Investment Bank Reputation Information Production And Financial Intermediaries Finance Essay - Free Essay Example

Sample details Pages: 6 Words: 1814 Downloads: 4 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? The article is a joint work of Thomas J Chemmanur and Paolo Fulghieri, it speaks about the reputation building of an investment bank, how information production and work of their underwriters help the banks build as well as break their reputation in the equity market. It calculates the reputation of a bank for entrepreneur and investor based on a virtual model created by them based on the real life market. About the Authors: The article is written by Thomas J Chemmanur and Paolo Fulghieri, this article was published by Blackwell Publishing for American Finance Association, in its The Journal of Finance, Vol 149 No.1; Mar 94; Pg. 57-79. Mr. Chemmanur is a professor of finance in Boston College in USA; with his research activities he has made a commendable contribution to the field of finance, which has also fetched him awards. Mr. Fulghieri is a professor of finance at the Kenan Flagler Business School, he is PhD in Economics, 1987 from University of Pennsylvania. He has contributed a lot towards the field of finance through his research and study; also he has been awarded many times for his papers, articles and researches. Don’t waste time! Our writers will create an original "Investment Bank Reputation Information Production And Financial Intermediaries Finance Essay" essay for you Create order Evaluation: The work is not completely original; up to some extend it is an extension to the work of authors like Leland Pyle (1977), Campbell Kracaw (1980) and Kreps Wilson (1982), etc. Relevant examples and references are quoted wherever required to support their findings and suggestions, but authenticity and co-relation of these examples and references needs to be checked, whether they are on the same lines or not. To make their research the authors have developed a virtual model based on the real market situations, and as prevailing in the market, there are 3 agents in the model, 1. Entrepreneur 2. Investment Banker 3. Investor They have quoted that the investment banks charge high fees for their service and a lot has been written about the reputation of the investment bank, but the fact remains very clear that major responsibility of either overpricing or under pricing of the assets of entrepreneur depends upon the skills and work of the underwriter who assess the assets of the entrepreneur and does not solely depends upon the reputation or brand name of the bank. Also, that the high fees are charged because high cost is being incurred on the information gathering and setting evaluation standards. Moreover, their model just doesnt include firms dealing in IPOs but also includes firms dealing into seasonal equity issues, bond or debt market, etc. Their research in this article has given the most importance to the underwriter and also that the fees of the bank just doesnt depends on banks reputation but also on underwriters reputation, and that underwriters fees also increases with their reputation. At one point, they have related their model to product market also, where an e.g. of Allen (1984) Shapiro (1983) is quoted. They say that, like fear of running reputation may prevent manufacturer of experience goods (these are the goods whose quality can be known only after purchasing, because they lower the product quality in order to gain shore term profit). But unlike, manufacturer in product market, investment banker plays the role of mediator or middleman in the equity market, and therefore does not has all the information. Rather has only that information which the entrepreneur wishes them to have. Therefore they say that if the banker ones overprice or underprice the project that doesnt hamper the reputation of the bank much. They also, give a suggestion that to lessen the moral hazard feeling of being cheated in investors by investing a huge amount in the overpriced shares themselves; this may lessen the risk of spoiling the banks reputation. The model of reputation acquisition by investment banks, have very well exhibited that reputation acquisition plays a critical role in enabling intermediaries to function as information producers. They have also laid down some formulas for calculating the reputation of the based on their model, which is not supported by any practical example of a real investment bank, which they should have done to make their article more realistic and applicable. Therefore, it seems it may not be practically possible to calculate reputation of a bank based on formulas. Moreover, a firm going for public listing can afford to calculate the formula and derive the reputation, but a common investor who invests one to ten thousand GBP cannot afford to make calculation to calculate the reputation, that to of a middleman. Therefore, if the authors would have developed a more realistic based reputation calculation method, it would have been more useful to the retail investors. A CRITICAL EVALUATION OF ARTICLE COMMERCIAL BANKS IN INVESTMENT BANKING CONFLICT OF INTEREST OR CERTIFICATION ROLE? Introduction: An article on similar grounds but different base as previous ones has been written by Prof. Manju Puri when doing her research from Stanford University. The article talks about the era before The Glass-Steagall Act was implemented in 1933, when the commercial banks were authorized to function as underwriter for corporate securities. She discusses and analyses that whether the commercial banks who finance the project, also underwriting corporate securities, whether it hampers the reputation of bank or not. About the Author: This article has been written by Manju Puri in The Journal of Financial Economics Vol 40, Issue March96), Pg. 373-401. Manju Puri is a PhD in Finance from New York University, she started her career with HSBC and now working as a professor of finance and