Crime Scene Manager Roles and Responsibilities

Crime Scene Manager Roles and Responsibilities According to the lecture on crime scene management SAPS 2006 the process of crime scene management is as follows. The different role players within the SAPS respond to the crime scene with due consideration personal safety, while at same time looking for potential evidence and possible suspects. The researcher wants to determine whether the role players from the components such as the visible policing, detectives and the Local Criminal Record Centre attended the murder crime scenes with the purpose of obtaining the required evidential material for linking suspects with the crime scene and for court purposes, further to determine whether such role players has the expertise to identify possible suspects at the murder scenes, SAPS (2006). In terms of SAPS, DCLP (2006) and SAPS Policy Number 1 (2004) on crime scene management, the procedure in the crime scene of crime is as follows: The first member to arrive at the crime scene will receive the crime scene from the members of the public and immediately take control of the scene and identify the injured victims. The first member will establish the command centre and act as Acting Commander for the Centre until the Official Commander is appointed. The Acting Commander will administers all the resources as required by the crime scene role-players examples of such resources are visible policing, Specialized units, Emergency services, Defence Force units etc and if the scope of the crime scene escalates (i.e) incident where public order policing or the task force is required, a major aircraft crash or any major operation), the command centre will further supported by the establishment of a field joint operational centre. The establish excess routes to the crime scene for control purpose. The first member will hand over the crime scene to the appointed crime scene manager on arrival who will be accompanied by the detectives and the crime scene technician and conduct a detail inspection to determine certain key aspects of the crime scene. The crime scene manager, the crime scene technician and the investigating officer will gain on the first walk through plan and agree on the crime scene investigation, processing strategy and methodology which they will follow. The crime scene manager will appoints the investigating officer who will be the principal investigator and be responsible for the maintaining of the case docket, investigating officer to co-ordinates the investigating team and for the maintaining the investigation diary and keeping track of the whole process and the investigating team is responsible for information gathering and proceeds which the interviewing of witnesses and taking down statements (SAPS 2006). The crime manager will also appoints the crime scene technician who will be the principal processing expert on the crime scene and evaluates the evidence possibilities and assembles the processing team with the correct skills to effectively process the crime scene. Crime scene technician will be supported by specialists available to assist the processing team on the crime; such specialists are provided by the Forensic Science Laboratory, Pathology, etc. The processing team will prepare a realistic visual representation of the scene to a court of law (SAPS 2006). After the crime scene team has completed their activities in the crime scene, the crime scene manager will conducts a final walk through of the scene, accompanied by the investigating officer and the crime scene technician. The purpose of walk-through is to review the activity of the investigation and processing team, ensuring that the original plan has been executed. The crime scene manager will conduct a debriefing with all role players as the last opportunity to collect any wrong decision made during the process and to ensure that all required actions have been performed. The crime scene manager will restore the crime scene and ensuring that all equipments has been removed and authorised the crime scene to be released to the public (SAPS 2006). Sometime after the event the crime scene manager calls a meeting with all the relevant role players to evaluate the process for lessons learnt planning the on going investigation, commenced on successes and identify mistakes. Cox (2009) in her article, explains that in order to ensure that the evidence is protected, the first person at the crime scene should secure it with barriers and or crime scene tapes soon after arriving at the crime scene, in addition, some should act as security guard so that people who do not belong at the location are kept out of the crime scene. According to Lee, Palmbach Miller, (2001), the first responders to a crime scene are usually Police, Emergency Medical personnel or Fire Department personnel. Their actions at the scene are often the foundation for the successful resolution of the crime. These first responding Officers are also in many cases some of the individuals, who may, through the course of doing their job, inadvertently change or alter the crime scene from its original condition, Lee, et al (2001). They further emphasized that those persons must do their job but they must always keep in mind that they will begin the process of linking the crime scene to the victim, the witness and ultimately, to the suspect. Any disruption of the crime scene may prevent the link to the suspect. The critical matters such as training, education, experience are all necessary for any potential first responder Lee et al, (2001). The process to be followed according to Roland (2007) correspond with (SAPS 2006) in the sense that the first Officers to respond are responsible for the securing the crime scene and preserving it as they found it. This means ensuring that nothing is touched or moved so that any physical evidence is not compromised or contaminated, if there are victims displaying signs of life the Police will call a team of Paramedics to give on site assistance if they did not respond to the initial emergency call. The injured can then be removed to Hospital, but dead bodies need to be left as they were found since vital causes can be obtained from studying the position and condition of the victim. The senior investigating officer will begin by interviewing the officers who were first on the scene to get their initial impression of the location and the behaviour of those who were directly involved. In a murder enquiry the suspects residence will require