Risk management and hedging

Risk management and hedging Risk Management And Hedging In Derivatives Market Risk management can be undertaken in several different manners, which often depends on the structure and initiatives for the specific firm. One commonly used approach is to hedge in the derivatives market, which consists of futures, forwards, swaps, CFDs, warrants, convertibles and options. Derivatives are financial instruments whose value and performance depends on the value of underlying assets, for example equities, stock market indices, exchange rates, commodities etc. The main argument for hedging is for companies to minimize risks that may arise from interest rates, exchange rates, and other market variables and volatilities. By engaging in derivatives companies manage their various risks by hedging a position, to be more certain what the outcome will be. For example, one can hedge a certain amount of currency at a future point in time, in order to know exactly how much that will be received/paid at the specific time thereby avoiding the risk of losing value because of the exchange rate risk. There are however also arguments against hedging in the derivatives market. Establishing hedging programs may be very costly, and if there are alternative and more cost efficient ways to reduce risks, such as operational and financial strategies, that could be preferable. Furthermore, sometimes hedging may lead to losses even though there is a gain on the underlying asset, which is a scenario that is difficult to explain to stakeholders. If losses appear too often, this could cause mistrust from the shareholders, and should then be avoided. One has to consider the overall trade-off between costs and savings when engaging in hedging to manage and reduce risks. It is therefore also necessary for management to undergo thorough risk assessments and to construct firm specific schedules, in order to identify the most significant risks and subsequently to establish risk preventing actions. Hedging is in addition mostly used by institutions that are extensively exposed to the various busines s and market risks, and who most of the time would benefit from undertaking such actions. However, derivatives may also be used by the private sector if necessary. The article Who Manages Risk? An Empirical Examination of Risk Management Practices in the Gold Mining Industry by Peter Tufanoexamines a new database that details corporate risk management activity in the North American gold mining industry. The article claims that academics know remarkably little about corporate risk management practice, even though almost three fourths of corporations have adopted at least some financial engineering techniques to control their exposures to intresest rates, foregin exchange rates, and commodity prices. There is little empirical support for the predictive power of theories that view risk management as a means to maximize shareholder value. The article furthermore describes risk management practices and tests their conformance with existing theory by analyzing an industry that seems almost tailor-made for academic investigation: the North American gold mining industry. These firms share a common and clear exposure in that their output is a globally traded, volatile commodity. Firms can manage this exposure using a rich set of instruments, including forward and futures contracts, gold swaps, gold or bullion loans, rolling forward commitments called spot deferred contracts, and options. Perhaps most importantly, firms in the gold mining industry disclose their risk management activities in great detail. The gold industry has embraced risk management: over 85 percent of the firms in the industry used at least some sort of gold price risk management in 1990-1993. Using industry-specific measures for firms exposures, cost structures, and investment programs, Tufano tests whether cross-sectional differences in risk management activity can be explained by academic theory. For example, theory predicts more extensive risk management by firms more likely to face financial distress, which in this industry can be measured by operating costs and leverage. Other theories posit that corporate risk management activities might be linked to risk aversion of corporate managers, and the form in which they hold a stake in the firm. These theories would predict that firms whose managers hold greater equity stakes as a fraction of their private wealth would be more inclined to manage gold price risk, but those whose managers hold options might be less inclined to manage gold price risk. This article tes ts the predictive (as compared with the prescriptive) power of the various theories, i.e., whether they help describe the choices made by firms. He finds that gold mining firms risk management decisions are consistent with some of the extant theory. Managerial risk aversion seems particularly relevant; the data bear out Smith and Stulzs (1985) prediction that firms whose managers own more stock options manage less gold price risk, and those whose managers have more wealth invested in common stock manage more gold price risk. These results seem robust under a variety of econometric specifications, and using a number of alternative proxy variables. In contrast, theories that explain risk management as a means to reduce the costs of financial distress, to break the firms dependence on external financing, or to reduce expected taxes are not supported strongly. He also finds that firm