research fellow in Duke University. She has won many awards honours grants for her research and papers book publication from Federal Deposit Insurance Corporation, etc. which suffice the authenticity if this article. She wrote this article when she was working with Graduate School of Business, Stanford University, Stanford. Evaluation: Like previous article the author here also speaks about reputation of investment banks (hereafter referred as investment house), but in different perspective, i.e. she has compared investment houses reputation with commercial banks reputation. She has also projected the possible hazard when commercial banks who are into financing and providing commercial loans to entrepreneurs, when theses banks function as a investment house for the same entrepreneur, is this information biased? Her article discusses a different dimenstion about the reputation of investment bank. Real life law and statutes are being explained and taken into consideration for proving her point, like The Glass-Steagall Act (1933). The pre Glass-Steagall Act period has been examined in this paper. The commercial banks are prohibited from underwriting corporate securities in USA after The Glass-Steagall Act (1933), but in some countries like India no such act has been levied and commercial banks are still permit ted to underwrite the corporate securities, so the validity of this paper is limited to some countries only. This article tried to find answer for a very significant question, whether the evidence regarding conflicts of interest, support the concern of those opposed to The Glass-Steagall Act deregulation? And she has also managed to get the answer by analyzing the pricing of securities underwritten by commercial bank in pre Glass-Steagall period. She says that to understand whether the conflicts of interest is reflected in the security price, and it is important to understand underwriters incentive in certifying securitys value. The commercial bank while processing loans obtain personal and private information about the firm which is generally not known to the investors. Therefore, the commercial banks have more information than investment house even after incurring high-cost on information gathering and commercial bank certification have a stronger effect than that of investm ent house. What commercial bank does is that they weigh the security strong when they finance the project so that from the proceeding the firm can pay back their loan, and protect their own self interest, at the expense of outside investors, and because investment house do not engage themselves in loan making they do not have such personal interest and tend to be more credible certifier. She also quotes that investors should understand the pattern that, if the issue is rated lower that means the conflict of interest of the bank is stronger than investment house and if the bank issued higher rate than the conflict of interest is lower than that of investment hous. For better understanding and clear presentation of information, the paper is divided into sub sections i.e. Section 1: Sample Selection. Section 2: Methods and Results. Section 3. Examines Certification Effect. Section 4: Conclusion. Section 1: Sample Selection: The data is collected on sample basis as listed below: Data is collected pre Glass-Steagall period i.e. 01/01/1927 to 30/09/1929, this period is before the application of Glass-Steagall Act. Data collected is measurable on front of size of issue, age of firm and the underlying security credit ration associated with issue. Section 2: Methods and Results: All the tests done are well explained this section with their results, some of them is as listed below: The basic null hypothesis test is used for results. Univariate Test: the results are tabulated for better reading, understanding and analyzing. Multivariated Test: the results are tabulated for better reading, understanding and analyzing. Prohibit Tests. Selectivity bias adjustments: the results are tabulated for better reading, understanding and analyzing. Section 3. Examines Certification Effect: Her findings from the tests showed that commercial banks underwriting has lower yields than investment house underwriting, to ensure that the incentives, that the banks get are driving the results she formulated additional tests, which showed that banks certification is highest when banks have access to more private information than investment house, accordingly she conducted some more tests on various kinds of issues and showed results in tabular format: Foreign Government Bonds v/s Industrial Bonds (corporate bonds). Industrial Bonds v/s Industrial Preferred Stocks. New v/s Seasoned Offerings. Non-investigating Grade Security v/s Investment Grade Security. In House Bond Underwriting v/s Affiliate Underwriting. Section 4: Conclusion: The paper examines that there are two types of intermediaries for issue of equity, i.e. bank and investment house. The loan resources that bank have at risk, gives them access to private information at little cost, as compared to investment house, which may under produce information, because of high cost of production. In general, the results drawn from this article confronts the hypothesis outline in Section 1 and 4. The test also supported the idea that investments perceived banks as being valuable certifiers of firms value. Conclusion: After evaluating both the articles I conclude the following: One reason why investment houses have to strive more to build reputation in equity market is that their underwriters have access to firms limited information. The investors believe that banks have more personal and private information of the firm and therefore find banks certification more reliable and this also hampers the repute of the investment house. The reputation of investment house just does not depends up on their on past performance and evaluation standards but also depends on their competitors performance and evaluation standards.