searching as well as the site where the body of the victim has been discovered. Team is led by a crime scene controller who answers to a superior the superior then reports to the investigating officer. When the crime scene is a house, an apartment, commercial building or vehicle all which can be sealed off and examined in the minutes detail and if murder or violent attack has occurred in one area of a building . The whole property will be considered relevant to the case and will be scoured for clause. When exterior location Police may have to extend the perimeter to includes vehicle tyre tracks, footprints and areas where there is a change of finding personal items, discarded cigarettes butts, a weapon or trace evidence which might have been snagged on undergrowth. It is a burial site for murder victims. There could be other makeshift graves in the area all in which will save to be excavates, photographed and combined for physical evidence. Exterior scene may also have to be isolated by a tent to protect evidence from the effects of whether and to exclude the prying eyes of curiosity seekers and media Roland (2007). It is clear that the procedure for the first person to arrive at the scene of crime is to ensure that the crime is protected for potential evidence. Cox(2009), Lee, el at 2001) and Roland (2007) support the (SAPS1 (2004) on crime scene management as well as the SAPS DCLP (2006). Wayne, Patherick, Brent, Turvey, Claire Ferguson (2010) indicates that particular attention should be given to determine if this is the only scene or whether there are secondary crime scenes that need to be located. Investigators will have only a limited amount of time to work a crime site in its untouched state. The opportunity to permanently record the scene in its original state must not be lost, such records will not only be useful during an investigation but are also required for presentation at trial Wayne et al (2010). Wayne et al (2010) has also stated that it is important that upon arrival at the scene investigators implement crime scene procedures, supervise uniform personnel and provide direction to the investigation to facilitate this. An investigative team should be nominated. This team should consist of an arresting officer, a corroborating officer, and an exhibit officer. This procedure is standard in most Police services for any major crime. The exhibits officer is responsible for protection and collection of exhibits, through to the examination of exhibits and their final production in court cases. The arresting officer and the corroborating officer are responsible for interaction with suspects and have final responsibility prosecuting the matter to trial. This team should be overseen by a senior Detective who has a broad management role in ensuring that a major incident room (MIR) or command post is established to support and manage investigative functions at the crime scene and also at later stages of the investigations Wayne et al (2010). Furthermore Wayne et at (2010) elaborates the initial assessment stage of crime scene that the trained investigators should have control of the investigation and begin to identify possible witnesses and suspects they should begin this stage by evaluating physical evidence located with a view to assisting with suspect generation by prioritising the most evidence (e.g) DNA located at a scene is powerful evidence as compared to an un-identified item such as clothing). It is also at this point that the investigators should familiarise themselves with the victim by performing interviews with the victim if still alive, or alternatively by conducting a victim logy (or profile) if the victim is the deceased. The profile should include the history of the victim, associates, criminal links, family and financial records. This step is important because the characteristics of a victim can provide links to possible suspects in particular, investigators may be able to draw inferences about the offe nders motive, modus operandi, and signatures behaviour (Turvey, 1999). Having done this, the investigators should be able to know the information about the victim. Wayne et al (2010). According to Wayne et al (2010) during the investigation stage the investigators undertake the most challenging work. At this point investigators must attempt to establish a motive for the crime, if this can be done, it must be accurate, then this information will greatly assist in reducing the suspect pool. Witness account also need to be closely examined at this stage and evaluated as to the assistance they can build a profile for the suspect. In this stage investigators should be ensuring that trained experts are evaluating all available physical evidence. Wayne et al (2010) further explain about the target stage of having carried out thorough examination of the crime scene, investigators need to build a profile for potential suspects from evidence available during the target stage. The investigators should then test the velocity of the evidence by seeking links between the suspect and the crime. All available evidence needs to be channelled into providing a nexus between the susp ect and the victim, in relation to time, place and motive. It is at this point the investigators need to be fully conversant with the investigations gathered by investigators with regards to build a profile for potential suspects. The investigators should develop an investigative interview plan so that when the suspect is confronted, the investigators are clear of the direction and purpose of the action or questioning that they undertake in the arrest stage, Wayne (et al 2010). According to Jackson, Andrew and Jackson, Julie (2004) the duties of the first Police Officer attending and preservation of the crime scene is as follows: Maintain the value of any physical evidence that may be present. Carry out an initial assessment of the scene. Deal with any emergencies (the overriding duty of the first officer attending is to preserve life, irrespective of whether crucial evidence is destroyed in the process). Call for assistance as necessary. Preserve the scene (unless it has been decided that physical evidence will not be recovered. Make an appropriate records of his or her assessment and actions (included in this times at which any key events took place, such as the first officer attending arrival at the scene and any estimated time of the incident that may be available from, for example, eyewitnesses. Communicate his or her assessment and actions to those who