system (RES) and thus increase the systemic circulation time of the LPNPs[28,29],and(iii)1,2-distearoyl-snglycero-3-phosphoethanolamineN[folate(polyethylene glycol)-5000] (DSPE-PEG5k-FOL), a PEGylated DSPE of longer PEG chains for the LPNPs to be functionalized by folic acid conjugation for targeted delivery purpose. Superparamagnetic iron oxide nanoparticles (SPIONS as delivery systems) Super paramagnetic iron oxide nanoparticles (SPION) have emerged as an MRI contrast agent for tumor imaging due to their efficacy and safety. Their utility has been proven in clinical applications with a series of marketed SPION-based contrast agents. Extensive research has been performed to study various strategies that could improve SPION by tailoring the surface chemistry and by applying additional therapeutic functionality. Research into the dual-modal contrast uses of SPION has developed because these applications can save time and effort by reducing the number of imaging sessions. In addition to multimodal strategies, efforts have been made to develop multifunctional nanoparticles that carry both diagnostic and therapeutic cargos specifically for cancer. Advances in nanotechnology have permitted new possibilities for theranostics, which are defined as the combination of therapy and imaging within a single platform [56, 57]. Nanotechnology is applied to molecular imaging in the form of imaging probes capable of enhancing the sensitivity of the image and the specificity toward the target tissue. Usually, the imaging probeconsists of nanoparticles conjugated with active targeting ligands [58, 59]. Superparamagnetic iron oxide nanoparticles (SPION) have a superparamagnetic iron core, which makes them useful as T2 contrast agents for MRI. SPION can be detected withhigh sensitivity, and both the iron and polymer components of SPION are biocompatible and degradable [60].The size of iron oxide nanoparticles plays a major rolein target cell uptake and elimination from the body. Spleen and liver capture nanoparticles of more than 200 nm in diameter whereas particles having sizes below 10 nm are selectively filtered by renal systems and eliminated from body [61].The majority of nanoparticles in development include drug conjugates and complexes, micelles, dendrimers, vesicles, core–shell particles, microbubbles, and carbon nanotubes [62]. Dendrimer-based Nanoparticles for Cancer Treatment Nanotechnology has led to a remarkable convergence of disparate fields including biology, applied physics, optics, computational analysis, and modeling, as well as materials science. Because of this, the application of nano scale analytical, computational, and synthetic approaches to understanding and manipulating complex biological systems offers incredible potential for advances in the diagnosis and treatment of cancer. Recent work has suggested that nanoparticles in the form of dendrimers may be a keystone in the future of therapeutics. The field of oncology could soon be revolutionized by novel strategies for diagnosis and therapy employing dendrimer-based nano therapeutics. Several aspects of cancer therapy would be involved. Diagnosis using imaging techniques such as MRI will be improved by the incorporation of dendrimers as advanced contrast agents. This might involve novel contrast agents targeted specifically to cancer cells. Dendrimers can also be being applied to a variety of cancer therapies to improve their safety and efficacy. A strategy, somewhat akin to the â€Å"Trojan horse,† involves targeting anti-metabolite drugs via vitamins or hormones that tumors need for growth. Further applications of dendrimers in photodynamic therapy, boron neutron capture therapy, and gene therapy for cancer are being examined.Most cancer therapeutics are small drug molecules that after being ingested or injected into the bloodstream can easily diffuse through vascular pores and the extracellular matrix to reach tumors. Complex therapeutics that involve drug delivery mechanisms or imaging moieties have tended to be much larger. While the exact size of molecules thatcan easily transverse vascular pores from the bloodstream and reach tumor tissue is unclear, it is probably limited to the size of proteins (

Individiual Understanding :: essays research papers

Individual Understanding I agree with functionalists, specifically the strong Artificial Intelligence (AI) camp, concerning the concept of understanding. While John Searle poses a strong non-functionalist case in his AChinese Room@ argument, I find that his definition of Ato understand@ falls short and hampers his point. I criticize his defense that understanding rests on a standardized knowledge of meaning, but not before outlining the general background of the issue. Functionalists define thought and mental states in terms of input and output. They claim that what we see, hear, smell, taste, and touch (input) creates a mental state or belief, and that particular mental state in turn creates our reaction (output). If I see it=s raining outside, I believe that if I go outside I will get wet, and therefore I take an umbrella with me. The functionalists define a mental state strictly through its cause and effect relationships, through its function. This thinking leads to the conclusion that the human brain is little more than a big, complex computer. All we humans do is take input, process it, and accordingly create output, just like a computer. In fact, functionalists who support strong AI go so far as to say that an appropriately programmed computer actually has all the same mental states and capabilities as a human. In AMinds, Brains, and Programs,@ John Searle outlines this argument: AIt is a characteristic of human beings= story understanding capacity that they can answer questions about [a] story even though the information they give was never explicitly stated in the story. . . . [Strong AI claims that m]achines can similarly answer questions about [stories] in this fashion. . . . Partisans of strong AI claim that in this question and answer sequence the machine is not only simulating a human ability but also (1) that the machine can literally be said to understand the story . . . and (2) that what the machine and its program do explains the human ability to understand the story and answer questions about it@ (354). While strong AI claims that a machine can understand just as a human understands, Searle himself disagrees. He claims that a strictly input-output system, such as a computer is, cannot understand anything, nor does it explain humans= ability to understand. In criticizing strong AI, Searle creates his famous AChinese Room@ argument: suppose that Searle was locked in a room with a large batch of Chinese writing.

