Friday, February 7, 2020
Mazda - Case Study Example We need to form some kind of emotional link to the product. In determining a brand, there is the need to differentiate from others or form a shorthand logo, position ourselves or have an integrated strategy, and create a personality and vision while adding value. In this paper, it will be discussed as to how Mazda has formed that link with us and how their marketing program has created a brand that tells us who they are and why we should buy their car. Mazda has a very unique shorthand Logo. According to Mazda Zoom Zoom is1 shorthand for the love of exhilarating movement that we all have. It is the imagination we have about a car moving quickly down the road. They use the emotions we had as children in seeing a fast car and wanting to be part of that. Zoom Zoom is a promise that we will feel special when we get in any car built by Mazda. It is definitely different than any other company and when you hear Zoom Zoom, you think only of Mazda which is what is meant to happen. Zoom Zoom just sounds like fun when you say it. When Mazda began to reposition itself, it needed to change its strategy. It now had to be positioned as a hip, cool, and fun to drive car. It is also positioned to be a great car for young females who are professionals, according to the case study. Now we have a car that is fun to drive by the young who identify them through their cars and we are using the logo Zoom Zoom which is something we all said as children when we thought of anything fun that moved us from one place to another. There is, of course, another group that is touched by this phrase or logo. Older adults, especially the baby boomer age have always been involved with cars. That group of people has retired and is retiring in a completely different way than any other group before them.2 Zoom Zoom means fun and Mazda has positioned itself to absorb those customers. They do not see themselves as old like the generations before them. Instead they see themselves as headed for another adventure and Zoom Zoom fits all the co rds. Mazda's position is certainly related to the fun already mentioned however; it plays to several types of personality. Let's take the Mazda RX 8 for example. It is a classic yet quick sportster that has a distinctive look and room in the back seat. So it is a commuter car that is fun to drive, kid-friendly, and a weekend toy. What more could you ask for It has a 247 horsepower motor that runs at 9,000 rpms. It accelerates quickly and stops fast. What more could you possibly ask for and who in their right mind would not buy this car The personality is one of fun and yet able to handle responsibility just like the personality of their trucks is one of power and towing capacity but at the same time rugged and comfortable. Mazda has quite a vision. 3 They promise to always build cars that are fun to drive and will provide high levels of environmental performance and safety performance. They believe that their Zoom Zoom brand is sustainable and they will plan to continue to use it over the long term. The envision that they will continue to work on technology and develop cars that create great driving performance as well as provide great interior environments and safety. They believe their cars will always be fun to drive and make you want to drive them again. They have as part of their vision that they w
Wednesday, January 29, 2020
Utilitarianism Today Essay Jurisprudence as we know it is an offshoot of philosophy and more precisely the philosophy that deals with questions of law. When one speaks of jurisprudence there are many theories, calculated analysis and profound philosophies which try, in each its own way, to guide the law as well as us in the end. Utilitarianism is one of them. The original concept of utilitarianism is simple which is, Ã¢â¬Ëthe greatest happiness of the greatest numberÃ¢â¬â¢, as utilitarianismÃ¢â¬â¢s best-known advocate, Jeremy Bentham, puts it. Stopping there however would not be doing justice to his theory. Bentham goes on to explain that, for every question whereby we judge whether an act is good or bad, the criterion to answer would be by its consequence. This consequence is taken in regard to the effect that particular act would have on human pleasure and pain, the two Ã¢â¬Ësovereign masters that govern mankindÃ¢â¬â¢. Bentham was a man of numbers and to him, good government needs numbers. The importance of numbers to him is indisputable and if anything his propositions were almost always quantitative in nature. Going back to the pleasure and pains idea, Bentham proposed an elaborate and rather thorough guide to analyzing them. For this, he devised a list of pleasures including pleasures of wealth, power, skill and memories among others as well as a list of pains such as pains of regret, disappointment, enmity and awkwardness to name a few. All in all, Bentham lists a total of fourteen pleasures and twelve pains. The value or degree by which a pleasure or a pain is to be measured posed a problem and so Bentham also devised a calculus in which he takes into account seven factors that is, intensity, duration, certainty, propinquity, fecundity, purity and extent. John Stuart Mill, another prominent utilitarian, rejected BenthamÃ¢â¬â¢s view that all pleasures were to count the same. He argued that differing people would have been brought up in varying manners and as such the appreciation of certain pleasures would greatly differ from one person to another. Also, BenthamÃ¢â¬â¢s own definition at the time was to apply the test of utility to private acts as well as public measures but was limited to Ã¢â¬ËactsÃ¢â¬â¢. It would only be years later that other philosophers would draw a distinction between what we now call Ã¢â¬Ëact-utilitarianismÃ¢â¬â¢ and Ã¢â¬Ërule-utilitarianismÃ¢â¬â¢. Put simply, act-utilitarianism concerns itself with acts that consequently have the highest net happiness whereas rule-utilitarianism applies where an act is permitted by a general rule whereby following that rule would have the best outcome. John Austin, the well known jurisprudence philosopher, strongly believed that the test of utility should apply to rules. Today, utilitarianism can be used in almost every aspect of our daily lives, whether it be our daily decision making, public policy by governing bodies or simple moral questions we would usually turn to religion for. As can be seen, the test of utility does not discriminate in where itÃ¢â¬â¢s applied, merely in how it is used that is, whether to apply it upon the rule or the act. It is no surprise then that the subsequent result of two different applications will lead to distinctively different conclusions. To exemplify how the utility test works and how different conclusions can be made one shall look at the famous Iran-Contra affair and in particular Oliver NorthÃ¢â¬â¢s assessment of the facts at hand and how he reaches his conclusion. In the 1980s, when asked why he had lied to congress regarding his role in the aforementioned affair, North said, Ã¢â¬Å"lying does not come easily to me. But we all had to weigh in the balance the difference between lies and livesÃ¢â¬ . Here, the Ã¢â¬ËgoodÃ¢â¬â¢ decision according to North would have been to lie about certain facts to save others from possible harm. In his mind this was probably the act that would have maximised pleasure and minimised pain by the greatest extent and therefore judged it to be the best course of action. Applying the test on a rule in this case might have led to a different outcome. If, for example, Ã¢â¬Ëalways tell the truthÃ¢â¬â¢ was the general rule by which the test concludes to be the best consequence, it may prove to lead North to a different decision in this case. This, however, depends on which rule one wishes to follow. Had the rule been Ã¢â¬Ëalways protect livesÃ¢â¬â¢ then North may as well answer in the same manner. The difficulty here lies in which test (act or rule) to use and how to apply it. The news piece that one has chosen, entitled Ã¢â¬ËGovernment to measure peopleÃ¢â¬â¢s happinessÃ¢â¬â¢, talks about the British GovernmentÃ¢â¬â¢s attempt at measuring the happiness of UK citizens. The reason behind the move, the article reads, is to track the nationÃ¢â¬â¢s progress apart from the usual yardstick that is the Gross Domestic Product (GDP). The article also mentions Jo Swinson, a Liberal Democrat MP and probable utilitarian, as saying Ã¢â¬Å"what gets measured gets done. While its not governments job to make people happy, regular measures of wellbeing will at least make sure it is