The importance of the Stock Market to the Economy

The importance of the Stock Market to the Economy The stock market is an important part of the economy because it organizes the resources and channels them to useful investments, in order to perform this role it must have proper association with the economy. Capital markets are important elements of a modern market based economic system as they give out the channel for flow of long term financial resources from the savers to the borrowers of capital. Stock prices of oil sector have been considered for the study. It is the most growing and important part of the stock exchange because its prices are deeply affected by the macroeconomic variables. Investor of Pakistan who invests for long term and short run will get benefit from this research. According to most of the past studies which conducted on this topic shows that macroeconomic variables which include interest rate and exchange rate directly impact on the stock prices if any changes take place in them it will directly going to affect the stock price. Macro economic variables are inversely related to the stock price. In markets, investors provide long term funds in exchange for long term financial assets offered by borrowers. The stock exchange is an important part of any country in the sense that it organizes domestic resources and channels them to productive investments. However, for this purpose it must have important association with the economy. Capital markets are main elements of a modern market based economic system as they serve as the channel for flow of long term financial resources from the savers of capital to the borrowers of capital. Efficient capital markets are essential for economic growth. With increasing globalization of economies, the worldwide capital markets are also becoming increasingly incorporated, while such integration is constructive for global economic growth. Hussainey Ngoc (2009) examined the effect of macroeconomic variables on Ghana Stock Exchange. They found that macroeconomic indicators such as lending rates and the inflation rate affect on stock market performance. Their results suggested that macroeconomic indicators should be considered for investors in developing economies. This motivates us to examine the degree to which this conclusion is applicable to another emerging stock market in Viet Nam. Huberman Zhenyu (2005) investigated that market embrace both the new issues by primary market and secondary market. Such securities might be raised in an organized market such as the Stock Exchange. As a marketplace where securities include stocks, bonds and shares are bought and sold openly with relative ease, the stock exchange is very important to the investors. The existence of a stock exchange in a capital market helps to broaden the share possession of a company and evenly distribute the nations wealth by making it possible for people in different locations to own shares in a firm in another location by purchasing the shares, bond stock through the simple mechanism of the stock market. Kandir (2008) investigated the linkage between stock price and macro economic variables for some developing countries in Eastern Asia which examined the impact of macroeconomic risks on the equity market of the Philippines stock exchange. Findings show that financial fluctuations in exchange rate and political changes on owners of Philippine equities cannot be able to explain Philippine stock returns. Mohammad et el. (2009) investigated that Karachi stock exchange is largest and most active stock market in Pakistan, accounting for 65% to 70 % of the value of the country total stock transaction as on October 1, 2004, 663 companies were listed with market capitalization $23.23 billion having listed capital of us $ 6.59 billion. Pakistans industrial exports and foreign investment today are growing at the countrys fastest rate ever. The countrys foreign exchange reserves skyrocketed to $12327.9 million in 2003-04 from $2279.2 million in 1998-99. Similarly, several Pakistani stocks are now traded on international markets. Also, foreign brokerage houses are now being allowed through joint ventures with Pakistani investment bankers to participate in primary as well as secondary markets in Pakistan. The stock exchange is not only crucial but also central to the entire mobilization process. This is because it offers an opportunity for continuous trading in securities. The purpose is to examine the impact of the macroeconomic variables which includes interest and exchange rates on the stock prices of oil sector by using regression analysis. Seven year data of both dependent variable and independent variables has been used to determine the result. The macroeconomic variables would provide more information about the stock return economic activity relationship. This would also consider other firm characteristics in order to obtain a better insight about the return generation process. Chapter two consists of literature review where as chapter three consist of methodology and chapter four consists of results interpretations. Chapter 2: Literature review Roll Ross (1980) suggested that the arbitrage pricing theory is suitable alternative because it agrees perfectly on what appears to be perception behind a capital asset pricing model. The arbitrage pricing theory is based on the linear return and generating process at the first principle which require no utility assumption. It is also not restricted to a single period. This theory is applicable in both multi period and single period cases. Arbitrage pricing theory begins with an assumption based on return generating process. There are two major differences between arbitrage pricing theory and capital asset pricing theory, first arbitrage pricing theory allows more then one generating factors. Secondly arbitrage pricing theory demonstrates that any market equilibrium must be consistent with no arbitrage profit, every equilibrium will be characterized by a linear relationship between each asset expected return and its return response. After determination of the factors in asset returns other than the market returns, the arbitrage pricing theory was introduced in order to determine the association between variables used in the study, arbitrage pricing theory stated the use of variables without the need of pre specification of variables but it did not take too long before the criticisms to appear. One foremost criticism was that, the arbitrage pricing theory can not be able to specify the factors, but just explain them statistically. This inefficiency of the arbitrage pricing theory was established even in the first empirical arbitrage pricing theory study. Ammer (1993) investigated the empirical relation between macro economic variables and stock prices in ten different countries, with a main objective is to find a links between these vaiables. The stock price decomposition is used to find the ways through which negative stock prices is associated with a positive inflation which