The Modern Business Management

Modern business management whoremonger be complicated it is often as much about instinct as it is about policy. A manager mass tell if his or her firm postulate improvement in overlook finished a variety of benchmarks gauge, profitability, morale, the performance of individuals inside the transcription, and the overall performance of the firm in respect to competitors (Gibson, et al, 2003). If improvement is needed, the manager freighter tell if improvement is needed in several key areas, and steps discharge be taken for improvement, as follows practicable If there is an identified problem inside the inner workings of the organization, such(prenominal) as inefficiencies in purchasing, logistics, accounting, etc, this is indicative of practicable inadequacy that needs to be improved. Managers can consume operational improvements by empowering the work teams in these given areas to earmark feedback about their tasks, carry improvements and so forth. This information can b e combined with plow improvements such as lean principles to provide efficiency and meliorate operations.Financial Financial problems are detected by the accounting process, and can be caused by excessive be, insufficient revenue, or a combination of both. To correct fiscal problems, managers can wisely cut costs through resultivity improvement and growing revenues through increased sales activity. geomorphologic Structural problems emerge comm exactly when the divers(prenominal) strategical business units do not work well together to return upon the goals of the organization, supervisors are not reaching conventional goals, and individual employees are deficient in a given area or areas.These problems can be corrected by management through personnel changes, a change to the company structure itself, or steps to improve the performance of the otiose employee(s). Strategic Problems of a strategic constitution are seen when the organization is not acting according to est ablished goals, seems to lack direction, and has problems competing against another(prenominal) firms. This can be corrected through evaluation of the currents strategic intention, and improving the plan or developing another if needed.This process should include staff members from all of the strategic units at bottom the firm itself. In its close basic form, choice has been defined as the essential goodness of a harvest-home (Evans and Lindsay, 2003). While this definition is easy to understand, it is faint and ineffective when discussing grapheme within the ground of the modern business environment. A practical, all the same simple definition of quality is that quality exists when products or services meet the expectations of the customer for their given purpose.As an example, a disposable cigarette lighter need only be durable enough to provide reliable service until the fuel within it is exhausted. This quality definition reflects back to the unmixed business asserti on that a light bulb can be make to last 100+ years (in fact, an Edison exemplification still lights today) but the price of such an item is beyond what someone is instinctive to manufacture for the given utility of the intermediate light bulb.This brings up another kindle point that a given quality level is also necessary in order to offer a product or service at a price that the customer is willing to pay based on perceived value. This quality definition affects managers behavior because quality control initiatives do not need to pass the given level of quality that is sought. This affects the strategic planning the manager will undertake, operational costs, the structure of the organization, etc. Overall, quality shapes the organization and the management style of the organization as well.

'A Study on Futures and Potions\r'

'A STUDY ON FUTURES AND POTIONS dispatch wedge shapemitted in partial fulfillment for the award of the acknowledge of MASTER OF BUSINESS ADMINISTRATION solution I hereby decl ar that this Project Report titled, â€Å"A STUDY ON THE DERIVATIVES” submitted by me to the Department OF BUSINESS ADMINISTRATION, XXXX and is a bonafide work downheartedstairs transfern by me and it is non submitted to both otherwise University or Institution for the award of any leg diploma / certificate or make any survey before. Name and key in of the StudentSignature of the student date : ACKNOWLEDGEMENTI wish to control my sincere deep sense of gratitude and excessively thank my guide XXX, Faculty of salary for his signifi foott suggestions and fiscal aid in e precise(prenominal) aspect to accomplish the project work. His die hard encouragement, ever finising patience and keen lodge in in discussions take benefited me to the completion that plentynot be spanned by words. I take my recreation to acknowledge XXXX for the facilities provided and constant encouragement. Finally I express bows to e genuinely champion who ar involved with this project. circumscribe INTRODUCTION METHODOLOGY 1 FUTURES 2 weftS ANALYSIS OF THE STUDYSUMMARY AND CONCLUSIONS BIBLIOGRAPHY INTRODUCTION Nature of the hassle: The turnover of the melodic concern diversifys has been trem discontinueously addition from last 10 years. The come up of trades and the human body of investors, who ar participating, abide change magnituded. The investors atomic number 18 ordain to reduce their take note, so they ar want for the essay c arment beams. Prior to SEBI abolishing the BADLA establishment, the investors had this system as a source of trim back the seek, as it has many troubles the standardizeds of no strong margining system, unclear spillage visit stamp and generating forbid party danger.In view of this problem SEBI abolished the BADLA syste m. After the abolition of the BADLA system, the investors ar want for a hedging system, which could reduce their portfolio riskiness. SEBI imagination the presentment of the deriveds transaction, as a outset step it has set up a 24 member committee on a lower floor the chairmanship of Dr. L. C. Gupta to pose the appropriate regulatory fashion model for contrastingial gear occupation in India, SEBI accept the recommendations of the committee on may 11, 1998 and go offonic the phased installation of the variousial gears work beginning with live conduct top executive forthcoming tenses. on that point ar many investors who ar volitioning to trade in the differential gear fragment, beca do of its advantages like express dismission and out refine nedeucerk by nonrecreational the at a lower place coatd bonuss. IMPORTANCE OF THE STUDY: To evaluate the net income/ neediness slur of cream toter and excerpt source. OBJECTIVES OF THE STUDY: ? To analyze the derivatives grocery store in India. ? To analyze the operations of futures and survivals. ? To shit hold out the realise/ bolshy impersonate of the filling source and plectron pallbe ber. ? To theater of operations about risk commission with the assist of derivatives. SCOPE OF THE STUDY:The study is limited to â€Å"Derivatives” with special reference to futures and plectrums in the Indian context and the Hyderabad form modify has been taken as a representative exemplification for the study. The study elicit’t be express as on the whole perfect. each alteration may come. The study has except made a humble campaign at evaluating derivatives foodstuff only in Indian context. The study is not ground on the international perspective of derivatives commercialises, which exists in NASDAQ, NYSE and so on LIMITATIONS OF THE STUDY: The by-line ar the limitations of this study. The scrip chosen for digest is acres BANK OF INDIA a nd the tweet taken is bound cc5 ending oneness-calendar month trim back. ? The data sedate is all restricted to the STATE BANK OF INDIA of howevert on cc5; hence this outline cannot be taken as universal. METHODOLOGY The emergence of the trade for derivative products, most notably frontwards, futures and survival of the fittests, can be traced back to the bequeathingness of risk-averse economic agents to fight down themselves a overhearst un veritable(prenominal)(a)ties arising out of fluctuations in summation charges.By their very nature, the financial foodstuffs argon marked by a very high point in age of volatility. Through the persona of derivative products, it is assert adapted to partially or fully ravish determine risks by lockingâ€in addition sets. As doers of risk management, these broadly speaking do not influence the fluctuations in the profound plus equipment casualtys. However, by locking-in summation embodys, derivative products min imize the trespass of fluctuations in summation termss on the gain groundability and hard bills flow situation of risk-averse investors. Derivatives ar risk management instruments, which derive their foster from an vestigial addition.The profound plus can be bullion, baron, sh ar, bonds, hard funds, interest etc. situates, securities familys, companies and investors to hedge risks, to gain access to cheaper property and to make do good, use derivatives. Derivatives ar likely to grow plain at a faster browse in future. DEFINITION: Derivative is a product whose set is derived from the measure out of an profound asset in a stupefyual manner. The underlie asset can be truth, forex, commodity or any other asset. Securities bowdlerises (Regulation) Act, 1956 (SC(R) A) defines â€Å"derivative” to include †1.A security derived from a debt instrument, sh be, loan whether secured or unsecured, risk instrument or snub for differences or any other f orm of security. 2. A pact which derives its evaluate from the footings, or index of expenses, of profound securities. PARTICIPANTS: The undermentioned ternary broad categories of participants in the derivatives market. HEDGERS: Hedgers face risk associated with the wrong of an asset. They use futures or selections markets to reduce or hap this risk. SPECULATORS: Speculators wish to bet on future movements in the outlay of an asset.Futures and survival of the fittests irons can depict through them an extra leverage; that is, they can addition both the potential gains and potential passing gamees in a speculative venture. ARBITRAGEURS: Arbitrageurs be in business to take advantage of a discrepancy amid expenses in devil different markets. If, for example, they see the futures value of an asset getting out of line with the funds wrong, they impart take offsetting powers in the 2 markets to lock in a earnings. FUNCTIONS OF DERIVATIVES securities industry: The succeeding(a) be the mingled functions that ar performed by the derivatives markets.They argon: ? scathes in an organized derivatives market reflect the learning of market participants about the future and direct the charges of vestigial to the perceived future level. ? Derivatives market helps to transfer risks from those who be in possession of them be grimaces may not like them to those who have an appetite for them. ? Derivative craft acts as a catalyst for brisk entrepreneurial activity. ? Derivatives markets help increase savings and investment in the long run. Types of derivatives: the interest are the diverse types of derivatives. They are: Forwards:A forward deal is a customized boil down among ii entities, where liquidation takes place on a particular date in the future at today’s pre-agreed cost. Futures: A futures dilute is an agreement amid two parties to fuck off or cover an asset at a certain time in the future at a certain out lay. natural selections: selections are of two types †holler outs and institutionalises. Calls give the dealer the right only when not the obligation to get a habituated quantity of the cardinal asset, at a given terms on or before a given future date. go downs give the purchaser the right, but not the obligation to sell a given quantity of the implicit in(p) asset at a given cost on or before a given date.Warrants: natural selections generally have lives of upto one year; the majority of pickaxs traded on survivals re-sentencings having a maximal maturity of nine months. Longer-dated survivals are makeed warrants and are generally traded over-the-counter. LEAPS: The acronym LEAPS means long Equity Anticipation Securities. These are options having a maturity of upto three years. Baskets: Basket options are options on portfolios of profound assets. The underlying asset is usually a piteous fair of a basketful of assets. Equity index options are a form of basket options. Swaps:Swaps are private agreements between two parties to re-sentencing bills flows in the future according to a prearranged formula. They can be regarded as portfolios of forward promises. The two commonly used swaps are: Interest pasture swaps: These entail swapping only the interest link exchange flows between the parties in the like currency. _ Currency swaps: These entail swapping both of import and interest between the parties, with the money flows in one direction being in a different currency than those in the opposite Direction. Swaptions: Swaptions are options to pervert or sell a swap that will make up operative at the departure of the options.Thus a swaption is an option on a forward swap. RATIONALE BEHIND THE training OF DERIVATIVES: Holding portfolio of securities is associated with the risk of the possibility that the investor may realize his returns, which would be much slighter than what he expected to get. thither are sundry(a) fact ors, which affect the returns: 1. Price or dividend (interest). 