The Importance of Learning to Play a Musical Instrument

Secondly, it helps build your team skills and your social skills. Finally, music helps broaden your knowledge of cultures. These reasons are just the tip of the iceberg. Music is the glue which helps connect us all. Firstly, Imagine a wonderful combination of notes and sounds, calming people down. It helps take away everyone's troubles. A combination of notes that relaxes you and allows you to float away with the sounds. A combination of notes that everyone can enjoy. Melodic music is like a calming stream and is a great stress relief.Many people enjoy coming home and playing on their instrument and unwinding after a long and stressful day. Music also helps you learn, not only patterns and rhythms, but math's and other school subjects as well. It has been proven that students who participate in a music program score higher on tests and do better in school. It doesn't matter if the students are in primary school, middle school, or high school, as the results are the same throughout al l years of schooling. According to a study done tit year g's, some students played the Plano and keyboard, while other students did not.The students who participated In playing the Plano and keyboard scored 27% higher In math tests than the students who TLD participate In learning the Instrument. Another study with high school students who took the Stats showed that students with experience in music performance and music appreciation scored higher, by up to 63 points, than students with no arts participation. There are multiple studies that prove time and time again that music programs are very valuable and beneficial for students. Secondly, music helps build your team skills. Team skills are a very important in life.Whether Its playing a sport, or having to do a Joint project at school, everyone, at some stage will have to be part of a team. Playing an Instrument requires you to work with others, so your music sounds good. In a band or orchestra setting, you must learn how to coope rate with the people around you. Also, In order for a group to make beautiful music, each player and section must learn how to listen to each other musical instrument leads to the potential chance of creating or Joining a group or and. Performing and rehearsing together may lead to you becoming friends.The world of music opens doors that usually wouldn't be open to you. It provides the opportunity to go to places and meet people that you may not have had the chance to meet before. It's very common for people to gain lifelong friendships through musical activities. Finally, music helps you understand other cultures. Often music reflects the environment and times of its creation. Therefore, you learn a variety of music types such as classical traditions, folk music, medieval, and other genres. Music itself is history, and each piece usually has its own background and storyline that can further your appreciation of other cultures.Music can include a range of different instruments, from all over the world. When you are listening to music from another country, you may notice some things that seem odd. Whether it's a different language being spoken or sung, or an instrument like tapping sticks that you may have never heard before, every song has a part of its country included into it. After all, music makes the world go round. In conclusion, today's world is one of rapid growth and development in all areas, be it technology, population, or any number of things.A well-rounded education is essential for equipping students with all the skills necessary to fare well in modern society. A strong emphasis on the basic core areas of reading, writing, math, and science are a must, but music should be as well. This way more students will learn to love music and will carry on the tradition of making music for the world hear. Not only can music better prepare students for successes both academically and referentially, but it can also become the base for a memorable, happy, and involved social life.The future of this planet lies in the hands of the students; are we going to poorly equip them by denying some of them the opportunity to experience and learn from music or are we going to prepare them for success and let them play musical instruments? Whether you are poor or rich, young or old, smart or dumb, music unites us all. If you are not playing an instrument, I suggest you go and start learning one. Are we really going to deny that playing a musical instrument is important?

Challenges of Higher Education Essay

The world of higher education is far removed from life in high school. Whereas in elementary and secondary education, individuals are being taught the foundations, college life is ultimately about training for a life-long profession or career. Higher education is a combination of fundamental concepts learned across professions and their practical use for specific careers. In college, individuals find their niche, that one true passion that will define and give meaning to our lives. Of all the choices we make in life, one of the most important and most difficult is the choice of what course to take in college. This choice more or less determines the course of our adult lives and whether we become successful or not. For some, the choice comes easy because they already know what they want to be. There are others on the other hand who have spent some years in college, shifting from one course to another, trying to find what fits them the most. In any case, regardless of what course one takes in college, one should have a sound grounding in general education because this will serve as the foundations for the acquisition of more specialized, employment-based learning. (Gless, 1992) Once a choice of course and school has been made, the main challenge now is how to get through the rigors of higher education as well as the addressing the necessary activities of daily living. Indeed for incoming college freshmen, it is an entirely new world, profuse with challenges. After having spent 18 years in the care and protection of our parents, its time to leave the nest and learn to fend for ourselves. Chores can be particularly annoying because they have to be done endlessly. The challenge is how to budget not just money but other resources such as food and clothing. After having depended on our parents to do things for us, it can be difficult adjustment to have to constantly worry about washing clothes and cleaning the room. However, such tasks need to be done and they are actually part of the more important lessons that we must learn. Socialization if one of most crucial aspects of college life. It is important to be able to get along with roommates and classmates because they will form the support structure that one needs in order to make it through the daily grinds of college. Sometimes it can get difficult, juggling school responsibilities with other concerns, but if you have good friends to support you, then the burden is somewhat lessened. For college freshmen it can be difficult at first to forge new friendships after high school, but once we make the effort to reach out, then we will realize that college is better when spent with people you can trust and people you love and respect. In college it is important to have social skills because more than what we learn inside the classroom, it is the ability to make genuine connections that determines the quality of life that we will have. All the academic demands of higher education such as assignment, projects, reports, and activities can really be overwhelming. The best way to cope with this is through time management. We must learn to prioritize and set a schedule that we will adhere to when faced with several duties at the same time. The not-so-urgent things can be set aside to be attended to on less-stressful days. In the end, higher education is more than the things that we learn inside the classroom. Our characters are shaped by how we react to the challenges that we face both inside and outside the classroom. The ability to become self-determined and independent; that is what higher learning is all about. References: Gless, Darryl J. The Politics of Liberal Education Duke University Press. 1992.

Roman Essay Example | Topics and Well Written Essays - 750 words

Roman - Essay Example r for the blue faction is thought to have started racing at the age of 13 years or even younger (4) bringing in the question of whether the game was a reserve of adults or was open to everybody. This game was so well organized to an extent of associating rules of the game with religion. †sometimes the chariots would be called back to the starting line and the race would be started over, this may have been in response to the mistakes in religious rituals.’’(Footnotes (1)). Even though there is no specific reason for each charioteer being called back, the reasons are summed up to religious factors or foul play a test for which all of them failed. This alone shows earlier religious life of the charioteers as well as all the participants. Apart from unavailable family attachments of the gamers, it is also evident as a common factor among all the charioteers that their lives ended earlier than normal for those whose details are documented about the year of death. This plus other factors points to the question of whether the lives of the charioteers was had a commonality. From the documented facts from all the sources, the motivation seemed not only to be the prices but also the national recognition. Some even went ahead to build and inscribe monuments by themselves while still alive. Publius Aelius Gutta who is also known to have won a sixteen chariot race four from each color and with a documented father built his own monument while still alive (10). His life just like the rest of the charioteers was riddled with races with many victories, recalls, first runner-up and third runner-up positions. For others who did not build their monuments while still alive, had them built by other people. Their characters, poems as well as victories were written on their tomb and an altar built on their names for any passer-by to read and get to know them (6). A good example is that of Fuscus whose competition was praised even after his death. It is not indicated whether he

MANAGING HUMAN RESOURCE IN AN ORGANIZATION Essay

MANAGING HUMAN RESOURCE IN AN ORGANIZATION - Essay Example The former is a process of sharing information and understanding between two people or a small group: the latter makes use of systems to share information and understanding with large number of people. Both type of communication occur at all level within an organization, with people outside the organization, and between organizations. Organization learning focuses on the way people make sense of their experiences at work. The aim of organizing is to enable people to relate other and to work together for a common purpose. The organized group of people in a collective sense is known as organization. (Yvonne 129) "Organization is the process of identifying and grouping work to be performed, defining and delegating responsibility relationships for the purpose of enabling people to work more effectively together in accomplishing objectives." (Yvonne 149) Organizational learning is about the effective processing, interpretation of, and response to, information both inside and outside the organization (Ahuja, 2005, p.880). Organization learning helps in bringing administrative efficiency and inculcate within element of success through several ways, which are outlined as follows: 1. Specialization. 1. Specialization. In the process of organizing, care is taken to see the activities are divided and subdivided into compact and convenient jobs. They are also to be grouped on the basis of similarity. Organizing thus promotes specialization, speedy performance of tasks and efficiency. 2. Well-defined jobs. The jobs of manager and non-managers are clearly defined and differentiated. This helps the process of looking for and selecting the employees and fitting the right person to the right job. 3. Clarifies authority and power. A clear-cut definition of authority enjoyed by each manager and his jurisdiction of activity minimizes conflict and confusion about the respective power and privileges of managers. 4. Avoid duplication of work. In the process of organizing specific jobs are assigned too individuals and work group. Thus organizing helps in avoiding duplication of work and overlapping in responsibilities among various Employees and work units. 5. Basis of coordination. The organization structure serves as a mechanism for coordination and unification of efforts of people. Higher-level managers exercising their authority over interconnected activities of lower level managers bring about harmony at work. 6. Source of support and security. Organizational structure is a source of support, security and satisfaction to managers and employees inn performing their assigned tasks. It recognizes the relative status levels of members enjoy a definite status and position in the organization. 7. Adaptation. Organization structure facilitates adjustment to changes in workload caused by changing conditions in the external environment related to technology, markets, products and resources. MANAGING HUMAN RESOURCE IN AN ORGANIZATION Theories of learning be integrated into the design and delivery of training courses The term Human Resource Management, as opposed to 'personnel', signifies the broader role the management of people now plays in

Face-Vase Illusion An Explanation Essay Example | Topics and Well Written Essays - 250 words

Face-Vase Illusion An Explanation - Essay Example Well, what do they do? Usually they draw a house and some trees in the foreground, with a field, sky and some birds flying, in the background. Ever wondered why children do not draw the picture of only a house, or only a tree, or a field or perhaps the sky only? Why do they choose to draw some things constituting the foreground and some things constituting the background in a picture? It would not be wrong to say that to a great extent, children do not do this deliberately, but in a way are naturally responding to the way human brain likes to perceive things. It is a psychologically valid fact that human brain has a natural tendency to differentiate between a foreground and a background, while perceiving things. Even when a flat picture is placed before the eyes, the human brain, responding to this natural tendency, tries to develop an idea of depth by establishing or identifying some things as foreground, while taking the other things to be constituting the background in that pictur e. This is the way it is. To explain as to why the brain does this may require a complex explanation. Yet, to explain the illusion under consideration, it will be appropriate to agree to the fact that human brain always sees things in terms of a foreground and a background.