is because of decrease in dividends and increase in real equity returns. Ammer (1993) observed in the results that generally increase in the rate of macro economic variables are directly linked with decrease in dividends and also decrease in required real equity returns. This favors the corporate tax related theories in which any change in the tax related systems affect on an increase in the rate of inflation this helps the firm in raising their cost of their capital relative to the return that has been earned by investors in the firm. Ammer (1993) investigated that In the United States (US) and the United Kingdom (UK) the suggestion of the arbitrage pricing theory model with a conditionally heteroscedastic economic factor imply that macro economic variables may increased the average amount of capital. Kaul (1995) suggested the impact of changes in monetary policy regimes, expected macro economic variables and there impacts on stock prices. Post war evidence from four countries reveals a direct link between these relations and the central banks operating targets which include money supply, interest rates and exchange rates. Specifically, the post war opposing relation has been found between stock price and in expected macro economic variables are significantly stronger during interest rate regimes. Bonomo Garcia (1997) investigated a version of the conditional capital asset pricing model with respect to a local market portfolio, which provides alternative by the Brazilian stock index during the period of 1976 to 1992. For this purpose they had selected conditional arbitrage pricing theory model by using the difference between the 30 days rate and the overnight rate as a second factor in addition to the market portfolio in order to capture the large inflation risk present during this period. Bonomo Garcia (1997) used conditional capital asset pricing model and arbitrage pricing theory models in the formation of the portfolio that consist of twenty five securities exchanged on the Brazilian market, this played an important role for the appropriate pricing of the portfolios. It has been examined that the unconditional moments of the returns series for the stock market index taken from the IFC Emerging markets data base it shows an average return in US dollars of 21.15% and an average excess return in local currency of 28.82%. For industrialized countries standards, it has been observed that these returns are exceptionally high. According to the fundamental asset pricing models such as the capital asset pricing model or the arbitrage pricing theory considered that, high expected returns getting from the security are linked with high measures of risk with respect to a number of risk factors that are going to affect directly on market portfolio. According to the capital asset pricing model, the expected return getting from the portfolio of assets is because of the covariance of the portfolio return which consists of different securities from exchange with the market portfolio return. It has been examined that the while selecting any market portfolio Two different views can be undertaken: it has been considered that the Brazilian stock market is divided into different segmented and concentrate on local risk factors which consist of macroeconomic variables that help in explaining local returns of the stocks, another way to adopt the perspective is that, international investors diversifying their portfolios worldwide by investing their funds into different market of the world in order to reduce the risk from their portfolio because if they invest in only one market with out diversifying in this way risk is high because if decline in market takes place then the investor will directly going to suffer loss on investment. Bonomo Garcia (1997) examined that they adopt the view according to which the Brazilian stock market is divided and tests a description of the conditional capital asset pricing model with reverence to a limited market portfolio, characterized by the Brazilian stock index in the IFC database. The conditional capital asset pricing model is experienced on a set of size portfolios produced from a total of twenty five securities exchanged on the Brazilian markets. The IFC emerging markets data base of the World Bank provides data on stock prices and other financial variables for both the stock index and individual stocks in a series of rising and newly industrialized countries. The Brazilian stock market is subjected by individual investors. They characterize investors in the market with minute investment knowledge or experience, they speculate in the stock market in the absence of market experience. Stocks are often bought and sold on historical prices and on market news about stock pri ces, resulting in stock market mania. Bonomo Garcia (1997) selected the total list of twenty five common shares which were listed on the brazilian stock exchange from January 1976 to December 1992. To test this model the return on individual securities has been selected, but for the purpose of getting linear result they have limit the number of variables used in this process. Bonomo Garcia (1997) examined the degree of the covariance parameters which is small in absolute value but small in variance of the surplus return. The betas of the second and third portfolios got negative values in the outline followed by their magnitudes, which increases with the capitalization value. This specifies the hight of worth portfolios which offers the best hedge against the risk. It should be seen that, by adding a second factor, all the market portfolio betas becomes lower as compare with others portfolios. Altay (2003) suggested that a range of macroeconomic variables representing the essential indicators of an economy are employed in the factor analysis processes and factor realizations of principal economic phenomena. Arbitrage pricing theory has a serious disadvantage in defining systematic risk factors. In contrast to the Arbitrage pricing theory, the market portfolio as the only risk factor in the capital asset pricing model is clearly defined. Asset prices are supposed to respond to series of macro economic procedures. A number of macroeconomic alteration influence asset prices stronger than others and some do not even influence them at all. One of the most well known Arbitrage pricing theory tests on this topic was implemented and measured by a number of important economic variables to have systematic influence on asset returns. Arbitrage pricing theory is only focused on shaping the number of risk factors that systematically give details about the stock market returns by formulating factor analysis methods. Altay (2003) have chosen five factors from the New York stock exchange and AMEX which depend on the period length and the size of the stock groups under examination. In this paper they put into practice empirical analysis to both German and Turkish stock markets and economic data. It shows that Germany and Turkey are both European countries with dissimilar