Pnl Explain

P&L Explain – Bonds and Swaps Tony Morris antony. [email  protected] com MICS – DKS Manila Contents 1. Bond Pricing – basic concepts 2. P&L sensitivities of a bond i. PV01 ii. CS01 iii. Theta iv. Carry 3. Extension to interest rate swaps 1. Bond Pricing – basic concepts Let’s say you have a 4 year 10% annual coupon bond, with a yield (‘yield to maturity’ or ‘yield to redemption’) of 12%. From this information, the price can be calculated as 93. 93%. The price is calculated by pricing each of the bond’s cash flows using the yield to maturity (YTM) as a discount rate.Why? Because the YTM is defined as the rate which, if used to discount the bond’s cash flows, gives its price. We could picture it like this: Bond Cash Flows on a Time Scale Each fixed coupon of 10% is discounted back to today by the yield to maturity of 12%: 93. 93% = 10 + 10 + 10 + 110 (1. 12)1 (1. 12)2 (1. 12)3 (1. 12)4 All we are doing is obse rving the yield in the market and solving for the price. Alternatively, we could work out the yield if we have the price from the market.Bond price calculators work by iteratively solving for the yield to maturity. For a bond trading at par, the yield to maturity and coupon will be the same, e. g. a four year bond with a fixed coupon of 10% and a yield of 10% would be trading at 100%. Note that bond prices go down as yields go up and bond prices go up as yields go down. This inverse relationship between bond prices and yields is fairly intuitive. For our par bond above, if four year market yields fall to 9% investors will be willing to pay more than par to buy the above market coupons of 10%. This will force its price up until it, too, yields 9%.If yields rise to, say, 11% investors will only be willing to pay less than par for the bond because its coupon is below the market. For a detailed example of the bond pricing process, see Appendix 3. For now, note that the dirty price of a bond is the sum of the present values of the cash flows in the bond. The price quoted in the market, the so-called â€Å"clean† price or market price, is in fact not the present value of anything. It is only an accountants’ convention. The market price, or clean price, is the present value less accrued interest according to the market convention. . P&L sensitivities of a bond As we saw above, the price of a bond can be determined if we know its cash flows and the discount rate (i. e. YTM) at which to present value them. The yield curve from which are derived the discount factors for a bond can itself be considered as the sum of two curves: 1. the â€Å"underlying† yield curve (normally Libor), and 2. the â€Å"credit† curve i. e. the spread over the underlying curve The sensitivity of the bond price to a change in these two curves is called: i. PV01, and ii. CS01 respectively. Related essay: â€Å"Support Positive Risk Taking For Individuals†In terms of the example above, the discount rate of 12% might be broken down into, say, a Libor rate of 7% together with a credit spread of 5%. (Note, in the following, it is important not to confuse the discount rate, which is an annualised yield, and the discount factor, which is the result of compounding the discount rate over the maturity in question. ) In addition to the sensitivities described above, we can also consider the impact on the price of the bond of a one day reduction in maturity. Such a reduction affects the price for two reasons: ) assuming the yield curve isn’t flat, the discount rates will alter because, in general, the discount rate for time â€Å"t† is not the same as that for time â€Å"t-1† b) since one day has elapsed, whatever the discount rate, we will compound it based on a time interval that is shorter by one day The names given to these two sensitivities are, r espectively: iii. Theta, and iv. Carry Note that, of these four sensitivities, only the first two, i. e. PV01 and CS01, are â€Å"market sensitivities† in the sense that they correspond to sensitivities to changes in market parameters.Theta and Carry are independent of any change in the market and reflect different aspects of the sensitivity to the passage of time. i)PV01 Definition The PV01 of a bond is defined as the present value impact of a 1 basis point (0. 