Case Study Analysis Cost Of Capital At Ameritrade Finance Essay

Case Study Analysis Cost Of Capital At Ameritrade Finance Essay Capital Asset Pricing Model is a model that describes the relationship between risk and expected return  and  that is used in the pricing of risky securities. Description: Capital Asset Pricing Model (CAPM) The general idea behind CAPM is that investors need to be compensated in two ways: time value of money  and risk. The time value of money is represented by the risk-free(rf) rate  in the formula and compensates the investors for placing money in any investment over a period of time. The other half of the formula represents risk and calculates the amount of compensation the investor needs for taking on  additional risk. This is calculated by taking a risk measure (beta)  that compares the returns of the asset to the market over a period of time and to the market premium (Rm-rf). The CAPM says that the expected return of a security or a portfolio equals the rate on a risk-free security plus a risk premium. If this expected return does not meet or beat the required return, then the investment should not be undertaken. The security market line plots the results of the CAPM for all different risks (betas). Using the CAPM model  and the following assumptions, we can compute the expected return of a stock in this CAPM example: if the risk-free rate is  3%, the beta (risk measure) of the stock is 2 and the expected market return over the period is 10%, the stock is expected to return 17% (3%+2(10%-3%)). CAPM has a lot of important consequences. For one thing it turns finding the efficient frontier into a doable task, because you only have to calculate the co-variances of every pair of classes, instead of every pair of everything. Another consequence is that CAPM implies that investing in individual stocks is pointless, because you can duplicate the reward and risk characteristics of any security just by using the right mix of cash with the appropriate asset class. This is why followers of MPT avoid stocks, and instead build portfolios out of low cost index funds. Cap-M looks at risk and rates of return and compares them to the overall stock market. If you use CAPM you have to assume that most investors want to avoid risk, (risk averse), and those who do take risks, expect to be rewarded. It also assumes that investors are price takers who cant influence the price of assets or markets. With CAPM you assume that there are no transactional costs or taxation and assets and securities are divisible into small little packets. CAPM assumes that investors are not limited in their borrowing and lending under the risk free rate of interest. How to Calculate the Cost of Equity CAPM The cost of equity is the amount of compensation an investor requires to invest in an equity investment. The cost of equity is estimable is several ways, including the capital asset pricing model (CAPM). The formula for calculating the cost of equity using CAPM is the risk-free rate plus beta times the market risk premium. Beta compares the risk of the asset to the market, so it is a risk that, even with diversification, will not go away. As an example, a company has a beta of 0.9, the risk-free rate is 1 percent and the expected return on the equity investment is 4 percent. Instructions Determine the market risk premium. The market risk premium equals the expected return minus the risk-free rate. The risk-free rate of return is usually the United States three-month Treasury bill rate. In our example, 4 percent minus 1 percent equals 3 percent. Multiply the market risk premium by beta. In our example, 3 percent times 0.9 equals 0.027. Add the risk-free rate to the number calculated in Step 2 to determine the cost of equity. In our example, 0.027 plus 0.01 equals a cost of equity of 0.037 or 3.7 percent. . Combining the risk-free asset and the market portfolio gives the portfolio frontier. The risk of an individual asset is characterized by its co-variability with the market portfolio. The part of the risk that is correlated with the market portfolio, the systematic risk, cannot be diversified away. Bearing systematic risk needs to be rewarded. The part of an assets risk that is not correlated with the market portfolio, the non-systematic risk, can be diversified away by holding a frontier portfolio. Bearing non-systematic risk need not be rewarded. For any asset i: where We thus have an asset pricing model the CAPM. Example. Suppose that CAPM holds. The expected market return is 14% and T-bill rate is 5%. What should be the expected return on a stock with ÃŽÂ ² = 0? Answer: Same as the risk-free rate, 5%. à ¢Ã¢â€š ¬Ã‚ ¢ The stock may have significant uncertainty in its return. à ¢Ã¢â€š ¬Ã‚ ¢ This uncertainty is uncorrelated with the market return. What should be the expected return on a stock with ÃŽÂ ² = 1? Answer: The same as the market return, 14%. What should be the expected return on a portfolio made up of 50% T-bills and 50% market portfolio? Answer: the expected return should be  ¯r = (0.5)(0.05)+(0.5)(0.14) = 9.5%. Multifactor CAPM In CAPM, investors care about returns on their investments over the next short horizon they follow myopic investment strategies. In practice, however: à ¢Ã¢â€š ¬Ã‚ ¢ Investors do invest over long horizons à ¢Ã¢â€š ¬Ã‚ ¢ Investment opportunities do change over time. In equilibrium, an assets premium is given by a multi-factor CAPM : Limitations of CAPM Based on highly restrictive assumptions i.e. no tax, transaction costs etc Serious doubts about its testability. Market factor is not the sole factor influencing stock returns. Summary of CAPM CAPM is attractive: 1. It is simple and sensible: is built on modern portfolio theory distinguishes systematic risk and non-systematic risk provides a simple pricing model. 