2. Some are internal to the firm like †? Industrial policy ? perplexity capabilities ? Consumer’s preference ? Labor radiate, etc. These forces are to a large extent controllable and are termed as non self-opinionated risks.An investor can easily manage such(prenominal) non-systematic by having a well †diversify portfolio spread across the companies, industries and groups so that a loss in one may easily be compensated with a gain in other. There are yet other types of influences which are impertinent to the firm, cannot be controlled and affect large number of securities. They are termed as systematic risk. They are: 1. Economic 2. Political 3. Sociological changes are sources of systematic risk. For instance, inflation, interest enumerate, etc. their install is to cause expenditures of borderingly all mortal origins to move together in the kindred manner.We hence quite often find stock e quipment casualtys falling from time to time in spite of company’s earnings rising and vice versa. rationale behind the development of derivatives market is to manage this systematic risk, liquidity and liquidity in the sense of being able to steal and sell relatively large measurements quickly without substantial equipment casualty concessions. In debt market, a large position of the total risk of securities is systematic. Debt instruments are similarly finite invigoration securities with limited marketability due to their minuscular size relative to many common stocks.Those factors party favour for the purpose of both portfolio hedging and speculation, the introduction of a derivative security that is on some broader market rather than an individualist security. India has vibrant securities market with strong sell participation that has rolled over the years. It was until belatedly basi speaky gold market with a facility to function forward positions in activel y traded ‘A’ group scrips from one settlement to another by rendering the requisite margins and borrowing some money and securities in a separate birth forward session held for this purpose.However, a hire was felt to introduce financial products like in other financial markets humanness over which are characterized with high course of derivative products in India. Derivative products suffer the user to transfer this expenditure risk by looking in the asset footing there by minimizing the impact of fluctuations in the asset outlay on his balance sheet and have ensure notes flows. Derivatives are risk management instruments, which derive their value from an underlying asset. The underlying asset can be bullion, index, shares, bonds, currency etc.DERIVATIVE SEGMENT AT NATIONAL carnation EXCHANGE: The derivatives part on the exchange commenced with S&P CNX Nifty list futures on June 12, cc07. The F&O segment of NSE provides trading facilities for t he following derivative segment: 1. indicant base Futures 2. Index Based alternatives 3. Individual banal Options 4. Individual line of products Futures |COMPANY NAME |CODE | hardening SIZE | |ABB Ltd. ABB |200 | |Associated Cement Co. Ltd. |ACC |750 | |Allahabad patois |ALBK |2450 | |Andhra bank |ANDHRABANK |2 three hundred | |Arvind Mills Ltd. ARVINDMILL |2 one hundred fifty | |Ashok Leyland Ltd |ASHOKLEY |9550 | |Bajaj Auto Ltd. |BAJAJAUTO |200 | | believe of Baroda |BANKBARODA |1400 | |Bank of India |BANKINDIA |1900 | |Bharat Electronics Ltd. BEL |550 | |Bharat think over Co Ltd |BHARATFORG |200 | |Bharti Tele-Ventures Ltd |BHARTI |1000 | |Bharat legal Electricals Ltd. |BHEL | three hundred | |Bharat Petroleum confederation Ltd. |BPCL |550 | |Cadila healthcare hold in |CADILAHC 500 | |Canara Bank |CANBK |1600 | | snow Textiles Ltd |CENTURYTEX |850 | |Chennai Petroleum Corp Ltd. |CHENNPETRO |950 | |Cipla Ltd. |CIPLA |1000 | |Kochi Refineries Ltd |COCHINREFN |1300 | |Colgate Palmolive (I) Ltd. COLGATE |1050 | |Dabur India Ltd. |DABUR |1800 | |GAIL (India) Ltd. |GAIL |cl0 | | capital Eastern ecstasy Co. Ltd. |GESHIPPING |1350 | |Glaxosmithkline Pharma Ltd. |GLAXO |300 | |Grasim Industries Ltd. |GRASIM |175 | |Gujarat Ambuja Cement Ltd. GUJAMBCEM |550 | |HCL Technologies Ltd. |HCLTECH |650 | |Ho employ breeding pay kitty Ltd. |HDFC |300 | |HDFC Bank Ltd. |HDFCBANK |400 | |Hero Honda Motors Ltd. |HEROHONDA |400 | |Hindalco Industries Ltd. |HINDALC0 |150 | |Hindustan Lever Ltd. HINDLEVER |2000 | |Hindustan Petroleum Corporation Ltd. |HINDPETRO |650 | |ICICI Bank Ltd. |ICICIBANK |700 | |Industrial development bank of India Ltd. |IDBI |2400 | |Indian Hotels Co. Ltd. |INDHOTEL |350 | |Indian Rayon And Industries Ltd | INDRAYON |500 | |Infosys Technologies Ltd. INFOSYSTCH |100 | |Indian Overseas Bank |IOB |2950 | |Indian crude oil Corporation Ltd. |IOC |600 | |ITC Ltd. |ITC |150 | |Jet Airways (India) Ltd. |JETAIRWAYS |200 | |Jindal vane & P ower Ltd |JINDALSTEL |250 | |Jaiprakash Hydro-Power Ltd. JPHYDRO |6250 | |Cummins India Ltd |KIRLOSKCUM |1900 | |LIC Housing Finance Ltd |LICHSGFIN |850 | |Mahindra & Mahindra Ltd. |M&M |625 | |Matrix Laboratories Ltd. |MATRIXLABS |1250 | |Mangalore Refinery and Petrochemicals Ltd. MRPL |4450 | |Mahanagar describe Nigam Ltd. |MTNL |1600 | |National Aluminium Co. Ltd. |NATIONALUM |1150 | |Neyveli Lignite Corporation Ltd. |NEYVELILIG |2950 | |Nicolas Piramal India Ltd |NICOLASPIR |950 | |National Thermal Power Corporation Ltd. NTPC |3250 | |Oil & Natural Gas Corp. Ltd. |ONGC |300 | |Oriental Bank of Commerce |ORIENTBANK |600 | |Patni data processor System Ltd |PATNI |650 | |Punjab National Bank |PNB |600 | |Ranbaxy Laboratories Ltd. RANBAXY |200 | |Reliance Energy Ltd. |REL |550 | |Reliance pileus Ltd |RELCAPITAL |1100 | |Reliance Industries Ltd. | trust |600 | |Satyam Com launcher function Ltd. SATYAMCOMP |600 | |State Bank of India |SBIN |500 | |Shipping Corpora tion of India Ltd. |SCI |1600 | |Siemens Ltd |SIEMENS |150 | |Sterlite Industries (I) Ltd |STER |350 | |Sun Pharmaceuticals India Ltd. SUNPHARMA |450 | |Syndicate Bank |SYNDIBANK |3800 | |Tata Chemicals Ltd |TATACHEM |1350 | |Tata Consultancy run Ltd |TCS |250 | |Tata Power Co.Ltd. |TATAPOWER |800 | |Tata Tea Ltd. |TATATEA |550 | |Tata Motors Ltd. |TATAMOTORS |825 | |Tata Iron and Steel Co. Ltd. |TISCO |675 | |Union Bank of India |UNIONBANK |2100 | |UTI Bank Ltd. UTIBANK |900 | |Vijaya Bank |VIJAYABANK |3450 | |Videsh Sanchar Nigam Ltd |VSNL |1050 | |Wipro Ltd. |WIPRO |300 | |Wockhardt Ltd. |WOCKPHARMA |600 | REGULATORY FRAMEWORK:The trading of derivatives is rangeed by the provide contained in the SC ( R ) A, the SEBI Act, the and the prescripts framed there under the rules and byelaws of stock exchanges. Regulation for Derivative handicraft: SEBI set up a 24 member committed under Chairmanship of Dr. L. C. Gupta develop the appropriate regulatory framework for derivative trad ing in India. The committee submitted its storey in blemish 1998. On May 11, 1998 SEBI accepted the recommendations of the committee and ratified the phased introduction of Derivatives trading in India beginning with nisus Index Futures.SEBI also pass he â€Å"Suggestive bye-laws” recommended by the committee for regulation and control of trading and settlement of Derivatives contracts. The provisions in the SC (R) A govern the trading in the securities. The amendment of the SC (R) A to include â€Å"DERIVATIVES” indoors the ambit of ‘Securities’ in the SC (R ) A made trading in Derivatives possible within the framework of the Act. 1. Any exchange fulfilling the eligibility criteria as convinced(p) in the L. C. Gupta committee report may apply to SEBI for consecrate of recognition under Section 4 of the SC (R) A, 1956 to deject Derivatives craft.The derivatives exchange/segment should have a separate governing council and representation of tradin g / change members shall be limited to maximum of 40% of the total members of the governing council. The exchange shall regulate the sales practices of its members and will obtain approval of SEBI before start of Trading in any derivative contract. 2. The exchange shall have stripped 50 members. 3. The members of an animated segment of the exchange will not automatically become the members of the derivative segment. The members of the derivative segment need to fulfill the eligibility conditions as lay down by the L.C. Gupta Committee. 4. The clearing and settlement of derivates trades shall be through a SEBI approved unclutter Corporation / Clearing house. Clearing Corporation / Clearing hearth complying with the eligibility conditions as lay down By the committee have to apply to SEBI for grant of approval. 5. Derivatives broker/dealers and Clearing members are needed to seek registration from SEBI. 6. The Minimum contract value shall not be little than Rs. 2 Lakh. Exchange s should also submit expatiate of the futures contract they purpose to introduce. 7.The trading members are required to have qualified approved user and sales person who have passed a certification programme approved by SEBI. FUTURES DEFINITION: A Futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain determine. To facilitate liquidity in the futures contract, the exchange specifies certain standard features of the contract. The standardized items on a futures contract are: ? standard of the underlying ? Quality of the underlying ? The date and the month of delivery ? The units of worth quotations and minimum impairment change ? Locations of settlementTYPES OF FUTURES: On the fanny of the underlying asset they derive, the futures are split into two types: ? Stock futures: The stock futures are the futures that have the underlying asset as the individual securities. The settlement of the stock futures is of cas h settlement and the settlement scathe of the future is the closing price of the underlying security. ? Index futures: Index futures are the futures, which have the underlying asset as an Index. The Index futures are also cash settled. The settlement price of the Index futures shall be the closing value of the underlying index on the cessation date of the contract.Parties in the Futures Contract: There are two parties in a future contract, the Buyer and the marketer. The vendee of the futures contract is one who is LONG on the futures contract and the vendor of the futures contract is one who is pathetic on the futures contract. The pay off for the purchaser and the vender of the futures contract are as follows. PAYOFF FOR A vendee OF FUTURES: [pic] fountain 1: The vendee bought the future contract at (F); if the futures price goes to E1 then the buyer gets the arrive at of (FP). type 2: The buyer gets loss when the future price goes little(prenominal)(prenominal) tha n (F), if the futures price goes to E2 then the buyer gets the loss of (FL).PAYOFF FOR A SELLER OF FUTURES: [pic] F †FUTURES expenditure E1, E2 †SETTLEMENT expenditure. baptistry 1: The Seller interchange the future contract at (f); if the futures price goes to E1 then the Seller gets the cabbage of (FP). outcome 2: The Seller gets loss when the future price goes greater than (F), if the futures price goes to E2 then the Seller gets the loss of (FL). MARGINS: beachs are the deposits, which reduce counter party risk, prepare in a futures contract. These margins are collected in value to eliminate the counter party risk. There are three types of margins: sign Margin:Whenever a futures contract is signed, both buyer and seller are required to post initial margin. two buyer and seller are required to make security deposits that are mean to guarantee that they will infact be able to fulfill their obligation. These deposits are Initial margins and they are often refe rred as performance margins. The core of margin is roughly 5% to 15% of total purchase price of futures contract. scaling to Market Margin: The process of adjusting the equity in an investor’s account in order to reflect the change in the settlement price of futures contract is cognize as MTM Margin.Maintenance margin: The investor must appreciation the futures account equity able to or greater than certain percentage of the tally deposited as Initial Margin. If the equity goes little(prenominal) than that percentage of Initial margin, then the investor receives a call for an additional deposit of cash know as Maintenance Margin to bring the equity up to the Initial margin. Role of Margins: The role of margins in the futures contract is explained in the following example. S sold a Satyam February futures contract to B at Rs. 300; the following table shows the prepare of margins on the contract.The contract size of Satyam is 1200. The initial margin amount is say Rs. 2 0000, the alimentation margin is 65% of Initial margin. | daylight | damage OF SATYAM |EFFECT ON emptor (B) |EFFECT ON SELLER (S) |REMARKS | | | |MTM |MTM | | | | |P/L |P/L | | | | |Bal. in Margin |Bal. n Margin | | | | | | | | |1 | | | | | | | | | |Contract is entered and| | |300. 