taken into accountÃ¢â¬ . Statically monitoring the peopleÃ¢â¬â¢s happiness by way of a national survey can be likened to BenthamÃ¢â¬â¢s plea for the foundation of a statistical-gathering society to compile facts, as factual information about actual state of affairs will support rational and informed decision making. It is no surprise Bentham wished to propose this as he was an advocate of official criminal statistics which he maintained would be Ã¢â¬Ëa measure of excellent use in furnishing data for the legislator to go to work upon. Ã¢â¬â¢ Using numbers to evaluate the health of a nationÃ¢â¬â¢s citizens is not uncommon or unheard of as, stated beforehand, GDP used to be yardstick. However, in the current state of affairs Britain finds itself in, perhaps it is time to turn to a different set of numbers. Many, if not most, countries use their national statistics on GDP as the focal point for policy decisions and measurement of welfare. Despite this, Treasury minister Angela Eagle who has long been accustomed to analysing GDP and working in the pursuit of economic stability using such data, conceded herself that, although not completely ditching the traditional form, a happiness index would be Ã¢â¬Ëuseful for policy makingÃ¢â¬â¢. When comparing the use of the wellbeing index as opposed to the GDP, one looks at it from a financial standpoint and in particular, given regard to wealth, opportunity and welfare on questions of distribution. How should it be distributed? According to need, ensuring equality or maybe in accordance with merit? A long standing argument is that utilitarianism does not even consider these factors and on top of that shows no concern whatsoever with how it should be distributed. The utilitarian in this context would look only at achieving the goal of maximising welfare with how much there is in total. For example, given two societies, A and B, with A having a highly imbalanced distribution of welfare but an overall higher total of welfare than B which happens to have exact equal distribution, the utilitarian would point to A to be regarded as the more morally preferable society. Nigel Simmonds, a noted reader in jurisprudence, states that it would be a mistake to conclude that since the distribution does not concern the utilitarian, it does not mean that the question of how wealth, resources and opportunities is ignored. The argument for that would be that a more equal allocation of wealth, opportunity and resources is desirable because it would eventually lead to maximisation of welfare and happiness. Put simply, if one gives a pound to a millionaire it would make for a negligible contribution to his overall welfare. Give that same pound to a poor man for him to use, for instance to purchase a meal he would otherwise not be able to pay for, it would be a significant contribution to his welfare. Insofar as the distribution of wealth, opportunity and resources is concerned, the aim in this instance is for the utilitarian to seek the maximisation of welfare by way of equality. Using the wellbeing index in a way that could enable the government to pinpoint where certain communities are happy and unhappy can help legislators and policy-makers take necessary steps to promote the nationÃ¢â¬â¢s state of welfare. Funds could be better allocated towards communities that are in more need of an increase in welfare and happiness by providing facilities, education, healthcare and the like in the right areas While on the topic of economic welfare with regard to utilitarianism, one wishes to mention the economic analysis of law, a principle that has its roots in BenthamÃ¢â¬â¢s theory. Since the felicific calculus of the utility test is a difficult one to apply, as one cannot be certain of peopleÃ¢â¬â¢s reaction to alternative measures, the difference here lies in making simple assumptions on human behaviour. The assumption to be adopted here is that mankind will rationally maximise his satisfactions or pleasure. Accordingly, this entire theory uses this premise to achieve, by its definition, what one wishes and what one is willing to pay for that. Payment here is not taken in the strictest sense of monetary terms but can include time and effort. The theory takes on a dynamic principle that this payment is the medium by which a hypothetical market of happiness can be run. Between two individuals, it is easy to demonstrate how this would work. If Adam wishes to run his laundry business all day long without closing shop, and Gary wishes for silence in the night, each would offer a monetary value for either privilege. If AdamÃ¢â¬â¢s payment is greater than GaryÃ¢â¬â¢s satisfactions are maximised by allowing him to run his overnight business. Economic analysis calls this the Ã¢â¬ËefficientÃ¢â¬â¢ solution and the most obvious difference with utility is where greatest happiness of the greatest number is replaced by overall efficiency. This movement, primarily attempted in the United States, was first applied to specific areas in law for example anti-trust legislation and nuisance laws. Richard Posner, in his book, Economic Analysis of Law, explains that he believes to have found a more systematic application of this approach which he claims can explain why many of the legal rules and institutions that exist are as they are and also inherent implications for how the law should be improved. This however, leads one to believe that economic analysis of the law concerns itself primarily with maximising economic criteria, begging the question, is this the highest ideal one would want for society? It takes a U-turn on the very basis by which the government had wished to evaluate happiness instead of relying on GDP as a measure of public wellbeing. Even the UKs National Statistician, Jil Matheson, who will oversee the happiness measurement, said: there is growing international recognition that to measure national well-being and progress there is a need to develop a more comprehensive view, rather than focusing solely on gross domestic product. Ã¢â¬ If the Judiciary were to use this wellbeing index in reference to adjudication, would that infringe on the established practice of judicial independence? One would point out that public opinion is a matter for which the courts do take into consideration when a case of great public interest is in question. The very notion that judges would look into these statistical analysis of numbered data seems highly implausible. The judiciary as we know it preserves the doctrine of separation of powers. This holds that the laws they would apply and uphold cannot be changed whatsoever without the proper due process of parliamentary approval. With regard to those highly publicised cases, a judge today cannot merely change the course of the law due to social pressure even if would produce the greatest net happiness. However, if a judge were to be utilitarian in nature, as one is sure there is at least a single judge of that calibre, he or she might apply a rule that passes the utility test which would state Ã¢â¬Å"judge according to the greatest net happinessÃ¢â¬ and as such that rule could undermine all other factors including upholding parliamentary legislation. If the same judge were to follow a rule stating Ã¢â¬Å"always follow the letter of the lawÃ¢â¬ the same conclusion as if the other did not exist would apply as always following the law would pass the test as generally being the best solution to achieving the greatest happiness. One would now like to delve into the topic of rights with regard to utilitarianism in the light of the governmentÃ¢â¬â¢s wellbeing index plans. Human rights has been a major concern since the atrocities of the first and second World Wars. Most nations have adopted or are a signatory or the Universal Declaration of Human Rights. In order to understand utilitarianismÃ¢â¬â¢s concept of rights, it is best to leave alone the notion of Ã¢â¬Ëmoral rightsÃ¢â¬â¢ as it is fundamentally opposed within the theory. Given the example of two conflicting interests in rights, whatever means one would employ would still lead to the same conclusion where one gains and the other loses. As mentioned before, utilitarianism would guide us to act in a way that would produce the greatest happiness for the greatest number and in doing so would find the best possible balance to ensure the net outcome is highest. One refers back to the infamous London riots of mid-2011 where police had a difficult time controlling the crowds. In this instance, the police would have had in mind the rights of the law-breakers and in turn led to minimal