risk management levels appear to be higher for firms with smaller outside block holdings and lower cash balances, and whose senior financial managers have shorter job tenures. â€Å"Managing Foreign Exchange Risk with Derivatives†by Gregory W. Brown is a field study of HDG, a multinational manufacturing company of durable equipment with sales in more than 50 countries that actively encounters 24 different currency exchanges. Although multinational companies like HDG are always exposed to foreign exchange risk, this is one of very few studies that investigate the risk management operations for a non-financial corporation. Since multinational companies tend to be very complex, while using multiple strategies, a field study of this nature provides a deeper understanding of how the risk management process works. Dr. Brown attempts to answer to three main questions. First he wants to understandhowthe Forex risk management program is structured; second,whythe firm focuses on management of exchange risk; finallywhatHDG uses within their hedging derivative portfolio in order to minimize their foreign exchange risk. In order to get a comprehensive understanding Dr. Brown investigated HDG over 14 quarters starting from 1995 and ending in 1998. The structure of HDGs foreign exchange group consisted of 11 employees who were not considered â€Å"traders†, with an average experience of 4 years, whose focus was not only hedging foreign exchange risk. The program cost which included salaries and overhead was approximately $1.5M annually, and the overall transactional costs averaged around $2.3M annually. HDG had an actual foreign exchange risk policy which focused to reduce transactional, translational, and overall economic exposures. In order to meet this policy the group actively engaged in spot and forward contracts, currency put option, and currency call options. Traditional economic theories usually illustrate hedging Forex risk for benefits such as reducing taxable income, protecting against potential costs of financial distress, and reducing overall volatility of wealth. HDG however, focu sed its risk management program on smoothing out earnings impacts, providing the company with competitive pricing, and enabling improved internal control management. In some ways it seemed that HDG was attempting to use Forex risk hedging in a speculative attempt to increase potential income and thereby increase overall firm value. The procedure used in Forex risk hedging was quite simplistic. The department would not use live market feeds but rather sources such as Bloomberg to signify a â€Å"hedge rate† from current market rates and overall cost of derivatives. This information would then be passed onto the tax department and after review would be developed into a hedging strategy to forecast future hedging activity. Browns statistical studies of HDGs hedging activities concluded that the models R-squared value increased as the time horizon decreased. This indicated that the companies hedging activity was dramatically affected by its most recent hedging transactions. This may seem rather obvious but the strongest tests only indicated 55% in accuracy. In all Brown explains there is much more in the way of testing that needs to beconducted in order to better evaluate which additional factors significantly influence the Forex risk management of multinational non-financial companies. This study should be the start of a new investigation in understanding currency risk perspectives. In Risk Measurement and Hedging: With and Without Derivatives, Petersen and Thiagarajan (2000) explore the reasons for two gold mining companies to use opposite approaches in managing their risk, namely American Barrick, which aggressively hedges its gold price risk with derivatives, and Homestake Mining, which uses no derivatives. By studying two firms from the same industry, which hardly has any variation in product quality, the fundamental differences that lead to the different approaches in risk management can be examined. Homestake Mining is focused on developing its own properties and hence, spends more on exploration costs (capital and labour costs), which makes high gold prices profitable if they are not correlated with exploration costs. The greater need of investment capital Homestakes Mining has when gold prices are high makes reductions in the volatility of operating cash flow less valuable to it as a complete hedging would take cash flow away when gold prices are high, i.e. when Homestake Mining is in need of it. The different opportunities companies possess of also explain some reasons for different risk management strategies. Homestake Mining has for example lower costs of adjusting the mining output than American Barrick as the former can (over a short period) alter the quality of the ore that is mined. This mining strategy creates costs that vary positively with the price of gold and thus provides the firm with a natural hedge, which American Barrick does not possess of. As managers will act differently according to the risk they are personally bearing, compensation strategies is of upmost importance when it comes to risk management. Both the American Barrick and Homestake Mining use options to link the managerial wealth to the shareholder wealth, however, American Barrick does so more intensively. Also, its compensation is equity-focused where the bonuses are linked to the stock values, whereas Homestake Miningss bonuses are linked to the profitability, which explains why