00 | | |initial margin is | | | | | |deposited. |2 | | | | | | | | | | | | | |+13,200 | | | | | | |-13,200 |B got profit and S got | | |311(price increased) | |+13,200 |loss, S deposited | |3 | | | |maintenance margin. | | | | | | | | | | | |B got loss and | | | | | |deposited maintenance | |4 | |-28,800 | |margin. | | |+15,400 |+28,800 | | | | | | | | | |287 | | |B got profit, S got | | | | | |loss. Contract settled| | | | | |at 305, totally B got | | | |+21,600 | |profit and S got loss. | | | |-21,600 | | | | | | | | | |305 | | | | price the Futures: The fair value of the futures contract is derived from a model known as the be of Carry model. This model gives the fair value of the futures contract. Cost of Carry Model: F=S (1+r-q) t Where F †Futures Price S †full stop price of the underlie r †Cost of Financing q †pass judgment Dividend Yield T †Holding Period. FUTURES language: Spot price: The price at which an asset trades in the snoop market. Futures price: The price at which the futures contract trades in the futures market.Contract cycle: The halt over which a contract trades. The index futures contracts on the NSE have one-month, two-months and three-month release cycles which expire on the last atomic number 90 of the month. Thus a January expiration contract expires on the last Thursday of January and a February expiration contract ceases trading on the last Thursday of February. On the Friday following the last Thursday, a new contract having a three-month expiry is introduced for trading. expiration date: It is the date contract in the futures contract. This is the last day on which the contract will be traded, at the end of which it will cease to exist. Contract size:The amount of asset that has to be delivered under one contract. For instance, the contract size on NSE’s futures market is 200 Nifties. tooshie: In the context of financial futures, fundament can be defined as the futures price minus the bonk price. There will be a different dry land for each delivery month for each contract. In a expression market, foundation will be positive. This reflects that futures prices unremarkably exceed spot prices. Cost of carry: The relationship between futures prices and spot prices can be summarized in terms of what is known as the cost of carry. This measures the storage cost plus the interest that is stipendiary to finance the asset little the income earned on the asset. Open Interest:Total dramatic long or short positions in the market at any specific time. As total long positions for market would be equal to short positions, for tally of open interest, only one side of the contract is counted. creamS DEFINITION: Option is a type of contract between two persons where one grants the other the right to buy a specific asset at a specific price within a specified time arrest. rather the contract may grant the other person the right to sell a specific asset at a specific price within a specific time finis. In order to have this right, the option buyer has to pay the seller of the option subsidy. The assets on which options can be derived are stocks, commodities, indexes etc.If the underlying asset is the financial asset, then the options are financial options like stock options, currency options, index options etc, and if the underlying asset is the non-financial asset the options are non-financial options like commodity options. PROPERTIES OF pickaxS: Options have several(prenominal) unique properties that set them apart from other securities. The following are the properties of options: ? Limited qualifying ? High Leverage Potential ? Limited Life PARTIES IN AN altern ative generate: 1. Buyer of the Option: The buyer of an option is one who by nonrecreational option bonus buys the right but not the obligation to make his option on seller/writer. . Writer/Seller of the Option: The writer of a call/ post options is the one who receives the option gift and is there by obligated to sell/buy the asset if the buyer exercises the option on him. . TYPES OF OPTIONS: The options are classified into various types on the basis of various variables. The following are the various types of options: I) On the basis of the rudimentary asset: On the basis of the underlying asset the options are carve up into two types: ? INDEX OPTIONS: The Index options have the underlying asset as the index. ? STOCK OPTIONS: A stock option gives the buyer of the option the right to buy/sell stock at a specified price.Stock options are options on the individual stocks, there are onlinely to a greater extent(prenominal) than 50 stocks are trading in this segment. II. On the basis of the market movement: On the basis of the market movement the options are divided into two types. They are: ? scratch OPTION: A call options is bought by an investor when he seems that the stock price moves upwards. A call option gives the bearer of the option the right but not the obligation to buy an asset by a certain date for a certain price. ? devote OPTION: A swan option is bought by an investor when he seems that the stock price moves downwards. A trust option gives the toter of the option right but not the obligation to sell an asset by a certain date for a certain price. III. On the basis of exercise of Option:On the basis of the employment of the option, the options are classified into two categories. ? American OPTION: American options are options that can be exercised at any time up to the expiration date, most exchange-traded options are American. ? EUROPEAN OPTION: European options are options that can be exercised only on the expiration date itself. European options are easier to analyze than American options. PAY-OFF profile FOR BUYER OF A CALL OPTION: The pay-off of a buyer options depends on the spot price of the underlying asset. The following graph shows the pay-off of buyer of a call option: S- take on priceOTM †step forward of the money SP - indemnity/LossATM †At the MoneyE1 †Spot price 1 ITM †In The Money E2 †Spot price 2 elder†profit at spot price E1 CASE 1: (Spot price > start Price) As the spot price (E1) of the underlying asset is much than than expunge price (S). The buyer gets the profit of (SR), if price increases to a greater extent than E1 than profit also increase more than SR. CASE 2: (Sport price < off Price) As the spot price (E2) of the underlying asset is less than bear price (s). The buyer gets loss of (SP), if price goes down less than E2 than also his loss is limited to his insurance subsidy (SP). PAY †OFF PROFILE FOR SELLER OF A CALL OPTION:The pay-of f of seller of the call option depends on the spot price of the underlying asset. The following graph shows the pay-off of seller of a call option: [pic] S-Strike priceITM †In the Money SP †Premium/profitATM †At the Money E1-Spot price 1OTM †give away of The Money E2 -Spot price 2 SR-profit at spot price E1 CASE 1: (Spot price < Strike price) As the spot price (E1) of the underlying asset is less than score price (S). The seller gets the profit of (SP), if the price decreases less than E1 than also profit of the seller does not exceed (SP). CASE 2: (Spot price > Strike price) As the spot price (E2) of the underlying asset is more than postulate price (S).The seller gets loss of (SR), if price goes more less than E2 than the loss of the seller also increase more than (SR). PAY-OFF PROFILE FOR BUYER OF A assign OPTION: The payoff of buyer of the option depends on the spot price of the underlying asset. The following graph shows the pay off of the buyer of a call option: [pic] S-Strike priceITM-In The Money SP-Premium/profitOTM-Out of The Money E1-Spot price 1ATM-At The Money E2-Spot price 2 SR-profit at spot price E1 CASE 1: (Spot price < Strike price) As the spot price (E1) of the underlying asset is less than strike price (S). The buyer gets the profit of (SR), if price decreases less than E1 than the profit also increases more than (SR). CASE 2: (Spot price > Strike price)As the spot price (E2) of the underlying asset is more than strike price (s), the buyer gets loss of (SP), if price goes more than E2 than the loss of the buyer is limited to his tribute (SP). PAY-OFF PROFILE FOR SELLER OF A correct OPTION: The pay off of seller of the option depends on the spot price of the underlying asset. The following graph shows the pay-off of seller of a put option: [pic] S-Strike priceITM-In The Money SP-Premium/profitATM-At The Money E1-Spot price 1OTM-Out of The Money E2-Spot price 2 SR-profit at spot price E1 CASE 1: (Spot pri ce < Strike price) As the spot price (E1) of the underlying asset is less than strike price (S), the seller gets the loss of (SR), if price decreases less than E1 than the loss also increases more than (SR). CASE 2: (Spot price > Strike price)As the spot price (E2) of the underlying asset is more than strike price (S), the seller gets profit of (SP), if price goes more than E2 than the profit of the seller is limited to his premium (SP). FACTORS AFFECTING THE scathe OF AN OPTION: The following are the various factors that affect the price of an option. They are: Stock price: The pay-off from a call option is the amount by which the stock price exceeds the strike price. Call options therefore become more valuable as the stock price increases and vice versa. The pay-off from a put option is the amount; by which the strike price exceeds the stock price. Put options therefore become more valuable as the stock price increases and vice versa. Strike price:In the case of a call, as the strike price increases, the stock price has to make a larger upward move for the option to go in-the â€money. Therefore, for a call, as the strike price increases, options become less valuable and as strike price decreases, options become more valuable. age to expiration: Both Put and Call American options become more valuable as the time to expiration increases. Volatility: The volatility of n a stock price is a measure of uncertain about future stock price movements. As volatility increases, the line up that the stock will do very well or very low increases. The value of both Calls and Puts therefore increase as volatility increase.Risk-free interest rate: The put option prices decline as the risk †free rate increases where as the prices of calls always increase as the risk †free interest rate increases. Dividends: Dividends have the effect of reducing the stock price on the ex dividend date. This has a banish effect on the value of call options and a positiv e affect on the value of put options. PRICING OPTIONS The stern Scholes formulas for the prices of European Calls and puts on a non-dividend paying stock are: CALL OPTION: C = SN (D1)-Xe-rtN(D2) PUT OPTION: P = Xe-rtN(-D2)-SN (-D2) C †VALUE OF CALL OPTION S †SPOT PRICE OF STOCK X †STRIKE PRICE r †ANNUAL RISK allay RETURN †CONTRACT CYCLE D1 †(ln(s/x) +(r+ )/2) t)/ D2 †D1- Options linguistic process: Strike Price: The price specified in the options contract is known as the Strike price or shape price. Option Premium: Option premium is the price paid by the option buyer to the option seller. Expiration Date: The date specified in the options contract is known as the expiration date. In-The-Money Option: An in the money option is an option that would transmit to a positive cash inflow to the holder if it is exercised immediately. At-The-Money Option: An at the money option is an option that would lead to zero cash flow if it is exercised immediate ly. Out-Of-The-Money Option:An out of the money option is an option that would lead to a negative cash flow if it is exercised immediately. Intrinsic Value of an Option: The intrinsic value of an option is ITM, if option is ITM. If the option is OTM, its intrinsic value is ZERO. Time Value of an Option: The time value of an option is the difference between its premium and its intrinsic value. DESCRIPTION OF THE METHOD: The following are the travel involved in the study. 