2. It is relatively easy to implement. CAPM is controversial: 1. It is difficult to test: difficult to identify the market portfolio difficult to estimate returns and betas. 2. Empirical evidence is mixed. 3. Alternative pricing models might do better. Multi-factor CAPM. Consumption CAPM (C-CAPM). APT. Other Methods for calculating cost of equity There are 3 methods which are mainly used for calculating Cost of equity other than CAPM Arbitrage Pricing theory 3 factor method Dividend Growth Method Arbitrage Pricing Theory APT assumes that returns on securities are generated by number of industry-wide and market-wide factors. Correlation between a pair of securities occurs when these securities are affected by the SAME factor or factors. Return on any stock traded in a financial market consists of two parts. R = Re + U Where, R = return on any stock Re = Expected or Normal return (depends on all of information shareholders have on the stock for next month.) U = Uncertain or Risky return (this comes from information revealed in the month) U = m +  Ã‚ ¥Ã¢â€š ¬Ã‚   Where, m = Systematic risk or market risk (it influences all assets of market)  Ã‚ ¥Ã¢â€š ¬Ã‚  Ã¢â€š ¬Ã‚  Ã¢â€š ¬Ã‚ ½ Unsystematic risk (it affects single asset or small group interrelated of assets, it is specific to company) The capital asset pricing theory begins with an analysis of how investors construct efficient portfolios. But in real life scenarios, it isnt necessary that every time portfolios will be efficient. It is developed by Stephen Ross. Moreover, the return is assumed to obey the following simple relationship: Where b1, b2 and b3 are sensitivities associated with factor 1, factor 2 and factor 3 which can be interest rate or other price factors. Noise =  Ã‚ ¥ is event unique to the company. APT states that the expected risk premium on a stock should depend on the expected risk premium associated with each factor and the stocks sensitivity to each of the factors. Thus, formula modifies to: Where, rf = risk free rate is subtracted from each return to give risk premium associated from each factor. Analysis of the formula: If we put value for b = 0, the expected risk premium will be zero. It will create a diversified portfolio which has zero sensitivity to macroeconomic factor which offers risk free rate of interest. Portfolio offered a higher return, investors could make a risk-free (or arbitrage) profit by borrowing to buy the portfolio. If it offered a lower return, you could make an arbitrage profit by running the strategy in reverse; in other words, you would sell the portfolio and invest the proceeds in U.S. Treasury bills. Consider portfolio A and B are sensitive to factor 1, A is twice sensitive to factor1 as then portfolio Therefore, if you divided your money equally between U.S. Treasury bills and portfolio A, combined portfolio would have exactly the same sensitivity to factor 1 as portfolio B and would offer the same risk premium. Steps of Arbitrage Pricing Theory The various steps during Arbitrage Pricing Theory can be stated as: Identify the macroeconomic factors: APT doesnt indicate which factors are to be considered. But there are 6 principle factors which are: Yield spread interest rate, exchange rate, GNP inflation portion of the market return Estimate the risk premium of each factor Estimate the factor sensitivity Net Return = risk free interest rate + expected risk premium 3 factor model It is a special case of APT It considers 3 major factors called as market factor size factor book to market factor. There is also evidence that these factors are related to company profitability and therefore may be picking up risk factors that are left out of the simple CAPM. The practical application of this model is to estimate the betas for the three factors and then use them to predict where returns should fall, much like the CAPM. It was researched by Fama and French. Dividend Growth Method Dividend Discount Model. It is useful when the growth rate of dividend is forecasted constantly. The present value of stocks is given as Where, r = discount rate, g = rate of growth, DIV = annual cash payment, This formula can be used when growth rate g When growth rate = rate of return, the present value becomes infinite. For perpetual growth, r > g. Growing perpetuity formula, Where,P0 in terms of next years expected dividend DIV g = the projected growth trend r = expected rate of return on other securities of comparable risk. We can estimate cost of equity from this formula by re-arranging. Lets understand by an example: Suppose that your company is expected to pay a dividend of $1.50 per share next year. There has been a steady growth in dividends of 5.1% per year and the market expects that to continue. The current price is $25. Then cost of equity r is given as: When the growth rate isnt constant but varies from year to year, then average can be calculated. Growth rate for current year is calculated using the formula: For example, Year Dividend (in Rs. Million) Percent change (g) 2000 1.23 2001 1.30 (1.30 1.23) / 1.23 = 5.7% 2002 1.36 (1.36 1.30) / 1.30 = 