the latter adjusts its costs as gold prices change. The earnings are quite volatile, however through this can be reduced by different choices of accounting techniques, which is the reason for Homestake Mining to changes them in opposite direction to gold prices, where American Barrick rarely alters its accounting choices at all. From the above findings one may conclude that the choice of managing risks depends on various firms specific characteristics; their firm structure, management contracts and incentives. Specifically, it is a matter of the trade-off between costs and savings/benefits. Establishing and maintaining derivatives program is often quite costly, and therefore the alternative of using other methods to hedge risks may be preferable. In the article Hedging and Coordinated Risk Management: Evidence from Thrift Conversions, the writers argue that the firms risk management can be used to reallocate the firms total risk between different sources, rather than reduce it. So in this case hedging doesnt necessarily equal total risk reduction as often stated, but rather a technique of risk-reallocation or as an essential part of a firms profit-maximizing strategy. This becomes clearer if we separate risk in to two types, based on the activities where the firms have their comparative information advantages, namely: -Core business risk: Firms earn rents or economic profit for taking on activities bearing this risk. -Homogenous risk: Financial risk as interest rate changes, foreign currency exchange rates, or commodity prices. By contrast there is no compensation for bearing this kind of risk. (This doesnt necessarily apply if the firm has a comparative information advantage in the financial risk sector, then financial risk can then become core business risk. If we now consider a risky asset, it may be viewed as a portfolio of multiple claims from the owners. These claims are bundled together which basically means that the firm must take on all the projects if it wants any of them. A subset of these projects may be â€Å"core business projects† which have a positive NPV for the firm, and the remaining subset may be projects bearing homogenous risk with NPV = 0 (the firm hasnt any disadvantage/advantage compared to others in assessing the unsystematic risk). The total variability of a portfolios cash flow of course includes both risk types. An example of this could be a farmer expecting payment for breeding pigs. Then his superior equipment or animal feed preparation would be categorized as activities bearing core business risk, while the price of pork would be homogenous risk. When increase in total risk is costly, risk composition becomes more important as the firm value becomes a concave function of the expected cash flows. Therefore if the risky asset was separable (which it is not), we would only seek to invest in positive NPV projects with core business risk. However this is not the case and therefore we can instead make a trade off by decreasing homogenous risk while gaining additional exposure to core business risk and still maintain the target level of total risk. This substitution is called â€Å"coordinated risk management† and can be attained by the use of derivatives. They test for coordinated risk management in a sample of thrifts that convert from the mutual to stock form of ownership. These conversions have been used to recapitalize the thrift industry since 1982 where legal barriers were cleared. From 83 to 88, 571 conversions issuing stock totaling over $10 billion were completed, compared to only 130 mutual-to-stock conversions between 75 and 82. At the end of 82, stock saving and loans managed only 30% of the industrys assets, but by the end of 88, stock saving and loans controlled 74% of the industrys total assets, going from $686 billion to $1,4 trillion. These converting thrifts provided an interesting sample to test whether the use of hedging can be part of an overall strategy to increase total risk. They argued that converting thrifts will attempt to increase their overall level of firm risk following conversion due to changes that occur at the time of conversion. In other words, these institutions are a unique case relative to empirical studies of risk management that focuses on firms with incentives to decrease total risk. The reasons for converting institutions to increase total firm risk are likely because of these two major reasons: 1. A converting institutions ability to take risk increases at the time of conversion, even though the investment opportunities do not change. This is because conversion provides financial slack and access to capital markets. A conversion typically proceeds at least the book value of equity of the mutual thrift. Assuming that pre-conversion mutual equity meets regulatory capital requirements, doubling the capital ratio creates a larger borrowing capacity that can be used to double the asset size of the thrift. Increasing thrift size does not necessarily imply an increase of thrift risk. However, thrifts usually have incentives to grow by investing in riskier assets because of flat deposit insurance premiums that allow thrifts to shift risk to the government. 