levels of economic development. There are numerous earlier empirical results of the Arbitrage pricing theory for the German and Turkish Stock Markets. Monthly returns of ninety three assets are put into practice, the principle components analysis method are used in order to test the arbitrage pricing theory. The accomplishment of the maximum likelihood factor analysis method used some macroeconomic variables as possible common risk factors in the analysis. The asset prices are supposed to respond to macroeconomic factors and unexpected changes in macroeconomic factors are estimated to be rewarded in stock markets. The factor structures of the German and Turkish economy are presented by employing the same eight macroeconomic variables and stock market proxies in the principle mechanism and maximum likelihood factor analysis. In each type of analysis of German variables, four factors are extracted while only three variables are derived from Turkish variables, representing dissimilar factor structures of these two economies. Javed Aziz (2005) suggested the development of financial equilibrium asset pricing models which has been the most significant area of research in current financial theory. These models are broadly tested for the development of the market. The strength of the Arbitrage Pricing Theory (APT) model on returns from twenty five aggressively trading stocks in Karachi Stock Exchange using monthly data from January 1997 to December 2003 had been examined. Arbitrage pricing theory suggested that there are a number of sources of risk in the economy that cannot be eliminated. Javed Aziz (2005) considered in relation to economy wide factors such as inflation, interest rate, exchange rate and changes in aggregate output. Instead of calculating a single beta, like the capital asset pricing model, arbitrage pricing theory calculates several betas by estimating the importance of an assets return to changes in each factor. The arbitrage pricing theory assumes that a security return is a linear function. The arbitrage pricing theory thus specified that the risk premium for an asset is connected to the risk premium for each factor and that as the assets sensitivity to each factor increases, its risk premium will increase as well. The arbitrage pricing theory forecast that the prices of all sensitive assets in the economy conformed to the condition of no arbitrage. No arbitrage indicate that an individual investment in a well diversified portfolio could not receive any additional return merely by altering the weights of the assets incorporated in the portfolio, holding equally systematic and unsystematic risk constant. The arbitrage pricing theory stated that there is a set of fundamental sources that influence all stocks returns. The stock return is a linear function of a certain number of economic factors, while these factors are unnoticeable and not significant. In order to test the arbitrage pricing theory empirically, following approach has been used. It can simultaneously calculate approximately the asset sensitivities and unknown factors by examining factor analysis on stock returns. On the other hand, it identifies previous general factors that give details about the pricing in the stock market. Such macroeconomic variables can be those affecting either future cash flows on companies or future risk adjusted discount rates. These selected twenty four stocks are the most active stocks with just about 80% weight of aggregate market capitalization of KSE 100 index companies. In order to analyze the stability of the factors in the arbitrage pricing theory, the period is divided into two sub periods; monthly data had been selected for the purpose of examination. The schedule are reported approximately daily by the news media. The outcome specify that in the whole sample period only two priced factors are found to have exploratory factor analysis approach; in the first sub period none of the factors seems to be priced, and in the second sub period they discovered only one priced factor at the 5% level of significance. The number of priced factors seems to be very low and the consequences of this approach specify considerable instability of the explanatory power of the arbitrage pricing theory. The results of two different testing methods for the arbitrage pricing theory are nearly in the identical manner because in the whole sample period two priced factors are found. This is an encouraging result, which supports the theory. But the number of priced factors seems to be very low and the results of this approach point towards substantial instability of the explanatory power of the arbitrage pricing theory. The arbitrage pricing theory is an alternative for the Capital Asset Pricing Model in this way both shows a relation between assets returns and their covariance with other variables, where as capital asset pricing model focuses on the covariance of the market portfolio return. Huberman and Zhenyu (2005) suggested that the arbitrage pricing theory entails a procedure to identify at least some features of the underlying factor structure. Merely stating that some collection of portfolios (or even a single portfolio) is mean variance efficient relative to the mean variance frontier spanned by the existing assets does not constitute a test of the arbitrage pricing theory, because one can always find a mean variance efficient portfolio. Consequently, as a test of the arbitrage pricing theory it is not sufficient to merely show that a set of factor portfolios satisfies the relation between the return and its covariance with the factors portfolios. Gunsel Cukur (2007) investigated the performance of the Arbitrage Pricing Theory (APT) in London Stock Exchange for the period of 1980-1993 as monthly. The arbitrage pricing theory introduced by CRR (1986) involves identifying the macroeconomic variables which directly impact on stock returns. Thus macroeconomic behavior influence the returns on stocks and utilizing macro variables in the return generating process provided a basis to approximate stock returns. The simplest of theories of pricing a financial asset is by discounting future cash flows. Hence, the following exogenous variables that affect the future cash flows or the risk adjusted discount rate of a company must be measured. The reason is to recognize the macroeconomic forces that influence the stock market. For this purpose seven economic variables are examined. The model is designed in a way to test the two conditions. These conditions are economic conditions such as term structure of interest rate, inflation, money supply, the exchange rate, the risk premium and industry specific conditions, dividend yield and industrial production. Their result suggests that share prices are affected in a different manner than one described in CRR. This can be explained by the idea that other explanatory variable may be at work in UK or the CRR methodology is inadequate. They suggested that, interest rate, inflation and money supply were among