Sustainability A Win-Win Equation Essay Example

Supportability: A Win-Win Equation Essay All business associations whether large or little, private or openly claimed, make critical commitments to the development and improvement of our economy.â Effects of globalization and industrialisation, particularly in the created nations, have had an incredible effect of the financial development of most business associations, either straightforwardly or indirectly.â This has thus influenced both national and worldwide economies in a positive manner however tragically, this expanded pace of modern development has not been without hitches.â Many business associations have been blamed for participating in rehearses which are earth antagonistic, henceforth prompting the serious worldwide issues (such a dangerous atmospheric devation, atmosphere changes and destitution) being knowledgeable about the present reality. The expanded worries for ecological preservation activated by instances of a worldwide temperature alteration and atmosphere changes have constrained numerous organizations to receive systems planned for accomplishing a progressively supportable advancement in our economy.â Sustainable improvement alludes to the demonstration of amplifying the usage of accessible assets to address the issues of the ebb and flow age, without trading off the capacity for people in the future to meet their needs.â â Â â â â Efforts for economical improvement are not only for enormous business partnerships (Lantos 2001: 12-23).â Small and medium organizations have been found to contribute a lot to natural protection and indeed, contemporary examination discoveries have indicated that, such organizations are ordinarily at a more prominent bit of leeway than the bigger associations because of less tightening influences by administration which gives space to quicker dynamic and execution process es.â For this situation, the selection of earth amicable strategic policies is increasingly adaptable, reliable and viable in little organizations than in huge organizations. We will compose a custom article test on Sustainability: A Win-Win Equation explicitly for you for just $16.38 $13.9/page Request now We will compose a custom paper test on Sustainability: A Win-Win Equation explicitly for you FOR ONLY $16.38 $13.9/page Recruit Writer We will compose a custom paper test on Sustainability: A Win-Win Equation explicitly for you FOR ONLY $16.38 $13.9/page Recruit Writer This paper looks to address the issue of how maintainability can be implanted at Carillion plc a development organization situated in UK, why it is significant, expected challenges of actualizing manageability in this sort of an association lastly, a plan standards on how reasonable concerns can be coordinated in the association to give new business openings. Foundation data. Carillion plc is a main supplier of development benefits in UK with activities all over Britain, Canada, Caribbean island, Middle East and different pieces of Europe (Sustainability at Work 2004: 1-6).â This organization was set up in 1999 after a de-merger from Tarmac Construction Services organization set up back in 1903.â Sustainability endeavors at Tarmac Construction started in the mid 1990s.â These endeavors were basically incited by the developing ecological concerns and open mindfulness on the need to save the environment.â The companys first natural approach was passed in 1994 to incorporate natural issues on the companys corporate administration (CIRIA Guide C571: 2001). In 1999, when the UK government built up a feasible advancement strategy, the organization extended its natural supportability endeavors to remember the social effects of its development tasks for an offer to address the effect of its activities to the nearby networks, consistence to work measures, among different issues pertinent to the society.â At this point, the organization grew new techniques to connect its ecological worries to the social issues raised by its development projects.â The organization has since been as often as possible assessing its business procedures to ensure it fits in with the natural and social issues through its sun graph and business methodology model. Since its dispatch in 1999 as a development administrations organization, Carillion has encountered huge development in offering types of assistance to different areas in the UK and manages (Sustainability at Work 2004: 1-6).â â This quick development has been ascribed to its manageability business approach which has improved its seriousness, earned it numerous new customers just as worldwide acknowledgment as a naturally delicate organization. Why I picked this organization. Development and support of streets, structures and other foundation influences the nature of human life in various ways.â Construction forms modify the physical viewpoint or presence of human environmental factors through the way toward building, fix, destruction and waste generation.â Over the previous multi decade or something like that, the development business has encountered significant upgrades because of new advancements in the zones of innovation, IT and undertaking management.â This has empowered most development organizations to provide food for the developing interest from the customers to convey quality administrations. In the ongoing past, the customers requests in the development business have moved towards an inclination for maintainable items to supplement their key plans.â accordingly, development organizations like Carillion plc have been compelled to embrace practical development forms so as to meet this new customer demands.â Though its inceptions are established in the landing area development administrations, Carillion plc likewise manages development in the wellbeing business, business properties, street and rail development among others.â As a development organization, Carillion has increased its endeavors to install reasonable worries in every aspect of its business activities. Conceivable manageable undertaking for Carillion. A manageable development venture is a procedure, an action and an outcome.â For this explanation, a supportability approach must be incorporated into all phases of development which length from the phase of land and structures determination right to end of life stage when the undertaking is completed.â The key components of a practical development venture for Carillion in type of a worth chain would include: This worth chain shows all the potential phases of a supportable development project.â To install manageability issues in the development activities at Carillion plc, the structure of this stages should be considered before the initiation of the development procedure. Terrains and structures choice;- At this stage, a manageability approach ought to be utilized to examine and assess the natural effects of the venture. Plan;- A reasonable structure ought to be coordinated into the development procedure as ahead of schedule as conceivable to guarantee best results.â This includes understanding the entire development process along with its natural and social effects. Arranging;- This stage gives a basic point to the incorporation between the companys dynamic procedures and issues concerning feasible turn of events. Getting;- This includes the offering of temporary workers, designers and providers in preparation for the genuine development process.â At this point, it is significant for the organization to guarantee that all the provided materials are ecological benevolent and that both the contractual workers and providers are proficient and earth sensitive.â For example, Carillion plc can utilize manageable deck materials in the vast majority of its emergency clinic improvements, rather than utilizing floor materials produced using vinyl polymers. Development;- This is the real physical development process and now, the organization ought to consider ideal use of the accessible assets with least ecological impacts.â This includes things like waste administration and reusing, less natural contamination as far as commotion and waste removal, ideal vitality use, etc. Repair;- This is otherwise called the modify stage.â Since renovation of structures frequently yields enormous volumes of squanders, an exhaustive plan is expected to limit the consequences for the encompassing environment.â This includes thinking of reusing and recovery plans of the materials connected to the development plan. End of life;- Sustainability issues at this stage are firmly connected to different stages in the worth chain.â This is otherwise called the destruction stage or de-development stage, and it includes the total disassembling of the structure materials which are later re-utilized or discarded, contingent upon the customers preference.â This stage regularly presents noteworthy effects on the earth as far as waste creation and hence, a supportability approach is essential now of the development venture. Steps for improvement of feasible development. The way toward coordinating supportability in structuring, creating, developing and keeping up practical structures and framework via Carillion plc would include six significant steps.â This means are for the most part planned for installing maintainability issues into the structure and execution of development projects.â These means include; Dynamic authoritative administration which is centered around manageable turn of events. A characterized business technique which spots an incentive on maintainability. Joining of manageability worries into the companys dynamic procedures. Improvement of a dream proclamation which sets targets and benchmarks the presentation of the development venture. Drawing in the customer or the end client in the task. Screen the exhibition of ventures did after some time to gauge the maintainable improvement estimation of the undertaking. Difficulties of supportability. Probably the best test of supportability in the UK development area has to do with consistence versus leadership.â A larger part (95 pe