2. Converting institutions are predicted to increase the total firm risk following because of the change in their managers incentives for risk taking. Before the conversion, managers receive a fixed salary. But upon conversion, shareholders are able to include stock and stock options in a managers compensation contract, aligning the managers interest with the shareholders. In this situation, the manager will typically be more willing to take risks in order to maximize firm value. The Test Schrand and Unal has used sample data from conversions completed between January 1, 1984 and December 31, 1988. They have also made some selecting in the sample excluding the supervisory mergers and merger-conversions. Also they further exclude smaller companies by having a minimum limit of $100 million among the sample companys. As of the methodology Schrand and Unal have used a quantitative time-series study, where they have analyzed the changes in total risk, interest-rate risk and credit risk using an ordinary least squares method. The model is a form of a least squares method where they have added the term Time(t+k). The extra term is an indicator variable which is equal to one if quarter t is k quarters from the conversion quarters, and if not the term equals zero. As of the independent variables in the model, they can be seen as tests, indicating the differences between the risks of the average converting institution and the risks of the average institution in the control group. However the model doesnt indicate whether the interest risk and credit risk are coordinated. Therefore Schrand and Unal have used another model to analyze if there is an association between the interest risk and the credit risk. The model which is a pooled time-series cross-sectional regression is computed as follows: Here Schrand and Unal predict a positive slope between the interest risk (XSNET) and the credit risk (XSHIGH). The Empirical Results The study show that the converting institutions capital position increases with roughly 70 percent after the conversion. Also the study shows that the converting institutions significantly decrease their exposure to interest risk. However the Credit risk increases when converting, because of taking more risk in their loan portfolios. Further the study indicates that the investment patterns are related to the actual conversion rather than the time-trend within the industry. Also they conclude that the increased use of derivatives is a strategic decision and not a mechanical phenomenon. References Brown, G. W. (2001), â€Å"Managing foreign exchange risk with derivatives†, Journal of Financial Economics, Vol. 60, pp. 401-448. Naik, N. Y., and P. K. Yadav (2003), â€Å"Risk Management with Derivatives by Dealers and Market Quality in Government Bond Market†, The Journal of Finance, Vol. 58 (5), pp. 1873-1904. Schrand, C., and H. Unal (1998), â€Å"Hedging and Coordinated Risk Management: Evidence from Thrift Conversions†, The Journal of Finance, Vol. 53 (3), pp. 979-1013. Tufano, P. (1996), â€Å"Who Manages Risk? An Empirical Examination of Risk Management Practices in Gold Mining Industry†, The Journal of Finance, Vol. 51(4), pp. 1097-1137. Petersen, M. A., and S. R. Thiagarajan, (2000), Risk Management and Hedging: With and Without Derivatives, Financial Management, Vol. 29(4), pp. 5-30.

More Purchase Instead of Less Essay -- Human Rights

In recent years, people in Europe and America have been clearly aware that the general commodity price in their markets had dropped dramatically. A lovely Barbie doll which, In the old days, used to cost them more than ten dollars or eight euros, now, values costs less than half of the original price. But as we all know, there must be someone who would pay for such a good bargain. So what on earth is the trigger that lead to the remarkable decline? And what is the most influential factor that rewrote the numbers on hundreds of thousand of price tags? When our curiosities drive us to keep on questioning, and to trace the unusual economic phenomenon, some mysterious burgeoning factories emerge in our sights. These factories are prevalent in a world scope because of the incredibly cheap price, while, on the other hand, they are also infamous for their poor working conditions, unbelievably low salaries, threatening devices, and abusing of labors. For reasons above, those factories are c alled sweatshops. And most of the sweatshops are located in Asia, such as China, South Korea, Indonesia, Vietnam and so on. From the beginning, there were only a small group of people who paid attention to those sweatshops. But with more and more grievous news unveiled, a huge growing number of people start to keep a watchful eye on the livelihood of those workers in sweatshops. To their surprise, those poor workers were bearing that unequal contracts, that long working hours, and that potential risks of their lives everyday How could those Americans and Europeans who have been high-fed and spoiled in the last century, imagine a twelve-hour day, seven days per week, no paid holiday in the foreseeable future job with an skinny income which was only en... ...ss Studies Vol. 31, No. 3 (3rd Qtr., 2000), pp. 367-385, Palgrave Macmillan Journals. Jean-Paul Sajhau, ‘Business ethics in the textile, clothing and footwear (TCF) industries: Codes of Conduct’, ILO Bulletin, no. II-9, (June, 1997). Stephen Frenkel, ‘Globalization, athletic footwear commodity chains and employment relations in China’, Organization Studies, issue 4 (2001). Nicholas D. Kristof and Sheryl WuDunn. â€Å"Two Cheers for Sweatshops.† New York Times 24 September 2000. 5 May 2012. Doug Guthrie, Dragon in a Three-Piece Suit (Princeton, New Jersey: Princeton University Press, 1999). Pun Ngai. The China Journal No. 54 (Jul., 2005), pp. 101-113. The University of Chicago Press.