crowd control which unfortunately spilled over and caused massive collateral damage. Had the test of utility been applied, officers of the force may have come to a conclusion that infringing a few citizensÃ¢â¬â¢ rights will save shops and business from the damage that they eventually incurred. Monmouth MP Mr Davies said that we have to decide where our priorities lie. Is it with the police in trying to maintain law and order? Or does it lie with the human rights of those who break the law? Ã¢â¬ . One could say the test of utility applied here might have concluded that the former would be the answer to maximising overall happiness of society that day taking into account the welfare of the shop owners and other victims of this tragedy. Or perhaps had the wellbeing index been formulated earlier and the government had helped to alleviate the pains of those who turned to rioting, none of it would have happened. That however, is a purely hypothetical analysis. With every applied theory comes the good and the bad, the success or failure to accommodate all aspects of governance and the uncertain impact it can have on society as a whole. Utilitarianism brings about a change in mindset and approach to dealing with todayÃ¢â¬â¢s issues but it does come with the risk of failing to protect the most vulnerable members of society. A report has sparked some debate across the Atlantic over the issue of special education funding in Kansas, USA, where budget cuts amounting to over twenty million US dollars are being contemplated. This is no isolated incident however, as a Christian activist group points out that even with the appropriate budget, schools are ever increasing the channelling of those funds to other departments instead of the purpose it was allocated for. In this incident, Broward County in Florida used eighteen million dollars of its special education budget to save around seven hundred jobs which had no relation to special education. It is without a doubt a utilitarian process of maximising overall happiness but it did come with a cost. The losers in this case were the children in need of special education in the first place. It is a difficult time for the economy and budget cuts are to be expected but this highlights the problem inherent within utilitarianism. If you are one of the losers to this policy, then that is the way the cookie crumbles. Unfortunately it was a segment of society that already is vulnerable. Additionally, utilitarianism can lead to injustice and breach of established human rights, that is the right against unlawful detention. Imagine a nation duped by its own government, propagandised to fear and hate and in turn direct those feelings towards a certain legislation that purportedly helps fight terrorism but instead merely gives powers to the state to detain and interrogate terror suspects without due consideration towards his or her human rights. One might think of the US and its anti terror campaign and acknowledge the fact that Guantanamo Bay is not just a movie. A government, using any means necessary, has the potential to manipulate its people into believing that in order to be secure and protected must pass into law some draconian legislation. If people do believe so, a nationwide survey on happiness might conclude that citizens will only be happy if their need to feel said security is fulfilled and the test can succeed if the circumstances are right. If one were to disbelieve such a notion, this idea has indeed been materialised in North Korea where an entire nation is fed news and reports directly aimed to instil a variety of ideas in its people. Of course, it is largely hypothetical but at the same time utilitarianism is not a known and practiced doctrine worldwide and this uncertainty is precautionary in nature. Is utilitarianism the way to go? Has the British government taken the right steps and the right precautions in ensuring a wellbeing index will not be put to use in a negative way? Some critics of the move have instead shown a distinct unhappiness over the issue. Some are calling for the test to be used on itself as to whether it will produce the greatest happiness if used at all. If possible, it would be a fresh undertaking for law-makers to change their mindset on ethical or moral grounds. Alan Coddington, author, spoke of replacing traditional questions of Ã¢â¬Å"should it be done? Ã¢â¬ and Ã¢â¬Å"is that right? Ã¢â¬ with Ã¢â¬Å"what would be the totalled up sum of happiness if this is done? Ã¢â¬ . A wellbeing index does indeed sound like a good idea and one that might help ease the financial instability that Britain currently faces. It could lead to never before known facts and statistics that may trigger the government into acting in the interest of the people to ensure the greatest happiness from the greatest number, in this regard, of Britons. [ 1 ]. Jeremy Bentham, A Fragment on Government, (1776) [ 2 ]. JG Riddal, Jurisprudence, (2nd edn Oxford Press 2006) 154 [ 3 ]. M Freeman, R Harrison, Law and Philosophy Current Legal Issues, (vol 10 2007) 304 [ 4 ]. JW Harris, Legal Philosophies, (Butterworths 1980) 36 [ 5 ]. Harris, (n4) 39 [ 6 ]. Manuel Velasquez, Claire Andre, Thomas Shanks, S. J. , and Michael J. Meyer, Ã¢â¬ËCalculating Consequence: The Utilitarian Approach to EthicsÃ¢â¬â¢ (1989) Issues in Ethics Vol 2 accessed 4th Jan 2012 [ 7 ]. BBC News, Government planning to measure peoples happiness (2010) accessed 26th Dec 2011 [ 8 ]. M Freeman, R Harrison, Law and Philosophy Current Legal Issues, (Oxford Press ,vol 10, 2007) 304 [ 9 ]. J Bentham, The Works of Jeremy Bentham (Simpkin, Marshal and Co, 1843) 29 [ 10 ]. B Wheeler,Ã¢â¬â¢ Crunch Time for Happy TalkÃ¢â¬â¢, (BBC News 9th Oct 2008) http://news. bbc. co. uk/1/hi/uk_politics/7657465. stm accessed 2nd Jan 2012 [ 11 ]. NE Simmonds, Central Issues In Jurisprudence, (Sweet and Maxwell ,3rd edn, 2008) 29 [ 12 ]. Simmonds (n 11) 30 [ 13 ]. Harris (n4) 42 [ 14 ]. BBC News (n7) [ 15 ]. D Meyerson, Understanding Jurisprudence, (Routledge Cavandish, 2007) 119 [ 16 ]. Daily Record, Ã¢â¬ËLondon riots: Human rights laws have made police sitting ducksÃ¢â¬â¢ accessed 9th Jan 2012 [ 17 ]. The Winfield Daily, Ã¢â¬ËLet Senate Prevail on Special Ed Funding, (18th Feb 2011) accessed 7th Jan 2012 [ 18 ]. Chuck Colsen, Ã¢â¬ËShorting Special Needs: Utilitarianism and Budget
Tuesday, January 21, 2020
Humorous Wedding Speech by a Fellow Gambler Ladies and gentlemen, my name is Josh and following the time-honored tradition, I will now do my best to give Roy the most uncomfortable five minutes of his life. For the record, the most uncomfortable five minutes of Joyce's life will be later on this evening, courtesy of Roy. Roy and I became acquainted many years ago, when we had three encounters in one week. I first saw him when he was placing a bet at the Horse Racing track. Then he appeared again at my local pub. And then, unbelievably, he appeared yet again - this time at poker night. It was at this moment that I realized someone very special had entered my life. Yes, I had a stalker! Or as his clothes suggestedÃ¢â¬ ¦ a gay stalker! This aside, we soon became friends and being a betting man myself I was immediately impressed by his outstanding knowledge of horse racing. He can name any trainer, jockey or horse which finished 4th or worse in any race in the last five years. But apparently, in the run up to the wedding, RoyÃ¢â¬â¢s form at the races has vastly improved and heÃ¢â¬â¢s been doing better than heÃ¢â¬â¢s ever done before. ThatÃ¢â¬â¢s right, Joyce hasnÃ¢â¬â¢t been letting him go. On the subject of betting I have a bit of an issue to raise. It came to my attention earlier that Roy is running a book on the length of the best man's speech. I am sure you will all be glad to know that I got wind of this and, not being known to Roy at the time, I put a tenner on myself to last an hour at the bargain odds of 500-1. So I suggest you top up your glasses and make yourselves comfortable - but do let me know if Roy tries to slip out. Attending university was definitely the best decision Roy ever made. Because he didnÃ¢â¬â¢t just meet me, he also met Joyce Ã¢â¬â who looks absolutely stunning today. October 1993, Roy Solomon, a county swimmer and keen football player, meets Joyce Reeves. And eight years later, Roy hasnÃ¢â¬â¢t so much as looked at a swimming pool and doesnÃ¢â¬â¢t play football anymore. But all is not lost, I understand he still has a good breaststroke, doesnÃ¢â¬â¢t have any problems with his ball control and can certainly use his head, even if he is a bit clumsy around the box.
