Homiletics Definition and Examples

Homiletics Definition and Examples Homiletics is the practice and study of the art of preaching; the rhetoric of the sermon. The foundation for homiletics lay in the epideictic variety of classical rhetoric. Beginning in the late Middle Ages and continuing to the present day, homiletics has commanded a great deal of critical attention.But as James L. Kinneavy has observed, homiletics isnt just a Western phenomenon: Indeed, nearly all of the major world religions have involved persons trained to preach (Encyclopedia of Rhetoric and Composition, 1996). See Examples and Observations, below. Etymology:From the Greek, conversation Examples and Observations: The Greek word homilia signifies conversation, mutual talk, and so familiar discourse. The Latin word sermo (from which we get sermon) has the same sense, of conversation, talk, discussion. It is instructive to observe that the early Christians did not at first apply to their public teachings the names given to the orations of Demosthenes and Cicero, but called them talks, familiar discourses. Under the influence of rhetorical teaching and the popularizing of Christian worship, the talk soon became a more formal and extended discourse . . ..Homiletics may be called a branch of rhetoric, or a kindred art. Those fundamental principles which have their basis in human nature are of course the same in both cases, and this being so it seems clear that we must regard homiletics as rhetoric applied to this particular kind of speaking. Still, preaching is properly very different from secular discourse, as to the primary source of its materials, as to the directness and simplicity of style whi ch become the preacher, and the unworldly motives by which he ought to be influenced.(John A. Broadus, On the Preparation and Delivery of Sermons, 1870) Medieval Preaching ManualsThematic preaching was not directed at converting the audience. The congregation was assumed to believe in Christ, as the vast majority of people in medieval Europe did. The preacher instructs them about the meaning of the Bible, with emphasis on moral action. Just as dictamen combined features of rhetoric, social status, and law to meet a perceived need in writing letters, so the preaching manuals drew on a variety of disciplines to outline their new technique. Biblical exegesis was one; scholastic logic was anotherthematic preaching, with its succession of definitions, divisions, and syllogism can be regarded as a more popular form of scholastic disputation; and a third was rhetoric as known from Cicero and Boethius, seen in rules for arrangement and style. There was also some influence from grammar and other liberal arts in the amplification of divisions of the theme.Handbooks of preaching were very common in the late Middle Ages and Renaissance. No one o f them, however, was widely circulated to become the standard work on the subject.(George A. Kennedy, Classical Rhetoric Its Christian Secular Tradition. University of North Carolina Press, 1999) Homiletics From the 18th Century to the PresentHomiletics [in the 18th and 19th centuries] increasingly became a species of rhetoric, preaching became pulpit oratory, and sermons became moral discourses. Less bound to classical rhetorical models, zealous fundamentalist and 20th-century homileticians adapted various inductive, narrative-based sermon strategies derived, respectively, from biblical models (jeremiad, parable, Pauline exhortation, revelation) and theories of mass communication.(Gregory Kneidel, Homiletics. Encyclopedia of Rhetoric, ed. by T.O. Sloane. Oxford University Press, 2001)African-American PreachingAfrican American preaching, unlike some of the straitjacket preaching of traditional Eurocentric homiletics, is an oral and gestural activity. This does not mean that it is not an intellectual activity, but in the tradition of African American preaching and the language of the Black church, the activity of the limbs contributes to the meaning of preaching by creating a dialogue with the self and the hearer. This is a critical, albeit ancillary, element of African American preaching and often helps to make the more substantive theological and hermeneutical ingredients more palatable because they become integrated into the whole preaching process.(James H. Harris, The Word Made Plain: The Power and Promise of Preaching. Augsburg Fortress, 2004)Active voice is more alive than passive.Dont use a 50 ¢ word when a 5 ¢ word will do.Remove unnecessary occurrences of that and which.Remove unnecessary or assumable information and get to the point.Use dialogue for added interest and life.Dont waste words.Use contractions where appropriate.Verbs are more alive than nouns.Accentuate the positive.Avoid the literary sound.Avoid clichà ©s.Remove forms of the verb to be whenever possible. Rules for Contemporary PreachersHere . . . are the Rules weve come up with for writing for the ear. . . . Adopt them or adapt them as you see fit. And with each sermon manuscript you write, pray the Lord will make you clear, concise, and directed toward the needs of your flock.(G. Robert Jacks, Just Say the Word!: Writing for the Ear. Wm. B. Eerdmans Publishing Company, 1996) Pronunciation: hom-eh-LET-iks

Corporate Strategies to Hedge Commodity Price Risks Applying Derivatives Essay Example