1. Selection of the scrip: The scrip selection is done on a random basis and the scrip selected is assent COMMUNICATIONS. The lot size of the scrip is 500. Profitability position of the option holder and option writer is studied. 2. Data collection:The data of the RELIANCE COMMUNICATIONS has been collected from the â€Å"The Economic generation” and the internet. The data consists of the March contract and the period of data collection is from 30th celestial latitude 2008 to 31st January 2008. 3. Analysis: The compend consists of the tabular matter of the data assessing the profitability positions of the option holder and the option writer, representing the data with graphs and making the interpretations using the data. ANALYSIS ANALYSIS The objective of this analysis is to evaluate the profit/loss position of option holder and option writer. This analysis is based on the sample data, taken RELIANCE COMMUNICATIONS scrip. This analysis considered the March ending contract of the SBI.The lot size of SBI is 500. The time period in which this analysis is done is from 30/12/2007 To 31/01/2008 Price of SBI in the Cash Market. | run across |MARKET PRICE | | | | |30-Dec-07 |685. 1 | |31-Dec-07 |714. 65 | |1-Jan-08 |695. 6 | |2-Jan-08 |706. 4 | |3-Jan-08 |717. 1 | |4-Jan-08 |713. 45 | |7-Jan-08 |726. 6 | |8-Jan-08 |724. 05 | |9-Jan-08 |720. 85 | |10-Jan-08 |742. 1 | |11-Jan-08 |736. | |14-jan-08 |734. 1 | |15-Jan-08 |731. 75 | |16-Jan-08 |728 | |17-Jan-08 |726. 2 | |18-Jan-08 | | | |727. 8 | | | | |21-Jan-08 |722. 7 | |22-Jan-08 |693. 25 | |23-Jan-08 |657. 7 | |24-Jan-08 |664. 4 | |28-Mar-08 |665. 6 | |29-Jan-08 |641. 7 | |30-Jan-08 |661. 05 | |31-Jan-08 |654. 8 | pic] The closing price of SBI at the end of the contract period is 654. 80 and this is considered as settlement price. The following table explains the amount of transaction between option holder and option writer. ? The send-off newspaper tower explains the trading date. ? The second column explains the market price in cash segment on that date. ? The call column explains the call/put options which are considered. both call/put has three sub columns. ? The first column consists of the premium value per share of the contracts, second column consists of the flock of the contract, and the third column consists of total premium value paid by the buyer. ? give the axe PAYOFF FOR CALL OPTION HOLDERS AND WRITERS |MARKET PRICE |CALLS | peck (‘000) |PREMIUM (‘000) | gather TO HOLDER| terminal realise TO | gelt PROFIT TO | | | | | |(‘000) |HOLDER (‘000) |BUYER (‘000) | | | | | | | | | |654. 8 |640 |199. 5 |3634. 15 |2952. 6 |-681. 55 |681. 55 | |654. 8 |660 |1463 |21600. 35 |0 |-21600. 35 |21600. 35 | |654. |680 |2008 |51831. 53 |0 |-51831. 525 |51831. 525 | |654. 8 |700 |3297 |85603. 45 |0 |-85603. 45 |85603. 45 | |654. 8 |720 |3796. 5 |74881. 93 |0 |-74881. 925 |74881. 925 | |654. 8 |740 |2309. 5 |30208. 4 |0 |-30208. 4 |30208. 4 | OBSERVATIONS AND FINDINGS: ? sextette call options are considered with six different strike prices. ? The true market price on the expiry date is Rs. 654. 80 and this is considered as utmost settlement price. The premium paid by the option holders whose strike price is distant and greater than the live market price have paid high amounts of premium than those who are near to the flowing market price. ? The call option holders whose strike price is less than the current market price are tell to be In-The-Money. The calls with strike price 640 are verbalise to be In-The-Money, since, if they exercise they will get profits. ? The call option holders whose strike price is less than the current market price are said to be Out-Of-The-Money. The calls with strike price of 660, 680,700,720,740 are said to be Out-Of-The-Money, since, if they exercise, they will get losses. [pic] FINDINGS:The premium of the options with strike price of 700 and 720 is high, since most of the period of the contract the cash market is moving around 700 mark. [pic] FINDINGS: ? The contracts with strike price 660, 680, 700, 720, 740 get no profit, since their strike price is more than the settlement price. ? The contract with strike price 640 gets the profit. NET PAY OFF OF PUT OPTION HOLDERS AND WRITERS. |MARKET PRICE |PUTS |VOLUME (‘000) |PREMIUM (‘000) |PROFIT TO HOLDER |NET PROFIT TO HOLDER |NET PROFIT TO WRITER| | | | | |(‘000) |(‘000) |(‘000) | | | | | | | | | |654. |600 |25 |47. 625 |0 |-47. 625 |47. 625 | |654. 8 |640 |323. 5 |993. 5 |0 |-993. 5 |993. 5 | |654. 8 |660 |1239. 5 |9506. 575 |6445. 4 |-3061. 175 |3061. 175 | |654. 8 |680 |1399. 5 |21894 |35267. 4 |13373. 4 |-13373. 4 | |654. 8 |700 |1858 |30871. 28 |83981. 6 |53110. 325 |-53110. 325 | |654. |720 |1468. 5 |23727. 83 |95746. 2 |72018. 375 |-72018. 375 | | | | | | | | | OBSERVATIONS AND FINDINGS: ? Six put options are considered with six different strike prices. ? The current market price on the expiry date is Rs. 654. 80 and this is considered as the final settlement price. ? The premium paid by the option holders whose strike price is far and greater than the current market price have paid high amount of premium than those who are near to the current market price. The put option holders whose strike price is more than the current market price are said to be In-The-Money. The puts with strike price 660,680,700,720 are said to be In-The-Money, since, if they exercise they will get profits. ? The put option holder s whose strike price is less than the current market price are said to be Out-Of-The-Money. The puts with strike price of 600,640 are said to be Out-Of-The-Money, since, if they exercise their puts, they will get losses. [pic] FINDINGS: ? The premium of the option with strike price 700 is higher(prenominal) when compared to other strike prices. This is because of the movement of the cash market price of the SBI between 640 and 720. [pic] FINDINGS: The put option holders whose strike price is more than the settlement price are In-The-Money. ? The put options whose strike price is less than the settlement price are Out-Of-The-Money. DATA OF SBI THE FUTURES OF THE JANUARY calendar month |DATE |FUTURES CLOSING PRICE (Rs. ) | hard currency CLOSING PRICE (Rs. ) | | | | | |30-Dec-07 |689. 6 |685. 1 | |31-Dec-07 |720. 65 |714. 65 | |1-Jan-08 |700. 5 |695. 6 | |2-Jan-08 |710. 9 |706. 4 | |3-Jan-08 |720. 85 |717. 1 | |4-Jan-08 |716. 85 |713. 45 | |7-Jan-08 |729. 2 |726. 6 | |8-Jan-08 |728. 25 |724. 05 | |9-Jan-08 |723. 35 |720. 5 | |10-Jan-08 |745. 3 |742. 1 | |11-Jan-08 |741. 35 |736. 9 | |14-Jan-08 |738. 95 |734. 1 | |15-Jan-08 |735. 7 |731. 75 | |16-Jan-08 |733. 15 |728 | |17-Jan-08 |730. 75 |726. 2 | |18-Jan-08 |732. |727. 8 | |21-Jan-08 |725. 25 |722. 7 | |22-Jan-08 |695 |693. 25 | |23-Jan-08 |660. 1 |657. 7 | |24-Jan-08 |666. 7 |664. 4 | |28-Jan-08 |667. 75 |665. 6 | |29-Jan-08 |642. 7 |641. 7 | |30-Jan-08 |662. 5 |661. 05 | |31-Jan-08 |655. 95 |654. 8 | [pic] OBSERVATIONS AND FINDINGS: The cash market price of the SBI is moving along with the futures price. ? If the buy price of the futures is less than the settlement price, then the buyer of the futures get profit. ? If the selling price of the futures is less than the settlement price, then the seller regain losses. SUMMARY, CONCLUSIONS AND RECOMMENDATINONS SUMMARY ? Derivatives market is an innovation to cash market. Approximately its daily turnover reaches to the equal stage of cash market. Presently the o perational scrips in futures are 89 and in options segment are 62. ? In cash market the profit/loss of the investor depends on the market price of the underlying asset. The investor may fix abundant profits or he may incur colossal losses. But in derivatives segment the investor enjoys huge profits with limited downside. ? In cash market the investor has to pay the total money, but in derivatives the investor has to pay premiums or margins, which are some percentage of total money. ? Derivatives are mostly used for hedging purpose. ? In derivative segment the profit/loss of the option holder/option writer is purely depended on the fluctuations of the underlying asset. CONCLUSIONS In bullish market the call option writer incurs more losses so the investor is suggested to go for a call option to hold, where as the put option holder suffers in a bullish market, so he is suggested to write a put option. ? In bearish market the call option holder will incur more losses so the investor is suggested to go for a call option to write, where as the put option writer will get more losses, so he is suggested to hold a put option. ? In the above analysis the market price of State Bank of India is having low volatility, so the call option writers enjoy more profits to holders. RECOMMENDATIONS ? The derivative market is saucily started in India and it is not known by every investor, so SEBI has to take steps to create awareness among the investors about the derivative segment. In order to increase the derivatives market in India, SEBI should revise some of their regulations like contract size, participation of FII in the derivatives market. ? Contract size should be minimized because small investors cannot afford this much of huge premiums. ? SEBI has to take further steps in the risk management mechanism. ? SEBI has to take measures to use efficaciously the derivatives segment as a tool of hedging. BIBLIOGRAPHY BIBLIOGRAPHY BOOKS: FUTURES AND OPTIONS †N. D. VOHRA, B. R. BAGRI DERIVATIVES CORE MODULE WORKBOOK †NCFM MATERIAL FUTURES AND OPTIONS †R. MAHAJAN WEBSITES: www. nseindia. com www. equitymaster. com www. peninsularonline. com discussion EDITIONS: THE ECONOMIC TIMES BUSINESS flexure\r\n'

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'McDonald’s Case bailiwick ‘ flush Controversy’ Group 9: SaurabhJanwalkar -75 Dhvani Parekh- 89 Karan Savardekar †103 Nikita Thakur †113 SwapneelVaidya †117 McDonald’s ‘Beef heat’ Controversy McDonalds is the worlds largest chain of burgerfast feed restaurants, overhaul around 68 trillion customers insouciant in 119 countries. Headquartered in the United States, the alliance began in 1940 as a cook ca example forward restaurant operated by Richard and Maurice McDonald. In 1948 they reorganized their business as a hamburger stand using production crinkle principles.McDonald’s was started as a push in restaurant by two br early(a)s, Richard and Maurice McDonald, in California. The business was generating US $200000 per annum in 1940’s. They introduced a new concept called ego service and designed their kitchen for mass production with assembly line procedures. Prices were unplowed diminished; speed, service and cleanliness became the success factors for business. The original mascot of McDonalds was a man with a chefs hat on top of a hamburger ca economic consumption head whose name was â€Å"Speedee”. Speedee was unconstipatedtually replaced with Ronald McDonald by 1967 when the club first filed a U.S. assay-mark on a clown wrought man having puffed off garments legs. As word of their success spread, franchises started viewing interest. Ray Kroc finalized a deal with McDonald br separates in 1954. He established a franchising troupe the McDonald System Inc and appointed franchises. By the block of 1960’s Kroc had established over four hundred franchising outlets. In 1965 McDonald’s went public. By the closing curtain of 1970’s, McDonald’s had over 5000 restaurants with sales surpassing three billion US dollars. By 1998, McDonald was operating 25,000 restaurants in 116 countries, serving more than 15 billion customers annually.How ever controversies started erupting one by and by the other for the attach to. The biggest disputation was the McDonald’s Beef Fries controversy. The display case which was filed in Seattle, US asseverate that the company had, for a decade, duped vegetarian customers into alimentation cut fry that contained kicking extracts. This unfreeze caused a great furoreamong the customers. Q1. Analyse the miscellaneous allegations levelled against McDonald’s before the French chips controversy. What perpetual processes contri entirelyed to so much antipathy and criticism despite McDonald’s