Shen Fu

Shen Fu The book Shen Fu’s Six Records of a Floating Life is both an autobiography and love story of a man named Shen Fu, who was educated toward the path to grow up to be a scholar, but he kept on failing the exams. He went on to earn his living as secretary for a magistrate and also selling off his wife’s artwork. His wife is the girl that he fell had fallen in love with as a young child. Together, they had a very weird and odd relationship (at least compared to our modern day idea of a relationship).I think that Shen Fu really wanted the big job as the magistrate, but it also seemed like he didn’t really want to work very hard for the position. Perhaps he was a tad on the lazy side of things. He grew up in a rather scholarly middle class family and he spent much of his life trying to pass the exam. The only problem was that he kept failing it over and over again, and did never actually get around to passing it. Shen Fu seemed to focus a lot of his attention on status, and I think that it was mostly due to his family and his social class that he was born into.It seems to me that the higher status you had back then, the more you focused on status and put being born of high class up on a pedestal. Shen Fu his whole life was seeking this â€Å"Floating Life† which basically means that you’re economically secure, and that life is a more of a â€Å"dream† rather than actual reality. I thought he was always seeking this because he was always trying to figure out how to make a good deal more money, or to get a desirable scholarly position. Shen Fu, in my opinion, was rather greedy and materialistic, and was generally out for himself.Although, to be fair, he did provide for his family by taking on many different kinds of jobs, loans, and even by attempting to sell his wife’s artwork. This book is actually better known being a love story. Though it is much different then what we think a love story should traditionally c onsist of. Shen Fu was known for spending a lot of time with Prostitutes, and his wife seemed ok with it, she even went and found him a concubine. Shen Fu basically viewed his wife as his equal, rather than looking down on her as a woman, this was a very rare view for a man to have considering the time and place this took story took course.Most traditional loves stories would make this story appear crazy, this is mostly because the more traditional thought of love is between two people sharing and expressing mutual feelings for each other. Love is generally not thought of as the wife going out and searching for a good Concubine for her husband to sleep with. However, I think the more romantic and warming part of the story was that Shen Fu and his wife, Yun, enjoyed reading, drinking, and writing poetry together. I actually think that they genuinely enjoyed each other’s company.Another reason why this story could be view as a bit of a romance, was because Shen Fu was really co mmitted to supporting his family by working and taking on many jobs and responsibilities. His dedication to his wife was pretty romantic in and of itself. I didn’t think that Shen Fu was a filial son because there was a lot of conflict between his family. Think that a lot of the conflict was because he went down in class and never did become a magistrate like he and his family had hoped he would.It seems like his family viewed at him as if he didn’t try hard enough and was a somewhat of a failure to them. I would consider Shen Fu in the lower to middle class, because, he never got the job as a magistrate and didn’t have enough money to adequately support his family, so he has to sell off his wife’s artwork. I would probably put him in the lower class, but the fact that he came from a middle class family and had a concubine might put him a little on the higher side of classes. I think that this story of Shen Fu’s life does indeed exemplify the typic al lifestyle during the Qing Dynasty.Shen Fu and his wife both viewed each other as equals, which back then was really different from the norm. How he focused mush of his attention on status was a really big thing during the Qing era, and how he aspired to have a floating life style. I think it also showed how that even though he had a wife, he went out drinking with prostitutes and with his Concubine, which seems like it was pretty common back then. Overall, I thought that it was actually a pretty interesting book. It definitely wasn’t what I was expecting, and It gave a good example of how life was for his class during the Qing era.