01%) increase (or â€Å"bump†) in the yield curve. In the derivation below, we will refer to a generic â€Å"discount curve†. As noted earlier, this discount curve, from which are derived the discount factors for the bond pricing calculation, can itself be considered as the sum of two curves: the â€Å"underlying† yield curve (normally Libor), and a credit curve (reflecting the risk over and above the interbank risk ncorporated in the Libor curve). The PV01 calculates the impact on the price of bu mping the underlying yield curve. Calculation For simplicity, consider the case of a zero coupon bond i. e. where there is only one cash flow, equal to the face value, and occurring at maturity in n years. Note, though, that the principles of the following analysis will equally apply to a coupon paying bond. We start by defining: P = price or present value today R(t) = discount rate, today, for maturity t FV = face value of the bond Then, from the above, we know:P = FV/(1+r(t))^n Now consider the impact a 1bp bump to this curve. The discount rate becomes: R(t) = R(t) + 0. 0001 The new price of the bond, Pb(t), will be: Pb = FV/(1+[r(t)+. 0001])^n Therefore, the sensitivity of this bond to a 1bp increase to the discount curve will be: Pb – P = FV/(1+[r(t)+. 0001])^n – FV/(1+r(t))^n Eqn. 1 The first term is always smaller than the second term, therefore: * if we hold the bond (long posn), the PV01 is negative * if we have short sold the bond (short posn), the PV01 is pos itive We can also see that: the higher the yield (discount rate), the smaller the PV01. This is because a move in the discount rate from, for example, 8. 00% to 8. 01% represents a smaller relative change than from 3. 00% to 3. 01%. In other words, the higher the yield, the less sensitive is the bond price to an absolute change in the yield * the longer the maturity, the bigger the PV01. This is more obvious – the longer the maturity, the bigger the compounding factor that is applied to the changed discount rate, therefore the bigger the impact it will have.To extend this method to a coupon paying bond, we simply note that any bond can be considered as a series of individual cash flows. The PV01 of each cash flow is calculated as above, by bumping the underlying yield curve at the corresponding maturity. In practice, where a portfolio contains many bonds, it would not be practical, nor provide useful information, to have a PV01 for every single cash flow. Therefore the cash f lows across all the positions are bucketed into different maturities. The PV01 is calculated on a bucketed basis i. e. by calculating the impact of a 1bp bump to the yield curve on each bucket individually.This is an approximation but enables the trader to manage his risk position by having a feel for his overall exposure at each of a series of maturities. Typical bucketing might be: o/n, 1wk, 1m, 2m, 3m, 6m, 9m, 1y, 2y, 3y, 5y, 10y, 15y, 20y, 30y. Worked example: Assume we hold $10m notional of a zero-coupon bond maturing in 7 years and the yield to maturity is 8%. Note that, for a zero coupon bond, the YTM is, by definition, the same as the discount rate to be applied to the (bullet) payment at maturity. We have: Price, P = $10m / (1. 08)^7 = $5. 834mBumping the curve by 1bp, the â€Å"bumped price† becomes: Pb = $10m / (1. 0801)^7 = $5. 831m Therefore, the PV01 is: Pb – P = $5. 831m – $5. 835m = -$0. 004m (or -$4k) Meaning In the example above, we have calcul ated the PV01 of the bond to be -$4k. This means that, if the underlying yield curve were to increase from its current level of 8% to 8. 01%, the position would reduce in value by $4k. If we assume the rate of change in value of the bond with respect to the yield is constant, then we can calculate the impact of, for example, a 5bp bump to the yield curve to be 5 x -$4k = -$20k.Note, this is only an approximation; if we were to graph the bond price against its yield, we wouldn’t see a straight line but a curve. This non-linear effect is called convexity. In practice, while for small changes in the yield the approximation is valid, for bigger changes, convexity cannot be ignored. For example, if the yield were to increase to 9%, the impact on the price would be -$365k, not -(8%-9%)x$4k = -$400k. Use The concept of PV01 is of vital day to day importance to the trader. In practice, he manages his trading portfolio by monitoring the bucketed yield curve exposure as expressed by PV 01.Where he feels the PV01 is too large, he will perform a transaction designed to either flatten or reduce the risk. Similarly, when he has a view as to future yield curve movements, he will position his PV01 exposure to take advantage of them. In this case, he is taking a trading position. ii)CS01 The basis of the CS01 calculation is identical to that of the PV01, only this time we