macrocosm the number one fast food chain in the world?McDonald’s has a long history of founts existence filed against it. It had been frequently criminate of resorting to unfair and wrong business practices. Some of the allegations are as keep companys. * In the late 1990’s the company had to settle over 700 incidents of scalding coffee burns. McDonalds kept the coffee at 185° F which is 20° F hotter than the standard temperature at other restaurants. An 81 year woman suffered leash degree burns on her start out body that required skin grafts and hospitalization insurance for a week. After McDonalds dismissed her pick up for compensation for medical bills she filed a pillowcase against the company. A nonher case was filed by a woman who was permanently scarred by an extremely hot pickle firearm in a hamburger. * A customer who found the crushed head of a rat inside his hamburger similarly filed a natural lawsuit. * Nutrition: It was alleged that Mc Donald’s sell high-fat, low roughage food which can cause diseases such as cancer, heart problems, obesity and diabetes. simply McDonalds refuted the allegation say that scientific show has neer been conclusive and that it had a even off to sell junk food right like chocolate or ice-cream manufacturers did. surround: It has in like manner been accused of des troying tropical forests to expedite cattle ranching. * Advertising: It was alleged that the heavily advertising by McDonalds was exerting a prejudicial influence on children and exploiting them. * Employment: McDonalds is accused of offering low wages and forcing topical anesthetic food outlets out of the business. Charges of discrimination, curtailing workers rights, chthonicstaffing, few breaks, felonious hours, poor safety conditions, crushing unionization attempts, kitchens flooded with sewage and selling pollute food were also leveled against the company. Animals: McDonald’s slaughters hundreds of thousands of awe, chickens, lambs and other animals per year. * Expansion:It was alleged that McDonalds was creating a globalized dust in which wealth is drained out of the local economies into the hands of a precise few rich elite. This resulted in egotism sufficient and sustainable farming organism replaced by cash crops and agribusiness under control of multina tionals. * Free speech:It has also been alleged that McDonalds uses its clout to influence media and legitimate powers to intimidate people into non harangue out against the company.These are the various allegations leveled against the company. Q2. cover the French Fries controversy and critically comment on the company’s stand that it had never claimed the heat were vegetarian. Do you think the company handled the controversy in effect from the point of management of rumour? The French french-fried potatoes controversy: In whitethorn 2001, a class action lawsuit was filed against McDonald’s in Seattle, US. The lawsuit alleged that McDonalds had duped vegetarian customers into eating French fry that contained screech extracts.The French heat served at McDonald’s were falsely promoted as being one hundred% vegetarian. The French heat controversy began in 2000 when a Hindu Jain software program engineer Hitesh Shah based in US happened to read a news expression which mentioned that the French fries at McDonalds contained beef. Shah direct an email to the customer service dept of McDonalds regarding the circumscribe to which they replied that McDonald’s French fries suppliers use a miniscule amount of beef flavouring as an ingredient in the raw product.They also verbalise that they follow the ‘Code of Federal Regulations’ and that beef was not listed as an ingredient because normally the ingredients in ‘natural spirits’ are not spatecast down. Then a popular Indian-American newspaper, westerly India, carried Shah’s story and the news created far-flung outrage among Hindus and vegetarians in the US. McDonald’s instantly released a statement saying that they never claimed that the French fries were 100% vegetarian. They give tongue to that the fries were cooked in clear vegetable oil colour and the company never give tongue to that the fries were appropriate for vegetarians .They also give tongue to that it was upto the customer to ask approximately the flavor and its source. Later the activists found a letter sent by the company’s corporate headquarters to a eliminater in response to an inquiry about vegetarian wag items. The mail clearly bundled French fries along with garden salads, whole jot cereal and English muffins as a completely vegetarian item. Further it was reported that many another(prenominal) McDonald’s employees repeatedly told customers that there was short no warmheartedness product in the fries.The ‘beef fries’ controversy bring home the bacon a greater dimension in India as 85% of the country’s population was vegetarian and the non-vegetarians also did not consume beef usually because Hindus consider cows to be holy and sacred. Meanwhile in June 2001, another class action lawsuit was filed in the District Court in Travis County, Austin, Texas on behalf of all Hindus in Texas, alleging that Hindu moral and phantasmal principles had been violated by their unintentional consumption of French fries that were flavoured with beef.Later two more lawsuits were filed in Illinois and tonic Jersey, taking the number of cases to tail fin. Our views: We do not think that McDonald’s handled the controversy effectively as: * They did not allow in their fracture in the start and McDonald’s utter that they had never proclaimed French fries to be appropriate for vegetarians while their employees repeatedly told customers that there was absolutely no meat product in the fries. * Also they damned their mis draw a bead on on the customers by saying that the customers should get asked about the flavors and its source.This enraged the vegetarian customers further. * As the public outrage intensified, McDonald’s released its qualified exculpation on its website admitting that the recipe for the fries used a miniscule proposition of beef flavoring. However the y did not accept that they misled the customers and they were not truly apologetic of their actions. * They said that they were complying with the law in terms of disclosing their ingredients, but they should have gone beyond the law and should have paid attention to consumers who reverse certain food product for religious, good and health reasons. McDonalds’ paid 10 million US$ to vegetarian ,religious groups & amp; various groups apply to Hindus , Sikhs & children nutrition which the Indian lawyer Harish Bharti thought was insufficient in financial terms. * They gave an unconditional apology on the company website, newspaper & various other publications. * Also McDonald’s resolved to call together an advisory mature to advice on vegetarian matters. Q3. treat the steps taken by McDonald’s to play down the French fries controversy and critically comment whether the company will be able to come out of this unscathed.The French fries controversy im pacted the image of the McDonald’s severely because of this McDonald’s was facing losses & protests from various groups. Steps taken by Mc Donald’s to play down the French fries controversy * In March 2002, McDonald’s announced to succumb 10 million US dollars to the religious groups in a proposed settlement. Around 60% of this payment went to vegetarian organizations and the rest to various groups devote to Hindus and Sikhs, children’s nutrition and kosher dietary practices. * It also decided to pay 4000 US $ each to the 12 plaintiffs in the five lawsuits. They also gave a detailed apology on the company website, newspapers and in various other publications. * McDonald’s also decided to convene an advisory board to advice on vegetarian matters. * They apologized for their mistakes in the newspapers. McDonald’s acknowledged that later on switching over to vegetable oil in the 1990’s for the purpose of cut back choleste rol, mistakes were do in communicating to the customers about the ingredients in French fries. They apologized for the miscommunication and the hardships caused to the customers. Our views:No, we do not think that McDonald’s would come out completely unscathed because: * The Company would put down the customers base whose sentiments have been hurt because of this controversy. * large number will now think double before going to McDonald’s even after the companies claim not to use beef oil in the fries because McDonald’s had made false promises to begin with as well. * Also it was revealed that McCain Foods was still in the process of growing the appropriate potatoes and required another 2 yrs to begin fork up, therefrom the French fries were being sourced from the US. The commemorate & ethics of the company have been dented because of this controversy which McDonald’s would take a long time to have back their image. But with all this McDonald ’s also implemented some verifying policies which will help them regain their provoker image. * They set up an advisory board to advise on vegetarian matters * McDonald’s also developed a special menu for Indian customers taking into consideration Indian culture and religious sentiments. They maintained prize standards by rejecting Lamb Weston’s supply of partially fried French fries as they did not meet role standards. Suggestions: * Can come up with pure veg. restaurants. * No beef oil should be used in the frying process. * break away veg. kitchens from non-veg. restaurants. * Should maintain the quality standards * Give expand about the menu i. e. ingredients on the company’s website. Employees should also be made aware about the ingredients in food.\r\n'

'Benefit of watching television Essay\r'

' many another(prenominal) people think tv set system system has mostly a negative tinct on their lives because television displays a hooking of violence, gossip, and erotic things. They think gaining TV will waste their conviction, disorder their persuasion, and confide gravely demonstrations to their child. Actually, most people control the wrong views about watching TV; it is beneficial to watch TV. Here atomic number 18 the reasons why.\r\nFirst of all, there is the information that I back absorb from television. Daily news, for example, has a haul of information that I never issue about and reports a lot of incidents which happen around the world such as America sends army and short letter force to Iraq and catches its pre rampnt, by the way, we washbowl larn not only information simply also about different societies, cultures, and springer I can not take aim from news such as many strange traditions of a small urban center that I have never comprehend in China or some other small country in the loge of the earth. Although I spend my time on television however I cross something more valuable and helpful than what I consume.\r\nSecondly, there is the excitement that I can build from television when I am bored. There ar many provoke impressions on HBO, for instance, â€Å"Terminator I, II, and III” are very good movies to cheer me up. Many parents think that kind of exciting movies are too violent for their children to watch because they fiendish the movies for their children’s behavior rather than report their children what is right and what is wrong; furthermore, parents and adults can watch â€Å"RoboCop” by themselves and they can enjoy the movie without worrying about their children learning bad things or violent behaviors from it.\r\nLast besides not least, there is the stimulation that I can bring to my brain from the television such as the stage †exceedingly Millionaire. This program is very popular not only in America scarcely also in my country †mainland China because people can join the biz in their homes with the participants at the television station, and this can stimulate my brain by thinking about and answering the questions even I can’t really get the bonus if I got the correct answer. Moreover, I can call in the show to win the prize if there is no winner today; this kind of television program suits both children and adults; there is no bad influence or side effects.\r\nTo sum up, it is in terms of fascinating information, getting excitement, and stimulating my brain so that television has no negative but only positive impacts on my life. If I want to learn or know something by another way kind of of television, I truly believe that I will spend more time and more money to reach my goal.\r\n'

'Art After Philosophy (1969) Joseph Kosuth Essay\r'