the factors that are found to be significant. However, in this case unexpected inflation seems to be insignificant. Humpe Macmillan (2007) investigated the relationship between stock market and a series of different macroeconomic and financial variables through out the stock markets over a range of different time horizons. Presented financial economic theory proposes a number of models that gives a structure for the examination of this association. Arbitrage pricing theory is a one way of linking macroeconomic variables to the stock market where different kind of risk factors which affect market in a different ways can give details about asset returns. The early investigations related to arbitrage pricing theory focused on individual security returns, where as it may also be used in a cumulative stock market structure. In this way any changes in a given macroeconomic variable could be seen as reflecting a change in an underlying systematic risk factor influencing future returns. Many of the past empirical studies based on arbitrage pricing theory that links the state of the macro economy to stock market returns, are characterized by modeling a short run relationship between macroeconomic variables and the stock price in terms of first differences, assuming trend stationary. These papers found a significant relationship between stock market prices and changes in macroeconomic variables. An alternative, but not inconsistent, approach is the discounted cash flow or present value model. This model relates the stock price to future expected cash flows and the future discount rate of these cash flows. All macroeconomic factors that influence future expected cash flows or the discount rate by which these cash flows are discounted should have an influence on the stock price. This showed that long term moving average of earnings predicts dividends and the ratio of this earnings variable to current stock price is powerful in predicting stock returns over several years. The only negative coefficients are found on long term interest rates. Additionally, it has been examined that Europe an stock markets are highly integrated with that of Germany and also found that industrial production, stock prices and short term rates in Germany positively influence returns on other European stock markets (namely France, Italy, Netherlands, Switzerland and the UK). Humpe Macmillan (2007) draw upon theory and existing empirical work as a motivation to select a number of macroeconomic variables that might expect to be strongly related to the real stock price. They make use of these variables, in a co integration model, to compare and contrast the stock markets in the US and Japan. The aim is to examined whether the same model can explain the US and Japanese stock market while yielding consistent factor loadings. This might be highly relevant to private investors, pension funds and governments, as many long term investors base their investment in equities on the assumption that corporate cash flows should grow in line with the economy, given either a constant or slowly moving discount rate. Unanticipated inflation may directly influence real stock prices negatively through unexpected changes in the price level. Inflation uncertainty may also affect the discount rate thus reducing the present value of future corporate cash flows. Tursoy, Gunsel, Rjoub (2008) suggested that the reason of this study is empirically test the arbitrage pricing theory in Istanbul Stock Exchange for the period of February 2001 up to September 2005 on monthly base. The arbitrage pricing theory is a theoretical substitute to the capital asset pricing model which analyzed the strength of the arbitrage pricing theory in the US securities market. They used US macroeconomic variables as proxies for the underlying risk factors driving stock returns. Tursoy, Gunsel, Rjoub (2008) found that several of these macroeconomic variables to be important in explaining expected stock return, particularly in industrial production, changes in risk premium, and twist in the yield curve. Tursoy, Gunsel, Rjoub (2008) analyzed the empirical applicability of the arbitrage pricing theory is to price the Istanbul Stock Market, and to recognize the set of macroeconomic variables which communicate more closely with the stock market factors. There are list macroeconomic variables which were used to price the stock of Istanbul Stock Exchange which formed in eleven portfolios from the industrial sector because it represents the important segment of the traded stocks which consists of 174 out of 259 totally traded stocks. A higher index is reflected in higher values of these three variables, therefore, this indicates greater pressure on the exchange market depending on the nature of the involvement of the respective Central Bank. That is, speculative pressures are either accommodated by a loss of reserves or can be prevented by the monetary authorities through an increase in interest rates. Each portfolio may influence different industry in different manner by macroeconomic variables; a macroeconomic factor may affect one industry positively, but affect the other industry negatively. The regression results specify that there is no significant pricing relation between the stock return and the tested macroeconomic variables. This indicates that other macroeconomic factors affect the stock return in Istanbul Stock exchange or the multifactor arbitrage pricing theory with macroeconomic variables fails to explain the effect in stock market. The consequence found that there is no relationship between the macroeconomic variables and stock market return. Kandir (2008) suggested that by make use of statistical tools like factor analysis, arbitrage pricing theory provide guidance in the use of variables without the requirement of pre specification of variables but it did not take too long before the criticism to appear. One most important criticism was that, arbitrage pricing theory cant be able to properly explain the variables which are used in the study, but just derive them statistically. This insufficiency of the arbitrage pricing theory continues that the result obtained from factor analysis should be primary economic variables, such as gross national product (GNP) or interest rates. Additionally, in this paper they acknowledge that stock prices and stock returns are systematically affected by economic variables. For this purpose they have selected the data from July 1997 to June 2005 in order to analyze there impact. Their findings of suggested that there has been a significant relation between Macroeconomic factors and stock return in the countries examined. Kandir (2008) recommended that the examination of major economic factors that are alternate of the derived factors in the arbitrage pricing theory which is the first to employ specific macroeconomic factors as proxies for undefined variables in the arbitrage pricing theory. Expected dividends of a company can be directly affected because of increase in inflation