bump the credit spread rather than the underlying yield curve. The above example was based on a generic discount rate. In practice, for any bond other than a risk free one, this rate will be combination of the yield curve together with the credit curve.At first glance therefore, we would expect that, whether we bump the yield curve or the credit spread by 1bp, the impact on the price should be similar, and described by Eqn. 1 above. What we can also say is that, bumping the yield curve, the overall discount rate will increase and therefore, as for PV01: * if we hold the bond (long posn), the CS01 is neg ative * if we have short sold the bond (short posn), the CS01 is positive From the same considerations as for PV01, we can see that: * the higher the credit spread, the smaller the CS01 * the longer the maturity, the bigger the CS01In practice, when we look at multiple cash flows, the impact of a 1bp bump in the yield curve is not identical to a 1bp bump in the credit spread. This is because, inter alia: * the curves are not the same shape and therefore interpolations will differ * bumping the credit spread affects default probability assumptions that will, in turn, impact the bond price In general though, PV01 and CS01 for a fixed coupon bond will be similar. The exception is where the bond pays a floating rate coupon. In this case, the sensitivity to yield curve changes is close to zero so, although the PV01 will be very small, the CS01 will be â€Å"normal†.Worked example: A worked example would follow the same steps as for PV01 above, only this time we would bump the cred it spread by 1bp rather than the underlying yield curve. Theta and Carry We now look at the two sensitivities arising from the passage of time (â€Å"1 day decay†, to use option pricing terminology). First, let’s calculate what the total impact on the value of a position would be if the only change were that one day had passed. In particular, we assume that the yield and credit curves are unchanged. Again, for simplicity, consider the case of a zero coupon bond i. . where there is only one cash flow, equal to the face value, and occurring at maturity in n years. Again, we note that the principles of the following analysis will equally apply to a coupon paying bond. Following the previous notation, the value (or price) today will be: P(today) = FV/(1+r(t))^n The value tomorrow will be: P(tomorrow) = FV/(1+r(t-1))^(n-1/365)Eqn. 2 There are two differences between the formula for the value today and that for tomorrow. Firstly, the discount rate has moved from r(t) to r(t- 1). Here, r(t-1) is the discount rate for maturity (t-1) today.We have assumed that the discount curve does not move day on day, therefore the rate at which the cash flow will be discounted tomorrow is the rate corresponding to a one day shorter maturity, today. Secondly, the period over which we discount the cash flows has reduced by one day, from n to n-1/365 (we divide by 365 because n is specified in years). Theta and Carry capture these two factors. P(tomorrow) – P(today) gives the full impact on the price due to the passing of one day. This impact can be approximated by breaking down the above formula into its two component parts i. e. he change in discount rate and the change in maturity, as explained below. iii)Theta As before, we define: P = price or present value today r(t) = discount rate, today, for maturity t FV = face value of the bond In addition, we define: r(t-1) = discount rate, today, for maturity t-1 (e. g. for a bond with 240 days to maturity, if the 240 day discount rate today is 8. 00% and the 239 day discount rate today is 7. 96% then: r(t) = 8. 00% and r(t-1) = 7. 96%) We now define Theta as: FV/(1+r(t-1))^n – FV/(1+r(t))^n We can see that, compared to the formula for the full price impact above (Eqn. ), this sensitivity reflects the change in the discount rate but ignores the reduction by 1 day of the maturity. In other words, Theta represents the price impact due purely to the change in discount rate resulting from a 1 day shorter maturity but ignores the impact on the compounding factor of the discount rate resulting from the shorter maturity. Note that the sign of Theta, in contrast to PV01 and CS01, can be both positive and negative. This is because r(t-1) can be higher or lower than r(t), depending on the shape of the yield curve.That said, in practice, given that yield curves are normally upward sloping, we would expect r(t) to be higher than r(t-1). Therefore Theta will normally be