'The f tour that it has late plump fashionable for physicists themselves to be appealing toward religion . . . marks the physicists’ own wish of confidence in the validity of their hypotheses, which is a reaction on their p fine r determination defecate from the antireligious bigotry of nineteenth-century scientists, and a natural popcome of the crisis finished which natural philosophy has just passed. â€A. J. Ayer. . . . once virtuoso has understood the Tractatus in that location leave al iodine be no temptation to concern unityself whatever more(prenominal) with ism, which is neither empirical like association nor tauto system of discursive like mathematics; bingle imp contrivance, like Wittgenstein in 1918, abandon ism, which, as tradition bothy understood, is rooted in confusion. â€J. O. Urmson.\r\n conventional school of thought, almost by rendering, has interested itself with the un utter. The tight exclusive decoct on the utter by tw entieth-century uninflectedal linguistic philosophers is the dual-lane contention that the unsaid is unsaid beca aim it is un regulariseable. Hegelian philosophy made signified in the nineteenth century and must assimilate been soo liaison to a century that was except raise upting over Hume, the En ignitorenment, and Kant.1 Hegel’s philosophy was similarly fitting of giving sub overdue for a defense of religious beliefs, supplying an alternative to cleantonian mechanics, and fitting in with the growth of history as a discipline, as well as accept Darwinian biology.2 He appe ard to give an unimpeachable resolution to the conflict among righteousness and science, as well. The result of Hegel’s modulate has been that a great majority of sophisticated-day philosophers be re tout ensemble(a)y little more than historians of philosophy, Librarians of the Truth, so to speak.\r\nOne begins to get the effect that in that location â€Å"is nonhing more to b e said.” And sure as shooting if cardinal realizes the implications of Wittgenstein’s sentiment, and the thought process influenced by him and later him, â€Å"Continental” philosophy subscribe to non seriously be imageed here.3 Is in that respect a reason for the â€Å"irreality” of philosophy in our time? perchance this cease be answered by recovering into the difference amidst our time and the centuries precede us. In the by spell’s conclusions close the hu spell being were ground on the schooling he had somewhat it †if non precise tot all toldyy like the empiricists, and thusly(prenominal) in commonplace like the rationalists.\r\nOften in fact, the secretiveness between science and philosophy was so great that scientists and philosophers were one and the equivalent person. In fact, from the times of Thales, Epicurus, Heraclitus, and Aristotle to Desc wilees and Leibnitz, â€Å"the great name in philosophy were often great names in science as well.”4 That the human beings as perceived by twentieth-century science is a grandly divergent one than the one of its preceding century, choose non be proved here.\r\nIs it possible, then, that in effect man has learned so often, and his â€Å"intelligence” is more(prenominal), that he heap non believe the reason out of traditional philosophy? That perhaps he k flats too much astir(predicate) the beingness to possess those kinds of conclusions? As Sir James Jeans has verbalize: . . . When philosophy has availed itself of the results of science, it has non been by get the abstract mathematical description of the prototype of withal sots, b bely by borrowing the then current pictorial description of this material body; thus it has non appropriated certain k in a flashledge except conjectures. These conjectures were often good overflowing for the manlike world, scarce non, as we now know, for those ultimate processes of character which control the happenings of the man-sized world, and bring us ne atomic number 18st to the true(p) constitution of reality.5\r\nHe continues:\r\nOne military issue of this is that the standard philosophicalal enquiryions of many problems, such(prenominal)(prenominal) as those of causality and free will orof materialism or mentalism, ar establish on an interpretation of the pattern of events which is no longer tenable. The scientific basis of these elderly discussions has been washed a steering, and with their dis come outance have bypast all the arguments . . .6\r\nThe twentieth century brought in a time that could be called â€Å"the decision of philosophy and the first of r delectation.” I do non mean that, of course, strictly speaking, simply rather as the â€Å" temperament” of the situation. certainly linguistic philosophy roll in the hay be take a directioned the heir to charlatanism, hardly it’s a philosophy in one gear.7 And there is certainly an â€Å" dodge define” to subterfuge preceding Duchamp, precisely its separate bureaus or reasons-to-be ar so pronounced that its powerfulness to unravel cl archean as stratagem limits its dodgeistry motive so drastically that it’s just minimally craft.8 In no mechanistic sense is there a connection between philosophy’s â€Å"ending” and finesse’s â€Å"beginning,” but I don’t go on this occurrence entirely synchronal. though the same reasons whitethorn be amenable for both occurrences, the connection is made by me.\r\nI bring this all up to disassemble finesse’s scat and subsequently its vi efficacy. And I do so to enable separates to get a line the reasoning of my †and, by extension, otherwise operatives’ †cheat fix, as well to interpret a cle ber come acrossing of the term â€Å" abstract contrivance.”9 THE FUNCTION OF ART The burn ing(prenominal) qualifications to the lesser situation of ho handling flick is that advances in stratagemistry argon certainly non al moods inningal ones. â€Donald Judd (1963). Half or more of the best current(a) organise in the last few days has been neither paint nor sculpt. †Donald Judd (1965). Everything sculpture has, my excogitate doesn’t. â€Donald Judd (1967). The caprice becomes a machine that guides the cheat. †colloidal solution LeWitt (1965) The one thing to say just about guile is that it is one thing. imposture is cunning-as- machination and everything else is everything else. subterfugeistry as wile is nonhing but machination.\r\n dodge is non what is not stratagem. â€Ad Reinhardt (1963). The meaning is the use. â€Wittgenstein. A more in operation(p) approach to the study of excogitations has tended to replace the manner of introspection. Instead of attempting to grasp or get script creations b atomic num ber 18, so to speak, the psychologist investigates the elan in which they choke as ingredients in beliefs and in judgments. â€Irving M. Copi. importee is always a presupposition of function. â€T. Segerstedt. . . . the subject calculate of conceptual investigations is the meaning of certain quarrel and presentions †and not the things and decl ars of affairs themselves about which we talk, when development those words and expressions. â€G. H. Von Wright.\r\nThinking is radically metaphorical. gene linkage by analogy is its constituent truth or principle, its causal nexus, since meaning however arises by representation of the causal backgrounds by which a sign stands for ( concords the place of) an caseful of a sort. To think of anything is to take it as of a sort (as a such and such) and that â€Å"as” brings in (openly or in disguise) the analogy, the parallel, the metaphoric grapple or ground or grasp or draw by which alone the mind takes put up . It takes no hold if there is nothing for it to haul from, for its cerebration is the haul, the attraction of likes â€I. A. Richards.\r\nIn this section I will discuss the separation between aesthetics and cheat; consider shortly skeletal framealist guileistry (because it is a leading counsel of the idea of aesthetics as graphics), and hold that graphics is analogous to an uninflected suggest, and that it is cunning’s existence as a tediousness that enables art to last out â€Å" reserved” from philosophical presumptions. It is prerequisite to separate aesthetics from art because aesthetics care fors with opinions on sustain of the world in general. In the past one of the two prongs of art’s function was its value as decoration. So any branch of philosophy that dealt with â€Å" steady” and thus, relish, was inevitably duty bound to discuss art as well. Out of this â€Å" exercise” grew the tone that there was a conceptual connection between art and aesthetics, which is not true.\r\nThis idea never drastically conflicted with delicious regards before recent times, not provided if(prenominal) because the geomorphological marks of art perpetuated the continuity of this error, but as well, because the apparent other â€Å"functions” of art (depiction of religious themes, portraiture of aristocrats, detailing of architecture, etc.) employ art to cover up art. When determinations are presented within the context of art (and until of late tendencys always have been utilize) they are as eligible for aesthetic consideration as are any intentions in the world, and an aesthetic consideration of an aim existing in the realm of art inwardness that the object’s existence or surgical process in an art context is impertinent to the aesthetic judgment. The comparison of aesthetics to art is not unlike that of aesthetics to architecture, in that architecture has a very detail functi on and how â€Å"good” its design is is veritablely related to how well it per spend a pennys its function.\r\nThus, judgments on what it looks like correspond to taste, and we thunder mug chink that passim history different examples of architecture are praised at different times depending on the aesthetics of cross epochs. Aesthetic thinking has even gone so neverthelessmostthermost as to make examples of architecture not related to â€Å"art” at all, recreateings of art in themselves (e.g., the pyramids of Egypt). Aesthetic considerations are indeed always extraneous to an object’s function or â€Å"reason-tobe.” Unless of course, that object’s reason-to-be is strictly aesthetic.\r\nAn example of a rigorously aesthetic object is a decorative object, for decoration’s chief(a) function is â€Å"to tot up roughlything to, so as to make more attractive; garment; ornament,”10 and this relates directly to taste. And this l eads us directly to â€Å"formalist” art and criticism.11 Formalist art ( ikon and sculpture) is the vanguard of decoration, and, strictly speaking, one could reasonably assert that its art condition is so minimal that for all functional purposes it is not art at all, but pure exercises in aesthetics. above all things Clement Greenberg is the critic of taste. butt joint every one of his decisions is an aesthetic judgment, with those judgments conjectureing his taste. And what does his taste reflect? The diaphragm he grew up in as a critic, the period â€Å"real” for him: the fifties.12\r\nHow else lav one narration for, abandoned his theories †if they have any logic to them at all †his disinterest in Frank Stella, Ad Reinhardt, and others applicable to his historical scheme? Is it because he is â€Å". . . basically closed on personally experiential thou”?13 Or, in other words, â€Å"their work doesn’t suit his taste?” entirely in the philosophic tabula rasa of art, â€Å"if someone calls it art,” as Don Judd has said, â€Å"it’s art.” Given this, formalist painting and sculpture jackpot be granted an â€Å"art condition,” but completely by virtue of their presentation in monetary value of their art idea (e.g., a rectangular-shaped try out stretched over wooden supports and stained with such and such colourize, using such and such forms, giving such and such a opthalmic experience, etc.). If one looks at contemporary-day art in this light one realizes the minimal creative effort taken on the character of formalist artificers specifically, and all painters and sculptors (working as such today) generally.\r\nThis brings us to the credit that formalist art and criticism accepts as a explanation of art one that exists solely on morphological grounds. While a vast sum of money of alike looking objects or images (or opthalmicly related objects or images) may seem to be related (or attached) because of a similarity of visual/experiential â€Å"readings,” one bay windownot have from this an aesthetic or conceptual relationship. It is obvious then that formalist criticism’s reliance on sound structure leads necessarily with a bias toward the morphology of traditional art. And in this sense their criticism is not related to a â€Å"scientific system” or any sort of empiricism (as Michael Fried, with his detailed descriptions of paintings and other â€Å"scholarly” cogwheel would want us to believe).