rate, real production, oil prices and consumption. The new model has an explicit advantage over the arbitrage pricing theory. There is no theoretical framework for the selection of macroeconomic variables. Stock prices are found to share positive long-run relationships with industrial production and consumer price index. Whereas result they obtained has found to have a negative relation with money supply, interest rate and exchange rate. Kazi (2009) identified the significant risk factors for the Australian stock market by applying co integration technique. It is Relevant to previously used variables, which act as a substitute for Australian systematic risk factors. The linear combination of previous variables is found co integrated although not all variables are significant. The bank interest rate, corporate profitability, dividend yield, industrial production and, to a lesser extent, global market influence are significant for the Australian stock market returns in the long-run; while the stock prices are used in each quarter by its own market presentation, interest rate and global stock market arrangements of previous quarter. The sensible implications for both local and overseas investors as all investors now able to direct their investment risks better while considering Australian stocks into their portfolios through monitoring only 4 to 5 factors that are identified here. The relationship between kibor rates and stock prices of oil sector from the viewpoint of asset portfolio allotment is commonly negative. An increase in interest rates raises the necessary rate of return, which in turn inversely affects the value of the asset. Measured as opportunity cost, the nominal interest rate affects investors decision on stock holdings. A rise in the opportunity cost may, however encourage investors to find a substitute shares for other assets. Using co integration technique this paper performs an empirical analysis to identify the significant risk factors for the Australian stock market. In doing so it examines whether or not the selected a previous variables can give details about the return generating and pricing process of the Australian stock market. The results are in conformity with the current finance theory, yet interestingly different on some points. In long run, it is found that the Australian stock market prices are being influenced by only 4 or 5 systematic risk factors. Nguyen (2010) examined the stock price performance of an emerging stock market the Stock Exchange of Thailand, by applying a new equilibrium stock price theory. They have chosen the data for assessment during financial crises. The theory recommend stock market risks and returns are determined by essentials under a linear relationship recognized on the basis of a consistent multi factor model return generating process and the assumptions of perfectly aggressive and frictionless markets. The literature on asset pricing models has taken on original lease of life since the appearance of the Arbitrage Pricing Theory, is substitute theory to the renowned Capital Asset Pricing Model (CAPM). Being motivating in its own right the arbitrage pricing theory soon concerned a number of main financial economists and researchers which had yielded its several affect on different researches. The methodology for testing the strength of the capital asset pricing model can be functional for testing the weight of arbitrage pricing theory. The two pass test measures are applied in almost every test of the arbitrage pricing theory. The study on certain macroeconomic forces which are going to systematically affect the stock returns of certain stocks. Their result suggests industrial production; changes in a default risk premium, term structure, and unanticipated inflati

Group Project Nike Paper Essay

Your specific assignment is to conduct research, analyze, and prepare a report for the CFO on the actual financial performance of the company that you choice for the years 2009, 2010, and 2011. In addition to reviewing the traditional financial performance indicators, you are also to review the companies past and current stock performance for the same periods. Your report is to consist of three parts: 1. an evaluation of the company’s financial performance for the periods 2009, 2010, and 2011 2. an evaluation of the company’s stock performance for the periods 2009, 2010, and 2011 3. finally, a specific recommendation, with supporting rationale, as to whether or not the company’s recent financial and stock performance are of sufficient financial strength to warrant entering into a long-term commitment with the company To assist you in your task, the CFO has provided the following general guidance. As it is recognized that the many companies are undergoing a major contraction, it is very important for you to compare the company’s financial and stock performance trends with those of the industry. You are to consider all necessary and relevant financial performance and stock information, trends, and projections in supporting your recommendation. Relevant factors include, but are not necessarily limited to, financial statement analyses, financial ratio trends and industry comparatives, capital spending, stock growth, Beta values, credit rating service valuations, bond rating valuations, and management and investment reports, when these documents are available. REPORT REQUIREMENTS Your final report is to be an executive-level financial report directed to the CFO. This report must be no longer than six (6) single-spaced typewritten pages. Include suitable comparative, quantitative, and qualitative analyses and conclude with a specific and supported recommendation based on the projected financial viability of the company for the next several years. Essential research data, financial calculations, and other documentation needed to support your recommendation should be referred to in summary form in your report and attached in detail as enclosures. All major sources should be referenced. There is no set limit to the size of the enclosures, but it is recommended that only essential enclosures be attached. You should use references and a bibliography to identify any remaining supporting documents you wish to include. Your report is to be submitted electronically and limited to a maximum of three, one for the executive report, one for attachments and one for power point presentation. Two files are acceptable, with attachments included as separate pages at the end of your report. Only Word, Plain Text, Rich Text, and Excel file formats are acceptable. This report is a group effort and must be researched, developed, and prepared by the entire group. However, to maximize the learning benefit, you are encouraged to share freely and exchange sources of information (Web sites), general approaches, alternatives, and information on general financial theory and applicability as related to the report with other teams. All questions related to this assignment should be referred to the mythical CFO (i.e., me).