Case study Essay Example | Topics and Well Written Essays - 1000 words - 7

Case study - Essay Example The following study will analyze and deduce the feasibility of the company and its requirement of $1 million. Joe’s Enterprises for Fast Food is a premium brand in the market of fast foods. It has gained immense popularity in the downtown Chicago, even though it does not have many selling points or carts at present. The USP of Joe’s is to provide healthy, natural and fresh food at competitive prices. It has grown impressively from a single cart company to a more than a million dollar enterprise. The company is primarily targeting the office workers with competitively priced fast food, which are high in nutritional value and are fresh and hygienic. The company wants to As mentioned the company is looking at a micro but profitable market. But again, it is a risky proposition to depend on a single market, even though it is competitively priced and has gained popularity. The present market may be the â€Å"star† for the company, but it still requires â€Å"cash cows† to boost its revenue and operating profit. Joe’s Enterprises should look beyond its present market and should implement plans to venture into new markets with innovative distribution system. The company can foray into restaurants and take away outlets to have a large bas of customers. And with its popularity will definitely reap returns in the long run. The current ratio is a very popular ratio and measures the ability of the firm to manage current liabilities. The higher the current ration the higher the short-term solvency. The current ratio of the firm is not high and hence it is looking for the loan for expansion. This ratio measures how efficiently assets are employed. This ratio is also akin to the output-capital ratio used in financial analysis. At the current rate we can assume that there is a proper utilization of assets and this may also help

Wal-Mart Essay Example | Topics and Well Written Essays - 1750 words

Wal-Mart - Essay Example This requires a benefit and wage package that accounts for the basic expenses and area-specific cost of living involved in supporting a family comfortably. By definition of their regions specific living wage standards are known to vary as compared to minimum wages offered by the federals. This is because the minimum wages do not begin to meet the family or the working people needs anywhere in the country; and on the contrary, it puts a child and parent below the poverty federal lines. This issue can effectively be addressed by the implementation of a more reasonable minimum and living wage at a local level that will not affect the family’s way of life. Our living wage standard like in many other municipal standards across the country combines some benefits with the wage standard to cater for employees and families that need it the most. The City of Washington, D.C government recently wanted to introduce a legislation that would ensure that large corporations running business i n the city would pay a "living wage" of $12.50 per hour to all employees hired in the city. Wal-Mart, one of the largest business corporations in the whole world responded by threatening to close stores in the city, and not to open planned stores because of the legislation. Such policies are meant to protect the public from exploitation by business companies and to ensure that employees are well remunerated. Is the living wage policy good? The question whether the policy is a good one can be argued from both ways, but on this paper, the argument will lean more on the positive aspects of the policy. This policy is good and its implementation would be beneficial for the employees, future employees, the families of the employees and ultimately the city of Washington, D.C. One advantage that can be achieved through its implementation is that the minimum income of the citizens would rise considerably. This will help in improving the lives of the employees and enable them meet their basic and secondary needs. In addition, it is also beneficial to women because over time they have been earning lower wages than the men have. The wage policy will ensure than women and men earn similar salaries that are based on their skills and work rather than gender. In this aspect, the policy would benefit most families of the employees. Through this, it can be regarded as an added benefit to the recovery of the economy as a whole from the family level. Others still view its implementation as an indirect form of justice for those affected by the economy crisis since within its implementation, there are dockets that would allow for effective compensations and responsibility mainly by the employers and managements and this would in effect protect the workers from any form of abuse. The policy is also beneficial to companies such as Wal-Mart because an increased wage will ensure that the employees are motivated to perform highly and yield more and high quality productivity. Due to thes e facts, it is clear that the policy is a good one. The people who support the implementation of the living wage policy state that all individuals should be provided with direct means of affording living costs in-terms of shelter, food, transport and usual basic needs, fiscal conservatives. On the other hand, those who do not support it refuse to uphold the idea of a minimum wage since according to them it makes it hard to determine the regional scale cost of labor appropriately. They adequately argue that the minimum wage increases the services and goods prices while also affecting disproportionally the minorities. Even with this argument and counter argument, it is still unfortunate that a major aspect is still not answered by this debate

Film Review Assignment Essay Example | Topics and Well Written Essays - 500 words

Film Review Assignment - Essay Example However, the real live Ryan wandered into an allied command center a few days after the invasion. He was not the object of a search party, and did not directly cause the conflict of man vs. mission portrayed by Tom Hanks as Captain . Rather, his story became the backdrop to create the images which were built for the silver screen. His BIs stHis His sotry His story 5h5s 1f23a-1f23sa1f23sa1f23-sa1f23-sa1f23-sa1f23-sastory allowed director Steven Spielberg to tell a much larger story of the bravery and humanity of the men who fought and died in order to establish the D-Day beachhead, and begin the ending of a War which was consuming the world. This cast for this film was lead by Tom Hanks, and with few cameo appearances by other strong leads, the rest of the cast was filled by relatively unknown actors. This approach to this film is an accurate reflection of the war itself, with a few strong men leading squads of unknown, nameless GI's across the European continent. The film covered the first few days of the D-Day landing and march inland, and is masterfully told.

Natural resources Research Paper Example | Topics and Well Written Essays - 1250 words

Natural resources - Research Paper Example So, there are several industries that are considered as natural resource industries such as mining, fishing, forestry and many others but agriculture is barred from this list. The name ‘natural resource’ was suggested, by E.F. Schumacher in the book published in the era of 1970s called as Small is Beautiful (Longstreth, 2011, p.4). Categorization of Natural Resources Natural resources are categorized into renewable and the non-renewable ones. Renewable resources are the ones, which can replenish themselves, provided that they are not over-harvested and are utilized wisely (Perman, 1999, p.9). The examples include fishes, forests, trees and other things. Once, these renewable resources are utilized at a speed which is greater than their normal tempo of replacement, the entire reserves will decrease in quantity and ultimately be depleted. The speed of utilization of a natural resource should be equal to the replacement speed and the quantity of reserve stock of a particula r natural resource. Inorganic renewable natural resources comprise of soil and water. Flow renewable resources can be harmonized with renewable resources but the difference is that they do not require renewal like the renewable ones. Renewable power sources that are incorporated in the list of Flow renewable resources are of sun: solar, of earth: geothermal, biomass, landfill gas, of sea: tides and wind. Resources can be further categorized on the grounds of their source of origin: biotic ones and the abiotic ones (Perman, 1999, p.9). Biotic resources result from the living beings but the abiotic resources are originated from the non-living components of the earth such as land, air and water. Other resources such as those related with minerals and power are also in the abiotic category, though some of them are derivative of the natural resources. Non-renewable resources A natural resource, which is present in rigid amounts and cannot exist, grow or renew itself at a speed as it is u tilized, is a non-renewable resource. Few of the non-renewable resources can become renewable but they require very long time duration to come into this category such as the fossil fuels which need millions of years to build up in moderate amount but they cannot be called as exactly renewable. Natural capital Natural resources can become natural capital when they are used up as a commodity that can help to increase the infrastructural capital developments (Perman, 1999, p.9). These can comprise of loam, timber wood, various oils, different minerals and some other sort of products that are digged from the earth. Both the mining of the essential resource and then refining them to an unpolluted, straightly functional form, for example, some metals and the refined oils, are usually designated as the natural resource capitals, although the latter may perhaps not essentially happen next to the former one. A country’s natural resource, sometimes, verify its capital and the repute in the world economic structure, via depicting the political affect in it. Urbanized states in the world are actually not reliant on natural resources for riches, because of their increased dependence on infrastructural capital for fabrication of new products. Though, some view this resource nuisance which might harm the future vistas of a nationalized country because of the time that is wasted in offering bribes for other similar sort of economically non-productive activities that do not lead

Was World War Two a Good War Essay Example | Topics and Well Written Essays - 1000 words

Was World War Two a Good War - Essay Example This is evident with the commencement of WWII, which historically despite cited as a â€Å"good war† in terms of ending repressive regimes, is far from it due to then its associated mass extermination of human life and crippling of allies’ economies. Contrary to numerous scholars’ works not citing detrimental effects of the war, it yielded to immense loss of lives to both civilians and those who engaged autocratic or â€Å"evil forces† as commonly preferred. As Mooney states, â€Å"roughly 6 million Jews and approximately 4 million others were murdered in the â€Å"Holocaust† (Mooney, 110).† Hence, revealing the utter retaliations of autocratic forces after realizing their victims of the day had support from external world, which was ready for engagements. However, numerous history scholars despite noticing this utter humiliation tend to incline towards adopting political perspective while ignoring scars the war left in people’s hearts . Most of the retaliations made by the then â€Å"evil forces/powers† of the day encompassed unleashing terror on those who could not defend themselves. The core reason was to irritate other global blocs who through their actions of inducing peace seemed to defend victims despite most of them being not their citizens. However, these efforts by sympathizing blocs instead of bringing relieve to the suffering continued to worsen while trying to eliminate totalitarian regimes. According to Mooney’s sentiments, â€Å"100,000 more eventually died from burns and radiation sickness†¦ On 9 August a second atomic bomb was dropped on Nagasaki, killing 80,000 more Japanese (Mooney, 119).† This was more than what opposing peaceful blocs together with their allies of the then campaigned while in the quest of inducing peace and saving life. It is irrefutable WWII despite attributed with overthrowing and containing the then tyrannical powers, it yielded to the destruction and stagnation of numerous global economies. This is in terms of numerous resources that went into supporting the military forces against their autocratic enemies, which was not an easy task. According to Ernie, â€Å"For a mile out from the beach there were scores of tanks and trucks and boats that you could no longer see, for they were at the bottom of the water - swamped by overloading, or hit by shells, or sunk by mines (Ernie, â€Å"The Horrible Waste of War†).† This was one of the numerous destructions evidenced on both sides as each pioneering state solicited monetary and weaponry support from respective allies. Hence, rendering the war as the most expensive the world has ever had, which somehow crippled entire global economy. It also led to the disruption of family structure whose effect is still evident to date. The female gender ended up assuming male’s occupations where they worked in industries to support the then ongoing combat. During then, almost all men comprising the energetic gap ganged together compelled by their respective states to wage war against tyrannical powers. This is evident in Sauer’s confession citing, â€Å"I worked seven days a week† (Sauer, â€Å"The War Changed My Life Completely†). Hence, revealing utter situation she had to undergo due to the lack of labor force in industrial firms where