Free Essays on Persian Wars

The most destructive war for Greek history was the Peloponnesian war. This war was fought between Athens and Sparta. Sparta’s goal was to attack Attica by land, burn its houses, and lay waste to the countryside. The Spartans hoped that by doing this they would disrupt agriculture and spread fear and chaos throughout the region. After realizing that trying to defeat the Spartan army would be stupid, the adopted a plan that relied on their fleet. Pericles ordered refuge behind the long walls. Pericles hoped the Spartans would grow tired and frustrated and give up the fight. At first the plan was working. In the summer of 431, the Spartans marched into Attica and burned Athenian homes and farms. After Pericles died in 429, some Athenians joined the Spartan-led alliance. After months and years of fighting the Spartans destroyed the Athenian fleet. Finally in 404 B.C. the Athenians surrendered. After the Peloponnesian war Greek city-states were weak and financially destroyed.... Free Essays on Persian Wars Free Essays on Persian Wars The most destructive war for Greek history was the Peloponnesian war. This war was fought between Athens and Sparta. Sparta’s goal was to attack Attica by land, burn its houses, and lay waste to the countryside. The Spartans hoped that by doing this they would disrupt agriculture and spread fear and chaos throughout the region. After realizing that trying to defeat the Spartan army would be stupid, the adopted a plan that relied on their fleet. Pericles ordered refuge behind the long walls. Pericles hoped the Spartans would grow tired and frustrated and give up the fight. At first the plan was working. In the summer of 431, the Spartans marched into Attica and burned Athenian homes and farms. After Pericles died in 429, some Athenians joined the Spartan-led alliance. After months and years of fighting the Spartans destroyed the Athenian fleet. Finally in 404 B.C. the Athenians surrendered. After the Peloponnesian war Greek city-states were weak and financially destroyed....

Sir Thomas Stamford Raffles Essay Example

Sir Thomas Stamford Raffles Essay Example Sir Thomas Stamford Raffles Paper Sir Thomas Stamford Raffles Paper Sir Thomas Stamford Raffles is one of the key persons who are responsible to the founding of modern Singapore. He played an important role in forming a British Settlement, Singapore, in the Melaka straits despite facing rejections, such as Dutch or even resistance in London itself. He is a controversial person even in his time. Hence there is no doubt that there are lots of information about him and founding of Singapore in the internet. However, how do we assess these websites for its appropriateness towards scholarly research is the main objective of this essay. According to The Sheridan Libraries an appropriate source for scholarly research would have information such as â€Å"authorship, publishing body, point of view, referral to other sources, verifiability and currency† . In the case of internets sources, at least we could have an idea who is the author and a way to contact, such as telephone or email, to clarify the information provided in the internet or even arranged an interview. The first source regarding Sir Thomas Stamford Raffles and the founding of Singapore which I’m going to examine is taken from Wikipedia. Let just put aside for a moment the authorship and verifiability of the passage, and for a moment assume it is what it is. Wikipedia provides a very detailed explanation of Sir Thomas Stamford Raffles. The information in Wikipedia is like a series of events that arranged chronologically. This is by far a more interesting and captivating way for the readers. Nonetheless, the events and points that provided by Wikipedia are also very broad. The general impression that I gained, from Wikipedia, that summarize who Sir Thomas Stamford Raffles was, was a hardworking, wise, fair, rational and both lucky and unfortunate person. When I read the passage, I generally felt that all he had done were good things. He was a very hardworking child, despite the early death of his father. He was lucky enough to be hired by East India Company and had the opportunity to expose himself to South East Asia, and based on his talent, picked up the native language, Malay, and good enough to impress the Governor to promote him as a Resident of Java at the age of 30. He abolished slave system, led an expedition to restore Borobudur, replaced Dutch forced agriculture system with land tenure, founded a more administrative Singapore and throughout the end, I elt