positive. In the same way, if th e yield curve is flat, then Theta will be zero. iv)Carry Using the standard notation, we define Carry as: FV/(1+r(t))^(n-1) – FV/(1+r(t))^n Comparing to the formula for the full price impact above (Eqn. 2), we see that this sensitivity reflects the change in maturity on the compounding factor to be applied to the discount rate but ignores the impact on the discount rate itself of moving one day down the curve.In other words, Carry represents the price impact due purely to the change in discount factor resulting from a 1 day shorter compounding period but ignores the impact on the discount rate resulting from the shorter maturity. Where discount rates are positive (r(t) > 0), Carry will always be positive since the first term will be larger than the second. Using the Taylor expansion, we can obtain a simplified approximate value for Carry. Remembering that: 1/(1+x)^n = 1 – n. x + (1/2). n. (n-1). x^2 – †¦ we have: Carry = FV. 1-(n-1/365). r(t)) – FV. (1-n. r(t)) = FV. r(t). 1/365 Note that r(t). 1/365 would represent one day’s â€Å"interest† calculated on an accruals basis since, in the case, the yield equals the coupon rate. (Note, where a position is accounted for on an accruals basis, and therefore valued at par, the yield will always equal the coupon. ) In other words, this definition ties in to the intuitive idea of carry that we have from, say, a deposit where the carry would be equal to one day’s interest, based on its coupon.We can also see that Carry is directly proportional to the yield. We have now seen that, between them, Theta and Carry attempt to capture the two components affecting the price move arising from the passing of 1 day, all other factors being kept constant. There will be certain â€Å"cross† effects of the two that will not be captured when performing this decomposition. In other words, Theta + Carry will not exactly equal the full impact (as per Eqn. 2). The difference, ho wever, will not normally be material.In general, for a long bond position, both Theta and Carry will be positive as, with the passing of one day, not only will the annualised discount rate be less (reflecting the lower yield normally required for shorter dated instruments) but the compounding factor will be smaller (reflecting the shorter maturity). Worked example: Assume we hold $10m notional of a zero-coupon bond maturing in 240 days and the yield to maturity today is 8%. Also, the yield today for the 239 day maturity is 7. 96%. Theta = $10m/(1. 0796)^(240/365) – $10m/(1. 08)^(240/365) = $23,159 Carry = $10m/(1. 8)^(239/365) – $10m/(1. 08)^(240/365) $20,047 Theta + Carry = $43,205 To compare, the full price impact of a 1 day â€Å"decay† is: $10m/(1. 076)^(239/365) – $10m/(1. 08)^(240/365) = $43,113 Summary We have now analysed the key sensitivities that explain the 1 day move in a bond’s mark to market value. To summarise some of the main featur es; for a long bond position: PV01 / CS01: * negative * for a fixed coupon or zero coupon bond, PV01 and CS01 will be similar * the higher the yield/credit spread, the smaller the PV01/CS01 * the longer the maturity, the bigger the PV01/CS01 for a floating rate coupon (with a Libor benchmark), PV01 will be very small but the CS01 will be â€Å"normal† Theta * positive * the flatter the curve, the smaller the Theta Carry * positive * proportional to the yield 3. Extension to interest rate swaps In essence, all the above applies equally to interest rate swaps (IRSs) when calculating/explaining daily P&L. We start by noting that an IRS is simply the exchange of two cash flows, one fixed and one floating. Extending the analysis we made for bonds, we can say: a) The PV01 of the floating rate leg will be close to zero. This is as noted for a floating rate bond.In both cases, as the yield curve changes so do the expected future cash flows but, at the same time, so will the discount rates at which they are PV’d. The two effects will broadly cancel out. (The PV01 will not be exactly zero because, once the Libor fixing occurs, the next cash flow becomes fixed and therefore effectively becomes a zero coupon bond, on which there will be PV01. ) b) The fixed leg is similar to the fixed coupon stream on a bond and can be considered as a series of zero coupon bonds. Therefore the exact same analysis as applied to bonds above will apply to the fixed leg. An IRS that ays floating and receives fixed will have a PV01 sensitivity similar to that of a long bond position. c) IRSs are normally interbank trades