Automation and Artificial Intelligence

Automation is on an increase across all technologies and fields. This increase has led to the transformation, and the future role people play in Global workforce. The rise of artificial intelligence will result in the need for new skills and roles. Some Skills and roles may disappear and others will evolve. Some industries may need more people and others may need less or none. The balance in human workforce will be impacted hard. Non-availability of required skills & re-skilling will disrupt the workforce in all industries. Organizations and people would need to adjust to this change. While machines need to be built and maintained, artificial intelligence leads to job loss due to the skill gap and jobs eliminated by machines.Impact of Artificial Intelligence on the WorkforceAutomation & Artificial intelligence will result in improvement of productivity and economic growth, but millions of people may need to switch occupation or upgrade themselves to stay in the global workforce. Automation will have a far-reaching impact on the global workforce. By 2030 at a 15% midpoint level of automation adoption, 400 Million workers will be displaced by adoption of automation. According, to a 2-year independent study by the McKinsey Global Institute (Dec 2017). It is estimated that in 60% of the occupation almost one-third of the activities could be automated. A SurveyMonkey poll on AI conducted for USA TODAY also had overtones of concern, with 73% of respondents saying that would prefer if AI was limited in the rollout of newer tech so that it doesn't become a threat to humans. USA Today. (Jan. 2, 2018). Unfortunately, with the pace at which automation and artificial intelligence are growing, 3 to 14% (75 to 375 Million) of the workforce will need to change their occupational category.Historical data on the technology shiftâ€Å"Innovation has generally liberated humans to be more productive,† says Rep. John Delaney.â€Å"Similar to the personal computer in the 1980s, AI will reshape our personal and business lives in such a dramatic manner, most companies today cannot comprehend the full impact,' said Anand Rao, PwC US Data & Analytics Innovation leader. Fear of technology advancement had always been there. From the textile revolution in 1811 with the advent of personal computers in 1980 world leaders and the Global workforce are worried about technological advancement. â€Å"The major challenge of the sixties is to maintain full employment at a time when automation is replacing men.† President Kennedy (1961). Although there had been concerns, every time a technology shift has happened more jobs had been created than lost. When a workforce is shifted from the usual mundane jobs, they have focused on more creative and productive areas, resulting in the advent of the human race. The past may not be an exact reflection of present or future. The advance of automation and artificial intelligence could be far reaching. A robot that could just build is different from a robot that could design and build.Artificial intelligence, Skill Gap & Workforce TransitionTo be successful in an automated world, Man & machine need to work together. One cannot replace the other. This would require new and niche skills with exceptional leadership skills. However, However, â€Å"77% of CEOs say they see the availability of key skills as the biggest business threat.† USA Today. (Jan. 2, 2018). According to an EY poll, 80% of the organization recognize the shortage of required talent to drive Artificial Intelligence adoption as the top challenge. Technology and Innovation along with the on demand human capabilities like leadership, creativity, problem solving, and passion will make organizations thrive in the market. Eventually an automated world is a possibility, however in the process will create major ripples in the workforce. The change would go beyond Man versus Machine and require re-learning and retooling.Impact on societyLarge corporations like Apple, Amazon, and Facebook had refused to comment on Artificial Intelligence. However, they do have people tasked with monitoring Artificial Intelligence. Microsoft had announced that they have created a review board called Aether – AI and Ethics in Engineering and Research. USA Today. (Jan. 2, 2018). Trusting and allowing Artificial Intelligence to control, drive cars and aeroplanes, and automated trading may eventually lead to AI taking control of learning and updating themselves resulting in an uncontrolled growth of machines. A study by McKinsey Global Institute (Dec 2017) suggests countries like China, India, USA and Germany will have more percentage of work activities displaced by automation. A 38 % of automation achievement would throw some western democracies to authoritarian policies to control the civil chaos as suggested by Brookings institution. Calum McClelland (2018). Governments and policy makers should handle this situation carefully.ConclusionEven if we successfully transition, we would lose all jobs to artificial intelligence and automation. Being creative and keeping us educated will give a good chance in this changing world.ReferenceArtificial intelligence: Doomsday scenario – or age of wonder? – USA Today. (Jan. 2, 2018)You can't have a machine age without humans – PwC report – ENP Newswire. (Mar. 1, 2017)AI creates jobs, yet talent crisis remains, according to EY poll – ENP Newswire. (May 1, 2018)Jobs lost, Jobs gained: workforce transitions in a time of automation – McKinsey Global Institute (Dec 2017).