In the late 20th century some people could be regarded or see themselves as victims of globalisation Essay Example For Students

In the late twentieth century a few people could be viewed or consider themselves to be casualties of globalization Essay Basically assess the manner in which arrangers have spoken to these individuals to show how globalization has made perspectives that have influenced them. Globalization has seen the disintegration of conventional limits, with the end goal for innovation to grow the correspondence of widespread facts, falling time and separation, and homogenize worldwide and nearby developments of reality into a solitary social character. This culture of societies, notwithstanding, keeps up values which sustain negative effects upon the neighborhood, misleading ones social condition and character on different levels as can be seen in Seamus Heaneys sonnets Digging and Requiem for the Croppies, and Annie Proulxs epic The Shipping News. These writings alongside others including Yasumara Morimaras visual The Slaughter Cabinet II, the film Snow Falling on Cedar, and the Television arrangement Star Trek: Voyager; utilize different procedures and ideal models to outline how withdrawing turns into a method of rocking the boat, through saving the nearby. These writings delineate the manner in which globalization has made various perspectives, which have regular ly stressed the way one battles to bar the worldwide, or equalization both social powers. These various perspectives have regularly come to presence, because of people who become mindful of the breaking down of the characteristics which make their neighborhood conventional and illuminating. In Heaneys Digging, the authors utilization of auxiliary divisions emblematically underpins the way toward withdrawing, investigating his Irish legacy. The shout of by god and dynamic idea of the elderly person, for example, passes on a feeling of profound respect for the customary associations between the Irish and their territory By god, the elderly person could deal with a spade. Much the same as his dad. The political talk, be that as it may, made by the pens nature of being cozy as a weapon; and the incongruity where the pen or the Global is expected to impart neighborhood esteems; demonstrates that the writer has acknowledged that the exploitation of the nearby is unavoidable and certain. These Global powers, in any case, has driven Heaney to recommend to the responder that in sp ite of the fact that the past can't be supplanted, and an absolute complete return can be made, there is a substitute method to burrow and follow men like them, utilizing systems of the worldwide against itself The squat pen rests, sick burrow with it. Globalization has supplanted national limits, impacting ones translations of their lives to a degree in which they are compelled to react through fitting in with principles, loathsome or enduring as casualties unfit to discover a character or network to have a place with. Like Digging, the utilization of auxiliary divisions in The Shipping News, essentially represents Quoyles retreat, and uncovers to the responder the tremendous differentiations among worldwide and neighborhood esteems. Quoyles youth, for example, creatively depicts the worldwide as shallow and unaccommodating disappointment of an ordinary appearanceat sixteen he was covered under a casement of tissue All one can do in these worldwide circumstances which influence ones observation is to concoct tricks to divert gazes. This delineation of the worldwide as ailing in substance and independence is additionally stressed by Petal Bear, whos Thin. Sodden. Hot. Appearances are differentiated to the dark diversion in her pass ing, when she endeavors to offer their kids to a pedophile, and bites the dust in an auto collision. The writer subsequently, features the consistency and negative effects the worldwide has on a person. Newfoundlands differentiating festivities of neighborhood customs, for example, the Christmas exhibition in section thirty four, shows the manner in which the nearby is strong a scope of best clothesthe puff of scented bodies, a mumble like honey bees over a red field The allegory of the honey bees clearly proposes that the nearby network is content, because of simplicities the social occasion of a little horde of individuals. Inside this public environment, Quoyles character can create, as found in his last discussion with Tert Card spouse! not going down there, shes remaining right here. Remain at home where she has a place. With which in response, Quoyle, strolls off to his youngsters, representative of Proulxs depiction of the neighborhood as recharging ones confidence throughout everyday life. Basically, through differentiating worldwide and nearby settings, the arranger threatens the Globals exploitation of people, and changes Quoyles encounters into an image of local people be coming stronger through its battle with the worldwide. Lifetime Goals and Achievements EssayGlobalisation might be amazingly compelling to some extent, where it might turn into an obstacle to those withdrawing from exploitation. In Snow Falling on Cedars the authors multiculturalism of American and Japanese neighborhood networks, withdrawing from an all damaging worldwide network, embodies the manner in which the nearby may adjust through coordinating withdrawing networks together. The differentiation of flashbacks anyway outlines the degree to which worldwide mentalities influence the nearby. The motorcade scene, for example, is like the Christmas Pageant, and complexities to the flashbacks of World War II, where Japanese individual residents are put into inhumane imprisonments. The suspension of the music, the spatial separation between the pontoon sending out the Japanese individuals and the island makes an emotional visual effect, persuading us that, now and again, the possibility the neighborhood soul retreat, after the disintegrati on of public qualities, is moderately less. Withdrawing from the worldwide establishes a prohibition of worldwide ways and a protection of differentiating conventional qualities so as to stay away from an exploitation the worldwide sustains. As the writings appear through making emblematic associations with worldwide and neighborhood ideas, globalization has made a tremendous woven artwork of standards and qualities. The portrayals of ones retreat, recommend that the worldwide is all expending, and contrarily impacts upon neighborhood culture, as commercialization, realism and gratification dissolve customs and character. Withdrawing is in this manner increasingly best, notwithstanding, may not generally be conceivable because of the degree societies have gotten normalized. A portion of the authors, in any case, show that the worldwide can give advantages to suit the insufficiencies of the neighborhood. What's more, thusly, a large portion of the writings point to the perfect that there is a need to coordinate worldwide and ne ighborhood viewpoints a glocalised culture, so as to generously bolster ones personality in the twentieth century.