4.6% 2003 1.43 (1.43 1.36) / 1.36 = 5.1% 2004 1.50 (1.50 1.43) / 1.43 = 4.9% Growth rate is average of all percent changes and equals This model serves the major advantage of being easy to understand and use but has a major drawback total dependence on dividend and it cannot be used where company isnt paying any dividend. Also, it doesnot consider any risk and is highly sensitive to the change in growth rate. Estimating Beta Beta is an important term in Capital Asset Pricing Method. Beta is the non-diversified risk of holding a single stock. But it turns out that companies in similar markets have similar risks. Interpretation of beta Beta = 1,it matches market portfolio Beta > 1, higher risk. Beta Methods for calculation of beta It is calculated as: beta_{i} = frac {mathrm{Cov}(R_i,R_m)}{mathrm{Var}(R_m)} Where, Ri = rate of return of asset and Rm is rate of return of market. Thus, beta is dependent on regression analysis. Beta is found by statistical analysis of individual, daily share price returns, in comparison with the markets daily returns over precisely the same period. We need to gather a lengthy time-series of observations for the market return and the individual asset return. Then required co-variances and variances can be calculated. If coefficient of correlation P is known then The alternative method of calculating beta is (by rearranging terms from CAPM equation): In practice, an additional constant alpha is also added in the above equation which tells how much better (or worse) the funds did than what the CAPM predicted. Alpha is a risk-adjusted measure of the so-called active return on an investment. Here, E(Ri) Rf is estimated return on asset portfolios and E(Rm) Rf is estimated return on market index. In order to check that there are no serious violations of the linear regression model assumptions. The slope of the fitted line from the linear least-squares calculation is the estimated Beta. The vertical intercept of this curve is called as the alpha. For a portfolio of assets, we have the relation: Given that beta is a linear risk measure, the beta of a portfolio of assets as simply the weighted average of all the individual betas that comprise the portfolio. HANU Estimate of Risk Premium We dont have reliable estimate where stock market will move in future. So we are using long term historical spreadsheets for estimate large stock than small stocks because they are more closer to proper estimate of market We are considering all values after Second World War because after that laws became stable in U.S. Risk premium = Rm Rf U.S. government securities rate = 6.69% (20 years bond, Exhibit 3) Average annual return for Large company stocks = 14 % (Exhibit 3) So Risk premium for Ameritrade = 14 % 6.69 % =7.31 %

Large Schools vs. Small Schools: Which perform better?

Small schools perform better than large schools in more than one aspect. A study finds that small rural communities with a school have significantly higher housing values, more new housing, smaller income variability, fewer households receiving public assistance, lower poverty and child poverty rates, more workers in professional and managerial jobs, and more workers employed within the community. (1) The existence of schools even in small rural areas proves many benefits, but there is a larger question posed, would it be more beneficial to have a small school or a large one? This paper aims to find which category offers more to the quality of students. It may be true that large schools may have grander facilities like television and radio stations but there is more than behind the curtain of facilities. An extensive body of research demonstrates numerous positive benefits of small schools and small learning communities, especially for those students who are at greatest risk of educational failure. Indeed, in a synthesis of research on small schools, Raywid (1997/1998, p. 35) concludes, â€Å"there is enough evidence now of such positive effects—and of the devastating effects of large size on substantial numbers of youngsters—that it seems morally questionable not to act on it.† (2) This is more or less the same stand that this paper takes. In a small school there would be more benefits. As you will see throughout the paper, there have been studies that point out the benefits of a small school over that of a large one.   There is almost 40 years of existing research and literature on small schools which indicates that students in small schools have higher attendance and graduation rates (1), fewer drop-outs, equal or better levels of academic achievement (2), higher levels of extra-curricular participation (3) and parent involvement, and fewer incidences of discipline and violence (4). (3) Wasley, et al (2000, pg 4) says small schools increase student attendance across all types of small schools: schools-within-schools (SWS), freestanding small schools, and multi-school small schools. Lakhman (1999), on the other hand found that between 1988 and 1998, DeWitt Clinton high school developed 10 small schools. During that time, they reduced their dropout rate by 8.5% and increased their on-time graduation rate by almost 50%. Thus, proving that small schools have the ability to improve attendance and graduation rate. Moreover, researchers observe that the effects of smallness on achievement are indirect, being mediated through other small-school features as quality of the social environment and students' sense of