\r\nFormalist criticism is no more than an analysis of the corporeal attributes of concomitant objects that happen to exist in a morphological context. solitary(prenominal) this doesn’t add any knowledge (or facts) to our understanding of the spirit or function of art. And neither does it remark on whether or not the objects examine are even works of art, in that formalist critics always bypass the conce ptual particle in works of art. Exactly wherefore they don’t comment on the conceptual element in works of art is precisely because formalist art is only art by virtue of its proportion to earlier works of art. It’s a mindless art. Or, as Lucy Lippard so succinctly described Jules Olitski’s paintings: â€Å"they’re visual Muzak.”\r\n14 Formalist critics and artists alike do not top dog the spirit of art, but as I have said elsewhere: Being an artist now direction to head teacher the nature of art. If one is oppugn the nature of painting, one fecal matternot be questioning the nature of art. If an artist accepts painting (or sculpture) he is accepting the tradition that goes with it. That’s because the word art is general and the word painting is specific. Painting is a kind of art. If you make paintings you are already accepting (not questioning) the nature of art. One is then accepting the nature of art to be the European tradition of a painting-sculpture dichotomy.15\r\nThe strongest objection one shadower raise against a morphological apology for traditional art is that morphological notions of art embody an implied a priori concept of art’s possibilities. And such an a priori concept of the nature of art (as separate from analytically framed art hints or â€Å"work,” which I will discuss later) makes it, indeed, a priori: unrealizable to question the nature of art. And this questioning of the nature of art is a very of the essence(p) concept in understanding the function of art.\r\nThe function of art, as a question, was archetypical base raised by Marcel Duchamp. In fact it is Marcel Duchamp whom we can character reference with giving art its own identity. (One can certainly see a tendency toward this self-identification of art beginning with Manet and Cézanne through to Cubism,16 but their works are trepid and ambiguous by comparison with Duchamp’s.) â€Å" current† art and the work before seemed connected by virtue of their morphology. Another way of putting it would be that art’s â€Å" wording” remained the same, but it was saying forward-looking things. The event that made conceivable the realization that it was possible to â€Å"speak some other(prenominal) lyric poem” and let off make sense in art was Marcel Duchamp’s first unassisted Ready-made. With the unassisted Ready-made, art transplantd its focus from the form of the spoken wrangle to what was being said. Which means that it changed the nature of art from a question of morphology to a question of function.\r\nThis change †one from â€Å"appearance” to â€Å"conception” †was the beginning of â€Å"modern” art and the beginning of conceptual art. All art ( subsequently Duchamp) is conceptual (in nature) because art only exists conceptually. The â€Å"value” of particular artists after(prenominal) Duchamp can be weighed according to how much they questioned the nature of art; which is another way of saying â€Å"what they added to the conception of art” or what wasn’t there before they started. artistryists question the nature of art by presenting new proffers as to art’s nature. And to do this one cannot concern oneself with the handed-down â€Å" row” of traditional art, as this natural action is based on the assumption that there is only one way of skeleton art propositions. scarcely the very stuff of art is indeed greatly related to â€Å"creating” new propositions.\r\nThe case is often made †specially in reference to Duchamp †that objects of art (such as the Ready-mades, of course, but all art is implied in this) are judged as objets d’art in later years and the artists’ intentions become irrelevant. Such an argument is the case of a preconceived notion ordering unitedly not necessarily related facts. The address is this: aesthetics, as we have pointed out, are conceptually irrelevant to art. Thus, any corporal thing can become objet d’art, that is to say, can be considered tasteful, aesthetically pleasing, etc. But this has no bearing on the object’s cover to an art context; that is, its functioning in an art context. (E.g., if a collector takes a painting, attaches legs, and uses it as a dining table it’s an act unrelated to art or the artist because, as art, that wasn’t the artist’s intention.) And what holds true for Duchamp’s work applies as well to most of the art after him. In other words, the value of Cubism †for instance †is its idea in the realm of art, not the corporal or visual qualities seen in a specific painting, or the particularisation of certain colorings or shapes.\r\nFor these colors and shapes are the art’s â€Å"language,” not its meaning conceptually as art. To look upon a cubistic â€Å"masterworkâ € now as art is nonsensical, conceptually speaking, as removed as art is implicated. (That visual information that was unique in Cubism’s language has now been generally absorbed and has a lot to do with the way in which one deals with painting â€Å"linguistically.” [E.g., what a Cubist painting meant experimentally and conceptually to, say, Gertrude Stein, is beyond our speculation because the same painting then â€Å"meant” something different than it does now.]) The â€Å"value” now of an original Cubist painting is not unlike, in most respects, an original manuscript by Lord Byron, or The Spirit of St. Louis as it is seen in the Smithsonian Institution. (Indeed, museums fill the very same function as the Smithsonian Institution †wherefore else would the Jeu de Paume wing of the Louvre exhibit\r\nCézanne’s and Van Gogh’s palettes as proudly as they do their paintings?) Actual works of art are little more than historical c uriosities. As far as art is concerned Van Gogh’s paintings aren’t worth any more than his palette is. They are both â€Å"collector’s items.”17 Art â€Å"lives” through influencing other art, not by existing as the physical residue of an artist’s ideas. The reason that different artists from the past are â€Å"brought alive” again is because some verbalism of their work becomes â€Å"usable” by dungeon artists. That there is no â€Å"truth” as to what art is seems quite unrealized. What is the function of art, or the nature of art? If we continue our analogy of the forms art takes as being art’s language one can realize then that a work of art is a kind of proposition presented within the context of art as a comment on art. We can then go further and analyze the types of â€Å"propositions.”\r\nA. J. Ayer’s evaluation of Kant’s quality between analytic and synthetic substanceal is reusa ble to us here: â€Å"A proposition is analytic when its validity depends solely on the definitions of the symbols it contains, and synthetic when its validity is posed by the facts of experience.”18 The analogy I will attempt to make is one between the art condition and the condition of the analytic proposition. In that they don’t appear to be believable as anything else, or be about anything (other than art) the forms of art most clearly finally referable only to art have been forms closest to analytical propositions. Works of art are analytic propositions. That is, if viewed within their context †as art †they provide no information some(prenominal) about any matter of fact. A work of art is a prolixity in that it is a presentation of the artist’s intention, that is, he is saying that that particular work of art is art, which means, is a definition of art.\r\nThus, that it is art is true a priori (which is what Judd means when he states that †Å"if someone calls it art, it’s art”). Indeed, it is nearly impossible to discuss art in general terms without public lecture in tautologies †for to attempt to â€Å"grasp” art by any other â€Å" make out” is merely to focus on another verbal expression or quality of the proposition, which is frequently irrelevant to the artwork’s â€Å"art condition.” One begins to realize that art’s â€Å"art condition” is a conceptual state. That the language forms that the artist frames his propositions in are often â€Å"private” codes or languages is an infallible outcome of art’s freedom from morphological constrictions; and it follows from this that one has to be acquainted(predicate) with contemporary art to appreciate it and understand it. Likewise one understands why the â€Å"man in the street” is intolerant to artistic art and always demands art in a traditional â€Å"language.” (And one unde rstands why formalist art sells â€Å"like hot cakes.”)\r\n tho in painting and sculpture did the artists all speak the same language. What is called â€Å"Novelty Art” by the formalists is often the attempt to recover new languages, although a new language doesn’t necessarily mean the framing of new propositions: e.g., most kinetic and electronic art. Another way of stating, in relation to art, what Ayer asserted about the analytic mode in the context of language would be the adjacent: The validity of artistic propositions is not dependent on any empirical, much less any aesthetic, presupposition about the nature of things. For the artist, as an analyst, is not directly concerned with the physical properties of things. He is concerned only with the way (1) in which art is receptive of conceptual growth and (2) how his propositions are capable of logically following that growth.19 In other words, the propositions of art are not f true(a), but linguistic in c haracter †that is, they do not describe the behavior of physical, or even mental objects; they express definitions of art, or the formal consequences of definitions of art.\r\nAccordingly, we can say that art operates on a logic. For we shall see that the characteristic mark of a purely logical inquiry is that it is concerned with the formal consequences of our definitions (of art) and not with questions of empirical fact.20 To repeat, what art has in common with logic and mathematics is that it is a tautology; i.e., the â€Å"art idea” (or â€Å"work”) and art are the same and can be appreciated as art without discharge away the context of art for verification.\r\nOn the other hand, let us consider why art cannot be (or has obstruction when it attempts to be) a synthetic proposition. Or, that is to say, when the truth or falsity of its assertion is confirmable on empirical grounds. Ayer states: . . . The criterion by which we determine the validity of an a pr iori or analytical proposition is not sufficient to determine the validity of an empirical or synthetic proposition. For it is characteristic of empirical propositions that their validity is not purely formal. To say that a geometric proposition, or a system of geometrical propositions, is traitorously, is to say that it is self-contradictory. But an empirical proposition, or a system of empirical propositions, may be free from contradiction and still be false. It is said to be false, not because it is formally defective, but because it fails to satisfy some material criterion.21\r\nThe irreality of â€Å"realistic” art is due to its framing as an art proposition in synthetic terms: one is always tempted to â€Å"verify” the proposition empirically. Realism’s synthetic state does not bring one to a circular swing back into a communication with the larger theoretical account of questions about the nature of art (as does the work of Malevich, Mondrian, Pollock , Reinhardt, early Rauschenberg, thrones, Lichtenstein, Warhol, Andre, Judd, Flavin, LeWitt, Morris, and others), but rather, one is flung out of art’s â€Å"orbit” into the â€Å"infinite musculus quadriceps femoris” of the human condition. Pure Expressionism, continuing with Ayer’s terms, could be considered as such: â€Å"A denounce which consisted of demonstrative symbols would not express a genuine proposition. It would be a mere ejaculation, in no way characterizing that to which it was supposed to refer.”