where it is assumed that there is no credit risk over and above Libor. Therefore, the CS01 will be zero. d) Theta and Carry may be either positive or negative. Appendix 1 : Date Conventions There are several methods for computing the interest payable in a period and the accrued interest for a period. A particular method applied to a transaction can affect the yie ld of that transaction and also the payment for a transaction. Counting the Number of DaysThe conventions used to determine the interest payments depend on two factors: 1) The number of days in a period and 2) The number of days in a year. The conventions are: 0 Actual/360 1 Actual/365 : sometimes referred as Actual/365F (seldom used now) 2 Actual/Actual 3 30/360 European: sometimes referred to as ISMA method (30E/360) 4 30/360 US (30U/360) The first three methods (Actual/360, Actual/365 and Actual/Actual) calculate the number of days in a period by counting the actual number of days. For each method the number of days in a year is different. Actual/365 and Actual/Actual are similar except: 1.Periods which include February 29th (leap year) count the number of days in a year as 365 under Act/365 and 366 under Act/Act; 2. Semi-annual periods are assumed to have 182. 5 days under Act/365 and however many actual days under Act/Act. Eurobond markets use the 30E/360 basis. This calculatio n assumes every month has 30 days. This means that the 31st of a month is always counted as if it were the 30th of the month. For 30E/360 basis, February is also assumed to have 30 days. If the beginning or end of a period falls on a weekend the coupon is not adjusted to a good business day.This means that there are always exactly 360 days in a year for all coupons. For example a coupon from 08-November-1997 to 08-November-1998 of 5% is a coupon of 5%, even though 08-November-1998 is a Sunday. There is no adjustment to the actual coupon payment. The various European government bond markets are described below: Country| Accrual| Coupon Frequency| Austria| Act/Act| Annual| Belgium| Act/Act| Annual| Denmark| Act/Act| Annual| Finland| Act/Act| Annual| France| Act/Act| Annual| Germany| Act/Act| Annual| Ireland| Act/ActAct/Act (Earlier Issues)| AnnualSemi-Annual| Italy| Act/Act| Semi-Annual| Luxembourg| Act/Act| Annual|Netherlands| Act/Act| Annual| Norway| Act/Act| Annual or Semi-Annual| Portugal| Act/Act| Annual| Spain| Act/Act| Annual| Sweden| Act/Act| Annual| Switzerland| Act/Act| Annual| United Kingdom| Act/Act | Semi-Annual| Appendix 2 : Calculating Accrued Interest Even though Eurobond coupons are not adjusted for weekends and holidays, the accrual of a coupon for any part of the year has to use the correct number of days. The difference between European and US 30/360 method is how the end of the month is treated. For US basis the 31st of a month is treated as the 1st of the next month, unless the period is from 30th or 31st of the previous month.In this case the period is counted as number of months: | 30/360 European| 30/360 US| Beginning DateEnding Date| M1/D1/ Y1M2/D2/Y 2| M1/D1/Y1M2/D2/Y 2| If D1 = 31| D1 = 30| D1 = 30| If D2 = 31| D2 = 30| If D1 = 31 or 30Then: D2 = 30Else: D2 = 31| The difference occurs when the accrual period starts and ends at the end or beginning of a calendar month: European and US 30/360 Examples Start| End| European| US| Actual| 3 1-Jul-01| 31-Oct-01| 90| 90| 92| 30-Jul-01| 30-Oct-01| 90| 90| 92| 30-Jul-01| 01-Nov-01| 91| 91| 94| 29-Jul-01| 31-Oct-01| 91| 92| 94| 01-Aug-01| 31-Oct-01| 89| 90| 91|Euro money markets: 0 Day count basis: actual/360 1 Settlement basis: spot (two day) standard 2 Fixing period for derivatives contracts: two day rate fixing convention Euro FX markets 3 Settlement timing: spot convention, with interest accrual beginning on the second day after the deal has been struck 4 Quotation: ‘Certain for uncertain’ (ie 1 Euro = x foreign currency units) U. S. Conventions Product| Day Count Convention| USD LIBOR| Act/360| USD Swap Fixed Rate in U. S. | Act/Act s. a. | USD Swap Fixed Rate in London| Act/360 p. a. | T-Bills| Act/360 discount rate| Government Bonds| Act/Act s. a. |Agency and Corporate Bonds| 30/360 s. a. | Appendix 3 : Detailed worked example of bond price calculation We can check the pricing of bonds in a more complicated example by using the following German governmen t bond (or Bund) : German Government Bund (in Euros) Coupon:| 5. 00%| Maturity:| 04-Feb-06| Price (Clean):| 102. 2651%| Yield:| 4. 