Corporate Strategies to Hedge Commodity Price Risks Applying Derivatives Essay Example Corporate Strategies to Hedge Commodity Price Risks Applying Derivatives Essay Corporate Strategies to Hedge Commodity Price Risks Applying Derivatives Essay Table of contents List of abbreviationsIII List of figuresIII List of tablesIII 1Introduction1 1. 1Problem and objective1 1. 2Structure of this paper1 2Background Information2 2. 1Definitions of fundamental terms2 2. 2Commodity price risk in different firms2 3Explanation of derivatives3 3. 1Options3 3. 2Futures4 3. 3Forwards6 3. 4Swaps6 4Hedging strategies with derivatives7 4. 1Hedging with options7 4. 2Hedging with futures7 4. 3Hedging with forwards8 4. 4Hedging with swaps8 5Pros and cons of hedging strategies with derivatives8 5. 1Pros and cons of options9 5. Pros and cons of futures9 5. 3Pros and cons of forwards10 5. 4Pros and cons of swaps10 6Practical example of corporate commodity price risk hedging10 6. 1Introduction on firms practical hedging strategy10 6. 2Analysis on this strategy11 7Summary12 Appendix13 Appendix 1: Amounts outstanding of over-the-counter (OTC) derivatives by risk category and instrument- - in billions of US dollar13 Appendix 2: Derivatives financial instr uments traded on organized exchanges by instrument and location- - in billions of US dollar14 Bibliography15 Internet Source16 List of abbreviations CHClearing House IMInitial Margin MBMargin Balance MM NMaintenance Margin No OTCOver The Count VM YVariation Margin Yes List of figures Figure 1: Structure of this paper2 Figure 2: P of each option position4 Figure 3: Flow chart of marking-to-market process5 Figure 4: P of each future position6 Figure 5: Hedging model on fuel oil of Air China11 List of tables Table 1: Summary for 4 option positions4 Table 2: Summary for future positions6 Table 3: Summary for 4 derivatives9 1Introduction 1. 1Problem and objective The risk of commodity price is a ferocious topic in corporate operation. Corporate profit is equal to total revenue minus total cost. For firms, because of the high volatility on commodity price, their inputs and outputs relating to commodity are unpredictable. As a consequence corporate profit will be immensely volatile, which will possibly lead the firm to go bankruptcy if no any preventive actions are taken. For example, producers of commodities probably need to assume unexpected losses, when the price of outputs goes down or the price of necessary raw materials goes up. The situations are similar to wholesale buyers, retailers, exporters and even governments. Volatility of commodities price has great impacts on corporate daily operation. The objective of this term paper is to introduce derivative hedging strategies for corporate managers to reduce or even eliminate future unpredictability, mainly from the perspectives of the role commodity price risks play, what the typical derivative instruments are, where and how to apply these different derivatives in terms of hedging principles thereof, and both advantages and disadvantages when applying each derivative in real business transactions. 1. Structure of this paper Firstly, this term paper highlights problems existing in real world. Secondly, it introduces advanced derivatives theory that can be applied to solve these problems. Thirdly, specific details on the theory will be presented, including explanation, application, as well as pros and cons of each derivative instrument. Then, an example is analyzed to show how companies apply derivatives to hedge commodity risks practically. Last is a summary of this term paper. Following figure shows the body of this paper. 2Background Information 2. Definitions of fundamental terms In financial markets derivative is a contract or security whose value is derived from the value of other more basic underlying variables . One of its most important functions is hedging. In corporate operation, hedging is to secure the companies against potential loss caused by variable risks that arise in international market, such as the commodity price risks. In this paper, commodity means any tangible goods or raw materials that may be sold or traded in the markets, such as energy, gold, or agricultural products. 2. Commodity price risk in different firms Volatility of commodities price influences firms’ daily operation significantly. Producers of commodities, such as farms, oil producers, mining companies, face price risk on output. Wholesalers and retailers, face price risk during the time period from buying from suppliers and selling to customers. Exporters, face the same price risk as well as currency exchange risk. And governments face price and yield risks generating from tax revenues that depend on firms’ operational conditions. 3Explanation of derivatives Derivatives are traded in exchange-traded markets and over-the-counter markets. (See recent derivatives transaction status in appendix 1 and appendix 2. ) Notably, exchange-traded derivatives are default risk free and liquid. However over-the-counter traded derivatives are the opposite. 3. 