will take over the responsibility for the processing of the scene and or those responsible for the investigation of the case. Provide appropriate information about the processing of the case to those members of the public who are directly involved. The fi rst officer attending the crime scene must during his or her initial assessment, ascertain whether any of the following are present or nearby. Injured persons victims. Eyewitnesses (who should be kept separate from one another, by the first officer attending need to avoid conversation between the eye witnesses that could distort their memories of the incident). Suspects (who must be kept separate from each other and from witnesses) it should be borne in mind that seemingly innocent might, in fact be suspects in case. Further Jackson et al (2004) provides that any crime scene from which physical evidence is recovered and recorded, this process is also known as documenting the crime scene. This is done by making written notes that are augmented by photographs, video recordings and or sketches, as appropriate Jackson et al (2004). Jackson et al (2004) also mentioned the following recording on the crime scene. There must be a record of each item of physical evidence recorded from the scene, detailing the identified of the person who recovered it, the time and date at which it was recorded, the exact location from which it was taken and a description of the item involved. A log of all images taken of the scene (whether by still photographing conventional digital or video recording) describing for each images. The exact location of the camera operator The identity of the camera operator The direction in which the camera was pointed. The time and date at which it was captured. Any special lighting or other conditions used. Any special light or other condition used. The items and / or area of the scene from which the image was captured. A log of any sketches made of the scene. A detailed description of the surroundings of the crime scene. A record of the conditions of whether and light that prevailed during the processing of the scene and a thorough description of the crime scene itself in the condition in which it was found prior to the removal of any physical evidence, including details or any features that might be of evidential worth (such as the location and condition of any likely points of the entry and or exits by the individuals involved in the incident). It is clear that on the crime scene the physical evidence needs to be protected for potential evidence. Wayne et al (2010) and Jackson et al (2004:19) support to each other in terms of the process of crime scene management. According to Savino, John, Brent and Turvey (2005) provides the information to be learned from the crime scene as follows: Investigators can experience the sights, smells and sound of the crime scene, as the victim and the offender perceived them. Investigators can experience the spatial relationship with the scene. Investigators can experience how open, or secluded the scene is, suggesting possible witnesses. Investigators can experience how accessible or hidden the scene is to those not from the area, suggesting possible suspect populations. Investigators can learn what kind of traffic (vehicle and pedestrian), residences or businesses are nearby, suggesting possible witnesses and suspect populations. Investigators can experience transfer evidence first hand, vegetation, soil, glass, fibres, and any other material that may have transferred on to the victim or offender may transfer on to them, providing examples of what to look for on suspect clothing or in suspects vehicles. Investigators can walk victim and offender routes themselves, seeing the sight first hand, in order to discover additional witnesses and suspect population. This witnesses can include businesses with active surveillance camera that may have recorded some or all of the crime Savino et al (2005). The attentive investigators may discover items of evidence previously thought lost and according to Savino and Turvey (2005) further elaborate the crime scene dos and donts that, locards exchange principle. Every contact result in a transfer of evidence contact between items in around and obliterate it. The investigator needs to be on the crime scene and have some contact with the evidence, as do Forensic personnel however, reasonable steps can be taken to minimize how much evidence is added, moved and obliterated consider the following guidelines. Do not enter the crime scene until you have signed in on the crime scene security log. If there is not a security log, start one. The security log should contain name, agency, function, time in and out, and clothing description for later exclusionary purposes. One person should be assigned to maintain the log. Make certain that someone is assigned to photograph the crime scene and surrounding areas. Part of this assignment involves maintaining a log of each roll of film and each item and location photograph. Make certain that someone is assigned to sketch the crime scene. A rough sketch should be prepared at the scene showing measurements between items of evidence and spatial relationships within the scene. A final or smooth sketch is prepared later, based on notes, photos, and other information gathered from the scene (Lee). Make certain that someone is assigned to maintain and evidence log. Do not collect multiple items of evidence in one bag or under one evidence number. This provides for potential cross -contamination. Wear disposable latex gloves at all times- this will help prevents the transfer of fingerprints, sweat, and other material from your bare hand on the scene. Change gloves every time you touch a new item on the scene. This will help prevent cross-contamination between items at the same that you have touched. Do not dispose gloves by carelessly discarding them in the scene. They could wind up in the crime scene photo obscuring evidence, or worse, somebody might collect them as evidence and run lab tests to determine their origin. Do not touch everything in sight. When you touch an object, you may move it from its original position or obliterate any evidence that may have been transferred to its surface during the crime, such as a fingerprints or biological fluids containing valuable DNA. Keep your hands in your pockets until they are needed. Do not wonder aimlessly through the crime scene. Do not touch, move or otherwise alter items of evidence before documenting them (photographs, measurements, etc) Do not stage collection effort from furniture involved in the crime. Set up your equipments elsewhere, away from areas of potential evidence transfer. Do not use the telephone on the scene. The offender may have used the phone. This evidence that should be seized and processed for fingerprints and other potential transfer evidence also, phone records should be checked for all incoming and outgoing local and long distance calls, as far back as possible. Do not use the television and / VCR at the scene. The offender may have used them, examine buttons for latent prints. Also, cable TV records should be checked both authors have worked cases where the offender has watched TV and / or ordered pornographic movies while waiting for the victim to return home. Do not use the bathroom. The offender may have the bathroom and may have lifted the toilet seat. The toilet should be seized and processed for fingerprints and other potential transfer evidence. Do not smoke, smoking changes smells of the air and results in hot ashes that have the potential to contaminate, melt, or even burn /ignite potential evidence. It also results in discarded cigarettes butts that may be confused as evidence. Do not eat into the crime scene and dropped food could contaminate or obliterate potential evidence. Do not drink. This is destruction and will results in refuse that could find its way into the crime scene and get more potential collected as evidence, also spilled liquids could contaminate or obliterate potential evidence. Do not spit, spitting result in the transfer of biological material into a crime scene. Do not bring civilians to a crime scene. This kind of thing show a lack of respect and professionalism, as well as introducing more potential transfer evidence into the scene and increasing the possibility that evidence may be carelessly contaminated or obliterated. Do not allow your superiors or colleagues to be civilians to a crime scene. Leave sealed containers sealed. Do not open sealed containers and sniff inside to determine the contents by odour. They may contain hazardours or toxic material such anhydrous ammonia, a necessary ingredient, especially the eye, skin, and respiratory tract will cause dehydration, cell destruction, and serve chemical burns. Do not touch pools of liquid in the crime scene. This is TV and movie behaviour done for dramatic effects to sell a scene, it has no place in real Forensic work. If you do not know what something is you think it is important follow the appropriate documentation and collection procedures and submit it to the LAB for analysis. Do not taste anything at the crime scene. This also TV behaviour done for dramatic effect to sell a scene, it has no place in real Forensic work. Do not interview the victim in the place where the attack occurred. This is extremely insensitive and may erode the trust between the victim and the investigator, to say nothing for potentially re-traumatising the victim. Do not leave the crime scene to get something to eat, play lotto, go back to the office, or work on something else, until you are done. Make written notes of everyone in the crime scene and each persons role. That way youll know whom to call later if you need statement. Take written notes of everything in the crime scene that get your attention because nothing is significant to record if it catches ones attention. Do not lead a victim family members from the crime scene through the area where there attack occurred unless there is no other way. Supervisors in charged of the crime scene with reviewing the work of an investigative unit do well to note those issues during performance reviews. They should also measure to ensure that once this kind of mistakes are discovered, they are not related. This can be accomplished by training and by the example set by seasoned investigators. Ignorance of physical evidence and protocol usually starts at the top, with those in charge and finds its way down through the ranks. Savino et al (2005). It is evident that members who attended the crime scene must follow the information guidelines of Savino et al (2005). According to Van Heerden (1982) the scene of crime can clarify, amongst others the following: The position of the deceased body and of various objects in relation to the body, can for example be important indications of the case of death. This means that whether the death is as results of murder, suicide or accident. The direction from which criminal approached the scene of crime and the manner in which the scene was left. The method used to commit the crime. The identity of the victim. The identity of the offender and the nature of his involvement in the crime. In view of the clarification as alluded by VAN HEERDEN (1982) it is important to illustrate how the potential evidence should be recognized, protected, recorded, collected and packaging, labelled or marked, submission for analysis, maintenance of chain of possession of presentation in court. Marais, Rooyen, Pretorius, De Beer, Smith and Mostert (1992) et al provides that the following legal requirements should be critical importance to the investigator. Before physical evidence can be collected it must obviously be recognized. In a murder investigation one usually concentrates on the weapon or object that was used that caused the death. A search is also made here for blood, hair, fibres and tissue in an effort to connect the criminal with the crime scene. Case and common sense should be always prevail with due precaution not to destroy physical evidence that may exist and the guidelines offered in this regard that the scene should be observed in its entirely and notes made of the location of all obvious physical clues, points of entry and exit signs of location (struggle) and the size and share in the area should be restricted and care taken not to destroy or to disturb any evidence during the examination, a suitable search method must be decided upon and during the search of an indoor scene. Special attention should be paid to fragile evidence that may be easily destroyed or contaminated. Places or objects where latent fingerprints may be found and other physical clues to be examined by the experts later need to be seemed. Comprehensive notes should also be made of all stains, spots, liquids and the like which could prove to have evidential value. The scene and surrounding areas must be demarcated off to ensure that valuable physical evidence is not destroyed or damaged by vehicles people or animals.