attachment to the school. Mitchell (2000) reminds us that in the studies conducted by Howley and others, school size had such a powerful positive effect on the achievement of poor students that it even trumped the beneficial effects of class size (Cotton, 2001). This can also be credited to the fact that in a small school, they can focus more on the need of each student. Sometimes, students does not need a large school with lots of reference books but a school that encourages a lot of help, from peers and teachers. There are several studies whose findings reveal that students at all grade levels learn more in small schools than in large schools. Several researchers have also examined middle-grades schools with interdisciplinary teams and found that students in this type of small learning community outperform similar students in schools without such organizational arrangements (Mertens and Flowers, 2003; Mertens, Flowers, and Mulhall, 2001; George and Lounsbury, 2000; Lee and Smith, 2000; Felner et al., 1997; Lee and Smith, 1993). (2) In addition from improved attendance, higher graduation rates and improved academic achievement in small schools, another factor that is considered is the students’ level of participation.   Take for example Mitchell’s (2000) observation where in a school of 2,000 students, only the most talented will be recruited for the basketball team or the drama club. The result is that a small number of gifted students dominate the sports and activity rosters, while the vast majority are relegated to spectator status. In small schools, sports teams, musical groups and clubs depend on broader participation. The number of extracurricular opportunities does increase with school size. But a twentyfold increase in population produces only a fivefold increase in opportunities. That is, as the school expands, an increasingly smaller percentage of students are needed to fill the available slots. In short, more students produce less participation. Most students will not be required to participate because there will be others who would. In a small school every student will have the opportunity to hone and improve their talents and interests. Researchers point out that, in small schools, everyone is needed to populate teams, offices, and clubs; thus, even shy and less able students are encouraged to participate and made to feel they belong. In addition to the factors mentioned, another advantage of a small school over a large one involves more personalized approach where levels of parent involvement and parent satisfaction are greater in small school environments than in large ones. Communication between parents and teachers tends to be more substantive given the fact that the teachers often know the students better in the smaller learning environment (Cotton, 2001). This is a positive reinforcement of discipline for the students.   In a smaller learning environment, the students’ activities can be monitored and can be reported to parents, whether a violation or a perceived improvement. Among the advantages mentioned, the fewer incidence of violence is perhaps the most important. â€Å"There is less violence in small schools, less vandalism, a heightened sense of belonging, and better attendance,† the KnowledgeWorks report states. (4)   Another research also showed that â€Å"In urban schools with less than 300 students, 3.9% of the schools reported serious violent incidents compared with 32.9% of schools over 1,000 students (Gregory, 2000).† Small schools are better positioned to detect and help hurting students, and to address disruptive behavior before it escalates into tragic violence and abuse. When teachers know virtually all students in a school community by name, it fosters a culture of belonging, accountability, and support. The Association for Supervision and Curriculum Development (2000) studies show that small learning environments are characterized by fewer incidents of violence and disruptive behavior, less school graffiti, lower crime levels, and less serious student misconduct. The association attribute this to what they term as â€Å"human-scale schooling† which reduces isolation and increasing the sense of belongingness. Indeed, a closer community will bring more familiarity and less hostility. Hence, with all the aspects considered in the paper, it can be deduced that in a school of smaller quantity, we can focus more on the students’ quality. From this standpoint, the performance of a small school is better. Even policy makers have noted these benefits leading to   the development of some new rules. These includes: Florida Small School Law which recognizes the benefits of small schools and prohibits, as of July 2003, the construction of large schools. As of that date, new elementary schools will be limited to 500 students, middle schools to 700, and high schools to 900. Another is the Vermont Funding for Small Schools which in 1997, Vermont adopted a new system of funding education under Vermont Act 60 – The Equal Educational Opportunity Act (EEOA). Unlike most states, Vermont choose to provide additional funding to cover the higher costs of the state's smallest school districts. An extra $1 million per year was allocated to districts with fewer than 100 students. (5) This paper believes as far as, the future can depend on small school more than large ones, and to borrow Daniel Kinnaman’s title, the future will be filled up by small schools (with) big benefits.