A Separate Peace By John Knowles Essay Example for Free

A Separate Peace By John Knowles Essay In A Separate Peace by John Knowles, it is evident that Finny and Leper undergo the most traumatic experiences from the Class of 1943. Through these experiences, both characters lose much of their innocence and naivety. Finny, upon learning of the existence of the war and Genes moment of hatred, learns to accept realities and perceive the world as it is, not as the perfect childlike image he wants it to be. However, when Leper enlists in the army, he quickly begins to have hallucinations because the reality is too much for him to handle. Nevertheless, he eventually overcomes his insanity and seems to be fairly mentally stable by the end of the novel. Although Finny and Lepers traumas are the source of a major loss of purity and childhood, they are also the cause of post-tramautic growth and a necessary increase in maturity. Finny goes through several perception-changing events during the course of the novel, but the event that cements his departure from childhood is the acceptance that Gene deliberately shook Finny off the tree. This shock was caused by his own inability to accept the truth in the first place. Despite the ease of denying unwanted information and living in a dream world, it is mentally unhealthy for Finny because of the shock caused upon finally believing the truth. Immediately after Genes confession of jouncing the limb, Gene remarks that Finny looked older than I had ever seen him (62). Finny, however, does not yet comprehend feelings of jealousy and betrayal, as he has hardly had any himself and finds it difficult to think of anothers point of view; the information registers on his face, but before he has time to process it and mature he rejects the idea entirely. Gene states it occurred to me that this could be an even deeper injury than what I had done before (62). The reality of adult themes such as jealousy, betrayal, and hate is what hurts Finny most, not the crippling injury itself. Another reality that takes away from Finnys nescience is the war (when he finally believes in its existence). The most dramatic and stunning war in recent history, World War II had a huge impact on millions of lives worldwide. Yet Phineas refused to believe in the war, and instead created a fantasy in which he was the one of the only people who knew that it was all a hoax. When Gene, in disbelief from Finnys opinion, questions Finny on why he is the only person who is aware of the stuffed shirts' (107) plot to  suppress happiness, Finny emotionally bursts out it is because he has suffered (108). Apparently, Finny has visualized this hoax to shield himself from the disadvantages of his disability, such as enlisting. Nevertheless, Finny quickly accepts the truth of the war after seeing Leper in a mentally disturbed state of mind. The image of what the war did to someone who used to be close to him shook him out of his dream world and spurred his emotional growth. When Finny, at the end of the novel, learned to accept the realities and avoid using denial to cope with shock, he lost the last of his childhood innocence. Leper is easily one of the most naive and innocent characters during the Summer Session. His good-naturedness and passive fascination with nature is such an ideal image of innocence that it seems almost depressing to see him in the traumatized state of mind after enlisting. Even while everyone is volunteering to shovel snow to aid the war effort and discussing their plans for which division to enlist in, Leper is only concerned with the beauty of nature and skis to a beaver dam to watch the beavers develop and build their dam. He is moved to join the army not for vain images of glory and glamor like the other students, but rather for the beauty of skiing down a mountain. Obviously, he soon finds that the army is too much for him, and while absent from the ongoings at Devon he loses every shred of innocence and guilelessness that previously surrounded his character. When Gene meets him, his psyche is obviously changed to such a point that he has hallucinations and other symptoms of sc hizophrenia, caused by his rapid ascension into adult matters. He does not accept reality nearly as well as Finny does because his character was far more innocuous at the start of the novel. So many of his images of the world are shattered that it can be seen that he feels like he has little familiarity to hold onto. He grasps to every gleam of regularity and unchangeable function, which explains his preference for spending time in the dining room of his house simply because he knows that three daily meals will be served there on a consistent basis. However, his time at home seems to have given him time to cope with the images of adulthood. Upon his return to Devon, he seems mentally well and a much more decisive authority than ever before. He accurately and forcefully convicts Gene of jouncing the limb in his new, confident voice (166).  Gene describes Leper during the trial as all energy (165). Evidently, Leper has dealt with the loss of innocence caused by his abrupt initiation into adulthood and has become a more confident, self-assured pe rson in spite of it. Knowles makes it apparent throughout A Separate Peace that while the loss of innocence may often seem to be a sad or tragic event, it is necessary to pave the way for maturation and a transition into adulthood. Had Finny never accepted the truth of the tragedy that occurred to him, he would have never matured beyond his carefree summer days. And had Leper kept living in his own world of vivid imaginations, he would have never developed into the sanguine individual he becomes at the end of the novel. While the loss of innocence is partly a lugubrious experience, John Knowles portrays it as a necessity a part of maturation and growth that leads to adulthood and self-fulfillment.