SIPA Graduation Speaker COLUMBIA UNIVERSITY - SIPA Admissions Blog

SIPA Graduation Speaker COLUMBIA UNIVERSITY - SIPA Admissions Blog General Brent Scowcroft, former National Security Advisor and SIPA Advisory Board member, will deliver SIPA’s 2009 graduation address on May 18. General Scowcroft served as National Security Advisor to Presidents Gerald Ford and George H.W. Bush. A graduate of the U.S. Military Academy at West Point, he earned his MA and Ph.D. in International Relations from Columbia University. As President and founder of The Scowcroft Group and one of the countrys leading experts on international policy, Brent Scowcroft provides Group clients with unparalleled strategic advice and assistance in dealing in the international arena.

Analysis Of Loyola University Chicago s Mission Statement

Loyola University Chicago has various opportunities that help engage students in different activities that can help them raise awareness of the outside world environment. Loyola’s mission statement states that â€Å"We are Chicago s Jesuit Catholic university- a diverse community seeking God in all things and working to expand knowledge in the service of humanity through learning, justice, and faith.† Under this statement, students are reminded of engaging themselves with the community and provide service that can help the community and demonstrate God’s faith over all purposes. Through the commitment of â€Å"learning, justice, and faith†, as a student, I am inspired to do more as a person for the community. As an international student, I am very grateful of being able to participate in the Engaged Learning Community of ISOM (Information Systems Operations Management), and earn more knowledge and awareness of the case study provided in class. Our Engaged Learning Community group was given the opportunity to participate with The Catholic Charity of Chicago, a group committed to help the less fortunate and the people with need of income. In accordance to Loyola’s mission, Catholic Charities helps the community regardless the background people seeking for assistance may come from. They are willing to provide assistance through funds, referrals, case managements, emergency shelter, clothing, food pantry, information on government benefit screening, basic needs, and social services.Show MoreRelatedThe Current Situation And Institutional Structure Of The Chicago Public Library7643 Words   |  31 Pagesinstitutional structure of the Chicago Public Library system in the light of current research of mission, vision, and value statements. 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Heres What I Know About Service Learning Essay Topics

Here's What I Know About Service Learning Essay Topics You may find there's a compelling argument for learning another language after all! Psychology can give a wealth of interesting matters to discuss. For a student in the center school the typical topics are associated with science and history. Choosingessay topics is essential for a student. The Appeal of Service Learning Essay Topics One, we apply an extremely careful range of our writers. Otherwise, you should look at a number of the easy compare and contrast essay topics on the many scientific innovations. Thanks to the correct selection of presentation style and a thorough understanding of the goals you wish to attain in your essay, there are many categories essay themes may be broken into. There is a variety of of essays, and every one of them is challenging in a different way. Up in Arms About Service Learning Essay Topics? The massive selection of related problems, concepts and positions would make it quite cha llenging to draw any clear conclusions, and you would spend the majority of your time merely defining the many issues and concepts. Also, remember your discussion topics must fit the other students' level some of them are able to be not able to take care of the topic that has too many elements to take into account. You should have accessibility to proper resources that will enable you to compose the essay with appropriate sense and structure. The subject can be associated with science or literature. In general, you can observe that writing a persuasive essay isn't a brain surgery. If you aren't sure which to use, you will hear which one is accurate. If you are pleased with the amount of your knowledge on a particular subject, hen you may safely consider it as the topic for your essay. You don't need to acquire super technical with legal argumentative essays, but don't forget to do your homework on what the present laws about your preferred topic actually say. Choosing exce llent essay topics for middle school needs to be a careful procedure, where a balance needs to be struck between topics that might be too simplistic, more fit for the main school, and choosing argumentative essay topics that might be too elaborate or controversial. Quite frequently, the ideal topic is one which you truly care about, but you also will need to get ready to research it. It's possible to use any as the subject of your essay particularly whenever you're not assigned any specific theme. In order to assist you narrow down an appropriate topic and title for your environmental essay, we've discussed some techniques you could employ. If you are feeling drawn to a specific topic or set of topics, then that's definitely what you will need to write out. The 30-Second Trick for Service Learning Essay Topics Individual schools sometimes need supplemental essays. Oeuvre the very best college admission essays are among the most provocative characteristics of the college employment transform, and it's also among the most eventful. A different way to help get a clearer idea about the college essay is read about other college essay that was done by other people. The Hidden Truth About Service Learning Essay Topics Facts, in the long run, will always win out against how folks are feeling at a specific moment. You have to have noticed that each topic is significantly related to the some type of mystery since if you won't create suspense and unveil the unknown then you won't be in a position to draw the readers attention at any instance. Even if a specific research paper topic is getting lots of buzz at this time or other men and women seem interested in writing about it, don't feel tempted to make it your topic if you don't genuinely have some type of interest in it also. The 30-Second Trick for Service Learning Essay Topics By way of example, in college, you might be requested to compose a paper from the opposing perspective. Pick a distinctive topic that others may not think of, and whatever you select, make sure that you know a lot about it! While you're just beginning to compose essays, you shouldn't struggle attempting to think of something to discuss. There's no one best approach to compose the college e ntrance essay. What You Should Do to Find Out About Service Learning Essay Topics Before You're Left Behind It is vital to answer the essay question. If so, you're in for writing a great essay. Persuasive essays share a good deal of resemblance with argumentative essays. An argumentative essay is a certain kind of academic writing. Some schools have many specific topics from which you're expected to choose and write about. Sure, with this kind of an enormous selection of topics to pick from, picking just one may be challenging. Curriculum proposal topics is a means to try. It's important to select debatable argumentative essay topics since you need opposing points which you can counter to your own points.