Can Christian Ethics Survive Within A Secular State

Can Christian Ethics survive in a secular state?. Christian ethics is the study of the way of life that conforms to the will of God. Judgment of behaviour derives from the fundamental Christian virtues. These are prudence, fortitude, temperance and justice. Christian ethics is essentially a religious ethic and is deeply founded in the revelation of God. Therefore, â€Å"how does the decline of Christianity in modern Western societies impede the validity of a Christian ethical approach to contemporary issues?† (Vorster, 2012). Using Vorster’s article as inspiration for research, I will be discussing whether in society today, true Christian ethics can be found. True Christian ethics involve â€Å"concepts like stewardship, readiness to serve and obedience to God† (Vorster, 2012). However, can these concepts flourish in an â€Å"environment where hard, rude pursuit of profits, wealth and prosperity are pursued† (Vorster, 2012). Augustine accepted the natural virtues of philosophers (prudence, fortitude, temperance and justice) but subordinated them to the â€Å"infused virtues† of faith, hope and love. We live in a different world context today and we have to rethink the relevance of Christian life not only from an individual personal perspective but also in terms of broader social Christian ethics (Wyk, 2010). Christian ethics is distinctive because it is the ethics of the New Testament, we don’t often think about it in that way. If we’re going to describe what Christian ethics is we must useShow MoreRelatedIntegrating My Faith and My Profession Essay1513 Words   |  7 Pagescomponents of Christian worldviews and our ability to reflect on them, either learned or chosen. The book details specific indications to a perceptive of the nature of knowledge, the character of human beings, the nature of humanity, and the environment of the world. The book contemplates in the pursuit of trut h, knowledge, and sympathizing human experience. These pursuits demonstrate assorted methods, including psychological hypothesis and theories, psychological discipline and science, Christian theologyRead MoreThe Medical Ethics Principle Of Autonomy Essay1548 Words   |  7 Pages In 34 states, the District of Columbia and Guam all have laws that exempt parents or caretakers who fail to provide medical assistance to a child based upon religious beliefs, from being prosecuted for child neglect. Of these, six states include laws exempting parents from charges of child abuse, neglect, child injury and manslaughter, when religious beliefs conflict with medical care. In Idaho, legislation was passed in the 1970s to accommodate faith-healing groups. â€Å"The religious exemption isRead MoreEthics and Political Philosophy1749 Words   |  7 PagesEthics and Political Philosophy PEC 3 Gabriel Benavides Escriva Hans Jonas, The changed nature of human action This chapter, which is the subject of our study is the first book The principle of responsibility: ethics test for technological civilization, and is titled, The changed character of human action. Hans Jonas studied in this chapter, the changes that have occurred in the history of mankind by emphasizing technological vocation of homo sapiens and what this means fromRead MoreThe And Martin Luther King2263 Words   |  10 Pagesoperate within society, the way love should be implemented in the ethics of individuals, and social change brought forth by nonviolence. Niebuhr’s quest for justice was in result to the horrific events he witnessed in World War I and World War II. King’s, on the other hand, was in result to the economic and racial injustices he experienced. While the catalyst in each theologian’s beliefs differed, their shared views on justice, nonviolence to an extent, and God offer a resource for Christians todayRead MoreMartin Luther And The Catholic Church1724 Words   |  7 PagesMartin Luther Martin Luther was arguably one of the most important figures in the entire history of Christianity. If the creation of the Lutheran Church was not enough of an accomplishment, he can also be credited with orchestrating the division of the Catholic and Protestant churches. Even as a young Augustinian Monk Martin Luther was convinced the Catholic Church had lost its way. He obsessed over his purity and relationship with God, and strongly believed the Catholic Church had lost its way overRead MoreWhat Are The Top Four Mainstream Philosophical Views On Human Purpose1936 Words   |  8 Pagesan Essay on Phenomenological Ontology).