1Options An option is the contract that gives the buyer the right but not obligation to buy (call option) or sell (put option) an underlying asset at a predetermined price (exercise price) for certain quantity during a fixed period of time (maturity). The buyer of the option pays a particular amount of money (option premium) to the seller to buy a right whereby he can decide whether or not to exercise this option, simultaneously the seller has the obligation to perform if the buyer exercises the option. European options only can be exercised on expiration day, and American options can be exercised at any time before maturity. The buyer of the call option is named long call, while the seller of the call option is named short call. Similarly, the buyer of the put option is named long put, while the seller of the put option is named short put. In commodity market, underlying of commodity option is a commodity, such as oil, wheat, or gold. Commodity options are both exchanges-traded and OTC traded. Following figure shows P of each option. Following table is the summary for these 4 option positions. Table 1: Summary for 4 option positions Market price expectationMaximum profitMaximum lossBreakeven point Long callupunlimitedoption premiumexercise price + option premium Short calldown or stableoption premiumunlimitedexercise price + option premium Long putdownexercise price option premiumoption premiumexercise price option premium Short putup or stableoption remiumexercise price option premiumexercise price option premium Source: author’s own. 3. 2Futures A future is a contract between two parties to buy or sell a specified amount of asset at a specified time period in the future for a certain price. Normally there are two types of futures, commodity futures whose underlying are commodities and financial futures who se underlying are financial assets. They are highly standardized, regulated, and traded in exchange markets with highly liquid and default risk free property. Because of the marking-to-market process, at maturity the settling price is the spot price at expiration date with profit gaining or loss paying from a margin account, which indirectly makes the effective bargain price equal to the predetermined price in the future contract. Notably, to ensure high liquidity of futures, marking-to-market process plays a significant role. The following figure shows the marking-to-market process. Generally there are two alternative ways at maturity to settle futures, either by cash or by actual delivery of underlying, which is clearly defined by futures exchange. Following figure and table show the details of a future. Table 2: Summary for future positions ?Maximum profitMaximum lossBreakeven point Long positionunlimitedexercise pricespot price + cost of carry Short positionexercise priceunlimitedspot price + cost of carry Source: author’s own. 3. 3Forwards A forward contract is a customized and over-the-counter agreement to buy or sell an asset at a specified time in the future for a specified price, where a long position has the obligation to buy and a short position has the obligation to sell. Compared with futures, no marking-to-market process are required. Counterparties can negotiate with each about the parameters of the contract. As a result, a firm who wants to make forward contract needs to find the counterparty by itself. 3. 4Swaps A swap is a customized and over-the-counter agreement to exchange a series of specified assets periodically in the future. Normally the counterparties of a swap contract are a large institution such as a bank and a company. Basically, we can view a swap as a complicated forward. Except currency swaps, counterparties just need to pay the differences between the cash flow they should exchange. Because swaps are bespoken as a result they are less liquid. There are commodity swaps, interest rate swaps and currency swaps. Interest rate swaps is an agreement of two counterparties to change fixed interest and floating interest on predefined nominal principal in the future periodically. Commodity swaps normally vary tremendously among different markets. In a currency swap, counterparties change same value of different currencies in inception and termination, where the exchange rate of the tow currencies depends on the negotiation of counterparties. 4Hedging strategies with derivatives This chapter will focus on the principles of hedging strategies on commodities. . 1Hedging with options If a trader wants to procure a commodity with high volatile price, he can buy a commodity call option to hedge the price risk of going up. Similarly, if a company wants to sell a commodity product, it can buy a long put to hedge the price risk of going down. In practice, because investors want to bet more precisely on the future price of the underlying, an d hedgers with long positions want to save option premiums, a few combinations of options come out, such as a long call and a short put with identical parameters except the different strike price. 4. 2Hedging with futures When the objective of a commodity trader wants to neutralize the price risk as far as possible, usually he will choose to take a position on a future on commodity. A hedger who already owns a commodity asset or doesn‘t own right now but will at some future time expecting to sell it in the future without assuming any price risk, he can apple future hedging strategy to enter into a short position to become a short. Likewise, a hedger who has to buy a certain commodity asset in the future and wants to lock in spot price immediately, he can apply a future to enter into a long position to become a long. . 3Hedging with forwards The principles of hedging strategy with forwards are similar with futures. Whether to use futures or forwards depends on different requirements. Generally, financial assets investors who need high liquidity prefer to choose futures, while commodity investors such as producers who need high customization prefer to choose forwards. 4. 