Monday, January 13, 2020
Anthropology is the study of humanity. In Chapters 3 and 4 of the text we are learning about kinship system. In these selections I will focus on the Australian Aborigines culture. I will also concentrate on the Australian Aborigines and the three specific examples of how the kinship system of the chosen culture impacts the way the culture evolves. This paper will also show how the cultures compare to each other. ? Voluntary controls on fertility for Aborigines were controlled in the form of infanticide. Based on the text infanticide is the killing or the abandonment of new born babies. This practice is usually used when a baby has problem or deformities, which make it hard for the offspring to be taken care of (3. 4 Settlement Patterns). In the United States infanticide would be consider a homicide. In our culture we do have abortions. Some women use abortions for various reason for example health problems, raped, or just plan not ready to be parent. ? ? In Australian Aborigines culture they believe in cross cousin marriage. As described in the text Cross cousins are the children of opposite sex siblings, such as the fatherÃ¢â¬â¢s sister or the motherÃ¢â¬â¢s brother. The man in this culture has the right to marry his father sisterÃ¢â¬â¢s daughter or his motherÃ¢â¬â¢s brotherÃ¢â¬â¢s daughter (3. 7 Social Organizations). In this culture and day and time, we look at marrying cousins as wrong. It is old folk tale that the third cousins are removed but that was some of the older cultures. So now we believe in my family at least that mixing blood so to speak can cause baby deformities. So in our culture cross cousin marriage is prohibited. We also have family reunions to help family members know who there family is. According to Australian Aboriginal culture, all living things were created by ancient spirit ancestors. These stories of creation are known as the Dream-time, or Dreaming. Dream time according to the Aborigines, describes the creation of the earth and how all living things were created and how that affects life and morality (3. 8 Rituals and Religion). We have all different religions in America thatÃ¢â¬â¢s what makes us as unique as a culture. I am a Christian. I believe Jesus Christ came and save the world from sin. I believe that God came to Moses and that only way to heaven is through Jesus Christ. Some atheists would compare us to the Australian AborigineÃ¢â¬â¢s folk tale, but everybody has and opinion. ? In-closing Australian Aborigines culture and all other cultures have examples of kinship systems. What I learned from the text is that through anthropology that all men as an allocated law or system to follow as there way of life, Today society has come a long ways, but still shares the some of the same values. To know where you going, you have to know where you came from. Nowak B. , & Laird, P. (2010). Cultural Anthropology. Ashford University, Discovery Series. Bridgepoint Education, Inc.
Sunday, January 5, 2020
European Settlements and the Decline of Indian Power in America What today is the state of Virginia used to be Native American lands. The Indians claim that God had given them the right to own and settle those lands. The problem as we have seen in class is the Europeans such as the Spanish and English came and took over the Native American land in the name of the King and /or Queen. They invaded their territory, and destroyed their culture, all in the name of conquest. What I intend to show is how these problems developed for the English from the years of 1607 to 1644. Kirkpatrick Sale in his book Conquest of Paradise says that the English were just carrying out the Columbian legacy with the same brutality toward the NativeÃ¢â¬ ¦show more contentÃ¢â¬ ¦How this all came about was 1. as I already mentioned the conversion of the Indians and 2. to gain a foothold into North America as the Spanish had who were in search of gold and great wealth. But their primary reason was the planting of tobacco because it was introduced to the English economy by Sir Walter Raleigh who explored the lands called Virginia in 1585, and it could be a profitable crop to the English. The charter was granted to the colonists on April 10, 1606 which establish the London Company which was to rule over the new colony which they called Virginia after Elizabeth the virgin Queen of England. The colonists were, Thomas Gates, George Sommers, Richard Hackluyt, Edward Wingfield, Thomas Harkin, and residents of London, Bristol Exeter, and Plymouth. They were granted a council which was to have a superior council in England governing over them. And they were to have all the rights and privledges of English subjects. They set sail in early April of 1607. Their first sight of land occured on April 26, 1607. Their first encounter with the Indians was not friendly. Captain John Smith described the savages as creeping along on all fours shooting at them with bows and arrows. Luckly they escaped, but further up the river their encounter was friendly. The natives were alarmed at first, but they welcomed them and took them to their town and treated them withShow MoreRelatedChristophe r Columbus : A Dominant Figure1366 Words Ã |Ã 6 Pagesthe history, because he explored America in the 15th century. It created relationships between the old world and the new world. With the exchange of animals, insects, and plants, population as well as cultures, the Columbian Exchange was created. (Boundless.com) Different kinds of resources were shared after the exploration of the New World, which definitely brought European countries benefits. 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Barbados had quickly grown to be the third major English Settlement in the Americas due to prime eastern location. It was the only island that did not change hands during the colonial period. The culture of Barbados was shaped by the syncretization of colonialism and imperialism by use of religion and cultural resistance. Pre-colonization, Barbados was a small island inhabited by Amerindian, American Indians, with settlement dates from the fourth and seventh centuries AD. Though there is
Friday, December 27, 2019
Sample details Pages: 19 Words: 5683 Downloads: 4 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? China, in the last 30 years, has shown the spectacular growth rate in economy. By the end of 2010, China GDP ranks the second in the world. Compared with the stable growth of Chinas economy, the performance of Chinese stock markets is also a limelight. DonÃ¢â¬â¢t waste time! Our writers will create an original "Weak form efficiency of chinese stock markets" essay for you Create order The stock markets have improved with an expansion in the number of the list companies and the total amount of stock trading. China has two major stock exchanges-Shanghai and Shenzhen Stock Exchanges. Shanghai Stock Exchange (SHSE) was founded in December 1990 and Shenzhen Stock Exchange (SZSE) started its trading in July 1991. Two types of shares are traded in Chinas Stock Exchanges, which are named type A and type B shares. In China, type A shares are available to Chinese nationals only and these shares are traded by Chinese Yuan. Type B shares, in Shanghai Stock Exchange, are traded by U.S dollars, while in Shenzhen Stock Exchange those are denominated in Hong Kong dollars (Martin Laurence, Francis Cai and Sun Qian 1997). Particularly, type B shares are only available to investors from Hong Kong, Taiwan, Macau and other countries before 19th February 2001. After this date, individual investors in Chinas Mainland are able to purchase type B shares. By the end of 2010, the number of listed companies on SHSE is 901 and on SZSE is 1169. In the Shanghai exchange, there are 891 A-shares and 54 B-shares. The Shenzhen Exchange has 1195 A-shares and 54 B-shares. Chinese stock markets are the emerging stock markets, since they are relatively young compared with stock markets in some developed countries. Many external and internal aspects and policies lead to the specific features of Chinas stock markets. One of the features is the structure of a listed company. A listed companys ownership structure can be divided into five categories: stated-owned shares, employee shares, legal-person shares, tradable A-shares and shares only available to overseas investors. To distinguish them in a more detailed way, stated-owned shares, employee shares and legal-person shares are classified as non-negotiable shares which cannot be traded on the two exchanges. The listed companies are financed with non-negotiable shares that account for 60 percent of the companies equities (Qiet al . 