Internal combustion engine Essay

There is a big debate about the future of the auto industry. The new big topic is electric cars. Ads emphasize how much less pollution these cars put out, but the truth is that many people do not realize the downside of these cars. For instance, did you know that average battery cost for electric cars is between $18,000 and $20,000? Also, these cars produce significant more amounts of sulfur dioxide compared to traditional internal combustion engines, and what about the factories that burn billions of tons of coal everyday to produce electricity to charge these cars? Yes, these cars do produce little carbon dioxide directly, but the main source of pollution comes indirectly from the power plants that power these cars. Electric cars are not the best environmental solution in the long run because they still cause pollution while charging and producing them, there is no safe place to dispose of the batteries, and they are extremely expensive (Hogan). The first major issue with electric cars is that the process of manufacturing and charging these cars produces billions of tons of carbon dioxide emissions. The EPA’s research shows that for an average size car, electricity’s emissions are about three times higher than the emissions of gasoline (Inside Climate Staff). Electric cars do not produce much pollution directly. Instead the pollution is rather created at the source of the energy, power plants. Pollution is caused when manufacturing and producing these cars too. In addition, large amounts of pollution are produced while mining for the metals found in the new types of batteries. All of the mining machines and vehicles are powered from fossil fuels such as coal, gasoline, and diesel fuels. A great amount of energy is lost in the process of transmitting the electricity from the power source to your car. Also, electric cars emit significantly higher amounts of sulfur dioxide into the air compared to internal-combustion engines. Sulfur dioxide is the main component that causes acid rain. Acid rain can cause damage to lakes, streams, forests, car paints, copper, stone, and other building materials. Acid rain soaks into the soil and roots of plants, and causes slowed growth, and loss of leaves or needles. In the Great Smoky Mountains, acid rain has actually killed one-hundred or more of the Frazier Fir and Red Spruce trees (U. S. Environmental Protection Agency). Furthermore, in the Northeastern United States. , such as in the Kesterson Reservoir in the San Joaquin Valley, acid rain caused hundreds of fish populations to vanish from lakes (Davis). Acid rain can contaminate our own drinking water without us even knowing it; it tastes, and looks like regular water! When sulfur dioxide is inhaled, it can cause damage to your heart and lungs, causing disorders such as bronchitis and asthma (National Parks Service). Additionally, battery disposal is a key issue. The average life of this new type of batteries is twenty-five to thirty thousand miles before they will have to be replaced. If electric cars are going to be a thing of the future, there will become an excess of batteries in landfills and other disposal sites. Presently, landfills are not designed to handle the millions of batteries that would need to be disposed of if millions of people were driving electric cars. If these batteries are not properly disposed of, toxic chemicals could leak into the environment. Also, recycling these lithium-ion batteries doesn’t appear to be in the future anywhere soon. The cost of collecting, organizing, and shipping these metals to a recycler far outweighs the value of the scrapped material, so for the time being, most of these metals will be thrown away in landfills and junkyards (Mitchell). Another obstacle with these materials being tossed in landfills is the possibility of corrosive chemicals leaking into streams, rivers, and lakes. The process of refining metals for these batteries also releases pollutants into the environment. Once the refiner gets what metal they need from the ore, they discard the other materials into the nearby ecosystems. When this happens, our drinking water could be contaminated, and it could also damage, or kill the wildlife in that area (Bacher). Lastly, these cars are extremely expensive. Because the batteries only last for about a hundred miles, this means you would have to charge them about three times for every full tank of gas that you would normally buy. Also, with this low charge capacity, it would be virtually impossible to take long trips. You would have to stop frequently to charge the battery, which takes about nine hours to completely charge. This would turn a normal two-hundred mile, four hour drive into at least a thirteen hour trip, assuming that you could find an open charging station! Another reason that these cars are so expensive is that you have to replace the battery in your car about every twenty-five to thirty thousand miles. This is a very costly expense, especially since each new battery is about eighteen to twenty thousand dollars! This is $80,000 for batteries alone if you drive 100,000 miles in your car! The price of charging an electric car is less than what a full tank of gas would cost you, but you end up paying for it in the long run when you have to replace the battery. Electric cars are expensive from the start. The average retail price of most electric cars is in the thirty to forty thousand dollar range. Most middle class individuals cannot afford to pay this price for this new technology, which is why this will not be the best economical solution in the long run. These cost projections assume that both the car and the battery work correctly for the duration of their lives, but what if the battery breaks, or stops working, forcing you to replace it? The technology is new and underdeveloped, which means that there might still be some problems or â€Å"bugs† that the designers haven’t had a chance to fix. That’s $20,000 right there that you would have to pay in addition to the purchase price. That’s close to half of what you originally paid for the car! Since these cars are less, there are fewer mechanics that are qualified to work or operate on them, so the price of operation will be very high. Electric cars were released around 2010, which means there hasn’t even been enough time for a mechanic to get a four-year degree in operating on electric cars (Hogan). The problem with automobile pollution definitely needs to be addressed and solved, but fully-electric cars are not the best solution. They are made out to be better than they actually are, and they definitely have major disadvantages. First of all, they will have to become a lot cheaper for people to be able to afford them. The general public cannot afford to pay $20,000 for a new battery every 30,000 miles. Designers also need to find a way to lengthen the range of these cars. With only a 100 mile range, it is just not practical for most people. In addition, these cars still produce pollution, just not directly. All of the pollution is created indirectly, at coal-burning electricity power plants. Another unaddressed issue is that these cars emit large amounts of sulfur dioxide into the atmosphere, which is what combines with water to become acid rain. Lastly, there is no good place to dispose of batteries. If millions of people are going to be driving these cars, there will be tons of toxic batteries in landfills and disposal sites, which can cause harm to the wildlife, and the surrounding environment. If you accidentally miscalculate the charge left in your car, you will be stuck. Unlike a gas-powered vehicle, you cannot simply fill up your car with a gas can. With electric cars, there is no way to replenish the energy in your car on the side of the road. The fully-electric car was a good idea, but in the long run, it is not the best answer. The automobile companies need to continue to improve internal combustion engines to decrease their carbon dioxide emissions. Works Cited Cultrona, R. L. Pros and Cons of Electric Cars. 1999-2012. 18 March 2012. . Davis, Jay. Marine Bio. 1998-2012. 18 March 2012. . Hogan, Micheal C. The Encyclopedia of Earth. 21 February 2012. 18 March 2012. . Mitchell, Robert L. Computer World. 22 August 2006. 18 March 2012. . National Parks Service. 28 October 2010. 18 March 2012 . Staff, Solve Climate. Inside Climate News. 1 April 2010. 18 March 2012. . U. S. Environmental Protection Agency. 8 June 2007. 18 March 2012. .