The Abolition Of Prostitution In Malaysia

The Abolition Of Prostitution In Malaysia Last year I spent a lot of time working for the charity entitled The Hope House. This charitable organizations objective is to educate the children that are born into the brothels. The organization intends to build a place where these children can be provided with training in several artistic areas such as: photography, dance, painting etc- which I intend to teach at when I achieve my degree. There is a documentary on this subject matter Born Into Brothels, directed by Zana Briski, Ross Kauffman , which brutally displays what these children endure throughout their childhood. One of the little boys featured in the documentary now attends NYU for photography, which is unheard of by the people in the brothels of Cambodia; Avijit is now one of my closest friends. The involvement I have in this organization sparked my interest to look further into the brothels and examine the different theories of how to essentially stop the red light district. A brothel can be defined as a house where men visit prostitutes ( OED 2. a). A brothel is an institution that enforces the trafficking of women by providing a place where the prostitution can occur. A brothel itself is the actual house where the prostitutes, in most cases, live, and where the prostitutes take their customers(OED 2. a). Throughout my paper I will thoroughly examine the different areas of social, political and economic factors contributing to the continuation and/or abolition of the red light district and the brothels. The economic factors I will discuss in my paper is based on money, and economic stability, the political factors which include the laws and regulations implemented that influence the sex trade, and the social factors which is the Monaghan 3 demand for prostitution- or the consumers of the sex trade. I will thoroughly depict how the economic factors are essentially the ultimate cause of the brothel industry of these three important key factors, and that if the women in prostitution are given economic stability, the brothels would be essentially eliminated as well. It is hard to examine only one particular country in relation to the sex trade because it is a global phenomenon. The sex industry as a whole needs to be considered and analyzed if an individual is trying to decipher the underlying contributor to the red light district, but in the sole purpose of examination and to take a closer look at the problems imbedded in the vicious cycle of prostitution, my paper will focus solely on the brothels of Malaysia. My paper will examine factors that enforce prostitution and therefore will identify the ultimate cause, which in turn will illustrate how to eliminate the sex trade. There are several reasons as to why women enter the prostitution industry, or the brothels. These reasons can range from almost anything and in turn can force a women to result in selling their bodies for money, economic stability. The economic reasons I am referring to in my paper consist of anything concerning money and poverty, social reasons consist of the demand and want for prostitution from the consumers, and the political reasons I am referring to is anything concerning laws for or against prostitution; as discussed above. Throughout this paper it is apparent that the economic factors are the underlying cause of the red light district and will be exploited throughout the history of Malaysia. Monaghan 4 When a woman has sex for money it is dangerous to an individuals health and considered a criminal offense in most countries (100 Countries and Their Prostitution Policies. 2010). It is dangerous especially because of STI`s and long term diseases that not only the women have to live with but the customers themselves. According to Ramachandran and Ngeow (2010) more than three quarters of women, associated with prostitution in brothels, suffer from some type of sexually transmited infection. The only reason a woman would exploit themselves and risk their health is because of their need to survive and provide for themselves (Ngeow 2010). Therefore if there were available jobs that would ensure security, they would certainly never voluntarily enter the sex trade. If these women were economically stable , then they would never enter this health threatening trade, which is apparent in the remainder of my paper. I will first examine ideal causes and factors of prostitution by scholars, and t hen examine prostitution more closely by exploiting the sex trade in Malaysia. Malaysia is a third world country and this will further prove my point that women do this for the sole purpose of money and survival, because third world countries are not economically stable. The economic factors that play an important role, primarily in the prostitution industry, is the lack of support and necessities to survive. An individual needs a certain amount of income to provide for their family and when they do not have this income, a woman can sometimes result in surrendering themselves to prostitution. In the article Sexual Trafficking in Women: International Political Economy and the Politics of Sex written by the scholar Andrea Bertone, the idea of economic factors, issues with money Monaghan 5 and debt, being the cause of prostitution is brought to attention. She explores the reasons why women enter the industry, which mainly are caused by lack of money and support for families, as stated above, and how this forces them into the sex trade. Aside from being physically forced into the industry, because some families do force their daughters into it, the only reason and girl or woman, according to Andrea Bertone, would willingly join the industry would be because of survival and economic stability (Bertone 2010). Brothel owners use this against these vulnerable women and tell them that there is a lot of money to be made overseas or in the sex trade, Bertone also states, and they therefore turn away from their families, and move over seas. In most cases, their families never hear from them again. When the brothel owners state that there is a lot of money to be made over seas, and these vulnerable woman leave their families, this illustrates how desperate these women are for ec onomic stability. They will travel many times in inhumane conditions and in unsafe vessels.(Bertone 2010) which shows how determined they are to find some type of economic stability. Bertone also states that one of the main reasons women choose, or are persuaded by others, to leave their country of origin and migrate is economic (2010). This quotation clearly states that the economic factors are the reason in which women travel across the world for prostitution. These women want economic stability and will do almost anything to achieve that. Bertone also states that the women that are vulnerable and targeted in the prostitution industry specifically, the supply sidethe women of the third world, the poor states (2010). This also further suggests that the only reason a women enters the Monaghan 6 sex trade is for survival and for some type of security. The poor states and the women with less money that need to resort to the sex trade are the women that enter it. The third world countries do not have enough resources or money to support these women (International labour office. 1998), so they therefore resort to prostitution. Therefore if poverty was eliminated, in places such as Malaysia, the sex trade would go down sufficiently and would slowly head towards abolition. Malaysia is a good example of how to eliminate prostitution and the brothels as it is an unsafe and very risky trade. The political aspect of the sex trade, the laws and regulations of prostitution, is explored throughout the article Female Sex Work as Deviance by Ronald Weitzer and in Malaysia specifically the article 100 Countries and Their Prostitution Policies. In this article 100 Countries and Their Prostitution Policies it illustrates the definite laws that Malaysia has against and for prostitution. There is some legalization of prostitution, in Malaysia, but the brothels and pimps are illegal. Interestingly enough the sex trade has gone up in Malaysia the past couple years. Even though brothels are illegal there, there are still many regulated institutions. This contradicts with many North Americans beliefs as the majority of Americans see both prostitution and pornography as immoral; three-quarters believe that we need stricter laws to control pornography; and a substantial number want prostitution to remain illegal (Weitzer 2007). This North American Theory is proved to be false in the case of Malaysia because as the policies and laws against prostitution increase, the more prostitution occurs. Throughout Malaysias history, it is evident that these North American theories do not help the abolition of the Monaghan 7 sex trade. As illustrated in the article 100 Countries and Their Prostitution Policies by implementing laws and regulations it most definitely will not help lower the prostitution rates. In the article Female Sex Work as Deviance Weitzer illustrates also how the more policies that are implemented the more sex work there is, Over the past three decades some cities and suburbs have indeed banned or restricted massage parlors, strip clubs, and X-rated video stores (2007). In European and poorer countries, such as Malaysia, the prostitution has had an up rise over the past couple of years (Weitzer 2007). This also illustrates the apparent fact that when policies and regulation on the sex trade are implemented, it just makes prostitution more desirable and valuable. Therefore by implementing policies and influencing the abolition of prostitution through government laws, it does more harm then good, this is clearly not the way in eliminating prostitution and brothel houses. The social factors, that I am focusing on, of the sex industry are the consumers desires. Male desires for sexual wants and needs are not hidden in this trade and can also be considered as a driving factor of prostitution. This is explored throughout Kamala Kempadoo`s Prostitution and Sex Work Studies and The Sex sector: The economic and Social bases of prostitution in Southeast Asia. Prostitution, it was claimed, would never completely disappear, since the vicious instincts to which it corresponds are, unfortunately, inborn in the human species (Kempadoo 2004). Kempadoo illuminates that the sex trade, prostitution, cannot completely disappear unless the want for it disappears, because the want is inborn in the human species. It is true that without Monaghan 8 consumers there would not be an industry in the sex trade as the international labour force analyzes that The sector responds to the changing tastes and sophistication of customers(International labour office 1998). These two articles ultimately illuminate the idea that the consumers control the sex trade and change it to what they want, and that they are the sole purpose for the changes and uprising of the brothels and prostitution. There is a huge difference between the roles that women play in the sex trade and the role that men play in the sex trade, Promiscuous sexual activity was deemed a male right, whereas women were condemned for similar behaviour (Kempadoo 2004). Men have the overall power in this area, according to Kempadoo, but It is not apparent that it is the most important contributing factor to prostitution, although it is apparent they have some contributing factor to the brothels and sex trade. A mans desire, according to Kempadoo, is imbedded in nature and cannot b e changed. So there will always be men who have unfulfilled sexual desires and have a want and need for this fulfillment, but if this desire will never go away, then this is surely not how to abolish the brothels. This is not the way to solve the problem of prostitution, it is the suppliers that must be focused on, not the consumers, or the social factors. This leads us back to the economic factors, which have proven to be the most influential factor in the prostitution sector. If women had economic stability there would be no need or urge pushing them towards the sex trade, therefore this would lower the prostitution rate. The brothels and sex trade are clearly linked to political, social and economic factors, but if a woman had a choice to avoid the brothels awful conditions and health Monaghan 9 risks they would. The political aspects of prostitution such as the laws and restrictions that are posed on prostitution, as demonstrates in Malaysia, are proven to not be a sufficient way of eliminated prostitution, the sex trade, and the brothels. Implementing laws works against the initial idea, and although the intentions are positive, there are many negative outcomes. The North American idea of forcing prostitution to stop by forceful laws, as shown in Malaysia would only result in a failure. The social demands of prostitution are high, but if there were not suppliers then essentially there would be no prostitution. To stop sex work from happening, it is hopeless to try and stop the demand, because as Kempadoo stated, it is natural, and is imbedded in our human nature. I do agree with this. Although the social factors are a huge factor on changing the sex trade, these factors cannot be focused upon when trying to eliminate them. It is essentially the supplies that need to be foc used on. In conclusion of this paper, the economic reasons are essential in the abolition of prostitution. The reason behind why women enter it in the first place is because of economic needs and survival, even though it is a risk to their health. If these women were supplied with economic stability then the brothels and the sex trade would slowly disappear. Even though the political and social factors are important when considering the overall aspects of prostitution and the brothels, the economic factors are the main components in exterminating prostitution.