2000, Wei and Varela 2003). Chinese Stock Exchange, in addition, exhibits that a majority of the individual investors are regarded as the gambler. Many investors treat the stock trading like a casino with the fact that they do not pay much attention to the information, finance and announcements about the listed companies (Ma 1996, Nam et al. 1999, Kang et al. 2002, Girardin and Liu 2003). Polices carried out by Chinas central government affect Chinas stock markets at a significant extent. The indexes of Chinas stock markets may not be consistent with the economic growth of China. The government has macro-economic control over the stock markets, which interferes the decisions made by investors. Thus Chinas government makes the stock markets a tool of raising finance. Except for the aspects mentioned above, the efficiency of Chinese stock markets is essential to the investors and regulators since it relates to how information in the market can be reflected by the stock price. Eff icient-Market Hypothesis (EMH) developed by Eugene Fama (1970), mainly, has three forms of market efficiency. In Weak-form efficiency, people cannot predict the stock prices in the future though they collect and analyze the information contained in the past prices. In addition, excess returns in long term cannot be made by using historical stock prices and other historical data. Some techniques can provide excess returns to investors in some cases. But the excess returns may not be consistently produced by the technical methods. Stock price in the future follow a random walk since it is predicted by the information not contained in the past prices, and no serial dependencies exist between these prices. Dimson and Mussavian (1998) defined efficient capital market in a similar way. In an efficient capital market, all information must be reflected in the financial assets prices and the prices changes should be consistent with the new information. An efficient capital market, of course, cannot be identical with a perfect market. Basically, the definition of a perfect market is with several assumptions. Investors in a perfect market can obtain all of the relevant information immediately and simultaneously. Also, the information provided is costless. Moreover, investors in such market are rational and the market should be presumed to be frictionless. In the real world, there is no perfectly efficient market and no completely inefficient market. This report mainly focuses on testing the weak-form market efficiency of Chinese stock markets. In this study, three statistical techniques are employed. Dickey-Fuller test for unit root test is firstly provided and then employing the non-parametric runs test. In addition, Lo-Mackinlay Variance Ratio test is presented. Section 2 presents some tests ealier employed by other people. The data description and the research methodology will be discussed in Section 3. Section 4 contains the empirical results, and Section 5 then p rovides the summary and conclusion. Literature Review Various previous market efficiency tests findings (Liu, X., H. Song and P. Romilly 1997, Laurence, M., F. Cai and S. Qian 1997 and Lima and Tabak 2004 for A-shares markets in both SHSE and SZSE, and Long, D.M., J.D. Payne and C. Feng 1999 for A- and B-shares markets in SHSE) reveal that Chinese stock markets are significantly speculative to the investors. Due the fact that Chinese stock markets are speculative, many noise traders who regard the stock trading as a casino may make the stock returns serially correlated. Previously De Long, J.B., A. Shleifer, L.H. Summers and R.J. Waldmann (1990) employed a theoretical model to indicate the effect of noise traders in the stock markets. This model finally shows that if noise traders expect to find positive returns when they trade, the price stress will give rise to autocorrelations between positive returns during a relative short time. However, Kang et al. (2002) reported that abnormal profits exist in the A-shares market given certain short-horizon and intermediate-horizon strategies. Random walk was employed by Abrosimova and Linowski (2002) when they examined the weak-form efficiency of the Russian Stock Exchange. They found that if the monthly data was used, random walk could not be rejected. However if daily data was used in the test, random walk could be rejected. Balaban (1995) carried out an experiment of testing the weak-form efficiency of Istanbul Securities Exchange, and he performed a random walk test on this market. Tian et al. (2002) reported that 412 technical rules were useful in predicting the movements of stock price in Chinese stock markets, which making traders pursue excess profits in 1990s. In addition to the aforementioned researches which apply the well-known and conventional tests, many other studies related to this topic aim at avoiding some defects in the previous tests. For instance, run tests employed by Laurence (1997) and Mookerjee and Yu (1999) enable them to reach the conclusion th at stock markets are in the weak-form efficiency. Besides, Liu (1997) and Seddighi and Nian (2004) used unit root tests to conduct their analyses. Lo and MacKinlay (1988) applied variance ratios tests to detect the serial correlations between the stock returns, and then asserted that random walk could be rejected using a sample of 1,216 observations of firms in NYSE-AMEX during 1962-1985. K.A. AI-Abdulqader et al. (2007) used two conventional tests to examine the weak- form efficiency of Saudi stock market. One of them is the filter rule test, and the other one is moving average strategy. Fliter rule is proposed by Alexander (1961, 1964). According to the opinion of Fama and Blume (1966), Alexanders filter rule detects whether prices changes are consistent to the new information. This research applied various filters to the data, and then assessed the filters effect on the rules profitability. This filter rule strategies finally obtained the conclusion that rule profits, in minor ity of cases, could not exceed the profits from the buy-and-hold strategy. Accordingly, if profits of the strategy are more than the profits from a buy-and-hold strategy, it could provide evidence against the weak-form efficiency. To compare the conclusion from the filter strategy, a moving average strategy was also employed in their research. This strategy relates to the buying (selling) at the short-term average price moves above (below) the long-term average price during k days. In this research they adopted four different moving average strategies: (1, 50, 0), (1, 50, 1), (1,150, 0), (1, 150, 1). For example, (1,150, 0) demonstrate that length of short-term is 1 day, the length of long-run is 150 and the bandwidth is 0. Bandwidth reflects the minimum change made before a signal is identified. The conclusion from the results of the moving average strategy indicated that though this strategy outperformed a buy-and-hold portfolio much more significantly, the ability of predicting c hanged according to the moving average strategies applied. Pakistan stock market is an emerging stock market like Chinese stock markets. Research conducted by Madhlimita Chakraborty (2006) investigated the weak-form efficiency of the Pakistan stock market. He employed the Lo-Mackinlay variance ratio test (1988) in addition to the traditional serial correlation test and runs test. The variance ratio test requires the precondition that the random walk increments variance is linear between the experiment samples. Therefore, if a random walk process is presented, the q-differences variance must be q multiplies the first differences variance. Also, the Box-Jenkins Technique (1978) was applied to his research. In context of Chinese stock markets, several studies have been done. In this report, three typical researches are presented. The reason for taking these reports into consideration is that they performed the distinct tests in their investigations and separately reached the dissimi lar conclusions. Martin Laurence et al. (1997) tested the behavior of the share price, weak-form market efficiency and causality of the Shanghai and Shenzhen stock markets. Also, they examined the causality of the Chinese stock markets with the Hong Kong and U.S. stock markets. The data were from four Chinese stock market indices, one Hong Kong Index and one U.S. Index. The four indices are Shanghai A, Shanghai B, Shenzhen A and Shenzhen B. Dow Jones News Retrieval Services and Datastream International provided the research data. First of all, they performed a unit root test for the six stock indices, and the test was based on an augmented Dickey-Fuller (1979, 1981) model. After that, they employed bivariate cointegration tests for comparing every pair of stock indices, which involved the method of the Phillips and Ouliaris (1990). This method is used for estimation through the Ordinary Least Square of the regression model. Apart from the above two tests, the serial correlations and Ljung and Box test (1978) were used. The presence of serial correlation was significant in form of daily returns. But it can be viewed as a violation of the weak-form market efficiency, because investors are able to take advantage of serial correlation for making excess return. Lastly, with the purpose of investigating lead-lag relationships among the six market indices, Grangers (1969) causality tests are performed. They, eventually, obtained the consequence that Chinese stock markets were getting closer to a weak-form efficient market. The results from causality tests indicated that Chinese stock markets were related to the global market to a