My Writing Career Free Essays

In my life, I had different events that have affected my personality and way of viewing stuff. Each category of events can be arranged from oldest to recent and put in a timeline. The timeline is a way to view your history in one part of your life. We will write a custom essay sample on My Writing Career or any similar topic only for you Order Now Writing skills are one of the major events that can be perfect for a timeline. This is because writing starts with you from an early age and keeps improving. Hence, this essay will be laying out my history in writing. I was born in Abu Dhabi in December 28, 2000. Actually, this was my birth date, but my writer was born in my first academic years. Everyone has a writer inside him that starts small and weak then grows big and strong. In kindergarten, I first learned how to write the English alphabets. The idea was to trace the alphabets until we know how to draw them. In grade one, the English teacher used to give us handwriting workbook to practice writing and improve the looking of our words. These workbooks used written examples. Under these examples, we should trace these words, and under the tracing, there was two lines for copying the sentences. In addition, teachers taught us how to write our names in both Arabic and English. From grade 3 to 5, were introduced to the idea of spelling tests and dictation. The procedure was that the teacher gives us a list of words to practice on. Then on the test day, she/he examines us on these words. Sometimes it is a paragraph instead of independent words. At first, I got average marks, and then I improved a lot. I remember that when I got some words spelled wrong, I was punished to write that word tens of times. It was annoying at that stage but now I realized that it was so beneficial for me. It made me have less spelling mistake onward. In grade 5, I started the real writing. I started to write short paragraphs and connect them, in order to make a good essay. In grade 6, we learned how to write narrative essays and stories. I remember that I had nearly the same events when I wrote stories. It was all about going to a place with my family and not following my uncle’s rules, which lead to problems and dangers for us. At the end of my story, I used to put somehow an advice to follow the rules and not be reckless. I started to write independent texts away from school starting from grade 7. At that year, I started to write my own diaries. I record what happened in my day and what experience I learned. The idea came to me when I was watching a cartoon and I saw that a character is writing diaries. He was looking after his diary always and take care of it. He influenced me to try that type of writing, but unfortunately, that did not last for a long time. In grades 8 and 9 we went in more serious types of writing. I learned how to write a persuasive essay for convincing people. I remember that one of the subjects to write about was why we should change the food in the school’s canteen. Then in grade 11, we were taught how to analyze both novels and movies. We used to extract the theme and the timeline in addition to vocabulary analysis. In my final high school year, argumentative essay was our assigned type of writing. One topic we studied in this field was whether spending a lot of money in space researches is beneficial or not. Some people say yes and the other say no, because other people can actually benefit from this wasted money including poor families. Also in 2017, I started to write both formal and informal email messages. It was a new way of writing. The year next I was learning the way of writing essays for English proficiency tests. Now in the time being I am learning how to write a secondary research paper by using data from reliable sources. In conclusion, everyone has a writer inside him that he should improve and work on. As you read, my writer was born when I was in my early academic stage and still working on it now. My real start was in grade 4 to 7. Then I went to a stage that is more serious from grade 8 to freshman year of university. I will try my best to learn from other experts and improve until I get the mastery level. How to cite My Writing Career, Papers

Interpretation Of Rushdie And Kazantzakis Stories Essays

Interpretation of Rushdie and Kazantzakis' Stories As I look back now, and begin to appraise the independant novels that I have read in the past few weeks, I was both stunned and surprised by the psychological effects that they had imposed on my mind. Whether it was Rushdie's tale of diabolical consequences or Kazantzakis' story on the trial of Christ, I found it increasingly difficult to maintain a coalition between the influence of society and the animosity of religion. Both novels featured plots centralized around the presence of an unseen mystical force, or rather, the significance and power of God. Whether it was the religious or saintly detriment of God's influence or society's standardization of identifiying God, the time factors of each book did little to alter the author's expressions and inclinations about religious beliefs. The Satanic Verses featured the modern day society compressing the main characters with their positronic rules and restrictions. The Last Temptation of Christ focused on the feudalism exhibited by the oppressors of the world at the current time (Roman militia). Upon the climatic ending of each novel, I would effortlessly integrate the author's deluge of spiritual dynamism with my own. This produced an ethical conflict in my mind that fought to distinguish what prominence God had maintained in my lifetime. I could scarcely believe that such literature would not have a profound effect on an individual who possessed strong religious background (this assimilates the decision of the exodus Rushdie has maintained contrary to the threats of the Islamic community) Never have I encountered such literature that treads upon on line between celestial religion versus oppresive regime Therefore, in analyzing and interpreting each piece of fiction, I was able to understand what similarities they held and why such novels can procreate an undersirable amount of calamity in the world. The supernatural portrayed a dominant role in both texts. Each author seemed to enjoy casting these uncanny forces against their main characters in order to induce their thoughts across much more clearly. In the Satanic Verses, I found the physical metamorphosis of Gibreel Farishta and Saladin Chamcha to be terrifiyingly graphic and demeaning. "Looking into the mirror at his altered face, Chamcha attempted to remind himself of himself. I am a real man, he told the mirror, with a real history and a planned-out future. I am a man to whom certain things are of importance: rigour, self-discipline, reason, the pursuit of what is noble without recourse to that old crutch" (Saladin remarking about his physical appearance). Having their physical status altered, they were unable to communicate on a humane level with other people in the world. It seemed as though their lack of faith and nobility to God had created an ethereal war between them and the supernatural spectrum. The angelic Gibreel was now only capable of exhibiting feelings of order, peace and love; while the demonic Saladin was forced to perform grotesque feats of chaos, hatred and violence. Before their transformations into socially unacceptable deviants, Gibreel fought long and hard in his prophetic movie career and Saladin enagaged in truthful, honest business negotiations. Their emotions and mental status was drastically changed by this supernatural intervention. It was not until Gibreel and Saladin had visited the various parts of the world in order to experience the humanity and benevolence that God had wanted them to witness, that they both eventually looked deep into their hearts to realise that only they controlled their desires and aspirations with their newly granted powers (by this time, Gibreel had conferred with Saladin about being a "Pawn in God's game of Life). Both these characters began as non-believers, idle worshippers of their religious affiliation, but towards the end of the book, they had transformed into faithful advocates of God. I can only assume that such decisions were reached due to metamorphosis that they endured and the punishment that they had suffered. It was generally accepted in their society that the messiah will punish all zealots and non-believers to those who follow their designated religion. This is relates to The Last Temptation, as Nikos Kanzantzakis guides the reader through a detailed portrayal of Christ's journey to Jerusalem in order to establish his belief in God. Like the main recipients in the Satanic Verses, Christ held a firm decision that God could not exist since his people were being tortured and abused by the Romans. His belief that it was up to him to survive under the oppression of the Romans and eventually to accumulate a substantial amount of financial security in the market sector of Nazareth