The Iranian Revolution - 732 Words

Longevity and positive outcomes are what determine whether a revolution is successful or not. This is not the case for Iran. Since the revolution, Iran has been economically, politically, and socially unstable. With an economy dependent on oil, a natural source whose production is unpredictable, stability is simply unattainable. With the same leader for a long period of time, not much can change politically. Oppositions and revolts can happen and disrupt the social lives of Iranian citizens. Although the Iranian Revolution was politically successful by maintaining an Islamic Republic, the revolution was unsuccessful because of the severe economic failure it was in the long term and the social unrest it still has today. The revolution of 1979 marked the beginning of Iran’s economic decay and even further economic instability. Before the revolution, Iran had one of the Middle East’s most advanced economies. Petroleum exports, which make up about 85 percent of government revenues, have decreased over the years after the revolution (Trading Economics). In fact, petroleum exports declined to 1.5 million barrels per day in 2012 from 2.5 million barrels per day in 2011 (Trading Economics). The Iranian government’s dependence on oil revenues has resulted in persistent financial instability. Because of this financial instability, Iran’s inflation rate was greatly affected. The inflation rate is the rate of change of prices calculated on a monthly or annual basis. In January 2014,Show MoreRelatedIranian Revolution1648 Words   |  7 Pagesbreeding ground for some kind of political upheaval or another. In recent times, back in 1979, there was a major revolution which was, in some ways, similar to the revolution we are seeing today. The people were angry and they were tired of being controlled by the government that was in power. 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The Iranian/Islamic Revolution refers to the events involving the deposing of Mohammad Reza Shah Pahlavi and pro-American government, and the replacement with an anti-Western authoritarian theocracy under the leader of the revolution, the GrandRead MoreThe Islamic Revolution And The Iranian Revolution Essay1379 Words   |  6 PagesDuring the Islamic Revolution in the Iranian country, education was essential to the people. Shah wanted the Western education because he believed that it was best for the Iranian people. Most of the women’s were involved in the demonstration of wearing the veil has some western education. The Islamic revolution wanted things to go back to the original Islamic culture. Based on the Complete Persepolis, in 1979, a revolution took place and later called â€Å"The Islamic Revolution†. 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Supporters of the revolution were very mixed in their goals for a new Iran. The Islamic Extremist lead by Ayatollah Khomeini wanted to install an Islamic regime inside of Iran that would follow Islamic law. Religious clerics viewed the Shah as not being a positive leader for Iran and wanted him overthrown and the country left as is. Iranians such as the middle class and students wanted to install an Islamic

The Wage Gap in America Essay - 1077 Words

The Wage Gap in America The wage gap is a serious problem that has consequences for women in America, our two parent families and our single mom households. The government tries to reduce the wage gap between men and women’s earnings and tries to make sure that women’s talents are properly used and rewarded. A lot has been done to relive the wage gap in the past fifty years, but it still is not enough. Women can do things on their own to help close the wage gap. They can get a non-traditional job or they can join a union. Women need to find out a company’s policy and discuss their salaries. The wage gap is a problem American women need to address, not wait on the government to fix it for us. The wage gap can be defined as the†¦show more content†¦Many employers may not realize their pay scale favors white men. Women are less likely to receive additional compensation such as bonuses, stock options, and profit sharing. Equal pay makes good business sense. It promotes a workforce that feels valued, which helps the bottom line. Fair pay polices will attract the best workers. The national committee on pay equality has a ten step guide that is developed to assist employers to recognize and reward the skills of working women. Women can decrease the wage gap by joining a union. Union members and the workers represented by unions have been paid higher wages than non-union members. Union membership and representation has been proposed as one way to raise women’s wages and decrease the wage gap between men and women. Most union members are in the public sector and include firefighters, police officers and teachers. Union pay advantage for women is 30.9 percent. 43.6 percent of the union members are women. Consider a career in a non-traditional field could help women close the wage gap. When making decisions about what to do when we grow up, most women tend to steer away from jobs they associate with men’s work. Jobs dominated by men typically pay higher wages and offer good benefits. Many non traditional jobs such as technical jobs, skilled trade occupations, and electrician provide on the job training. This means you are getting paid while training unlike manyShow MoreRelatedWage Gap in America1572 Words   |  7 PagesWage Gap in America On a broader aspect, it says men and women are equal. Though at a bottom level, women are still struggling to occupy the same status as men in the outer world. Stratification between the two genders is seen everywhere including the household or the workplace. Even today, women still earns less as compared to men involved in the same profession. Like a male physician makes $140,000, while a female in the same profession makes $88,000. Statisticians at the US census bureau lookedRead MoreGender Wage Gap in America1565 Words   |  7 PagesThe Gender Wage Gap in America The gender wage gap has been