sorry with his early death and his lost of family members. All the events are centralizing in the goodness of Sir Thomas Stamford Raffles. However, aren’t these very subjective opinions from a historical point of view? In the passage, it mentioned â€Å"considered Farquhar unfit for the position of Resident, so Raffles took direct control with a heavy hand. † The Wikipedia source didn’t really stated why William Farquhar was unfit for the position. Did he done something wrong that suffer the indigenous people? Did he make a lost in financial during his tenure? We may get some answer for these questions from how well the author think Singapore did as soon as the take over from British until the return of Raffles at year 1822 base on the paragraph â€Å"†¦as Singapore grew at an exponential rate, the Dutch gave up their claim on the island†¦Ã¢â‚¬  This in certain account created ambivalence from the author, and let just assume what both lines are true. Maybe the author is trying to tone down the confrontation between Farquhar and Raffles. By providing a reason for the discord, which reasonably present with a glim, it seems what Raffles did is reasonable. Besides that, under the â€Å"Founding of Singapore† session in the Wikipedia source, Farquhar was only credited for securing of British possession in the Riao’s area. This is by far had neglected his role in the founding of Singapore. The second source that I am going to examine is a website from USP, NUS. Once again, put aside verifiability and authorship. Let examine the passage’s point of view towards Raffles and the founding of Singapore. The passage gave a more general view of Raffles. At least at the first glance of the passage, I won’t have a feeling that he is almighty. Just take an example, â€Å"†¦Raffles became a subject of controversy and a target of attack, from British as well as Dutch adversaries. To some, Raffles was an admired reformer, who wanted to abolish the slave trade, and ameliorate the lot of the people. To others, he was simply a young and ambitious schemer. † This paragraph gives me a feeling that he is a controversial figure even during his time. The word â€Å"ambitious schemer† also reflects that he may not be as pure as a saint. All these that I have mentioned, didn’t come to me when I was reading the source from Wikipedia. With these, in certain account, there is a different in objectivity of the author of these two sources. Besides that, â€Å"it was Farquhar who worked alongside the Malay rulers for four years to secure the survival and growth of the British settlement on Singapore Island†¦Ã¢â‚¬  gives a general account on what Farquhar had contributed to the development of Singapore. This just gives me an impression of what Singapore was at that time, and it was definitely not the sole contribution and hard work of Raffles. The source did mention an outline of the life of Raffles. The author did give a high regards on Raffles effort to abolish slavery. This can be showed â€Å"He held strongly to moral principles on the dignity and equality of human beings † . Besides that, the source also mentions two important names in the founding of Singapore, William Farquhar and Dr John Crawfurd, and credited them as â€Å"The Founders of Colonial Singapore† . This source gives an alternative view of who were possible founders, or who had at least contributed to the radical founding of early Singapore. With these additional information provided, Raffles is not the only one credited with the establishment of early Singapore and thus gives a more objective view of early history of Singapore under British possession. The third source I’m going to examine is from suit101 . This passage gives a general overview of Raffles and his involvement in Singapore. This source is a summary of his early life, his career, and also how it links to the founding of Singapore. Compare to the first two sources, this source is comparatively less detailed information. For example, â€Å"Following the hallowed English tradition of divide and conquer, Raffles and his successors †¦Ã¢â‚¬  The source didn’t mention about who are the other successor. Is it Farquhar? Is it John Crawfurd? Or is it somebody else? This source gives a very subjective view towards Raffles, â€Å"Raffles continued to enjoy a long and celebrated career in imperial administration. † How does the author know the feelings of Raffles despite so many obstacles in his tenure as stated in the first and second source? Before I choose one of these sources to be an appropriate source for scholarly historical research, let me examine