Performance of Hedge Fund Relatively in UK

Performance of Hedge Fund Relatively in UK 1.1- Introduction: Hedge funds are actively managed portfolios that hold positions in publicly traded securities. Gaurav S. Amin and Harry M. Kat (2000) stated on their report that A hedge fund is typically defined as a pooled investment vehicle that is privately organized, administrated by professional investment managers, and not widely available to the public. It charges both a performance fee and a management fee. It allows a flexible investment for a small number of large investors (usually the minimum investment is $1 million) can use high risk techniques. 1Now days it is very clear that in the matter of alternative investment mutual fund is not performing well. As a high absolute returns and typically have features such as hurdle rates and incentive fees with high watermark provision hedge fund gives a better align to the interests of managers and investors. 2Moreover mutual funds typically use a long-only buy-and-hold type strategy on standard asset classes, which help to capture risk premia as sociate with equity risk, interest rate risk, default risk etc. However, they are not very helpful in capturing risk premia associate with dynamic trading strategies. That is why hedge fund comes into the picture. In the year of 2009, this takes the greatest history of the world in the following century. In the year of 2008 the world saw the greatest fall down of the world economy. Lots of people missing their jobs, lots of company were stopped. The world economy faced the highest losses in the history. These all factors are showing only one way to makeover from that greatest downfall that is hedging. 3The last couple of decades have witnessed a rapidly growing in the hedge funds. Relative to traditional investment portfolios hedge funds exhibit some unique characteristics; they are flexible with respect to the types of securities they hold and the type of the position they take. 1 Agarwal, V. and Naik, N. (2000). Multi-period performance persistence analysis of hedge fund s. The journal of financial and quantitative analysis. Vol. 35, No,3. PP-327. 2 Agarwal, V. and Naik, N. (2004). Risks and portfolio decisions involving hedge funds. The review of financial studies, Vol. 17, No.1. PP-64. 3 Journal of banking and finance 32(2008) 741-753- Hedge Fund Pricing and Model Uncertainty by Spyridan D. Vrontos, Ioannis D. Vrontos, Daniel Giomouridies. Since the early 1990s, hedge funds have become an increasingly popular asset class. The amount invested globally in hedge funds rose from approximately $50 billion in 1990 to approximately $1 trillion by the end of 2004. And because these funds characteristically use stantial leverage, they play a far more important role in the global securities markets than the size of their net assets indicates. Moreover, investments in hedge funds have become an important part of the asset mix of institutions and ever wealthy individual investors (Malkiel, B. and Saha, A. (2005). 4The number of FOHFs increase by 40% between 2001 and 2003, and now comprised almost two third of the $650 billion invested in the USAs hedge fund market. Due to its nature it is difficult to estimate the current size of hedge fund industry. 5Van Hedge Fund Advisors estimates that by the end of 1998 there were 5380 hedge fund managing $311 in capital, with between $800 billion and $1 trillion in total assets, which indicates the higher number of recent new entries. So far, hedge fund is based on American phenomena. About 90% hedge fund managers are based in the US, 9% in Europe and 1% in Asia and elsewhere. Now a days around 5883 hedge funds are trading around the world. (*Barclay Hedge database). Chart 1: Assets of Hedge fund industry from 1997 to 2009. Source: http://www.barclayhedge.com/research/indices/ghs/mum/Hedge_Fund.html According to the Barclay hedge database the asset of hedge fund industry is $1205.6 billion dollar. 4 Financial times, 29th October, 2003. www.vanhedge.com http://www.barclayhedge.com/products/hedge-fund-directory.html 1.2- Research questions: Specifically in this paper, I want to address two main questions. First one is what is the performance of hedge fund and FTSE100 over the period of 2001 to 2008? To evaluate the performance I use three traditional risk adjusted performance measurement model. To give a better idea and matter of easily understand I use the Sharp ratio, the Treynor ratio, and the Capital Asset Pricing Model (CAPM). However, the equity market index is not necessarily the right benchmark for hedge funds, therefore, market betas and abnormal returns may not be the appropriate measures for risks and profits. To mitigate this problem, I calculate sharp ratios, which are defined as the ratio of the average excess fund returns over the standard deviation. Second question is does hedge funds gives better return from UK equity market (FTSE100)? To make this comparison I use regression analysis where the correlation will show how the hedge funds act against the FTSE 100. 1.3- Objective of the study: The main objective of this study is to find out the performance of Hedge fund relatively with the UK equity market FTSE 100. In addition, I address in this paper four major hedge funds performance correlation with FTSE100. As a result an individual investor can easily understand which portfolio will give better return at their investment perspective. This study focuses on UK investors perspective only. In the past several years, lots of studies had been done on this area like Park and Staum (1998), Brown et al. (1999), Agarwal and Naik (2000), Herzberg and Mozes (2003), Capocci and Hubner (2004), and Malkiel and Saha (2005) analysis the hedge fund performance. Most of the statistical methodology is on the regression with equity markets and rest of all are in the cross product ratio. Above all they tried to find out the return of different types of hedge fund depending on the market risk and market return. So finally, the purpose of this paper is clearly established, that is to understand hedge fund performance over the UK equity market (FTSE100). 1.5- Overview of the methodology: In this section I would like to describe an overview of my methodology. To find out the hedge fund performance and the FTSE100 markets performance I use three traditional risk-adjusted performance measurement models. First one is the Sharpe ratio, secondly, the Treynor ratio and finally, the Capital Asset Pricing Model (CAPM). I address the Sharpe ratio and the Treynor ratio because these two gives better easy view for an investor to evaluate the hedge fund performance by themselves. However, the Sharpe ratio and the Treyneo ratio measure the excess return of per unit of risk for an investment asset. These two are used to understand how well the return of an asset compensates the investor for the risk taken. When comparing two assets each with the expected return of fund against the same benchmark with risk free return, the asset with the higher Sharpe ratio gives more return for the same risk. As a result investor can easily understand where to invest. In this paper I use total 287 funds including different types of hedge funds like- Event driven (31), Hedge fund (54), Global macro (37) and Market neutral (165). As a benchmark I use FTSE100 and for the risk free rate I use UK 10 year Treasury bond. All data were collected from the DataStream which is run by Thomson Reuters the worlds leading source of intelligent information for businesses and professionals (http://thomsonreuters.com/). 1.6- Definition of the key terms: Hedge fund: In the early study by Francis C.C. Koh, Winston T.H. Koh , David K.C. Lee, Kok Fai Phoon (2004) stated in their report that Hedge Funds are innovative investment structures that were first created more than 50 years ago by Alfred Winslow Jones. He established a fund with the following features: (a) He set up hedges by investing in securities that he determined as undervalued and funding these positions partly by taking short positions in overvalued securities, creating a market neutral position; (b) He also designed an incentive fee compensation arrangement in which he was paid a percentage of the profits realized from his clients assets; and (c) He invested his own investment capital in the fund, ensuring that his incentives and those of his investors were aligned and forming an investment partnership. Most modern hedge funds possess the above listed features, and are set up as limited partnerships with a lucrative incentive-fee structure. In most hedge funds, managers also often have a significant portion of their own capital invested in the partnerships. The term hedge fund has been generalized to describe investment strategies that range from the original market-neutral style of Jones to many other strategies and opportunistic situations, including global/macro investing. On the other report by Liang, B. (1999) stated on his report that there are two major types of hedge funds, one is inshore and another is offshore. Onshore funds are limited partnerships of no more than 500 investors. Offshore funds are limited liability corporations or partnerships established in the tax neutral jurisdictions that allow investors an opportunity to invest outside their own country and minimize their tax liabilities. Due to the large variety of hedge fund investing strategies, there is no standard method to classify hedge funds smartly. There are at least 8 major databases set up by data vendors and fund advisors. I follow the classification used by Eichengreen and Mathieson (1998), which relied on the MAR/Hedge database. Under this classification, there are 8 categories of hedge funds with 7 differentiated styles and a fund-of-funds category. For my paper I chose three different categories, which are as follows: (a) Event driven funds. These are funds that take positions on corporate events, such as taking an arbitraged position when companies are undergoing re-structuring or mergers. For example, hedge funds would purchase bank debt or high yield corporate bonds of companies undergoing re-organization (often referred to as distressed securities). Another event-driven strategy is merger arbitrage. These funds seize the opportunity to invest just after a takeover has been announced. They purchase the shares of the target companies and short the shares of the acquiring companies. (c) Global/Macro funds refer to funds that rely on macroeconomic analysis to take bets on major risk factors, such as currencies, interest rates, stock indices and commodities. Opportunistic trading manager that makes profits from changes in global economies typically based in major interest rate shifts. To make profits managers uses leverage and derivatives. (d) Market neutral funds refer to funds that bet on relative price movements utilizing strategies such as long-short equity, stock index arbitrage, convertible bond arbitrage and fixed income arbitrage. Long-short equity funds use the strategy of Jones by taking long positions in selective stocks and going short on other stocks to limit their exposure to the stock market. Stock index arbitrage funds trade on the spread between index futures contracts and the underlying basket of equities. Convertible bond arbitrage funds typically capitalize on the embedded option in these bonds by purchasing them and shorting the equities. Fixed income arbitrage bet on the convergence of prices of bonds from the same issuer but with different maturities over time. This is the second largest grouping of hedge funds after the Global category. Source Eichengreen and Mathieson (1998). 2.1.2- Current scenario of hedge funds: Chapter two Literature review: 2.1- History of hedge fund Despite the increasing interest and recent development, few studies have been carried out on hedge funds comparing to other investment tools like mutual funds. An analysis of Hedge Fund performance 1984-2000 by Capocci Daniel using one of the greatest hedge fund database ever used on his working paper (2796 individual funds including 801 dissolved), to investigate hedge funds performance using various asset-pricing models, including an extension from of Carharts (1997) model combined with Fama and French (1998), Agarwal and Naik (2000) models that take into account the fact that some hedge funds invest in emerging market bond. At the end they found that their model does a better job describing hedge funds behaviour. That appears particularly good for the Event Driven, Global Macro, US Opportunistic, Equity non-Hedge and Sector funds. Since the early 1990s, when around 2000 hedge funds were managing assets totalling capital of $60 billion, the subsequent growth in the number and asset base of hedge funds has never really been refuted. The industry only suffered from a relative slowdown in 1998, but since then has enjoyed a renewed vitality with an estimated total of 10,000funds managing more than a trillion US dollars by the end of 2006. The growing trend of the sector remained remarkably sustained during the stock market collapse that started in March 2000, when the NASDAQ composite Index reached an all-time high of 5,132 and finished three years later with a floor level of 1,253. In the meantime, the global met asset value (NAV) of hedge funds continued to grow at a steady rate of 10.6% (Van Hedge Funds Advisors International, 2002), contrasting with a decrease of 2.7% in the worldwide mutual fund industry ( Investment Company Institute, 2003). In 2001, Capocci and Hubner(2004) estimated that there were 6,000 he dge fund managing around $400 billion. In 2007, Capocci, Duquenne and Hubner (2007) estimated that there were 10,000 hedge funds managing around $1 trillion. This is a growth of 11% in the number of funds and 26% in assets over six years (6PhD thesis paper by Daniel P.J. Capocci). Other studies from practitioners Hennessee (1994), and Oberuc (1994) also showed an evidence of superior performance in the case of hedge funds. Ackernann and Al. (1999) and Liang (1999) who compared the performance of hedge funds to mutual funds and several indices, found that hedge funds constantly obtained better performance than mutual funds. Their performance was not better than the performance of the market indices considered. They also indicated that the returns in hedge funds were more unstable than both the returns of mutual funds and those of market indices. According to Brown and Al. (1997) hedge funds showing good performance in the first part of the year reduce the volatility of their portfolio in the second half of the year (Capocci Daniel- An analysis of hedge fund performance 1984-2000). Taking all these results into account hedge funds seems a good investment tool. 6 PhD thesis paper by Daniel P.J. Capocci. Electronic copy available at: http//ssrn.com/abstract=1008319. 