Solution of Week6

Problem 1. 7. Suppose that you write a put contract with a strike price of $40 and an expiration date in three months. The current stock price is $41 and the contract is on 100 shares. What have you committed yourself to? How much could you gain or lose? You have sold a put option. You have agreed to buy 100 shares for $40 per share if the party on the other side of the contract chooses to exercise the right to sell for this price. The option will be exercised only when the price of stock is below $40. Suppose, for example, that the option is exercised when the price is $30.You have to buy at $40 shares that are worth $30; you lose $10 per share, or $1,000 in total. If the option is exercised when the price is $20, you lose $20 per share, or $2,000 in total. The worst that can happen is that the price of the stock declines to almost zero during the three-month period. This highly unlikely event would cost you $4,000. In return for the possible future losses, you receive the price of the option from the purchaser. Problem 1. 21. â€Å"Options and futures are zero-sum games. † What do you think is meant by this statement?The statement means that the gain (loss) to the party with the short position is equal to the loss (gain) to the party with the long position. In aggregate, the net gain to all parties is zero. Problem 1. 30 The price of gold is currently $1,000 per ounce. The forward price for delivery in one year is $1,200. An arbitrageur can borrow money at 10% per annum. What should the arbitrageur do? Assume that the cost of storing gold is zero and that gold provides no income. The arbitrageur should borrow money to buy a certain number of ounces of gold today and short forward contracts on the same number of ounces of gold for delivery in one year.This means that gold is purchased for $1000 per ounce and sold for $1200 per ounce. Assuming the cost of borrowed funds is less than 20% per annum this generates a riskless profit. Problem 2. 3. Suppose th at you enter into a short futures contract to sell July silver for $17. 20 per ounce. The size of the contract is 5,000 ounces. The initial margin is $4,000, and the maintenance margin is $3,000. What change in the futures price will lead to a margin call? What happens if you do not meet the margin call? There will be a margin call when $1,000 has been lost from the margin account.This will occur when the price of silver increases by 1,000/5,000 ? $0. 20. The price of silver must therefore rise to $17. 40 per ounce for there to be a margin call. If the margin call is not met, your broker closes out your position. Problem 2. 10. Explain how margins protect investors against the possibility of default. A margin is a sum of money deposited by an investor with his or her broker. It acts as a guarantee that the investor can cover any losses on the futures contract. The balance in the margin account is adjusted daily to reflect gains and losses on the futures contract.If losses are above a certain level, the investor is required to deposit a further margin. This system makes it unlikely that the investor will default. A similar system of margins makes it unlikely that the investor’s broker will default on the contract it has with the clearing house member and unlikely that the clearing house member will default with the clearing house. Problem 2. 11. A trader buys two July futures contracts on frozen orange juice. Each contract is for the delivery of 15,000 pounds. The current futures price is 160 cents per pound, the initial margin is $6,000 per contract, and the maintenance margin is $4,500 per contract.What price change would lead to a margin call? Under what circumstances could $2,000 be withdrawn from the margin account? There is a margin call if more than $1,500 is lost on one contract. This happens if the futures price of frozen orange juice falls by more than 10 cents to below 150 cents per pound. $2,000 can be withdrawn from the margin account if the re is a gain on one contract of $1,000. This will happen if the futures price rises by 6. 67 cents to 166. 67 cents per pound. Problem 2. 21. What do you think would happen if an exchange started trading a contract in which the quality of the underlying asset was incompletely specified?The contract would not be a success. Parties with short positions would hold their contracts until delivery and then deliver the cheapest form of the asset. This might well be viewed by the party with the long position as garbage! Once news of the quality problem became widely known no one would be prepared to buy the contract. This shows that futures contracts are feasible only when there are rigorous standards within an industry for defining the quality of the asset. Many futures contracts have in practice failed because of the problem of defining quality. Problem 2. 6 Trader A enters into futures contracts to buy 1 million euros for 1. 4 million dollars in three months. Trader B enters in a forward contract to do the same thing. The exchange (dollars per euro) declines sharply during the first two months and then increases for the third month to close at 1. 4300. Ignoring daily settlement, what is the total profit of each trader? When the impact of daily settlement is taken into account, which trader does better? The total profit of each trader in dollars is 0. 03? 1,000,000 = 30,000. Trader B’s profit is realized at the end of the three months.Trader A’s profit is realized day-by-day during the three months. Substantial losses are made during the first two months and profits are made during the final month. It is likely that Trader B has done better because Trader A had to finance its losses during the first two months. Problem 2. 29. A company enters into a short futures contract to sell 5,000 bushels of wheat for 450 cents per bushel. The initial margin is $3,000 and the maintenance margin is $2,000. What price change would lead to a margin call? Under what c ircumstances could $1,500 be withdrawn from the margin account?There is a margin call if $1000 is lost on the contract. This will happen if the price of wheat futures rises by 20 cents from 450 cents to 470 cents per bushel. $1500 can be withdrawn if the futures price falls by 30 cents to 420 cents per bushel. Problem 2. 