Mohandas Karamchand Gandhi Analysis

Mohandas Karamchand Gandhi Analysis Mahatma Gandhi was a ‘nonconsequentialist’ in his beliefs because he rejected consequential philosophy which insinuates that consequences of actions can appreciably justify the means. ‘Nonconsequentialism’ views morality from the actions and not the consequences.Advertising We will write a custom essay sample on Mohandas Karamchand Gandhi Analysis specifically for you for only $16.05 $11/page Learn More According to nonconsequential theory, one’s morality lies in his/her actions and not consequences of his/her actions for nothing good can come from immoral actions. Therefore, actions are ether right or wrong independent of the consequences, as good ends cannot justify any corrupt means. Allen argues that, â€Å"Gandhi is well known for his emphasis on the integral, mutually reinforcing relationship between means and ends because one cannot use impure or immoral means to achieve worthy goals† (3). Gandhi did not believe that an action is right if it promotes greatest good for the greatest number of people; far from it, he believed in moral actions that lead to the greatest good for all and this simple outright belief passes Gandhi for a nonconsequentialist. Deontological theory supports Mahatma Gandhi view of morality for it states that morality depends on the actions or motives of the people. The deontological theory is a nonconsequential theory that does not assess morality from the point of consequences rather it assesses morality from the actions or omissions. According to this theory, actions and rules are primary in determining morality in the society for deontologists argue that, actions are morally right or wrong based on commands from higher power or divine. In this case, Gandhi believed in divine obedience as a way of attaining the highest state of morality. Libertarian theory is also nonconsequential theory that supports Gandhi’s beliefs and arguments concerning morality. The the ory posits that policies are only morally right if they protect life, property and liberty of the people. Libertarians hold that freedom is inherent right of humanity, which guarantees life and property ownership, hence equality. Like libertarian theory, egalitarian theory supports the welfare of all in the society as depicted in the lifestyle of Gandhi when he fought for the freedom of the Indian masses. Gandhi is a virtue ethicist who observed virtues from the nonconsequential perspective. He believed that actions define morality in the society as depicted by his life philosophies. Gandhi informed many people about their rights, advocated for a peaceful society, demanded for equality, taught about goodwill living and divine morals.Advertising Looking for essay on biography? Let's see if we can help you! Get your first paper with 15% OFF Learn More Gandhi argues that, â€Å"if I am accumulating wealth and power, my neighbor is in great need, and I do nothin g to help alleviate the suffering of the other, then I contribute to and am complicit in the violence of the status quo† (Allen 4). In the argument, Gandhi implies that it is immoral to amass wealth in the society without helping the unprivileged for it propagates inequality. In his argument that he does not believe in the doctrine of the greatest good for the greatest number, but greatest good for all, Gandhi depicts that he is a nonconsequentialist. This argument sets him apart from the consequential theorists who argue that any action is morally right if the end justify the means or satisfy greatest number of people. Consequential theories define morality from the consequences emanating from the actions for it does not matter whether the actions are morally right or wrong. Examining Gandhi’s life, he was a man who dedicated his life for the benefit of all humanity because he struggled to instill ethics in all aspects of society such as economic, political, social and spiritual spheres. He believed that ethics are fundamental principles that keep the society together for the benefit of all members. Allen, Douglas. â€Å"Mahatma Gandhi.† Routldge Philosophy. (203): 1-12

Dont Hate the Authors Buy Book Reports Online and See the Light at the End of the Tunnel

Dont Hate the Authors Buy Book Reports Online and See the Light at the End of the Tunnel Dont Hate the Authors: Buy Book Reports Online and See the Light at the End of the Tunnel Have you been assigned to read one of the hard to decipher classics and then write a lengthy detailed book report demonstrating that you read and understood the themes, events and the author’s intention or style? If you begin to read the book and find it too far out of reach you might want to consider the fact that you can buy book reports online.   Why? There are many reasons to consider this option. Classics Teach about the Different and Subjective World of the Past The classics teach about a different from today ´s world that many younger readers know little about. It will be hard for someone who has little experience in life to grasp the themes and ideas behind the classics because they simply do not have the experience to relate to the book. It is challenging for one with limited life experience to appreciate the details and themes of the classics and it may be that they would gain more by reading the classics in maturity as opposed to youth. So, if you struggle with a task to read a â€Å"heavy† novel, think about book reports online. Forced Reading Causes Resentment towards Book Authors and Reading Itself It is indeed a good thing to read the classics as they can give you a perspective, shape your thinking and confirm things you have always suspected. The problem lies in the lack of choice given to students. We naturally resent anything we must do, regardless of the actual quality of the literature itself. It is akin to being forced to eat our vegetables when younger and growing to hate vegetables because of it. When we choose to read for enjoyment or curiosity we are able to relax and appreciate the literature at our own pace. Reading a Book While Never Fully Grasping It Is a Bad Use of Time With all of the other tasks and assignments students have, spending a disproportionate time on a book because it is hard to understand, and then not really gaining anything from reading, as it was likely rushed, is a bad use of time. The time is better spent on fruitful assignments the student will be able to use near term. If you are to really read a classic, really savor it, you must first have the capacity to do so. Second you must have the desire to engage in the activity. Third, you need to have the time, or make the time to fully dig into it, as classics are not light reading. They take time to digest, and you need to chew on them for a while to get the most from them.

The technological advancements that have changed human lives Essay

The technological advancements that have changed human lives - Essay Example The innovation of computers and cellphones changed our mode of communication, accuracy, efficiency, and speed of doing things. This has led to complex interactions between humans and machines, which changes our values and culture. As such, there are questions regarding the long-term effects of technology and the possibility of technology conquering us. In this context, there are two concepts of technology, which include Wilbur Mercer and Buster Friendly. This paper will give a detailed answer as to whether I am Wilbur Mercer or Buster Friendly and, more importantly if it matters who I am. In doing this, the paper will rely on evidence from Do Androids Dream of Electric Sheep? By Dick, Phillip K and a video presentation by Amber Case entitled â€Å"We’re All Cyborgs Now† among other scholarly sources. Wilbur Mercer symbolizes Mercerism that is a technology product, which defines a religion created by emotional connections by people from everywhere. It also encourages int eractions with other humans with a view of sharing the suffering and teaches its members to treat their neighbors the way they would want to be treated (Landsberg 38). On the other hand,  Buster Friendly is a technology product that depicts a media personality that derives an alternate media reality and offers entertainment on Earth (Sims 132). Seemingly, the show seeks to convince people that what has been happening lately is fine and normal and claims that Mercerism is a false religion (Rossi 262). There are various critics and praises for in Wilbur Mercer or Buster Friendly in the novel Do Androids Dream of Electric Sheep. Notably, the two compete for humans' attention and the resultant control of humans' thoughts. This manifests the strength of technology on humans to their oblivion. Personally, I chose to be Wilbur Mercer. It is quite clear that the modern society values religion as one of the fundamental aspects of human life. Ideally, religion derives spiritual teachings an d morals that control actions and dominate our personal thoughts and decision-making in our daily lives. As such, the use of religion in the novel, â€Å"Do Androids Dream of Electric Sheep?† is very significant and I support it. Indeed, in this novel, Dick portrays a wide range of religious analogies and references and manifests how humans rely on religion in times of isolation, war, distress, destruction, and instability. Actually, Dick confirms that Mercerism that in the novel acts as the people’s religion is fundamental in deriving hope and unity among human beings in times of dire need. Dick devised his story to reflect human life in 2021 where there was nuclear war fought by rockets and the effects of the nuclear fallout and radioactive dust that plagued the Earth (Dick 4). This created a sense of dire need and desperation. Dick portrays the plagued Earth as an uninhabitable place after the human beings engineered its destruction (Dick 16-17). However, he shows s ome inhabitants who remained and suffered on Earth due to the harsh and isolated conditions they lived in. Most assuredly, this a destitute condition where there are very few people surviving and hence the need for Mercerism. Notably, Dick displays Mercerism as a mass religion criticized by many people at his time (Dick 20-27). This would indeed reflect a religion like Christianity, which is facing critics among scientists. Indeed, Wilbur Mercer would represent Jesus Christ in this context. In addition, just like people interpreted religion before the scientific evolution, Dick portrays people interpreting Mercerism literally in the novel. Mercerism has far-reaching benefits in that it encourages people to care for other people’s feelings and to share in their suffering. It asserts that if you hurt