Nonverbal Cues Are The Most Critical Aspect Of Communication

â€Å"Don’t you roll your eyes at me young lady!† my mother always use to tell me. Nonverbal communication is one of the easiest ways to communicate how you are feeling and can be one of the hardest to read. It is believed that up to 93 percent of all communication is nonverbal. Dr. Albert Mehrabian, author of Silent Messages (1971), had conducted many studies to find that 7 percent of communication is through words, 38 percent through vocal elements, and 55 percent through nonverbal elements such as facial expressions, posture and gestures. Subtracting the 7 percent as vocal communication, and adding the other 55 percent and 38 percent which gives us the 93 percent statistic. Nonverbal cues are the most critical aspect of communication. To†¦show more content†¦The smallest features on your face can tell people exactly how you feel whether you want to or not. Haptics Haptics is the term used to refer to our touching behaviors. Touch can be considered the most emotional type of communication we have as humans. It can range from comforting someone with a big hug or showing disapproval with a smack in the face. As I watched the couple sitting across from each other, they held hands almost constantly. The man would caress her hand so gently that you could easily see just by that little touch that he loved her very much. Looking back at the sister who shoved her brother away from her, almost pushing him off his seat, shows how much she disliked him at the moment. I also noticed that when a group of teenagers were meeting one another at the food court, the girls would hug each other as a welcome but the guys would only fist bump or do a quick hand grab to shoulder bump. In our society, it seems that it is more appropriate for women to touch one another in social places, while men have a quick hand shake but never an embrace. As a human, we are born to touch and want to be touched. It is a very important part of our nature and our nonverbal communication with one another. Physical appearance How we dress and take care of ourselves is generally the first way we make perceptions of one another. Physical appearance shows how much you value

How Personal Computers Affect Student s Learning...

Introduction As we moved into the turn of the century, technology like personal computers and tablets have become more accessible and inexpensive. The aim of this research is to inform the public and education institutions on how personal computers affect student’s learning processes in the classroom. Most universities require the access to computers in order to perform task and write assignments. This has manifested in having more computers in a classroom used by the lecturers and students. The massive evolution and consumption of technology have affected various aspects of society. The evolution of technology has meant the integration of these devices in our everyday lives and consequently has meant mass incorporation of computers into the classrooms . It is important to understand and analyze the impact personal computers and tablets have on the education of U.S. college and university students and how they are used in classrooms. Are these devices used by students to supplement their education or simply as a means of distraction? The outcome of this research can aid in the creation of a policy that would either potentially restrict personal computers in classrooms, or create a program or agency that would track and monitor personal computers in classrooms and inform all the potential parties involved. The results of this research can even lead to the restriction and blocking or censoring of certain non-academic websites that would serve as a distraction for thoseShow MoreRelatedFactors Affecting the Study Habits and Attitudes of 1st Yr Bsa Student of Pup-Src1669 Words   |  7 Pagesthe study habits and attitudes of 1st yr BSA student of PUP-SRC Objectives * this study is to provide awareness and better understanding of how their current study habits affected their academic performance to 1st year college students *   gives them a more focused and clear perspective on how the specific behaviors related to their studies influenced study habits * this study also gives a much deeper understanding of their selves as students considering that the college life  is typicallyRead MoreTechnology Has Made It Move Into Today Classroom1559 Words   |  7 PagesTechnology has made it move into today classroom. Earle, defines technology as a tool make learning more efficient (Earle, R. A. 2002). 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For thisRead MoreLearning Theories : My Sixth Grade Classroom Essay1697 Words   |  7 PagesIZT2, Learning Theories My eighth grade classroom is set in a Jr-Sr. High school and is located in the Jr. High hallway, in the rear of the high school. I have thirty-two student desks situated in rows and two small tables at the front of my room used for paper pick up. My desk and computer are in the back corner of the room. The students all have their own Chromebooks and I have a desktop computer as well as a Samsung Tablet. Google Classroom is used daily as well as many other applications suitedRead MoreAdult Learners : The Adult Learner : Neglected No More1618 Words   |  7 Pagesto learn, orientation, and motivation to learning and relevance. Self-concepts refer to an individual who has moved from pedagogy to androgyny. Which mean, moving from an adolescent learner to an adult learner. 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Essay on Cracking the Genome of Genetically Modified Foods