4Hedging with swaps When i nvestors want to hedge risks of interest rates, currencies, or commodities, they can use swaps. In gold swaps, counterparties change fixed lease rate with variable lease rate. In swaps on base metals, counterparties change fixed metal price with average price of near dated metal future. In oil swaps, counterparties change fixed West Taxes Intermediate (WTI is a benchmark in oil price) price with average price of near dated WTI future. 5Pros and cons of hedging strategies with derivatives The following integrated summary of these derivatives depending on pervious analysis makes systematic comparisons. (The options here are exchanged-traded European options) Table 3: Summary for 4 derivatives SUMMERY OF DERIVATIVES FOR GENERAL TYPES OptionsFuturesForwardsSwaps Types of contractstandardizedstandardizedcustomizedcustomized Settlementscash and deliverymost cash and few deliverydeliverydepends on individuals Trading marketExchange tradedExchange tradedOTCOTC Liquidityhighhighlowlow Marketing-to-marginnorequirednono Time of settlementmaturitydailymaturityperiodically Initial investmentoption premiuminitial margin nodepends Default risk assumed byClearing houseclearinghouseBoth partiesBoth parties ProsDefault risk free liquiditycustomization no initial investment Consinitial investment inflexibledefault risk for both party illiquidity Source: author’s own. . 1Pros and cons of options The pros of options are obvious. Firstly, they have no risk to assume more loss than premium but have possibility to get unlimited potential profit. Secondly exchanged-traded options are highly liquid and OTC traded options are flexible. However, the cons of options are also explicit, such as the difficulty to decide when to enter into a long position. Because buying an option needs to pay option premium, if the spot price cannot go above (for a long call) or go below (for a long put) the breakeven point the hedger will suffer a loss, and depends on statistics the possibility of a long position to lose is about 66%. 5. 2Pros and cons of futures It definitely makes sense for most companies whose majors are in businesses but not professional in forecasting the price of commodities price volatility, which can make them pay more attention on their core competences instead of fearing about volatile price. Nonetheless, taking neutralized strategies make hedgers give up the possibility of both profit and loss. Moreover, instead of hedging risks by companies, shareholders can hedge themselves according to their preferences. Additionally, if other competitors of the same industry don’t apply hedging strategies, in fact, it is the hedging company itself that assumes risks, because competitive pressures are the same for other all competitors but different for the hedging company its own. 5. 3Pros and cons of forwards Basic pros and cons have been listed in the table in front of this chapter. Generally, compared to futures, the most explicit pro is that forwards are highly customized and therefore the con is that they are hardly liquid. 5. 4Pros and cons of swaps Basic pros and cons have been listed in the table in front of this chapter. Gernally, compared to futures and forwards the most precise pros is that both counterparties could reap benefits from a swap, such as in a currency swap where a firm with a low rate may get a cheaper loan as other firms with high rates, and the counterparty may get a payment as compensation. However the corresponding cons is that counterparty may need to pay commision to intermediary, because it is difficult to find an appropriate counterparty by itself. 6Practical example of corporate commodity price risk hedging 6. 1Introduction on firms practical hedging strategy Air China is an airline company, whose cost of fuel oil occupies 44. 75% of total revenue in 2008. To hedge the fuel oil price risk, Air China bought a call option with strike K1, meanwhile sold a put option with strike K2, where K1

US Investment Essay Example | Topics and Well Written Essays - 250 words

US Investment - Essay Example The federal government plays the crucial role in funding education in public institutions either through grants or loans. Without the government support more than 400,000 students who would not have access to quality education or employment (Thelin 120). Therefore, the federal government can encourage more investment in education through subsidies in order to promote quality education that leads to better jobs. Limiting subsidies to specific professionals considered crucial for economic development will increase competence in technical areas; increase job stability and marketability of the workers hence increase in global competence of the economy (Flores 78). However, it will have adverse effects because some students will not join their careers of choice, increase unemployment due to congestion in particular careers and increase of illiteracy rate for those who cannot afford to take careers of their choice (Flores 79). Increasing subsidies to the certain profession will violate the economic principle that upholds government market outcomes because it will increase inequalities of sharing national resources (Mankiw 64). In conclusion, education is essential for economic growth hence government support through subsidies increases the literacy rate, employment opportunities, and improvement in the living standards. The government should offer uniform support in all professions while attractiveness of the labor market determines the choice individuals make when choosing their