Rapid Freight Converged Network Security Case Study

Rapid Freight Converged Network Security - Case Study Example Accidentally, internal threats occur when people use their portable devices outside the network then plug them back in importing viruses and other malware. Some members of staff might be malicious and try to access unauthorized segments (Paul, 2011). External threats are easily kept at bay through the implementation of firewalls. A firewall allows a flow of data from known sources to the web server or specified destination while rejecting unknown traffic. If the firewall is compromised, it severs the connecting of the system to the internet host. Notwithstanding, firewalls are not perfect and should not be used solely (Stewart, 2010). Unified Access Control and Network Access Control ensure that device users are authorized to use the network. Account management system registers network users and signals any illegal activity. Coupled with Personalization, the intervention will keep the network safe from internal threats of any nature (Gregory, CISA, & CISSP, 2007). Implementing session management features such as Virtual Private Networks (VPNs) will overcome challenges posed by the use of VoIP phones, Video conferencing and PDAs. IPSec VPN scrambles traffic from the phone and safely connects to the corporate network without fear of infiltration. Softphone users will require authentication into the Converged network. Secure Socket Layer VPN (SSL VPN) ensures that users are logging in from healthy computers when accessing the network remotely. Intrusion Detection and Prevention software (IDS and IPS) will further enhance overall security by scanning entire network to identify and report signatures or suspicious traffic arrays (Gregory et al,  2007).