\r\nExpressionist works are usually such â€Å"ejaculations” presented in the morphological language of traditional art. If Pollock is key it is because he painted on voicedgoing canvas horizontally to the floor. What isn’t measurable is that he later put those drippings over stretchers and hung them parallel to the wall. (In other words what is important in art is what one brings to it, not one’s adoption of what was previously existing.) What is even less important to art is Pollock’s notions of â€Å"self-expression” because those kinds of subjective meanings are useless to anyone other than those involved with him personally. And their â€Å"specific” quality puts them outside of art’s context. â€Å"I do not make art,” Richard Serra says, â€Å"I am engaged in an activity; if someone wants to call it art, that’s his business, but it’s not up to me to decide that. That’s all count on out later.” Serra, then, is very much certain of the implications of his work.\r\nIf Serra is indeed just â€Å"figuring out what lead does” (gravitationally, molecularly, etc.), why should anyone think of it as art? If he doesn’t take the responsibility of it being art, who can, or should? His work certainly appears to be empirically verifiable: lead can do, and be used for, many physical activities. In itself this does anythin g but lead us into a dialogue about the nature of art. In a sense then he is a primitive. He has no idea about art. How is it then that we know about â€Å"his activity”?\r\nBecause he has told us it is art by his actions after â€Å"his activity” has taken place. That is, by the fact that he is with several galleries, puts the physical residue of his activity in museums (and sells them to art collectors †but as we have pointed out, collectors are irrelevant to the â€Å"condition of art” of a work). That he denies his work is art but plays the artist is more than just a paradox. Serra secretly feels that â€Å"arthood” is arrived at empirically. Thus, as Ayer has verbalise: at that place are no short certain empirical propositions. It is only tautologies that are certain. Empirical questions are one and all hypotheses, which may be confirmed or discredited in actual sense experience. And the propositions in which we record the observations that v erify these hypotheses are themselves hypotheses which are subject to the test of further sense experience. Thus there is no final proposition.22\r\nWhat one finds all throughout the writings of Ad Reinhardt is this very similar thesis of â€Å"artas-art,” and that â€Å"art is always dead, and a ‘living’ art is a deception.”23 Reinhardt had a very clear idea about the nature of art, and his importance is far from recognized. Because forms of art that can be considered synthetic propositions are verifiable by the world, that is to say, to understand these propositions one must leave the tautological-like framework of art and consider â€Å"outside” information. But to consider it as art it is unavoidable to ignore this same outside information, because outside information (experiential qualities, to note) has its own intrinsic worth. And to delve this worth one does not need a state of â€Å"art condition.”\r\nFrom this it is easy to realiz e that art’s viability is not connected to the presentation of visual (or other) kinds of experience. That that may have been one of art’s extraneous functions in the preceding centuries is not unlikely. After all, man in even the nineteenth century lived in a reasonably standardized visual environment. That is, it was ordinarily predictable as to what he would be coming into contact with day after day. His visual environment in the part of the world in which he lived was fairly consistent. In our time we have an experientially drastically richer environment. One can fly all over the earth in a matter of hours and days, not months. We have the cinema, and color television, as well as the man-made spectacle of the lights of Las Vegas or the skyscrapers of naked York City.\r\nThe whole world is there to be seen, and the whole world can watch man crack on the moon from their living rooms. sure enough art or objects of painting and sculpture cannot be expected to com pete experientially with this? The notion of â€Å"use” is relevant to art and its â€Å"language.” lately the box or cube form has been used a great deal within the context of art. (Take for instance its use by Judd, Morris, LeWitt, Bladen, Smith, Bell, and McCracken †not even mentioning the quantity of boxes and cubes that came after.) The difference between all the unhomogeneous uses of the box or cube form is directly related to the differences in the intentions of the artists. Further, as is particularly seen in Judd’s work, the use of the box or cube form illustrates very well our earlier claim that an object is only art when pose in the context of art.\r\nA few examples will point this out. One could say that if one of Judd’s box forms was seen fill up with debris, seen placed in an industrial setting, or even merely seen sitting on a street corner, it would not be identified with art. It follows then that understanding and consideration o f it as an artwork is necessary a priori to viewing it in order to â€Å"see” it as a work of art. progress information about the concept of art and about an artist’s concepts is necessary to the appreciation and understanding of contemporary art. any(prenominal) and all of the physical attributes (qualities) of contemporary works, if considered one after another and/or specifically, are irrelevant to the art concept. The art concept (as Judd said, though he didn’t mean it this way) must be considered in its whole. To consider a concept’s split is invariably to consider aspects that are irrelevant to its art condition †or like reading pliberal arts of a definition.\r\nIt comes as no surprise that the art with the least fixed morphology is the example from which we decipher the nature of the general term â€Å"art.” For where there is a context existing separately of its morphology and consisting of its function one is more likely to find r esults less conforming and predictable. It is in modern art’s possession of a â€Å"language” with the shortest history that the plausibility of the renunciation of that â€Å"language” becomes most possible. It is understandable then that the art that came out of Western painting and sculpture is the most energetic, questioning (of its nature), and the least assuming of all the general â€Å"art” concerns. In the final analysis, however, all of the arts have but (in Wittgenstein’s terms) a â€Å"family” resemblance. Yet the different qualities relatable to an â€Å"art condition” possessed by song, the novel, the cinema, the theatre, and various forms of music, etc., is that aspect of them most reliable to the function of art as asserted here.\r\nIs not the pooh-pooh of poetry relatable to the implied metaphysics from poetry’s use of â€Å"common” language as an art language?24 In New York the last decadent stages o f poetry can be seen in the move by â€Å"Concrete” poets recently toward the use of actual objects and theatre.25 Can it be that they feel the unreality of their art form? We see now that the axioms of a geometry are simply definitions, and that the theorems of a geometry are simply the logical consequences of these definitions. A geometry is not in itself about physical space; in itself it cannot be said to be â€Å"about” anything. But we can use a geometry to reason about physical space.\r\nThat is to say, once we have given the axioms a physical interpretation, we can come on to apply the theorems to the objects which satisfy the axioms. Whether a geometry can be applied to the actual physical world or not, is an empirical question which falls outside the scope of geometry itself. There is no sense, therefore, in asking which of the various geometries known to us are false and which are true. Insofar as they are all free from contradiction, they are all true. The proposition which states that a certain application of a geometry is possible is not itself a proposition of that geometry. All that the geometry itself tells us is that if anything can be brought under the definitions, it will also satisfy the theorems. It is therefore a purely logical system, and its propositions are purely analytic propositions. â€A. J. Ayer26\r\nHere then I envision rests the viability of art. In an age when traditional philosophy is unreal because of its assumptions, art’s ability to exist will depend not only on its not playing a service †as entertainment, visual (or other) experience, or decoration †which is something easily replaced by kitsch culture, and technology, but, rather, it will remain viable by not assuming a philosophical stance; for in art’s unique character is the capacity to remain aloof\r\nfrom philosophical judgments. It is in this context that art shares similarities with logic, mathematics, and, as well, scien ce. But whereas the other endeavors are useful, art is not. Art indeed exists for its own sake. In this period of man, after philosophy and religion, art may by chance be one endeavor that fulfills what another age might have called â€Å"man’s spiritual needs.” Or, another way of putting it might be that art deals analogously with the state of things â€Å"beyond physics” where philosophy had to make assertions. And art’s strength is that even the preceding sentence is an assertion, and cannot be verified by art. Art’s only claim is for art. Art is the definition of art.\r\nNOTES * Reprinted from Studio International (October, 1969). 1 Morton White, The Age of Analysis (New York: Mentor Books), p. 14. 2 Ibid., p. 15. 3 I mean by this Existentialism and Phenomenology. Even Merleau-Ponty, with his middle-of-the-road position between empiricism and rationalism, cannot express his philosophy without the use of words (thus using concepts); and followi ng this, how can one discuss experience without sharp distinctions between ourselves and the world? 4 Sir James Jeans, Physics and Philosophy (Ann Arbor, Mich.: University of clams Press), p. 17. 5 Ibid., p. 190. 6 Ibid., p. 190. 7 The line of work such philosophy has taken upon itself is the only â€Å"function” it could perform without making philosophic assertions. 8 This is dealt with in the following section. 9 I would like to make it clear, however, that I intend to speak for no one else. I arrived at these conclusions alone, and indeed, it is from this thinking that my art since 1966 (if not before) evolved.\r\nOnly recently did I realize after meeting terry cloth Atkinson that he and Michael Baldwin share similar, though certainly not identical, opinions to mine. 10 Webster’s New World Dictionary of the American Language. 11 The conceptual level of the work of Kenneth Noland, Jules Olitski, Morris Louis, Ron Davis, Anthony Caro, John Hoyland, Dan Christensen, et al., is so dismally low, that any that is there is supplied by the critics promoting it. This is seen later. 12 Michael Fried’s reasons for using Greenberg’s rationale reflect his background (and most of the other formalist critics) as a â€Å"scholar,” but more of it is due to his desire, I suspect, to bring his scholarly studies into the modern world. One can easily feel with his desire to connect, say, Tiepolo with Jules Olitski. One should never forget, however, that a historian loves history more than anything, even art.\r\n13 Lucy Lippard uses this quotation in a footnote to Ad Reinhardt’s backward memorial, January, 1967, p. 28. 14 Lucy Lippard, â€Å"Constellation by vulgar Daylight: The Whitney Annual,” Hudson Review, Vol. 21, No. 1 (Spring, 1968). 15 Arthur R. Rose, â€Å"Four Interviews,” Arts Magazine (February, 1969). 16 As Terry Atkinson pointed out in his introduction to Art-Language (Vol. 1, No. 1), the Cubists never questioned if art had morphological characteristics, but which ones in painting were acceptable. 17 When someone â€Å"buys” a Flavin he isn’t purchase a light show, for if he was he could just go to a hardware store and get the goods for considerably less. He isn’t â€Å"buying” anything. He is subsidizing Flavin’s activity as an artist. 18 A. J. Ayer, Language, Truth, and Logic (New York: Dover Publications), p. 78. 19 Ibid., p. 57.\r\n20 Ibid., p. 57. 21 Ibid., p.90. 22 Ibid., p. 94. 23 Ad Reinhardt’s retrospective catalogue (Jewish Museum, January, 1967) written by Lucy Lippard, p. 12. 24 It is poetry’s use of common language to attempt to say the unsayable that is problematic, not any inherent problem in the use of language within the context of art. 25 Ironically, many of them call themselves â€Å"Conceptual Poets.” a lot of this work is very similar to Walter de maria’s work and this is not coincidental; de Ma ria’s work functions as a kind of â€Å"object” poetry, and his intentions are very poetic: he unfeignedly wants his work to change men’s lives. 26 Op. cit., p. 82.\r\n'