43%| We are pricing this bond on 27/July 2001. It matures on 4 Feb 2006 and has a coupon of 5%. The table below shows that the bond price (the ‘dirty price’ or invoice price) is simply the sum of the present value of all of the coupons discounted at the yield to maturity.Pricing the German Euro Denominated Bund Dates| AA Days| Periods| Cash Flow| Cashflow PV| 04-Feb-01| | | | | 27-Jul-01| | | | 104. 6350%| 04-Feb-02| 192| 0. 5260| 5. 00%| 4. 8873%| 04-Feb-03| 557| 1. 5260| 5. 00%| 4. 6800%| 04-Feb-04| 922| 2. 5260| 5. 00%| 4. 4814%| 04-Feb-05| 1288| 3. 5260| 5. 00%| 4. 2913%| 04-Feb-06| 1653| 4. 5260| 105. 00%| 86. 2950%| The market convention uses the yield to maturity as the discount rate, and discounts each cash flow back over the number of periods as calculated using the accrued interest day-count convention.In the case of Bunds, the day -count convention is the Act/Act convention. Appendix 1 contains more details of date conventions – it is recommended that you read this at the end of the module. The part of a year between the settlement date (27 July 2001) and the next coupon (4 February 2002) is: Day Count 192/365 (ie Actual days/Actual days) = 0. 5260 The price of the first coupon can therefore be calculated in the following way: PV of First Coupon = 4. 8873% All of the other cash flow present values are calculated in the same manner. Adding them up gives us the price of the bond.Accrued interest is calculated from 04 February 2001 to 27 July 2001 (173 days) : Accrued Interest Accrued = 5% x 0. 47397 = 2. 3699% There is more detail on Accrued interest in Appendix 2. It is recommended that you read it at the end of this module. Notice that the quoted price of the bond (the ‘clean price’) is 102. 2651% not 104. 6350% (which is the ‘dirty price’ or invoice price – ie the pric e actually paid for the bond). The dirty price is the sum of the present values of the cash flows in the bond. The price quoted in the market, the so-called â€Å"clean† price or market price, is in fact not the present value of anything.It is only an accountants’ convention. The market price, or clean price, is the present value less accrued interest according to the market convention. Practitioners find it easier to quote the clean price because it abstracts from the changing daily accrued interest (i. e. it avoids a â€Å"saw-toothed† price profile). This publication is for internal use only by Deutsche Bank Global Markets employees. The material (including formulae and spreadsheets) is provided for education purposes only and should under no circumstances be used for client pricing.Examples, case studies, exercises and solutions may use simplifying assumptions that do not apply in practice, and may differ from Deutsche Bank proprietary models actually used. The publication is provided to you solely for information purposes and is not intended as an offer or solicitation for the purchase or sale of any financial instrument or product. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed.

Character Sketch Story of an Hour

Kayla Silva Mrs. Barrish English IV 31 March 2010 Character Sketch Some people believe that marriage is bliss. However that is not the case. In â€Å"Story of an Hour,† Mrs. Mallard I treated wrongly by her husband Brently Mallard. She is very tired of being hurt she wishes her life would end. When finally getting her life back together she wanting to live it long but instead it ends short still. Mrs. Mallard is very heart troubled, happy, and then shocked. Mrs. Mallard has been very heart troubled through her marriage. She is so deeply in love with Brently but not once did he love back to her. All he ever does is hurt her. Her family sees that they are not one big happy couple. â€Å"She wept at once, with sudden, wild abandonment, in her sister’s are. † Mrs. Mallard now is happy when told by her sister that her husband has died. Though her family members believe that she is crying because she is hurt. Now Mrs. Mallard will be able to live her life the way she wants it. Instead of being shut down and treated wrongly. Its says â€Å"She looks out house die her house where its new spring life. † That means that it is no longer darkness for her. Mrs. Mallard is very heart troubled from being hurt from her husband to be she is happy cause he is now gone and then shocked again. When she found out that he was dead she goes to her room and sheds tears of happiness. After her sister finally gets here to come down stairs Brently walks in. Being so shocked to realizes hes not dead after all she dies of what the say is heart diease.