great extent. At the beginning of the 21th century, Ma and Bames (2001) completed their report about testing the weak-form efficiency of the Shanghai and Shenzhen stock markets. They employed serial correlation, run tests and variance ratio tests. The data collected for this report was based on daily, weekly and monthly returns. They c ollected stock returns from December 1990 to April 1998 for Shanghai stock exchange, and employed stock returns from April 1991 to April 1998 for Shenzhen stock exchange. To be more detailed, the numbers of A-share taken from Shanghai and Shenzhen stock markets were 375 and 348, and the amount of B-share employed from the two markets were 49 and 51. They found that stock returns between the two stock exchanges were correlated significantly, but the daily returns were much more correlated than the return of weekly and monthly. Considering the daily returns of individual A-share and B-share of the Shanghai exchange and daily returns of individual B-share of the Shenzhen exchange, generally, they did not follow a random walk. They also concluded that individual shares exhibited more efficient than stock indices, and the Shenzhen market showed more evidence than the Shanghai market. Generally, B-share typically violated the random walk. That is, prices of B-shares were more easily predi cted than prices of A-shares. To explain this, they asserted that thin trading could result in the B-shares inefficiency. If according to the theory of Famas (1965), Chinese stock markets were in weak-form efficiency. Nevertheless, they finally reported that Chinese stock markets were not determined to be as a weak-form efficient market, since many professionals argued that Famas (1965) theory of defining the efficient markets was not correct to some extent. Seddighi and Nian (2004) conducted an investigation about the Shanghai exchange indices and 8 listed shares in this market. The data contained the stock returns from January 2000 to December 2000. The listed shares were randomly selected from 8 companies involved in 8 sectors. In their research, three tests were used, i.e. the Lagrange Multiplier test, Dickey-Fuller test and ARCH test. From the result of the Lagrange test, they concluded that 6 of the target companies were not related to autocorrelation. Random walk was asser ted to be present in the Shanghai stock market as a result of Dickey-Fuller test. However, unit root was not found in 2 of the listed shares series. Finally, they reported that the Shanghai stock prices did not follow a random walk. That is, Chinese stock market did not perform weakly efficient. 3. Data and Methodology 3.1 Data description The data, in this study, is daily price index for Shanghai and Shenzhen stock exchanges. These price indices are obtained from the Datastream, and the observation period ranges from January 3, 2000 to December 31, 2010. To examine Chinese market efficiency, this study employes daily data of closing prices for four Chinese stock indexes: Shanghai A-share Index, Shanghai Composite Index, Shenzhen A-share Index and Shenzhen Composite Index. The data in Table 1 (see Appendix), obtained from Datastream, are collected on basis of the daily closing prices for weekdays between January 03, 2000 and December 31, 2010. Shanghai A-share Index, Shanghai Composite Index, Shenzhen A-share Index and Shenzhen Composite Index are denominated in Chinese Yuan (CNY). These four stock indices reflect the statistical data related to domestic investors and the overall stock market, but the indices used by overseas are excluded since domestic investors account for the majority and the composite index es could reflect the overall market daily prices. Time series plots are exhibited below: Figure 1. Time Series Plots for Chinese Stock Indices Shanghai A Index Shanghai Composite Index Shenzhen A Index Shenzhen Composite Index Apparently, Shanghai A-share Index approximately has the identical distribution of return compared with that for Shanghai Composite Index. Shenzhen A-share Index, also, has the identical time series compared with that for Shenzhen Composite Index. Both of Shanghai indices and Shenzhen indices reached the peak level in the year of 2007. Between 2007 and 2008, the Shanghai Composite Index experienced the highest level of price which is around 6000, and Shenzhen Composite Index had almost reached at the level of 1600. From 2000 to 2007, all of the four indices series did steadily fluctuate with relative small range. After 2007 these indices ascended sharply until the financial crisis arrived. In the following year of 2008, the four indices descended dramatically due to the financial crisis. Overall, Shanghai and Shenzhen indices have the identical fluctuation before 2009, whereas in the following years, Shenzhen indices has higher increase in index prices compared with Shanghai indice s. That is, Shenzhen stock market is considered to be in better condition than Shanghai stock market after 2009. All indices series returns are calculated by the following formula: Where stands for the closing price for the index at time t and is natural logarithm. 3.2 Methodology To test the weak-form efficiency of Chines stock markets, the main approach is to examine whether Chinese stock markets follow a random walk. Generally, it is necessary to indicate that logarithmic market returns follow a random walk. However, there are two assumptions in the theory of random walk. That is, the continuous price changes are independently distributed and the price changes follow some probability distribution (Fama 1965). The random walk hypothesis requires the price increments to be independently and identically distributed (IID). The equation below shows the dynamics of share prices: where and IID distributed Statistically, we need to define the hypothesis as the following: H0: Chinese stock markets follow a random walk, i.e. follow the weak-form efficiency H1: Chinese stock markets do not follow a random walk, i.e. do not follow the weak-form efficiency Therefore, to examine the null hypothesis of the random walk, three statistical tests includ ing unit root test, non-parametric runs test and variance ratio test are employed. The tests are performed on the entire sample. The unit root test was mainly based on the the Dickey-Fuller test. This test determines whether the stock returns series is non-stationary since it is an essential condition for random walk. Lo and Mackinlay (1988) developed the variance ratio test which may be a more proper test for a random walk hypothesis. 3.2.1 Unit root test The unit root test was developed by Dickey and Fuller (1981), which examines the stationarity of the time series. If unit root is found in the series, then it can be defined as non-stationary which shows the presence of random walk. Commonly, Dickey-Fuller test is proper to examine whether a unit root exists in a series. With the purpose of testing the weak efficiency of Chinese stock markets, therefore, the Dickey-Fuller test is provided. Equation (1), basically, is a simple unit root form. In this equation, only by the fact that slope coefficient is equal to 1 can we exhibit that the current price is totally explained by the lagged term of the market price. Then the current price is explained by the constant or drift. (1) Where is independently and identically distributed with the mean 0 and the constant variance . The error increment is called white noise, and all of the error terms are uncorrelated. Nevertheless, Dickey-Fuller (1981) showed that under the null hypothes is that , the standard t-ratio does not have a t-distribution since corresponds to a non-stationary process which invalidates the standard results on the distribution of the OLS (Ordinary Least Square) estimator . Then Dickey and Fuller transformed the equation (1) to the equation below: (2) Dickey and Fuller replaced by , which is realized by deducting in both sides of the equation. Accordingly, the actual return has been changed to the change in return, as well as the hypothesis should be transformed to: (Non-stationary or unit root) against (Stationary or no unit root) In equation (2), the last termcan also be assumed to be white noise. Denoteas the OLS (Ordinary Least Square) estimator andas the usual OLS standard error. To test the hypothesis thatwe can use standard t-statistic given by: With the value of to be more be negative, the more significant the t-value might be to reject the null hypothesis and the returns are stationary which do not follow a random w alk. In other words, if the null hypothesis is not rejected, that the series follow a random walk. To examine whether the stock prices in Chinese stock markets follow a random walk, Dickey-Fuller test,significantly, provides the effective evidence. 