the authorship of these three sources. The source from Wikipedia, apparently is edited by not a few but a lot of authors. Just a brief view in the â€Å"history† link in the wikipedia webpage toolbar, there is approximate 500 entries of editorial in the Stamford Raffles site and still counting. In some account, base on the large amount of authors, contradictory may occur and there maybe a more objective viewpoint regarding the topic, â€Å"†¦emergence of resonance will only come after experiencing some dissonance. However, this is not an appropriate source for scholarly historical research mainly because of its multi-authorship and anonymous authorship. How can we verify the source when there are anonymous authors? Meanwhile, the second source from USP weblink, was the work of an associate professor in the History Department of NUS. The author is highly qual ified and contactable. Finally, the last source, it was also from a single author, John Walsh from Mahidol University International College. In terms of verifiability, the second and third source provides a direct contact name and title to verify the content or for further research. However for the first source, Wikipedia, if the readers have any doubt of the source, they have little chance to clarify with the author. There is no direct contact number and there is little chance of knowing the name, beside username of the author or even anonymous authorship. However as an ordinary user, we can raise the mistakes in the content to the webmaster, rise in discussion or edit the page. Finally, regarding citation, both sources from Wikipedia and John Walsh didn’t provide any; presumably every word is directly from the author. Source from the USP and Wikipedia, did provide references. In certain extend, this provides the readers a way for further research of the topic. This helps the reader to verify the points and facts in the source too. In Wikipedia, the â€Å"general look† is more appealing, with pictures of Stamford Raffles and well credit where the picture’s origin. The more user appealing part of Wikipedia is its usage of Wiki software to develop its webpage, and this may be a good start for newbies and for background reading â€Å"†¦wikis should not take authoritative, but can relied upon for ‘background reading’. After assessing the qualities of these websites, source from the USP website regarding Stamford Raffles and founding of Singapore is an appropriate source for scholarly historical research. This is due to its authorship; it provides a name and a title from the author, and it ensures verifiability. The publishing body, which is the NUS website, is a well ma intained and contactable publishing body. The details provided in the source are sufficient for a person to understand Stamford Raffles and the founding of Singapore reasonably well. It also provides other possible founders or contributors to the founding of Singapore. As a conclusion, it has all the attributes of an appropriate source for scholarly historical research. Bibliography Elizabeth E. Kirk, â€Å"Evaluating Information Found on the Internet†, Sheridan Libraries (1996), 8 February 2008, library. jhu. edu/researchhelp/general/evaluating/ â€Å"Stamford Raffles†, Wikipedia, The Free Encyclopedia. Wikimedia Foundation, Inc. (10 Aug. 2004), 17 February 2008, http://en. wikipedia. org/wiki/Stamford_Raffles Ernest C. T. Chew. The Founders of Colonial Singapore†, USP (12 October 2002), 17 February 2008, usp. nus. edu. sg/post/singapore/history/chew/founders. html John Walsh, â€Å"Raffles: Sir Stamford Raffles and the Founding of Singapore. † Suit101 (9 Jan 2004). 8 February 2008, suite101. com/article. cfm/east_asian_history/105792/1 Alvin Tan Peng Hong, â€Å"Allowing Dissonance†, The History Journal (1998), p. 14 Lesl ie Goh, â€Å"Share your knowledge or ignorance†, Straits Times (17 October 2006), 7 March 2007, http://news. independent. co. uk/world/americas/article2331980. ece Stephen Foley, â€Å"Wikipedia Hits An Identity Crisis As Student Admits Posing As Professor†, 2007 Independent News And Media Limited (7 March 2007) Noam Cohen, â€Å"A History Department Bans Citing Wikipedia As Research Source†, The New York Times (21 February 2007), 2 March 2007, nytimes. com/2007/02/21/ education/21wikipedia Marshall Poe, â€Å"The Hive†, The Atlantic Monthly (September 2006), 6 January 2007, theatlantic. com/doc/print/200609/wikipedia Stacy Schiff, â€Å"Can Wikipedia Conquer Experts†, The New Yorker (24 July 2006), 31 July 2006, newyorker. com/printables/fact/060731fa_fact

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