† From this perspective, the only true morality is the morality of freedom, in which the only crime is subjecting oneself to another power, or forcing another to be a subject. Yet even this â€Å"morality† that secular existentialism upholds is wholly an illusion. There is no escape from the bleak desert of a world into which mankind finds itself thrown—at least, not if the end goal of it all is everlasting personal freedom. For oblivion still awaits the universeRead MoreDoes morality need religion?3589 Words   |  15 Pagesinherent within many aspects of humanity, as religious institutions affect morality in areas such as politics, economics and cultures. For example, â€Å"the relationship between religion, morals and society can be seen in Islamic religion and Muslim social culture, Christianity and economics, and Buddhism and politics† (n.a n.d). Each of these religions uses the sacred texts in their religious institutions’ on morality to influence society. For example, the Islamic holy text, the Qur’an, states that â€Å"AllahsRead More What Christian Literature Is Essay4677 Words   |  19 PagesWhat Christian Literature Is Lewis here writes about Christianity and literature, specifically what is Christian literature and how does it differ with secular literature. He read this paper to a religious society at Oxford fairly early in his Christian walk. The question he seems to be answering is, What is Christian literature? His main argument is that the rules for good literature are the same for both Christian and non-Christian. He writes, The rules for writing a good passion play orRead MoreWitchcraft And Its Effect On Society3333 Words   |  14 Pagestakes many shapes that can be determined by the religion, economics, politics, and folk beliefs in each individual culture where it may take place. Its importance in our own, American, history should not go understated: Witches were a major dilemma for people who lived in 1692 Salem, Massachusetts, and as a result women (and men) were hanged due to undeniable belief in the power of Witchcraft. Today, belief in magic and witches has diminished with the incr easingly secular nature of our culture, butRead MoreCatholicism2239 Words   |  9 PagesCatholicism a religion not so different than what was known to most, there are similarities that clarify the presence of an ultimate being. It could truly be called a religion of God among all the others. The official model of religion is present within Catholicism, models such as a doctrine; the holy bible, cultic expressions; rituals and institutional organizations; church buildings. Catholicism from far seemed different than most religions, but a closer look concluded that it isn’t. Catholicism

Muscular System Muscle Metabolism Free Essays

1. List the three roles of ATP in muscle contraction: 1. Energize the power stroke of the myosin cross bridge. We will write a custom essay sample on Muscular System: Muscle Metabolism or any similar topic only for you Order Now 2. Disconnecting the myosin head from the binding site on actin at the conclusion of a power stroke. 3. Energizing the calcium ion pump. 2. The potential energy in ATP is released when the terminal high-energy bond is broken by a process called hydrolysis. Write the end products of this process: ATP (+ H2O) ( ADP 3. Rebuilding ADP into ATP with a new source of energy is carried out by a process called dehydration synthesis. Write the equation for this process: ADP ( ATP (+ H2O) 4. List the three processes used to synthesize additional ATP when ATP supplies are low: 1. Hydrolysis of creatine phosphate 2. Glycolysis 3. The Krebs cycle and oxidative phosphorylation 5. An immediate source of energy is creatine phosphate (CP), but the supplies are limited and rapidly depleted. One molecule of CP produces one ATP. 6. Glucose is a major source of energy for synthesizing ATP. List the two sources of glucose: 1. Glucose enters the muscle cell directly from the blood. 2. Glucose is produced by hydrolysis of glycogen stored in the muscle cell. 7. Glycolysis is the process that breaks down glucose. Name two products of the breakdown of glucose: 1. Two ATP molecules 2. Pyruvic acid If oxygen is not available, pyruvic acid is converted to lactic acid, which is the end product of anaerobic respiration. 8. If oxygen is available, the process is known as ___aerobic_ respiration. Name two sources of oxygen: 1. Oxygen enters the muscle cell directly from the blood. 2. Oxygen is stored in myoglobin, an oxygen-binding protein. The aerobic pathway consists of glycolysis + krebs cycle + oxidative phosphorylation. The net result of one glucose molecule is 36 ATP. 9. The process of restoring depleted energy reserves after exercise is called repaying the oxygen debt. Name four processes that occur during this time: 1. Lactic acid is converted back to pyruvic acid, which enters the Krebs cycle, producing ATP. 2. This ATP is used to rephosphorylate creatine into creatine phosphate. 