around since women began having jobs and careers. Though in the beginning the gender wage gap was purely do to discrimination by social stereotypes, now it has become more complicated than that. The issue today has evolved into a complex issue which combines our American culture with business economics. As a result, some are skeptical of the issue and some are very adamant in their beliefs. The issue encompasses not only gender stereo typesRead MoreGender And Gender Within The American Workforce1306 Words   |  6 Pageshuge topic at the forefront of America for many years. Whether it is equality for races, religion, gender or sexual orientation, people just desire for life to be equal and fair. Although much has changed and is continuously changing, women still struggle to be seen as equivalent to men in the American workforce. Bound by a wage gap that is bias towards the female species, women have to battle different factors which lead to inequivalent compensation. 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The United States is very dependent on its currency, without it then you are almost unable to live. Healthcare is free in most other developed countries while in the United States you are forced to literally pay for your life if the situationRead MoreSocial Inequality Is An Important Issue In Today’S Society.1595 Words   |  7 Pagestheir gender, race, religion, and disability status, yet there are many different ideologies and ongoing debate about social inequality. There are three perspectives concerning the issue of inequality in America. This paper will analyze an article about social inequality, â€Å"Gender, Race, and Income Gaps† by Richard Hogan and Carolyn Perrucci, and how it applies to the viewpoints concerning social inequality. In order to better understand the debate surrounding social inequality, one must first understandRead MoreA Brief Note On Wage Gap And The Workplace Gap1582 Words   |  7 PagesIntroduction Wage gap is an important reality that women constantly have to face in their everyday work lives. â€Å"The wage gap is a statistical indicator often used as an index of the status of women’s earnings relative to men’s† (The Wage Gap, 2015). It has been a major issue for many decades and it is often experienced by women in many traditionally male dominated industries. The problem may seem to be diminishing, however there is still a significant gender wage gap that can allow us to see thatRead MoreThe American Dream By James Truslow Adams1500 Words   |  6 Pagesproblem, the American Dream has to be defined. James Truslow Adams, author of the 1931 book The Epic of America, was the first person to mention and therefore define the American Dream. 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On average, women earn less than men in basically every profession that there is adequate income data for both women and menRead MoreThe Pros And Cons Of Raising The Minimum Wage993 Words   |  4 PagesAlthough it is not a new topic in Ame rica, the decision to raise the minimum wage continues to be controversial, especially in the political realm. The political parties still move to block the opposing party from successfully implanting their ideals, causing either nothing to be accomplished or the situation to worsen. Research shows that raising the minimum wage a reasonable amount would lessen the gap between the rich and the poor, continue to fulfill its original purpose of protecting workers

Which Is Better Poetry and Prose Essay - 1555 Words

‘Prose; words in their best order; - poetry: the best words in the best order’ (Coleridge). A reflection on Coleridge’s definition, Nobody can claim that prose is a somewhat less commendable form of literature than poetry. Prose must still contain a certain amount of veraciousness and technique in order to be created. However poetry requires these things in order to be successful and whilst it is some people’s view that prose is layered with different meanings and is read to be analysed, poetry is simple, often encapsulating intricate ideas using a minimal amount of words; and it is not produced to explain or create an argument but instead persuade the reader through the power of the language it contains and the intricate way in which†¦show more content†¦However poetry can take these standard words and their meaning from the storytelling of prose and use its own devices, by adding structure and form, to convey the authors original meaning. This added use of structure allows the poet to say things in an unusual and imaginative way rather than stick to the confinements of prose structure which is d esigned for clarity not for creativity. In poetry the structure of the piece is more than just a way of displaying the content to the reader, it can be manipulated and changed and without the clues which the grammar in prose provides, the reading of a poem becomes much more ambiguous. Poetry can lift the reader into their own imagination in just a few short lines, and reading it can take you on a journey from the ordinary life to an illuminated extraordinary existence. â€Å"To see a world in a grain of sand, And a heaven in a wild flower, Hold infinity in the palm of your hand, And eternity in an hour.