2.1.1- Facts and finding of development in hedge funds: As a result of flexible investment strategies, a better manager inventive alignment, sophisticated investors, and limited SEC regulations hedge funds have gained incredible popularity. In the report of Agarwal, V. and Naik, N. (2004) stated that it is well accepted that the world of financial securities is a multifactor world consisting of different risk factors, each associated with its own factor risk premium, and that no single investment strategy can span the entire risk factor space. Therefore investors wishing to earn risk premia associated with different risk factors need to employ different kinds of investment strategies. Sophisticated investors, like endowments and pension funds, seem to have recognized this fact as their portfolios consist of mutual funds as well as hedge funds.1 Mutual funds typically employ a long-only buy-and-hold-type strategy on standard asset classes, and help capture risk premia associated with equity risk, interest rate risk, default risk, etc. Howe ver, they are not very helpful in capturing risk premia associated with dynamic trading strategies or spread-based strategies. This is where hedge funds come into the picture. Unlike mutual funds, hedge funds are not evaluated against a passive benchmark and therefore can follow more dynamic trading strategies. Moreover, they can take long as well as short positions in securities, and therefore can bet on capitalization spreads or value-growth spreads. As a result, hedge funds can offer exposure to risk factors that traditional long-only strategies cannot. However, investor can create exposure like hedge funds by trading on their own account, in practice they encounter many frictions due to incompleteness of markets like the publicly traded derivatives market and the financing market. Moreover, the derivatives market for standardized contracts has grown a great deal in recent years, still it is very costly for an investor to create a customized payoff on individual securities. The same is true for the financing market as well, where investors encounter difficulties shorting securities and obtaining leverage. These frictions make it difficult for investors to create hedge fund-like payoffs by trading on their own accounts. According to Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) in 1990, the entire hedge fund industry was estimated at about US$20 billion. At of 2004, there are close to 7000 hedge funds worldwide, managing more than US$830 billion. Additionally, about US$200-300 billion is estimated to be in privately managed accounts. While high net worth individuals remain the main source of capital, hedge funds are becoming more popular among institutional and retail investors. Funds of hedge funds and other hedge fund-linked products are increasingly being marketed to the retail market. While hedge funds are well established in the United States and Europe, they have only begun to grow aggressively in Asia. According to Asia Hedge magazine, there are more than 300 hedge funds operating in Asia (including those in Japan and Australia), of which 30 were established in year 2000 and 20 in 2001. In 2003, 90 new hedge funds were started in Asia, compared with 66 in 2002, according to an estimate by th e Bank of Bermuda. In 2004 more than US$15 billion, hedge fund investments in Asia are expected to grow rapidly. Several factors support this view. Asian hedge funds currently account for a tiny slice of the global hedge fund pie and a mere trickle of the total financial wealth of high net worth individuals in Asia. Hedge funds have posted attractive returns. From 1987 to 2001, the Hennessee Hedge Fund Index posted annualised returns of 18%, higher than the SPs 13.5%. Hedge funds are seen as a natural hedge for controlling downside risk because they employ exotic investment strategies believed to generate returns that are uncorrelated to traditional asset classes. Hedge funds vary in their strategies. So-called macro funds, such as Quantum Fund, generally take a directional view by betting on a particular bond market, say, or a currency movement. Other funds specialize in corporate events, such as mergers or bankruptcies, or simply look for pricing anomalies the stock markets. Hedge funds vary widely in both their investment strategies and the amount of financial leverage. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) There are a number of factors behind the meteoric rise in demand for hedge funds. The unprecedented bull-run in the US equity markets during the 1990s expanded investment portfolios. This led an increased awareness on the need for diversification. The bursting of the technology and Internet bubbles, the string of corporate scandals that hit corporate America and the uncertainties in the US economy have led to a general decline in stock markets worldwide. This in turn provided fresh impetus for hedge funds as investors searched for absolute returns. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) Unlike registered investment companies, hedge funds are not required to publicly disclose performance and holdings information that might be construed as solicitation materials. Since the early 1990s, there has been a growing interest in the use of hedge funds amongst both institutional and high net worth individuals. Due to their private nature, it is difficult to obtain adequate information about the operations of individual hedge funds and reliable summary statistics about the industry as a whole. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) Hedge funds are known to be growing in size and diversity. As at the end of 1997, the MAR/Hedge database recorded more than 700 hedge fund managing assets of US$90 billion. This is only a partial picture of the industry, as many funds are not listed with MAR/Hedge. In practical terms, it is not easy to estimate the current size of the hedge fund industry unless all funds are regulated or obligated to register their operations with a common authority. Brooks and Kat (2001) estimated that, as at April 2001, there are around 6000 hedge funds with an estimated US $400 billion in capital under management and US $1 trillion in total assets. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) According to Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) three interesting features differentiate hedge funds from other forms of managed funds. Most hedge funds are small and organized around a few experienced investment professionals. In fact, more than half of U.S Hedge Funds manage amounts of less than US$25 million. Further, most hedge funds are leveraged. It is estimated that 70 per cent of hedge funds use leverage and about 18% borrowed more than one dollar for every dollar of capital. (See Eichengreen and Mathieson (1998). Another peculiar feature is the short life span of hedge funds. Hedge funds have an average life span of about 3.5 years (See Stefano Lavinio (2000) pp 128). Very few have a track record of more than 10 years. These features lead many to view hedge funds, as risky and opportunistic. In the early study by Fung and Hsieh (2001), they use option like payoffs to view the risks of trend following hedge funds. They saw that the trend followers are typically commodity trading advisors (CTAs) who attempt to profit from trends in commodity prices using technical indicators. According to Fung and Hsieh (2001) trend followers are particularly interesting in that not only are their returns uncorrelated with the standard equity, bond, currency, and commodity indices, but their returns tend to exhibit option like features. They tend to be large and positive during the best and worst performing months of world equity indices. They cite evidence by Fung and Hsieh (1997) who show that if one divided up the states of the world into five states based on the return on the MSCI equity world index, trend followers tend to outperform when the MSCI equity return is at its lowest and highest. The relationship between trend followers and the equity market is non-linear and U-shaped. Alth ough returns of trend following funds have a low beta against equities on average, the state-dependent betas tend to be positive in up-markets and negative in down markets. As a result, Fung and Hsieh (2001) assume that the simplest trend following strategy has the same payout as a structured option known as the look back straddle. The owner of a look back call option has the right to buy the underlying asset at the lowest price over the life of the option. Similarly, a look back put option allows the owner to sell at the highest price. The combination of these two options is the look back straddle, which delivers the ex-post maximum payout of any trend following strategy. Fung and Hsieh (2001) then demonstrate empirically that look back straddle returns resemble the returns of trend following hedge funds. Building on this pioneer work, Fung and Hsieh (2004) propose seven factors that explain aggregate hedge fund returns. These seven factors include the excess return on the SP 500 index, the Wilshire small cap minus large cap index return, the term spread, the credit spread, and trend following factors for bonds, currencies, and commodities. They show that their seven factor model well explains variation in aggregate hedge fund returns. In addition, they find that equity long/short hedge funds tend to load positively on the SP 500 index factor and the small cap minus large cap factor. These results are consistent with the observation that equity long/short hedge funds typically have a small positive exposure to stocks and tend to be long small stocks and short large stocks. Fung and Hsieh (2004) also find that fixed income funds on the other hand tend to load negatively on the change in the credit spread, where the credit spread is measured as the difference between the yield on Moodys Baa bonds and the yield on the 10-year constant maturity Treasury bond. The reason is that fixed income funds typically buy bonds with lower credit ratings and/or less liquidity and then hedge the interest rate risk by shorting US Treasury bonds, which have the highest credit rating and are more liquid. However, Agarwal and Naik (2004) also propose a multi-factor model to explain hedge fund risks. They find that non-linear option like payoffs are not restricted to trend followers and risk arbitrageurs, but are an integral feature of payoffs for a wide range of hedge fund strategies. In particular they observe that the payoffs on a large number of hedge fund strategies look like those from writing a put option on the equity index. These strategies include risk arbitrage, distressed debt, convertible arbitrage, and relative value arbitrage. Consistent with the exposure of these strategies to the risks borne by sellers of equity index put options, Agarwal and Naik (2004) find that these hedge funds suffer from significant left tail risk which tends to coincide with severe market downturns. The performance of hedge fund in 2008 was very shocking like more than ten years ago. Teo, M (2009) stated that in the month of August 1998 alone LTCM lost 45% of its capital in the wake of the massive liquidity event triggered by the Russian rubble default. Lots of academic literature has shown that the year 2007 and 2008 was the worst performance of hedge fund. As we know that hedge fund managers make portfolio by taking position in equity market and another fund, but unfortunately the world equity market goes downside. As a result investors who wish to weather future financial maelstroms should take note of the non-linear relationship between hedge fund returns and the equity market. 