3.2.2 Runs Test Runs test provides another method to the random walk. To distinguish runs test with the other two tests, it is presumed that the returns would not be required to follow a normal distribution. Specifically the non-parametric runs test, unlike the general runs test, it tests the independency of the successive price changes. The non-parametric runs test is under the assumption that only if the observed number of runs in the series is close to the expected number of runs can the returns of price in the series follow a random walk. A sequence of successive price changes with the same sign is described as a run. The non-parametric runs test, actually, is proper to examine the randomness for the successive of returns; hence, it provides adequate evidence on whether price returns in Chinese stock markets are possible to be predicted. The first stage of the test is observing the number of runs which is defined as the total number of the sequence of consecutive prices changes with the sam e sign: positive, negative or no change. Then assigning equal weight to every corresponding change and distinguishing direction of the successive changes, which must be based on the rule that classifying each change in return according to the mean return. That is to say, the positive change is obtained when the price return is larger than the mean return, and the negative change is obtained when the price return is less than the mean return and no change when the return is equal to the mean return. The run test is employed by taking the actual runs (R) and the expected runs (m) into account. To perform the test, comparing the actual returns and the expected returns is required. Since the distribution of the number of runs is assumed to converge to a normal distribution, the expected number of runs can be calculated as equation (3) below: (3) Where N is the number of observations,denote the signs of positive, negative and zero,denotes the number of price changes of each sign . If the total number of observations N is greater than 30, the expected number of runs m is normally distributed with a standard deviation as the equation below (4): (4) The standard normal Z-statistic is: Z~ N(0,1) (5) Where R is the actual number of runs, (1/2) denotes the correction factor for continuity adjustment (Ma and Bames 2001), where the sign is plus if Rm, and is negative if Rm. The null hypothesis can be described as the following: If null hypothesis can be rejected at a certain significance level (1%, 5% and 10%), then it indicates that the series does not follow a random walk at that significance level. Furthermore, a positive serial correlation is implied by a negative Z value, and a positive Z value implies a negative serial correlation. 3.2.3 Variance Ratio Test The variance ratio test designed for random walk testing was proposed by Lo and MacKinlay (1988). Basically it is assumed that there is a linear relationship between the variance of random walk increments. Accordingly, if a random walk exists, the variance of its differences should be times the variance of its first differences. Consequently, when we have observations () of the log of stock returns and obtain these log returns at the intervals with equal space (is an integer larger than 1), the ratio of of the variance to the variance of is equal to 1. The variance ratio test is employed under assumptions of homoscedastic and heteroskedastic random walks. Then some important equations in this test are presented: (6) Where is the variance of the difference and is the variance of the first differences. (7) where (8) and (9) where and is the number of observations Under the assumption of homoscedasticity, the modified (Liu and He 1991) is in the form o f the formula below: Where (asymptotic variance of the variance ratio) If the null hypothesis of no autocorrelation coefficient is rejected, there is no random walk under the case of homoscedasticity. Commonly, heteroscedasticity and autocorrelation might lead to the rejection of random walk under homoscedasticity (Worthington and Higgs 2004). In addition, Campbell et al. (1997) reported that the variance ratio would be close to unity even in under the assumption of heteroscedasticity if returns are not correlated. Lo and MacKinlay (1988) introduced the standard normal test : where (standard error term) and Under the null hypothesis, the variance ratio is equal to 1. That is, the series follows a random walk. If random walk is rejected under the assumption of heteroskedastic, evidently, there is the presence of autocorrelation. Under the case of autocorrelation, a negative serial correlation exists if variance ratio is less than 1 and a positive serial correlati on is presented if variance ratio is larger than 1. 4. Empirical Results 4.1 Descriptive Statistics An overview of descriptive statistics for Shanghai and Shenzhen stock indices are provided in Table 2 (see Appendix). The total number of observations for each stock index is 2870. All of the four series have the positive means. Shenzhen Composite Index has the highest mean of returns of 0.000406, while Shanghai A Index has the lowest mean of returns of 0.000246. The maximum returns obtained from Shanghai A Index and Shanghai Composite Index, obviously, exceed these obtained from Shenzhen A Index and Shenzhen Composite Index; nevertheless, Shanghai A Index has the lowest minimum return of -0.092608. Due to th fact of high return with high risk, the two Shenzhen indices incorporate with the highest standard deviations even though they have higher average returns than these of two Shanghai indices. Therefore, daily returns for two Shanghai indices are less volatile than returns of two Shenzhen indices and Shenzhen indices has higher returns compared with Shanghai indices on the avera ge. Daily compounded indices statistics for Shanghai and Shenzhen stock markets are provided in this table. The returns are given by , where is the series price at time t. ÃÆ'Ã ½ÃâÃ ¼ is the mean of returns and ÃÆ'Ã Ãâ Ã¢â¬â¢ is the standard deviation for the series of returns. 4.2 Unit Root Basically it is essential to use Dickey-Fuller test without time trend to examine whether Shanghai and Shenzhen stock indices follow a random walk. This test model composites of the constant or drift, coefficient slope and white noise. The results for Dickey-Fuller test without time trend is given in Table 3 (see Appendix). This table presents the results for Shanghai and Shenzhen Index prices between 2000 and 2010. The estimated slope coefficient is represented by and the standard error for is. The critical value is 3.51 at 2% significance level, 3.17 at 5% significance level and 2.58 at 10% significance level. ***, ** and * indicate the slope coefficient is statistically significant at the 2%, 5% and 10% level. Results in table 3 (see Appendix) indicate that indices series in Shanghai and Shenzhen are non-stationary or unit root under the significance level of 2%, 5% and 10%. Currently the result shows the random walk of the Chinese stock markets, but testing results may va ry with some changes of this model. In this model, on the one hand, time trend is not taken into consideration. In some cases, we may have to consider a statistical model which can include a deterministic time trend. It is particularly necessary when the series exhibit either upward or downward trend. The reason is that if a series shows significant time trend it is non-stationary. Considering a trend-stationary process, if the process is not accounted for in the regression model, it is likely that a unit root test would fail to reject the null hypothesis, even though the process is trend-stationary. On the other hand, unit root may exist in high-order AR model. In this report, only AR(1) has been employed, which may not be the correct specification. If we use an AR(1) when the correct specification would be a higher-order AR process, we may misleadingly reject the null hypothesis of a unit root because of the misspecification of the model. Thus Augmented Dickey-Fuller Test can prov ide further analysis to examine the existence of random walk. Overall Dickey-Fuller test without time trend can provide solid evidence that Chinese stock markets follow a random walk. 4.3 Runs Test Table 4 (see Appendix) indicates the results of non-parametric runs test for four stock indices in Shanghai and Shenzhen between 2000 and 2010. The total number of observations is represented by N and total number of runs is denoted by R. The amount of observations below mean is denoted by mean, whereas =mean indicates the number of observations larger than or equal to the mean. The critical value for Z statistics is given by: Z=1.285 at 10% significance level, Z=1.645 at 5% significance level and Z=2.33 at 1% significance level. ***, ** and * denote the statistical significance at 1%, 5% and 10% levels. The results of the non-parametric runs tests for Shanghai and Shenzhen market indices are presented in Table 4 (see Appendix). The estimated Z-values for returns on Shenzhen A-share Index and Shenzhen Composite Index are significant at 5% level, and both of returns on Shanghai indices are significant at 10% level. Accordingly the null hypothesis can be rejected under some signif icance level, which implies that both of Shanghai and Shenzhen stock markets are not weak-form efficient. Nevertheless Shanghai stock market can only be determined as weak-form inefficient in the case of 10% significance level, which may