† These words written taken from the first stanza of William Blake’s ‘Auguries of Innocence’(1863) are a powerful example of this technique. Here Blake uses a tiny grain of sand to invoke the gigantic imagery of the world and by doing so engages the readers’ minds whilst also acting as a powerful tool to ignite theirShow MoreRelatedPoetry vs. Prose: A Killer Topic734 Words   |  3 Pagesstarted with an argument between which is better, poetry or prose, and it ended with a knife. On January 20, 2014, a Russian man was stabbed to death in the Sverdlovsk region over an argument of which is better, poetry or prose. Poetry and prose have various common aspects, though it is their differences that make each unique in how they are loved. There seem to be three types of people in the world, those who love poetry and hate prose, those who love prose and despise poetry, and the mediators that loveRead MoreEmily Dickinson s Poem, A Fairer House Of Poetry905 Words    |  4 PagesPoetry Explication Poetry has the ability to expand minds and put its reader in touch with the world around them. Emily Dickinson attempts to convey the power of poetry in her poem I Dwell in Possibility. She pours her passionate feelings about poetry into this poem and drives her point home with a comparison to prose. Using language, structure, and symbolism, Emily Dickinson’s I Dwell in Possibility effectively articulates how poetry can broaden horizons and provide an escape from the mundaneRead MoreHow Poems Create Thoughts And Thoughts1360 Words   |  6 Pagesrhymes, or of short reads that come together almost in a lyrical and musical type of way. Today’s modern poems are much different because they incorporate different types of techniques and literary ways of making a piece of writing into a poem. Through poetry many poets tend to have a deeper connection with themselves and their readers because they express their thoughts, feelings and memories through their close selection o f words. Many people believe a poem should be composed of a specific and limitingRead MorePoetry Is A Type Of Communication Essay1470 Words   |  6 PagesPoetry can help us to be aware of the changes that are otherwise not noticed, changes in our world. Poetry is something that we create. Poetry is stemmed from the roots of one’s life stories and experiences. Poetry is an outlet of human expression, allowing us all to share the untold stories of the journey’s that we travel. Poetry has no rules, therefore it can have endless results and can allow the poet to be completely vulnerable while fully clothed. If you took the art from poetry, it would simplyRead MoreA New Covenant With The House Of Judah1628 Words   |  7 PagesHarper Collins Study Bible) Jeremiah 31:31–34 is one of the popular passages for the discussion for both Christina and Jews alike. Jeremiah 31: 31-34 is a part of a section of the book of Jeremiah which was called, the Book of Consolation. It is a foretelling message of God promise for the people, in which God promises that he will make a new unconditional covenant with the nation of Israel and Judah. Specifically states in the passage Jeremiah 31:31–34 that this New Covenant is different from theRead MoreShadows in the Yellow Wood: The Dark Side of Rober Frosts Poetry1508 Words   |  7 PagesDark Side of Robert Frost’s Poetry Robert Frost is one of the most widely-read and recognized poets of the twentieth century, if not all time. If his name is mentioned, it is usually followed by a reference to two roads diverged in a yellow wood and taking the one less traveled by. But lurking in the shadows of the yellow wood of Frost’s poetry are much deeper meanings than are immediately apparent. As the modern poet Billy Collins says in his â€Å"Introduction to Poetry†, in order to find the trueRead MoreEssay on What Is Literature and Why Study Literature711 Words   |  3 Pageswritten form, on the other hand can either be in the real form of biographies and science, or the imaginative form of poetry, prose fiction and drama. The specific perspective of literature makes a clearer example of how literature plays a critical role in our lives. The specific perspective of literature is composed of poetry, prose and drama. We are surrounded by poetry, prose, and drama everyday of our lives. Whether it is a song that we are listening to on the radio or in the supermarket, orRead MoreEssay about Analysis of Emily Dickinson’s No. 657 and No. 303945 Words   |  4 Pagesnotes the Chariots pausing At her low Gate Unmoved an Emperor kneeling Upon her Mat I’ve known her from an ample nation Choose One Then close the Valves of her attention Like Stone 657 I dwell in Possibility A fairer House than Prose More numerous of Windows Superior for Doors Of Chambers as the Cedars Impregnable of Eye And for an Everlasting Roof The Gambrels of the Sky Of Visitors the fairest For Occupation This The spreading wide my narrow Hands To gather ParadiseRead MoreHamlet Is A Theater Performance Of The Shakespeare Play1715 Words   |  7 PagesEssay 2 The play Hamlet is written by William Shakespeare whereby he uses a combination of poetry and prose. The film, Hamlet is a theater performance of the Shakespeare play. The play is written in blank verse offering an insight into the state of mind of the character as well as a reaction to the ongoing actions in the stage. The style is reserved for the nobles and informal situations like courts. Figurative language is used to express the actions and feelings of the characters have been evidencedRead MoreAn Analysis Of Tim O Brien s Things They Carried1183 Words   |  5 Pagesrole in our society. However, the process that the story is told differs based on its form. For example is it a poem (which has a specific form and style) or is it a prose (written/spoken language without any metrical structure)? Although poetry and prose greatly differs from each other, there are many similarities between them. Prose is defined to be in an ordinary form, but prose can share some poetic qualitie s such as literary devices, imagery, and theme, and many more. Tim O’Brien’s Things

White Tiger Free Essays