Cracking the Genome of Genetically Modified Foods. From prehistoric times crop plants and animals have been improved by selective breeding, a process by which humans breed other animals and plants for certain traits, but the modern marvels of GMOs and transgenic plants have come to light in just the last few decades. Selection procedures have achieved huge differences in form and genetics of a single species for instance the mule, a cross between a male donkey and a mare has been used in Europe for more than 3,000 years (GM Education). Modern genetic engineering started back in 1973 when Stanley Cohen, Annie Chang and Herbert Boyer created the first genetically modified DNA organism. In terms of food, genetic engineering simply means†¦show more content†¦A research conducted by World Health Organization (WHO) in 2000, new varieties of food crops, other than those produced using rDNA technology, are rarely subjected to toxicological assessments (The National research Council, 39). This could give a rise to medical emergenci es in the United States and requires people with allergies to pay very close to attention to what they’re trying to consume. This could also introduce humans to new varieties of diseases and health conditions. Opponents of GMF argue that genetic engineering of plants and animals for food and medicine is expensive and impractical and that they are not labeled as such in the United States. This raises concern that US consumers are not fully aware of what they are buying (Forman, 13). US Food and Drug Administration (FDA) only makes sure that the food consumers consume is wholesome. It doesn’t consider whether or not the food’s genetically modified (UC Santa Cruz). This could possibly make people think that there’s something that they’re not aware of and eventually give rise to resentment. In 1994, FDA approved injection of cows with a genetically modified growth hormone called rBGH despite a study that suggested doing so might increase the risk for disease in humans (Forman). Consumers with allergies, vegetarians and people who follow religious dietary rules are not only having a hard time avoiding food that might containShow MoreRelatedGp Essay Mainpoints24643 W ords   |  99 Pagesimproved†, or â€Å"part of a complete meal† for fast food when it is actually only healthy when eaten in extreme moderation †¢ E.g. Before and after photos for slimming advertisements. In the ‘before’ photos, the person usually slouches, is pictured in full view and is clad in unsuitable clothing. In the ‘after’ photos, pictured in half view with more attractive clothing. Increased attractiveness is thus attributed to weight loss. †¢ E.g. Fast food usually photographed in warm light so that it looks

Future of Retail Store for Behavioral Nutrition -myassignmenthelp

Question: Discuss about theFuture of Retail Store for Behavioral Nutrition. Answer: With the increasing ramified economic changes and global expansion of business, retails stores has gained momentum throughout the time. There have been string of news stories about retail stores business in Australia, such as various big companies named Woolworths, Red earth, Myer has decreased their average three years turnover by 25% since last three years. This level of decrease in their overall turnover reflects that retail store business growth in Australia has been going down due to increased level of E-business. In this report study has been conducted on the retail stores name Under Armor Company (Govindan, et al. 2016). There are several products such as household items, cloths and other essential items which are sold by retail store around the globe. Under Armor is an American company that manufacture footwear and other cloths and sell these items through its online and offline means in market (Black, et al., 2014). After conducting data from various sources, it is considere d that people in Australia is more inclined towards buying goods and services from retail stores. Under Armor has been selling various goods and services through its off line and online portals. This has been observed that each and every big retail stores in Australia has total revenue of around AUD $ 120 million through its overall sales. Moreover, Under Armor has also decreased by its overall revenue by average 10% since last five years. This level of changes in its business and increased level of turnover in retail business has shown that retail store business has high amount of opportunity growth only when company adopts ERP online business chain (Piramuthu, Wochner and Grunow, 2014). Nonetheless, after evaluating the growth perspective of retails stores business in Australia, Under Armor has increased its number of items sold in market which simultaneously increase overall turnover of company. In addition to this, the future of retail stores in E business is very high but with a view to strengthen the value chain activities and increasing the overall clients satisfaction, company needs to implement proper level of enterprises resource planning (Gallino and Moreno, 2012). If this retail stores business of Under Armor is taken on international level through online mode then it could not only increase the overall efficiency of business but also result to creation of effective brand image. Retail store business has shown high amount of growth and it could be further increased if retails sellers introduced upgraded technologies in determined approach (Piramuthu, Wochner and Grunow, 2014). Now in the end, it could be inferred that if companies like Red Earth, Under Armor and Woolworths could provide best level of goods and services to their clients in retails store business through online business chain then it will surely result to increased level of turnover. However, clients inclination towards online retail stores is high as compare to shopping online. It is considered that Under Armor needs to adopt ERP system to increase its overall productivity and efficiency of business as per the retails store market needs and demand. References Black, C., Ntani, G., Inskip, H., Cooper, C., Cummins, S., Moon, G. and Baird, J., 2014. Measuring the healthfulness of food retail stores: variations by store type and neighbourhood deprivation.International Journal of Behavioral Nutrition and Physical Activity,11(1), p.69. Gallino, S. and Moreno, A., 2014. Integration of online and offline channels in retail: The impact of sharing reliable inventory availability information. ManagementScience,60(6), pp.1434-1451. Govindan, K., Palaniappan, M., Zhu, Q. and Kannan, D., 2012. Analysis of third party reverse logistics provider using interpretive structural modeling.International Journal of Production Economics,140(1), pp.204-211. Piramuthu, S., Wochner, S. and Grunow, M., 2014. Should retail stores also RFID-tag cheapitems?.European Journal of Operational Research,233(1), pp.281-291.