30. Suppose that there are no storage costs for crude oil and the interest rate for borrowing or lending is 5% per annum. How could you make money on May 26, 2010 by trading July 2010 and December 2010 contracts on crude oil? Use Table 2. 2. The July 2010 settlement price for oil is $71. 51 per barrel. The December 2010 settlement price for oil is $75. 3 per barrel. You could go long one July 2010 oil contract and short one December 2010 contract. In July 2010 you take delivery of the oil borrowing $71. 51 per barrel at 5% to meet cash outflows. The interest accumulated in five months is about 71. 51? 0. 05? 5/12 or $1. 49. In December the oil is sold for $75. 23 pe r barrel which is more than the amount that has to be repaid on the loan. The strategy therefore leads to a profit. Note that this profit is independent of the actual price of oil in June 2010 or December 2010. It will be slightly affected by the daily settlement procedures. Problem 3. 1.Under what circumstances are (a) a short hedge and (b) a long hedge appropriate? A short hedge is appropriate when a company owns an asset and expects to sell that asset in the future. It can also be used when the company does not currently own the asset but expects to do so at some time in the future. A long hedge is appropriate when a company knows it will have to purchase an asset in the future. It can also be used to offset the risk from an existing short position. Problem 3. 3. Explain what is meant by a perfect hedge. Does a perfect hedge always lead to a better outcome than an imperfect hedge?Explain your answer. A perfect hedge is one that completely eliminates the hedger’s risk. A pe rfect hedge does not always lead to a better outcome than an imperfect hedge. It just leads to a more certain outcome. Consider a company that hedges its exposure to the price of an asset. Suppose the asset’s price movements prove to be favorable to the company. A perfect hedge totally neutralizes the company’s gain from these favorable price movements. An imperfect hedge, which only partially neutralizes the gains, might well give a better outcome. Problem 3. 5.Give three reasons why the treasurer of a company might not hedge the company’s exposure to a particular risk. Explain your answer. (a) If the company’s competitors are not hedging, the treasurer might feel that the company will experience less risk if it does not hedge. (See Table 3. 1. ) (b) The shareholders might not want the company to hedge because the risks are hedged within their portfolios. (c) If there is a loss on the hedge and a gain from the company’s exposure to the underlying asset, the treasurer might feel that he or she will have difficulty justifying the hedging to other executives within the organization.Problem 3. 17. A corn farmer argues â€Å"I do not use futures contracts for hedging. My real risk is not the price of corn. It is that my whole crop gets wiped out by the weather. †Discuss this viewpoint. Should the farmer estimate his or her expected production of corn and hedge to try to lock in a price for expected production? If weather creates a significant uncertainty about the volume of corn that will be harvested, the farmer should not enter into short forward contracts to hedge the price risk on his or her expected production. The reason is as follows.Suppose that the weather is bad and the farmer’s production is lower than expected. Other farmers are likely to have been affected similarly. Corn production overall will be low and as a consequence the price of corn will be relatively high. The farmer’s problems arising f rom the bad harvest will be made worse by losses on the short futures position. This problem emphasizes the importance of looking at the big picture when hedging. The farmer is correct to question whether hedging price risk while ignoring other risks is a good strategy.

Was The Second World War - 1775 Words

The Second World War was something that mankind would not expect to see in regards to such devastation the war would bring compared to the First World War and the new political ideas that would arise during the period of 1914-1945 such as fascism, communism and ‘social democracy’. It was such a horrific conflict seen in human history in terms of the number of deaths, both civilian and military deaths combined. With battles raging across the globe particularly in Europe, North Africa and to the Far East in Asia, people feared for their lives and didn’t know what darkness this terrible war would bring to them especially for the Jewish people living in Europe. The war was divided into two sides. One being the Axis powers which included†¦show more content†¦The lead up to the Second World War happened in 1936 when Adolf Hitler, Fà ¼hrer to the German people, moved his troops into the demilitarised zone in the Rhineland, West of Germany. Once he controlled the region, his next plan would be to annex Austria in 1938 and later in the same year, Sudetenland in Czechoslovakia consisting of German minorities was also annexed by the Germans. Britain and France accepted the ‘Anschluss’ of Austria as it was a German speaking country and the Sudetenland in Czechoslovakia was also resolved by France and Britain at the Munich Agreement. In 1939, Hitler broke the Munich Agreement with France and Britain leading to him occupying most of Czechoslovakia. The last roll of the dice occurred when Hitler signed a non-aggression pact with the Soviet Union, meaning that he could invade Poland in which he had no hesitation in doing so. As a result, these actions triggered the beginning of the Second World War. So why did Hitler believe that he was doing the right thing? That his actions were for the greater good? Why did he believe that Germany deserved more? What was his end goal for Germany if he succeeded? All these questions have many different answers and beliefs from historians on what they think about Adolf