In current society many books are written based racial or social issues reflecting the past, present or future. The White Tiger by Aravind Adiga is an example that confronts social and racial issues within India, shown through the eyes of servant to wealthy, named Balram. Born in rural part of India with a deceased mother and rickshaw-pulling father, Balram is dedicated to serving others. We will write a custom essay sample on White Tiger or any similar topic only for you Order Now Whether it was driving the wealthy around, grinding coal, or running behind cars to get a job, Balram’s life was constant and there was no chance of him becoming a man who had servants. He was judged on where he was from and the family he was born into just like Jim was judged in The Adventures of Huckleberry Finn for the color of his skin. They both had nothing to do with what they were born with but they both try to make the best of their lives by making relationships with those of a higher class or skin tone. In comparison to The White Tiger Balram shows how he deals with struggles within given class in order to better himself in the modern Indian society. The common apartment buildings in Delhi thrive on the past like caste systems based on the structure of the floors within the apartment. Balram describes his job, as a servant is to drive his masters around and then when they return to the buildings clean the apartment or do anything for his masters waiting for the master to tell him to leave until the morning. When Balram is done with work he goes downstairs to the servants’ quarters in the basement, which is traditional to have in apartment buildings because all residential buildings or homes are built with quarters to house their servants. These living arrangements are a place of â€Å"rest, sleep, and wait. When our masters wanted us an electric bell began to ring throughout the quarters†¦I swept the floor, tied the mosquito net to four nails on the wall, and went to sleep. The wall was covered with cockroaches,†(108-110). While their masters lived in beautiful, cleanly apartments, their servants sleep on the lowest part of the building full of cockroaches and dirt awaiting the bell to go to their masters. The life in the apartment building represents the Caste System, that was prominent in India but now is illegal all over India, with the poorest, lowest class in basement and then the rising castes follow. Although Balram does not highlight the floor assignments of the building resembling the Caste System; the idea of living below your master is a representation of the ancient but known system. Life as servant for Balram in India means that he can’t be considered or seen doing the same things as his masters suggesting that he is not of the social status to partake in the same activities. The idea that Balram drives his masters to the mall and then not allowed to enter the same mall as them is ridiculous. But its not just Balram who sits and waits outside for his clients but other chauffeurs cannot enter the mall too. Balram describes his desire to go into the mall but knows that the guards will never let him because of the way he is dressed. â€Å"I went to the gateway of the mall in my new white T-shirt. But there, the moment I saw the guard, I turned around- went back to the Honda City†¦Even as I was walking side the mall, I was sure someone would say, Hey! That man is a paid driver! What’s he doing in here,† (128)? Going to the mall is like entering a prestigious club with guards protecting it to make sure those who did not belong get in. This representation of the Caste System is shown by those who were not in the right class would not have the same privilege of shopping in the mall like the upper classes. Balram compares being a servant of the wealthy to a Rooster Coop, where both a servant and rooster are trapped in a controlling world of a master that is useful and beneficial to the master. â€Å"He unloads all this furniture for you, and you give him the money in cash-a fat wad of cash the size of a brick†¦A years salary, two years’ salary, in his hands, and he never takes a rupee of it,† (148). The idea of the Rooster Coop is that these servants have so many opportunities to steal the money of their masters but they do not want to disobey them. They are worried that their families will be harmed and therefore these servants are imprisoned by the rich just the chickens are by farmers. How to cite White Tiger, Papers

Is Reading Fiction a Waste of Time free essay sample

Although by reading these books, our imaginations expanded and our creativity grew. Imagination is one of the many qualities of a healthy mind and can help shape the ideas of future generations to come. So what if they are â€Å"fake,† so are many other things, including T. V. shows and movies. But people still love all of those things. So why is everyone only picking on fiction books? Out of all of those, fiction books are the most educational. They are definitely not a waste of time and fiction books are suitable for any age. Fiction books always have a moral to their story, no matter what age level you are reading at. These novels teach us the values of love, friendship, family and many other things. Authors who write fiction books take a real life situation and give it their own twist with their imagination and creativity. Fiction is a way to introduce certain concepts and morals through character choices. We will write a custom essay sample on Is Reading Fiction a Waste of Time or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page In these stories, we may look at certain issues in the world through the eyes of the main characters. Daily, we are forced to face reality and whatever life throws at us. Wouldn’t you like to read a novel and imagine yourself in their shoes? Or imagine what they would do in yours? Why should we face reality when we can drift off into a good book? It’s sometimes necessary to escape from bad moments in life. Fiction is great for the mind and everyone should read a little bit more of it. These novels are great for just forgetting whats around you for a while, relax, and get rid of all the stress. There’s proof that happy people live longer. Even after explaining all the good things that come out of reading a fiction books, there are still some skeptics. They say that a real lesson can’t be learned from reading a â€Å"fake† book or that fiction books take away from learning about real life events. Non-fiction will educate you on the past. Fiction books educate you with new ideas. Fiction books also increase your knowledge and vocabulary. Good authors usually use big vocabulary. So, you will always be learning new words. Fiction has changed lives and shaped philosophies. So what if people see fiction as a waste of time, they’re the ones missing out. These nonbelievers will never experience their imaginations growing, learn valuable lessons, or escape from reality.