Intelligent Public Transport System Design

Intelligent Public Transport System Design An Intelligent Public Transport System for Smart City Gurnoor Walia, Kuljit Kaur Abstract Road safety has changed into a main subject for governments and automobile manufacturers in the last decade. The advancement vehicular technologies has privileged researchers, institutions and companies to target their efforts on improving road safety. new kinds of networks, such as for instance Vehicular Ad Hoc Networks (VANETs), have now been designed to assist communication between vehicles themselves and between vehicles and infrastructure. Smart cities embrace intelligent traffic management in which data from the Traffic Information Centre (TIC) infrastructures might be accessible at any point. In this paper we have listed the details of various features relating to intelligent transportation system. INTRODUCTION Cities are complex, networked and continuously changing social ecosystems, shaped and transformed through the interaction of different interests and ambitions. Cities represent a promise for future years: a vision of creativity, opportunity, freedom and prosperity. More than half of the global population has become urban and surveys estimate this percentage may even grow towards 70% in 2050 [2]. The services are increasingly enabled by broadband infrastructures, Internet-based networked applications, wireless sensor networks, open data and open platforms. Within the last decade digital technologies have begun to cover our cities, working together to make the backbone of a big, intelligent infrastructure. Wireless telecommunications grids and broadband fiber-optic are supporting smart phones, mobile phones and tablets which can be increasingly affordable. Add to this foundation a uncompromisingly growing network of sensors and digital control technologies such as smart meters, all tie d together by inexpensive, powerful computers and our cities are quickly fitting like computers in open air[3]. Smart City A smart city use digital technologies to boost the performance and wellbeing, to decrease costs and resource consumption, and also to engage more successfully and actively with its citizens. The core smart sectors comprise energy, health care, transport, water and waste. It should be able it to respond more rapidly to needs of a city and global challenges than one with a simple transactional association with its people. Interest in smart cities is motivated by major challenges, including economic restructuring, climate change, ageing populations, the move to online retail and entertainment, and pressures on public finances.[4] The terms ‘intelligent city’ and ‘digital city’ are also used. [5][6].According to IEEE A smart city brings together technology, government and society to enable the following characteristics: smart cities, a smart economy, smart mobility, a smart environment, smart people, smart living, and smart governance.[7]. 1.3 Intelligent Transportation System As India plans to take a leap forward with approval for smart cities, intelligent transportation is a must have technology. Intelligent transportation systems (ITS) are applications which, without embodying intelligence as such, intend to offer innovative services relating to traffic management and different modes of transport and enable users to be much better informed and make safer, more synchronized, and smarter use of transport networks. Intelligent transport systems differ in technologies used, from basic management systems such as traffic signal control systems; car navigation; container management systems; automatic number plate recognition; variable message signs or speed cameras to observe such applications, such as security CCTV systems; and to more complex applications that combine live data and feedback from numerous sources, such as weather information; parking guidance and information systems; bridge de-icing (US deicing) systems; etc. INTELLIGENT TRAFFIC SYSTEM USING VANETs The development of new vehicular technologies has shifted companies, researchers and institutions to focus their efforts on improving road safety. The evolution in wireless technologies has allowed researchers to style communication systems where vehicles directly take part in the network. Thus networks such as for instance VANETs are produced to facilitate communication between vehicles themselves and between vehicles and road side unit (infrastructure). Vehicular ad hoc network (VANET) is a technology which uses moving cars as nodes in a network to make a mobile network [10]. VANETs are becoming a useful consideration due to the various important applications related to traffic controlling road safety. Smart cities saturated in traffic want to minimize their transportation problems due to the increasing population that results in congested roads. VANET helps to fix this issue by improving vehicles mobility and also helps at having more secured and sophisticated cities. VANETs provide easier communication facility among vehicles and also with fixed infrastructure. This can not merely improve the trail safety, but also gives benefits commercially. Pollution reduction, accidents prevention, congestion reduction and safer roads are some of the benefits of VANETs. The development of an efficient system in VANETs has many important benefits, to the traffic police as well as to the drivers. Proper traffic alerts and updated information about traffic incidents will make safe driving, increase road safety and reduce the traffic jams in the city. It also helps to indentify where the traffic rules are violated. Furthermore, it also helps economically; real-time traffic alerting will reduce trip time and fuel consumption and therefore decrease pollution as well [11]. So it is definitely beneficial in many ways. TECHNIQUES FOR IMPELMENTING VARIOUS ASPECTS OF VANETS The smart city can utilize VANETs by having intelligent traffic lights (ITLs) set in the crossroads of a city. These ITLs gathering traffic information (e.g. traffic density) from the passing vehicles, updating traffic statistics (congestion) of the city and reporting those statistics to the vehicles to ensure that vehicle can select the very best path that is congestion free. Also, ITLs will send warning messages to vehicles in case accident occurs to prevent further collisions. As [14], the proposal manages traffic information to be able to avoid accidents, though the information here is gathered from the vehicles themselves so no more infrastructure is needed. Also the system could easily be utilized by the traffic information centre to style an adaptive traffic light system similar to [12] and [13]. The proposed system architecture [16] is as shown in figure 4. Figure 4. The proposed System architecture [16] with intelligent traffic lights It is assumed that vehicles have a global positioning system (GPS), aboard unit, full map information of the city including the exact position of the each ITL, to ensure that vehicles can very quickly select the nearest ITL. Warning message is of three types: yellow circle indicates that vehicle is independent and not communicating with every other vehicle, green circle indicates communication is made and messages transition is certainly going on red and signal indicates two vehicles come closer and there could be the chances of collision as shown in figure 4. Inter-vehicular communication is presented based on an adaptive traffic signal control system [12]. This system reduces the waiting time of the vehicles at the square also results in decrease in waiting time at the signal. To realize this system, the concept of clustering is used to collect the data of the vehicles coming towards the intersection. System that takes the control decisions based on the information coming from the vehicles is very well described by the authors [13]. Every vehicle is equipped with a short range communication device and controller nodes are placed in the intersection with traffic lights. This controller node at intersection acts as adaptive control signal system. In [12] and [13] two adaptive traffic light systems based on wireless communication between vehicles and fixed controller nodes deployed at squares are designed. Both systems improve traffic fluency, reduce the waiting time of vehicles at squares and help to avoid collisions. The work in [14] is a survey about multifunctional data driven intelligent transportation system, which collects a large amount of data from various resources: Vision-Driven ITS (input data collected from video sensors and used recognition including vehicle and pedestrian detection); Multisource-Driven ITS (e.g. inductive-loop detectors, laser radar and GPS); Learning-Driven ITS (effective prediction of the occurrence of accidents to enhance the safety of pedestrians by reducing the impact of vehicle collision);and Visualization-Driven ITS (to help decision makers quickly identify abnormal traffic patterns and accordingly take necessary measures). But, it requires large amount of memory to stores the videos. The e-NOTIFY [15] system was designed for automatic accident detection, which sends the message to the Emergencies Center and assistance of road accidents using the capabilities offered by vehicular communication technologies. The e-NOTIFY system combines both V2V and V2I communications to efficiently notify an accident situation to the Control Center. A technique of finding water-logging-prone areas is given in [8]. This recognition technique is principally based on the following steps. (i) Prediction of locations of low valleys in a sound prone 2D curve. (ii) Confidence score obtained from the calculation of valley area. The proposed solution could easily be integrated with participatory sensing for smart cities. If the smart-phone users voluntarily submit the GPS information received in their hand-held devices, the