not provide adequate evidence ensuring the weak-form inefficiency of this market. Shenzhen stock market is determined as weak-form inefficient even at 5% significance level. The negative Z-values for daily returns on the four stock indexes, indeed, imply the positive serial correlation. Anyway Chinese stock markets can not determined as wear-form efficient using the non-parametric runs test. 4.4 Variance Ratio Test The results of variance ratio test for the Chinese stock markets are presented in table 5 (see Appendix) and the time period is 2000-2010. N denotes the total amount of observation and q is the equal-spaced interval of the observation. In this test, q is equal to 2, 4, 12 and 20, respectively. VR(q), Z(q) and Z*(q) are the estimations of the corresponding statistics. VR(q) is the estimate of variance ratio, and Z(q) and Z*(q) are the Z test statistics of homoscedasticity and heteroscedasticity, respectively. *, ** and *** denote the statistical significance at 10%, 5% and 1% level. The outcomes of variance ratio test for Shanghai and Shenzhen stock indexes are provided in table 5 (see Appendix). VR(q) is the estimate of variance ratio, and Z(q) and Z*(q) denote the Z test statistics under homoscedasticity and heteroscedasticity, respectively. The q-difference is assigned as 2, 4, 12 and 20 for all four indexes. For Shanghai A-share market, apart from the interval of 20 days, the null hypothesis cannot be rejected at all three significance levels under both of homoscedasticity. The results of variance ratio for Shanghai Composite Index are similar with these obtained for Shanghai A-share Index. For variance ratio test conducted for Shanghai Composite in 20-day interval, the null hypothesis of random walk is only rejected at 5% and 10% significance level under the assumption of homoscedasticity and heteroscedasticity, respectively. However, the null hypothesis of random walk for Shenzhen stock market is strongly rejected under the presumptions of homoscedasticity and heteroscedasticity in all the q intervals. The rejection of random walk can be realized even at 1% significance level. Under homoscedasticity, the reason for rejection of the null hypothesis of random walk could be the autocorrelation in stock returns. Nevertheless the null hypothesis is also rejected under heteroscedasticity, which indicates that the rejection of the null hypothesis under homos cedasticity is exclusively attributed to the autocorrelation in the series returns. According to the results obtained from all of the statistics about variance ratio test, Shanghai stock market is weak-form efficient and Shenzhen stock market is weak-form inefficient. The findings of Shenzhen stock market indicate that the autocorrelation in returns may completely reject the random walk of this market. Overall the Chinese stock markets represent inconsistency between the Shanghai and the Shenzhen stock markets. Compared with the findings of runs test, Chinese stock markets may not be weak-form efficient. 5. Conslusions Examining the weak-form efficiency of Chinese stock markets presents the relevant information behind the market series returns. The definition of Efficient-market Hypothesis (EMH) is developed by Eugene Fama (1970), which defines that in weak-form efficient market investors cannot make excess returns though historical stock prices and data, and the stock prices follow a random walk because the past price would not provide any related information to predict the future price. Based on the theoretical interpretation about the weak-form efficient market, some research has been conducted in the context of Chinese stock markets. As the empirical evidence obtained in the previous studies, they cannot reach a consensus on whether Chinese stock markets are weak-form efficient. Some studies asserted that Chinese stock markets did not follow a random walk, however other empirical findings subscribed to the opinion that Chinese stock markets are weak-form efficient. This study focuses on te sting the weak-form efficiency of Shanghai and Shenzhen stock markets, and two major indexes in each market are examined. Daily price from the time period 2000 to 2010 for each index is collected in order to examine the hypothesis of the random walk, and A-share index and composite index in Shanghai and Shenzhen stock markets are used. Statistical methodologies have been used in many empirical studies testing the random walk hypothesis. Considering the features of each statistic method, three statistical methods are employed. Dickey-Fuller is used to find the unit root of the returns series of stock indices, a non-parametric runs test aims at finding the independence among the returns for each stock index, and the variance ratio test examines the linear relationship between the variance of the random walk increments. Except for the empirical results of the Dickey-Fuller, the findings of the other two statistical methods indicate that Chinese stock markets do not perform consisten tly with the hypothesis of random walk, consequently implying that Chinese stock markets are weak-form inefficient. The results of Dickey-Fuller test ensure the existence of the unit root in the return series, which determining Chinese stock markets as weak-form efficient. Generally speaking, Chinese stock markets are not typically consistent with the hypothesis of weak-form inefficiency since no consensus has been reached among the three statistical methods. This results seem to be similar to the conclusion of the previous studies. A significant number of studies reported that the emerging stock markets might not has the unique features of the weak-form efficient markets because of the characteristics of the domestic polices and economies and etc. Even though Chinese stock markets are found untypical under the assumption of weak-form efficient market, it is still rational to believe the Chinese stock markets to behave like an market of informational efficiency in the following year s since the development in Chinese financial world is significant. Investors in Chinese stock markets cannot get a sufficient historical information from the current stock prices, which indicates some investors may acquire excess returns by some techniques. Inefficient markets may benefit the investors who can get access to the inner information or information about the patterns of the movements of the stock prices. To improve this study, firstly, it is proper to employ weekly or monthly data and to employ Shanghai B-share index and Shenzhen B-share index. Secondly, further researches could use Augmented Dickey-Fuller test with time trend instead of Dickey-Fuller test in this study. Besides, the whole time period could be divided into some sub-intervals, which proving more detailed analysis. At last studies employing four or more statistical methods might present adequate evidence on this topic.
Thursday, December 19, 2019
Air Canada Business Brief Alessia Ianni-Palarchio Ms. Adridge BOH4M1-01 Air Canada is a major player in the airline industry, as it has been since its foundation on April 11, 1936. As one of the top airlines in the industry, there is a high standard of quality that was, is, and must continue to be maintained by the dedicated staff in the employee of Air Canada. It continues to be a steady market, especially with the stability of the Canadian economy. The downturn prices in oil continue to impact the dollar, however, it lowers operational cost in the industry, and allows competition to remain high. Currently staff numbers 24.5 thousand full time employees across all of our locations in Canada, the United States, France, Denmark, NewÃ¢â¬ ¦show more contentÃ¢â¬ ¦Stock Prices 2007 - 2015 Lowered oil prices reduce overall overhead costs, also improving the financial state as it provides more leeway in the budget. This can be put toward improving the fleet, as well as invested into improving customer service abilities. PEST Analysis Political Factors Economic Factors Ã¢â¬ ¢ Riots in the United States and high racial tensions may lower flights specifically to that area. Ã¢â¬ ¢ Lowered price of oil for political reasons Ã¢â¬ ¢ Economic downturn, but stability Ã¢â¬ ¢ Young generations spending less on travel Social Factors Technological Factors Ã¢â¬ ¢ Recent airline disappearances and crash reports in media Ã¢â¬ ¢ Change in PEDs policies Ã¢â¬ ¢ Apple iWatch provides new means of check-in and data collection on passengers. Ã¢â¬ ¢ New regulation on use of PEDs in flight With the emergence of new personal electronic devices (PEDs), the company has been pleased to announce the new policy on the usage of such devices, which allows for gate-to-gate usage, so long as no data is transmitted or received. The use of earbud headphones is still not permitted for use until the designated altitude has been reach, however, as a safety protocol. With the number of plane-related incidents in the past year, safety procedures are of the utmost importance and must be maintained to a higher level of standard than usual. PorterÃ¢â¬â¢s Five Forces Industry Competition Ã¢â¬â Moderate to High No sustainable advantage