2.3- Limitations (previous) With respect to lightly regulated investment vehicles with great treading flexibility, hedge funds often pursue highly sophisticated investment strategies. Hedge funds promise absolute returns to their investor leading to a belief that they hold factor-neutral portfolios. With this in mind, hedge funds have some limitations. In the early studies many researchers discussed and explain that obstacles. First of all if we consider the measurement model of hedge funds performance, most of the researcher use traditional performance measure model like, Sharpe ratio, Treynor ratio and Jensen alpha which are not adequate for the performance evaluation of hedge funds. Fung and Hsieh (2000) and Roy (2003) stated that is incorrect to use these performance measures t evaluate the hedge funds strategies. Brooks and Kat (2002), Kat (2003), Mahdavi (2004) and Murguia and Umemoto (2004) also mentioned that the Sharpe ratio does not represent the true performance of hedge funds because it does not take into consideration the asymmetry returns of these funds. As a result Perello (2007) propose to use the downside risk framework like Sortino ratio, the upside potential ratio and Omega measure as alternative performance measure. Moreover, Chung, Rosenberg and Tomeo (2004) and Scherer (2004) showed that Sortino ratio makes it possible to the investors to evaluate the risk and the performance of the h edge funds more sustainably than Sharpe ratio. Secondly, according to Ackermann et al. (1999) and to Fung and Hsieh (2000), two upward biases exist in the case of hedge funds. They do not exist in the case of mutual funds, and they both have an opposite impact to the survivorship bias. Survivorship bias is an important issue in hedge funds performance studies (see Carhart and al. 2000). This bias is present when a database contains only funds that have data for the whole period studies. In this case, there is a risk of overestimating the mean performance because the funds that would have ceased to exist because of their bad performance would not be taken into account. The two upward biases exist because, since hedge funds are not allowed to advertise, they consider inclusion in a database primarily as a marketing tool. The first phenomenon stressed by Ackermann and al. (1999) and called the self-selection bias is present because funds that realize good performance have less incentive to report their performance to data providers in order to attract new investors. Malkiel, B. and Saha, A. (2005) stated in their report that Databases available at any point in time tend to reflect the returns earned by currently existing hedge funds but they do not include the returns from hedge funds that existed at some time in the past but are presently not in existence (i.e., the truly dead funds) or exist but no longer report their results (the defunct funds). Unsuccessful hedge funds have difficulties obtaining new assets. Hence, they tend to close, leaving only the more successful funds in the database. But some funds stop reporting not because they are unsuccessful but because they do not want to attract new investment. The second point called instant history bias or backfilled bias (Fung and Hsieh 2000) occurs because after inclusion a funds performance history is backfilled. This may cause an upward bias because funds with less satisfactory performance history are less likely to apply for inclusion than funds with good performance history (Capocci Daniel 2001, An analysis of hedge fund performance 1984- 2000). Performance of Hedge Fund Relatively in UK Performance of Hedge Fund Relatively in UK 1.1- Introduction: Hedge funds are actively managed portfolios that hold positions in publicly traded securities. Gaurav S. Amin and Harry M. Kat (2000) stated on their report that A hedge fund is typically defined as a pooled investment vehicle that is privately organized, administrated by professional investment managers, and not widely available to the public. It charges both a performance fee and a management fee. It allows a flexible investment for a small number of large investors (usually the minimum investment is $1 million) can use high risk techniques. 1Now days it is very clear that in the matter of alternative investment mutual fund is not performing well. As a high absolute returns and typically have features such as hurdle rates and incentive fees with high watermark provision hedge fund gives a better align to the interests of managers and investors. 2Moreover mutual funds typically use a long-only buy-and-hold type strategy on standard asset classes, which help to capture risk premia as sociate with equity risk, interest rate risk, default risk etc. However, they are not very helpful in capturing risk premia associate with dynamic trading strategies. That is why hedge fund comes into the picture. In the year of 2009, this takes the greatest history of the world in the following century. In the year of 2008 the world saw the greatest fall down of the world economy. Lots of people missing their jobs, lots of company were stopped. The world economy faced the highest losses in the history. These all factors are showing only one way to makeover from that greatest downfall that is hedging. 3The last couple of decades have witnessed a rapidly growing in the hedge funds. Relative to traditional investment portfolios hedge funds exhibit some unique characteristics; they are flexible with respect to the types of securities they hold and the type of the position they take. 1 Agarwal, V. and Naik, N. (2000). Multi-period performance persistence analysis of hedge fund s. The journal of financial and quantitative analysis. Vol. 35, No,3. PP-327. 2 Agarwal, V. and Naik, N. (2004). Risks and portfolio decisions involving hedge funds. The review of financial studies, Vol. 17, No.1. PP-64. 3 Journal of banking and finance 32(2008) 741-753- Hedge Fund Pricing and Model Uncertainty by Spyridan D. Vrontos, Ioannis D. Vrontos, Daniel Giomouridies. Since the early 1990s, hedge funds have become an increasingly popular asset class. The amount invested globally in hedge funds rose from approximately $50 billion in 1990 to approximately $1 trillion by the end of 2004. And because these funds characteristically use stantial leverage, they play a far more important role in the global securities markets than the size of their net assets indicates. Moreover, investments in hedge funds have become an important part of the asset mix of institutions and ever wealthy individual investors (Malkiel, B. and Saha, A. (2005). 4The number of FOHFs increase by 40% between 2001 and 2003, and now comprised almost two third of the $650 billion invested in the USAs hedge fund market. Due to its nature it is difficult to estimate the current size of hedge fund industry. 5Van Hedge Fund Advisors estimates that by the end of 1998 there were 5380 hedge fund managing $311 in capital, with between $800 billion and $1 trillion in total assets, which indicates the higher number of recent new entries. So far, hedge fund is based on American phenomena. About 90% hedge fund managers are based in the US, 9% in Europe and 1% in Asia and elsewhere. Now a days around 5883 hedge funds are trading around the world. (*Barclay Hedge database). Chart 1: Assets of Hedge fund industry from 1997 to 2009. Source: http://www.barclayhedge.com/research/indices/ghs/mum/Hedge_Fund.html According to the Barclay hedge database the asset of hedge fund industry is $1205.6 billion dollar. 4 Financial times, 29th October, 2003. www.vanhedge.com http://www.barclayhedge.com/products/hedge-fund-directory.html 1.2- Research questions: Specifically in this paper, I want to address two main questions. First one is what is the performance of hedge fund and FTSE100 over the period of 2001 to 2008? To evaluate the performance I use three traditional risk adjusted performance measurement model. To give a better idea and matter of easily understand I use the Sharp ratio, the Treynor ratio, and the Capital Asset Pricing Model (CAPM). However, the equity market index is not necessarily the right benchmark for hedge funds, therefore, market betas and abnormal returns may not be the appropriate measures for risks and profits. To mitigate this problem, I calculate sharp ratios, which are defined as the ratio of the average excess fund returns over the standard deviation. Second question is does hedge funds gives better return from UK equity market (FTSE100)? To make this comparison I use regression analysis where the correlation will show how the hedge funds act against the FTSE 100. 1.3- Objective of the study: The main objective of this study is to find out the performance of Hedge fund relatively with the UK equity market FTSE 100. In addition, I address in this paper four major hedge funds performance correlation with FTSE100. As a result an individual investor can easily understand which portfolio will give better return at their investment perspective. This study focuses on UK investors perspective only. In the past several years, lots of studies had been done on this area like Park and Staum (1998), Brown et al. (1999), Agarwal and Naik (2000), Herzberg and Mozes (2003), Capocci and Hubner (2004), and Malkiel and Saha (2005) analysis the hedge fund performance. Most of the statistical methodology is on the regression with equity markets and rest of all are in the cross product ratio. Above all they tried to find out the return of different types of hedge fund depending on the market risk and market return. So finally, the purpose of this paper is clearly established, that is to understand hedge fund performance over the UK equity market (FTSE100). 1.5- Overview of the methodology: In this section I would like to describe an overview of my methodology. To find out the hedge fund performance and the FTSE100 markets performance I use three traditional risk-adjusted performance measurement models. First one is the Sharpe ratio, secondly, the Treynor ratio and finally, the Capital Asset Pricing Model (CAPM). I address the Sharpe ratio and the Treynor ratio because these two gives better easy view for an investor to evaluate the hedge fund performance by themselves. However, the Sharpe ratio and the Treyneo ratio measure the excess return of per unit of risk for an investment asset. These two are used to understand how well the return of an asset compensates the investor for the risk taken. When comparing two assets each with the expected return of fund against the same benchmark with risk free return, the asset with the higher Sharpe ratio gives more return for the same risk. As a result investor can easily understand where to invest. In this paper I use total 287 funds including different types of hedge funds like- Event driven (31), Hedge fund (54), Global macro (37) and Market neutral (165). As a benchmark I use FTSE100 and for the risk free rate I use UK 10 year Treasury bond. All data were collected from the DataStream which is run by Thomson Reuters the worlds leading source of intelligent information for businesses and professionals (http://thomsonreuters.com/). 1.6- Definition of the key terms: Hedge fund: In the early study by Francis C.C. Koh, Winston T.H. Koh , David K.C. Lee, Kok Fai Phoon (2004) stated in their report that Hedge Funds are innovative investment structures that were first created more than 50 years ago by Alfred Winslow Jones. He established a fund with the following features: (a) He set up hedges by investing in securities that he determined as undervalued and funding these positions partly by taking short positions in overvalued securities, creating a market neutral position; (b) He also designed an incentive fee compensation arrangement in which he was paid a percentage of the profits realized from his clients assets; and (c) He invested his own investment capital in the fund, ensuring that his incentives and those of his investors were aligned and forming an investment partnership. Most modern hedge funds possess the above listed features, and are set up as limited partnerships with a lucrative incentive-fee structure. In most hedge funds, managers also often have a significant portion of their own capital invested in the partnerships. The term hedge fund has been generalized to describe investment strategies that range from the original market-neutral style of Jones to many other strategies and opportunistic situations, including global/macro investing. On the other report by Liang, B. (1999) stated on his report that there are two major types of hedge funds, one is inshore and another is offshore. Onshore funds are limited partnerships of no more than 500 investors. Offshore funds are limited liability corporations or partnerships established in the tax neutral jurisdictions that allow investors an opportunity to invest outside their own country and minimize their tax liabilities. Due to the large variety of hedge fund investing strategies, there is no standard method to classify hedge funds smartly. There are at least 8 major databases set up by data vendors and fund advisors. I follow the classification used by Eichengreen and Mathieson (1998), which relied on the MAR/Hedge database. Under this classification, there are 8 categories of hedge funds with 7 differentiated styles and a fund-of-funds category. For my paper I chose three different categories, which are as follows: (a) Event driven funds. These are funds that take positions on corporate events, such as taking an arbitraged position when companies are undergoing re-structuring or mergers. For example, hedge funds would purchase bank debt or high yield corporate bonds of companies undergoing re-organization (often referred to as distressed securities). Another event-driven strategy is merger arbitrage. These funds seize the opportunity to invest just after a takeover has been announced. They purchase the shares of the target companies and short the shares of the acquiring companies. (c) Global/Macro funds refer to funds that rely on macroeconomic analysis to take bets on major risk factors, such as currencies, interest rates, stock indices and commodities. Opportunistic trading manager that makes profits from changes in global economies typically based in major interest rate shifts. To make profits managers uses leverage and derivatives. (d) Market neutral funds refer to funds that bet on relative price movements utilizing strategies such as long-short equity, stock index arbitrage, convertible bond arbitrage and fixed income arbitrage. Long-short equity funds use the strategy of Jones by taking long positions in selective stocks and going short on other stocks to limit their exposure to the stock market. Stock index arbitrage funds trade on the spread between index futures contracts and the underlying basket of equities. Convertible bond arbitrage funds typically capitalize on the embedded option in these bonds by purchasing them and shorting the equities. Fixed income arbitrage bet on the convergence of prices of bonds from the same issuer but with different maturities over time. This is the second largest grouping of hedge funds after the Global category. Source Eichengreen and Mathieson (1998). 