same can be used for water logging zone calculation. This can help the city authority to create a dynamic water logging prone map of the entire city. In [9] researchers propose a radically different road pricing scheme to avoid and decrease the traffic congestion in metropolises. Unlike designating a small congestion charge zone in an area, they propose to employ a road pricing system over the entire city. Thus, the road pricing system can control the traffic flow in the whole traffic network of the city. Furthermore, the road costs are adjusted dynamically on the basis of the instantaneous traffic densities of every road in the city in order torapidly and efficiently control the traffic flow and to prevent the traffic congestion. Geographical source routing is just a promising routing technique for VANETs, because adaptability for network dynamics and ability to take care of topology holes. In traditional geographical source routing algorithms a best-known neighbor, usually the neighbor nearest to another junction in a greedy fashion, is designated as the following hop. This method may cause two drawbacks: (1) the designated neighbor mightnt have the packet correctly and (2) non-neighbor nodes are never given opportunities to complete forwarding. In [1],two problems are solved by introducing the thought of opportunistic routing to geographical source routing. A new routing protocol, named Geographical Opportunistic Source Routing (GOSR), is developed. GOSR allows non-neighbor nodes as well as the best-known neighbor to become forwarder. The notification cost of opportunistic routing is minimized by enforcing a scope from which candidate forwarders are selected. Defer timers are adopted in order to avoid confl icts due to simultaneous transmissions by nodes in the designated scope. Simulation results also reveal that GOSR can substantially reduce hop count and also improve end-to-end delivery ratio remarkably. TOOLS USED FOR SIMULATING VANETS It is significant to estimate the performance of any network in order to highlight any issues that may exist; the most appropriate way to accomplish this task is therefore to deploy simulations that provide the closest results to real-world annotations. Various simulation tools have been used to evaluate and simulate the performance of routing protocols in VANET. 5.1 Network simulator (NS2 and NS3 ) The NS-2 provides significant support for the simulation of TCP, routing and multicast protocols over wired and wireless networks. The NS-2 simulator is written in C++ with an OTcl (Object Tool Command Language) interpreter as a command and configuration interface. C++ is fast to run but slower to change, making it appropriate for use in comprehensive protocol implementation. NS3 is exclusively written in C++ and it is available for different platform such as Windows, Linux, Unix and OSX, with the coding limited to only a few hundred lines as opposed to 300,000 lines for NS-2. For the sake of huge network simulation,NS3 has come to support distributed and federated simulation tasks. NS-3 is free software available for researchers and developers in order to simulate internet protocols and huge systems in a controlled environment. 5.2 GlomoSim GlomoSim was developed to simulate wireless network simulation. It was coded in Parsec, in which all new protocols need to be described. GlomoSim has the ability to run on SMP (shared-memory symmetric processor: memory simultaneously accessible by all programs) and to assist in dividing the network into separate modules, each running as a distinct process. This decreases the load on the CPU by dividing its workload. GlomoSim supports multiple wireless technologies. GlomoSim was developed to support million of nodes as a single simulation. 5.3 MOVE The mobility model generator for vehicular networks is based on the Java programming language and is built on SUMO (Simulation of urban mobility). MOVE has greater consideration of traffic levels supported by GUI facilities. Mobility trace files can be generated from the Google Earth or TIGER databases. Custom (random and user) graphs a real so supported, although the node movement is constrained to a grid in a random graph. 5.4 TraNs TraNs (traffic and network simulator environment) is based on Java with a visualization tool to integrate SUMO and NS-2 and is specially designed for VANET (Traffic and network simulation environment) in a single module to support vehicular simulation. This can be accomplished by converting traffic files in to a dump file by SUMO. This file can then be read by NS-2. 5.5 VANET MobiSim VANET MobiSim was developed to overcome the limitations of CanuMobiSim. It supports car-to-car and car-to- infrastructure communications, which support stop signs, traffic lights and activities based macro-mobility with the support of human mobility dynamics. TIGER, GDF and random and custom topology are used to obtain road and traffic topology. Vanet MobiSim uses a parser to obtain the topology from GDF or TIGER. 5.6 NCTUns NCTUns (National Chiao Tung University Network Simulator) (WangandLin,2008) is built using C++ programming language with a high level of GUI support. The user has less need to be concerned about code complexity. NCTUns combines the traffic and network simulators in a single module, making a distinct vehicular network environment available. NCTUns supports the ITS (intelligent transport system) environment by using automatic road assignment supported by the SHARPE-format map file. Vehicle movement can be controlled automatically. FUTURE WORK and CONCLUSION In previous work researchers have designed a smart city framework for VANETs including intelligent traffic lights (ITLs) that transmit warning messages and traffic statistics. Simulation results reveal that the usage of ITLs in smart cities can not merely improve road safety but also the drivers quality of life. They have explained the way the ITLs gather traffic and weather conditions of the roads and how they update those statistics. The goal is that the drivers assistant device usually takes proper trip decisions, for instance in order to avoid congested roads, and therefore reducing the trip time and pollution as well. As a near future work, ITLs could communicate to passing vehicles indicating where would be the free parking spots in the city. With this specific information, the driver assistant device could indicate the driver where free spots are located. This technique could use a WSN to obtain the data about free parking spots and communicate it to the nearest ITLs. The ITLs could share that information although sub-network they form. This might save trip time, petrol and CO2 as a consequence, which helps to own sustainable smart cities. Also, statistics collected by the ITLs can improve data routing protocols selecting the road that offers an increased chance to forward a supply to the destination successfully. A VANET routing protocol that considers those statistics in its operation can also be designed. REFERENCES [1] Zhongyi, L., Tong, Z., Wei, Y., and Xiaoming, L., â€Å"Poster Abstract: GOSR: Geographical Opportunistic Source Routing for VANETs,† Mobile Computing and Communications Review, Vol. 13, No. 1, January 2009 [2] United Nations, â€Å"World Urbanization Prospects, The 2007 Revision Highlights,† United Nations, New York, 2008. [3] Schaffers, H., Ratti, C., and Komninos, N., â€Å"Special Issue on Smart Applications for Smart Cities – New Approaches to Innovation,† Journal of Theoretical and Applied Electronic Commerce Research, Universidad de Talca – Chile, Dec 2012 [4] Dept Business, Challenges Faced by Cities and the Need for Smarter Approaches, pg-5, 2013 [5] Moir, Challenges Faced by Cities and the Need for Smarter Approaches, pg-18, 2014 [6] Smart City, http://en.wikipedia.org/wiki/Smart_city [7] IEEE Smart Cities ,http://smartcities.ieee.org/about.html [8] Choudhury, A.D., Agrawal, A., Sinha, P., Bhaumik, C., Ghose, A., and Bilal, S., â€Å"A Methodology for GPS-based Water logging Prediction and Smart Route Generation,† 12th International Conference on Intelligent Systems Design and Applications (ISDA), Kochi , 2012. [9] Soylemezgiller, F., Kuscu, M., and Kilinc, D., â€Å"A Traffic Congestion Avoidance Algorithm with Dynamic Road Pricing for Smart Cities,† presented at IEEE 24th International Symposium on Personal, Indoor and Mobile Radio Communications: Mobile and Wireless Networks, London, 2013 [10] Emmelmann, M., Bochow, B., and Kellum, C.C., â€Å"Vehicular networking: Automotive applications and beyond,† John Wiley and Sons, 2010. [11] Ferrari, G., Busanelli, S., Lotti, N., and Kaplan, Y., â€Å"Cross- Network Information Dissemination in VANETs,† 11th International Conference on ITS Telecommunications, pp. 351-356, 2011. [12] Maslekar, N., Boussedjra, M., Mouzna, J., and Labiod, H., â€Å"VANET based Adaptive Traffic Signal Control,† IEEE 73rd Vehicular Technology Conference (VTC Spring), pp. 1-5, 2011. [13] Gradinescu, V., Gorgorin, C., Diaconescu, R., Cristea, V., and Iftode, L., â€Å"Adaptive Traffic Light Using Car-to-Car communications,† IEEE 65th Vehicular Technology Conference (VTC Spring), pp. 21-25, 2007. [14] Junping, Z., Fei-Yue, W., Kunfeng, W., Wei-Hua, L., Xin, X., and Cheng, C., â€Å"Data-Driven Intelligent Transportation Systems: Survey,† IEEE Transactions on Intelligent Transportation Systems, Vol. 12, Issue 4, pp. 1624-1639, 2011. [15] Fogue, M., Garrido, P., Martinez, F. J., Cano, J. C., Calafate, C. T., Manzoni, P., and Sanchez, M., â€Å"Prototyping an Automatic Notification Scheme for Traffic Accidents in Vehicular Networks,† Wireless Days (WD) IFIP, pp. 1-5, 2011. [16] Khekare, G.S., Sakhare, A.K., â€Å"Intelligent Traffic System for VANET: A Survey,† International Journal of Advanced Computer Research (2277–7970) Volume-2 Number-4 Issue 6, December 2012.

Anomalies in Option Pricing

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