3. Glycogen is synthesized from glucose molecules. 4. Additional oxygen re-builds to myoglobin. 10. Put the following characteristics under the correct fiber type in the table below: Krebs cycle and oxidative phosphorylationuses glycolysis fatigue rapidlyhigh endurance few capillariesmany capillaries much myoglobinlittle myoglobin long-distance runnersprinter Krebs cycle and oxidative phosphorylation uses glycolysis fatigue rapidly high endurance few capillaries many capillaries much myoglobin little myoglobin long-distance runner sprinter light in color, large diameter red in color, small diameter. Â   How to cite Muscular System: Muscle Metabolism, Papers

Nethergrave vs. A Sound of Thunder Essay Sample free essay sample

You and I live in a universe were modernism is making new highs every twenty-four hours. One twenty-four hours that touchscreen phone is considered new. and so following hebdomad it’s old intelligence. These two narratives that I am traveling to compare are about the function of engineering. scientific discipline and how it affects me and you. Based on how it uses new engineering and modern scientific discipline A Sound of Thunder is a better sci-fiction narrative. When it comes to engineering. ‘A Sound of Thunder’ uses it better than ‘Nethergrave’ . In ‘Nethergrave’ the computing machine is the engineering and it doesn’t seem like a chief portion in the narrative until the terminal. ‘A Sound of Thunder’ uses a clip machine. This is an extract from the book – â€Å"†¦ . -1999! 1997! Gone! The Machine roared†¦Ã¢â‚¬  ( Bradbury pg. 289 ) . This tells you that the narrative includes a Time Machine and is sounds like some action is traveling on with it. We will write a custom essay sample on Nethergrave vs. A Sound of Thunder Essay Sample or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page However. ‘Nethergrave’ uses a computing machine as the chief portion of engineering. This is besides a portion from the narrative – â€Å"Two techno encephalons would transport in a bran-new computing machine †¦-â€Å" ( Skurzynski pg. 316 ) . The computing machine feels like a remnant it merely shows its importance in the terminal of the book. This is why I know ‘A Sound of Thunder’ uses the consequence of engineering is greater. When it comes to the development of the scene. Bradbury’s ‘A Sound of Thunder’ helps us to acquire to cognize location better and its consequence on the other elements of the narrative. Bradbury helps us visualise the scene with giving us the twelvemonth it puting is on. which is 2055. The narrative tells us that the edifice mark says – â€Å"TIME SAFARI. INC. SAFARIS TO ANY YEAR IN THE PAST†¦-â€Å" . This shows that it is set in the hereafter which is normally where clip machines are. In contrast ‘Nethergrave’ deficiency of puting committedness made the sci-fi narrative expression like it had three different secret plans. For case the narrative showed him being bullied. so his pa being absent. following on to him populating a dual life. and eventually to meeting and disappearance with ‘NetherMagus’ . The manner ‘Nethergrave’ develops is less effectual. In general. ‘A Sound of Thunder’s scene is more to the full developed. When it comes to the chief message ‘A Sound of Thunder’ is a batch more effectual. The chief message I interpreted from it was â€Å"be careful what you do. it could impact everyone in the long run† . An illustration is when the hunter/guide. Travis said â€Å"Well. what about the foxes that’ll need those mice to last? For privation of 10 mice a fox dies†¦-’’ . He is explicating to the readers that every small and little thing has an consequence on though you may non see it instantly. Conversely ‘Nethergrave’ didn’t have a message that you could see in mundane life. The secret plan was non fluxing with the narrative and it seemed like three different narratives lines/plot. ‘A Sound of Thunder’ have the best chief message overall that had a true significance. ‘A Sound of Thunder’ is better than ‘Nethergrave’ because the usage of engineering. function of scientific discipline and the chief message. Its function of engineering is alone and the function of scientific discipline is unusual. Its chief message was to ‘be careful’ because every small or large thing ‘has an consequence on person. somewhere’ . This message is true and can be incorporated in life every bit good as engineering. This is why I know that ‘A Sound of Thunder’ was an overall better pick of sci-fi fiction than ‘Nethergrave’ . Plants Cited * Skurzynski. Gloria. Nethergrave pg. 313-324* Bradbury. Ray. A Sound of Thunder pg. 287-301