2.1.2- Current scenario of hedge funds: Chapter two Literature review: 2.1- History of hedge fund Despite the increasing interest and recent development, few studies have been carried out on hedge funds comparing to other investment tools like mutual funds. An analysis of Hedge Fund performance 1984-2000 by Capocci Daniel using one of the greatest hedge fund database ever used on his working paper (2796 individual funds including 801 dissolved), to investigate hedge funds performance using various asset-pricing models, including an extension from of Carharts (1997) model combined with Fama and French (1998), Agarwal and Naik (2000) models that take into account the fact that some hedge funds invest in emerging market bond. At the end they found that their model does a better job describing hedge funds behaviour. That appears particularly good for the Event Driven, Global Macro, US Opportunistic, Equity non-Hedge and Sector funds. Since the early 1990s, when around 2000 hedge funds were managing assets totalling capital of $60 billion, the subsequent growth in the number and asset base of hedge funds has never really been refuted. The industry only suffered from a relative slowdown in 1998, but since then has enjoyed a renewed vitality with an estimated total of 10,000funds managing more than a trillion US dollars by the end of 2006. The growing trend of the sector remained remarkably sustained during the stock market collapse that started in March 2000, when the NASDAQ composite Index reached an all-time high of 5,132 and finished three years later with a floor level of 1,253. In the meantime, the global met asset value (NAV) of hedge funds continued to grow at a steady rate of 10.6% (Van Hedge Funds Advisors International, 2002), contrasting with a decrease of 2.7% in the worldwide mutual fund industry ( Investment Company Institute, 2003). In 2001, Capocci and Hubner(2004) estimated that there were 6,000 he dge fund managing around $400 billion. In 2007, Capocci, Duquenne and Hubner (2007) estimated that there were 10,000 hedge funds managing around $1 trillion. This is a growth of 11% in the number of funds and 26% in assets over six years (6PhD thesis paper by Daniel P.J. Capocci). Other studies from practitioners Hennessee (1994), and Oberuc (1994) also showed an evidence of superior performance in the case of hedge funds. Ackernann and Al. (1999) and Liang (1999) who compared the performance of hedge funds to mutual funds and several indices, found that hedge funds constantly obtained better performance than mutual funds. Their performance was not better than the performance of the market indices considered. They also indicated that the returns in hedge funds were more unstable than both the returns of mutual funds and those of market indices. According to Brown and Al. (1997) hedge funds showing good performance in the first part of the year reduce the volatility of their portfolio in the second half of the year (Capocci Daniel- An analysis of hedge fund performance 1984-2000). Taking all these results into account hedge funds seems a good investment tool. 6 PhD thesis paper by Daniel P.J. Capocci. Electronic copy available at: http//ssrn.com/abstract=1008319. 2.1.1- Facts and finding of development in hedge funds: As a result of flexible investment strategies, a better manager inventive alignment, sophisticated investors, and limited SEC regulations hedge funds have gained incredible popularity. In the report of Agarwal, V. and Naik, N. (2004) stated that it is well accepted that the world of financial securities is a multifactor world consisting of different risk factors, each associated with its own factor risk premium, and that no single investment strategy can span the entire risk factor space. Therefore investors wishing to earn risk premia associated with different risk factors need to employ different kinds of investment strategies. Sophisticated investors, like endowments and pension funds, seem to have recognized this fact as their portfolios consist of mutual funds as well as hedge funds.1 Mutual funds typically employ a long-only buy-and-hold-type strategy on standard asset classes, and help capture risk premia associated with equity risk, interest rate risk, default risk, etc. Howe ver, they are not very helpful in capturing risk premia associated with dynamic trading strategies or spread-based strategies. This is where hedge funds come into the picture. Unlike mutual funds, hedge funds are not evaluated against a passive benchmark and therefore can follow more dynamic trading strategies. Moreover, they can take long as well as short positions in securities, and therefore can bet on capitalization spreads or value-growth spreads. As a result, hedge funds can offer exposure to risk factors that traditional long-only strategies cannot. However, investor can create exposure like hedge funds by trading on their own account, in practice they encounter many frictions due to incompleteness of markets like the publicly traded derivatives market and the financing market. Moreover, the derivatives market for standardized contracts has grown a great deal in recent years, still it is very costly for an investor to create a customized payoff on individual securities. The same is true for the financing market as well, where investors encounter difficulties shorting securities and obtaining leverage. These frictions make it difficult for investors to create hedge fund-like payoffs by trading on their own accounts. According to Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) in 1990, the entire hedge fund industry was estimated at about US$20 billion. At of 2004, there are close to 7000 hedge funds worldwide, managing more than US$830 billion. Additionally, about US$200-300 billion is estimated to be in privately managed accounts. While high net worth individuals remain the main source of capital, hedge funds are becoming more popular among institutional and retail investors. Funds of hedge funds and other hedge fund-linked products are increasingly being marketed to the retail market. While hedge funds are well established in the United States and Europe, they have only begun to grow aggressively in Asia. According to Asia Hedge magazine, there are more than 300 hedge funds operating in Asia (including those in Japan and Australia), of which 30 were established in year 2000 and 20 in 2001. In 2003, 90 new hedge funds were started in Asia, compared with 66 in 2002, according to an estimate by th e Bank of Bermuda. In 2004 more than US$15 billion, hedge fund investments in Asia are expected to grow rapidly. Several factors support this view. Asian hedge funds currently account for a tiny slice of the global hedge fund pie and a mere trickle of the total financial wealth of high net worth individuals in Asia. Hedge funds have posted attractive returns. From 1987 to 2001, the Hennessee Hedge Fund Index posted annualised returns of 18%, higher than the SPs 13.5%. Hedge funds are seen as a natural hedge for controlling downside risk because they employ exotic investment strategies believed to generate returns that are uncorrelated to traditional asset classes. Hedge funds vary in their strategies. So-called macro funds, such as Quantum Fund, generally take a directional view by betting on a particular bond market, say, or a currency movement. Other funds specialize in corporate events, such as mergers or bankruptcies, or simply look for pricing anomalies the stock markets. Hedge funds vary widely in both their investment strategies and the amount of financial leverage. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) There are a number of factors behind the meteoric rise in demand for hedge funds. The unprecedented bull-run in the US equity markets during the 1990s expanded investment portfolios. This led an increased awareness on the need for diversification. The bursting of the technology and Internet bubbles, the string of corporate scandals that hit corporate America and the uncertainties in the US economy have led to a general decline in stock markets worldwide. This in turn provided fresh impetus for hedge funds as investors searched for absolute returns. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) Unlike registered investment companies, hedge funds are not required to publicly disclose performance and holdings information that might be construed as solicitation materials. Since the early 1990s, there has been a growing interest in the use of hedge funds amongst both institutional and high net worth individuals. Due to their private nature, it is difficult to obtain adequate information about the operations of individual hedge funds and reliable summary statistics about the industry as a whole. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) Hedge funds are known to be growing in size and diversity. As at the end of 1997, the MAR/Hedge database recorded more than 700 hedge fund managing assets of US$90 billion. This is only a partial picture of the industry, as many funds are not listed with MAR/Hedge. In practical terms, it is not easy to estimate the current size of the hedge fund industry unless all funds are regulated or obligated to register their operations with a common authority. Brooks and Kat (2001) estimated that, as at April 2001, there are around 6000 hedge funds with an estimated US $400 billion in capital under management and US $1 trillion in total assets. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) According to Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) three interesting features differentiate hedge funds from other forms of managed funds. Most hedge funds are small and organized around a few experienced investment professionals. In fact, more than half of U.S Hedge Funds manage amounts of less than US$25 million. Further, most hedge funds are leveraged. It is estimated that 70 per cent of hedge funds use leverage and about 18% borrowed more than one dollar for every dollar of capital. (See Eichengreen and Mathieson (1998). Another peculiar feature is the short life span of hedge funds. Hedge funds have an average life span of about 3.5 years (See Stefano Lavinio (2000) pp 128). Very few have a track record of more than 10 years. These features lead many to view hedge funds, as risky and opportunistic. In the early study by Fung and Hsieh (2001), they use option like payoffs to view the risks of trend following hedge funds. They saw that the trend followers are typically commodity trading advisors (CTAs) who attempt to profit from trends in commodity prices using technical indicators. According to Fung and Hsieh (2001) trend followers are particularly interesting in that not only are their returns uncorrelated with the standard equity, bond, currency, and commodity indices, but their returns tend to exhibit option like features. They tend to be large and positive during the best and worst performing months of world equity indices. They cite evidence by Fung and Hsieh (1997) who show that if one divided up the states of the world into five states based on the return on the MSCI equity world index, trend followers tend to outperform when the MSCI equity return is at its lowest and highest. The relationship between trend followers and the equity market is non-linear and U-shaped. Alth ough returns of trend following funds have a low beta against equities on average, the state-dependent betas tend to be positive in up-markets and negative in down markets. As a result, Fung and Hsieh (2001) assume that the simplest trend following strategy has the same payout as a structured option known as the look back straddle. The owner of a look back call option has the right to buy the underlying asset at the lowest price over the life of the option. Similarly, a look back put option allows the owner to sell at the highest price. The combination of these two options is the look back straddle, which delivers the ex-post maximum payout of any trend following strategy. Fung and Hsieh (2001) then demonstrate empirically that look back straddle returns resemble the returns of trend following hedge funds. Building on this pioneer work, Fung and Hsieh (2004) propose seven factors that explain aggregate hedge fund returns. These seven factors include the excess return on the SP 500 index, the Wilshire small cap minus large cap index return, the term spread, the credit spread, and trend following factors for bonds, currencies, and commodities. They show that their seven factor model well explains variation in aggregate hedge fund returns. In addition, they find that equity long/short hedge funds tend to load positively on the SP 500 index factor and the small cap minus large cap factor. These results are consistent with the observation that equity long/short hedge funds typically have a small positive exposure to stocks and tend to be long small stocks and short large stocks. Fung and Hsieh (2004) also find that fixed income funds on the other hand tend to load negatively on the change in the credit spread, where the credit spread is measured as the difference between the yield on Moodys Baa bonds and the yield on the 10-year constant maturity Treasury bond. The reason is that fixed income funds typically buy bonds with lower credit ratings and/or less liquidity and then hedge the interest rate risk by shorting US Treasury bonds, which have the highest credit rating and are more liquid. However, Agarwal and Naik (2004) also propose a multi-factor model to explain hedge fund risks. They find that non-linear option like payoffs are not restricted to trend followers and risk arbitrageurs, but are an integral feature of payoffs for a wide range of hedge fund strategies. In particular they observe that the payoffs on a large number of hedge fund strategies look like those from writing a put option on the equity index. These strategies include risk arbitrage, distressed debt, convertible arbitrage, and relative value arbitrage. Consistent with the exposure of these strategies to the risks borne by sellers of equity index put options, Agarwal and Naik (2004) find that these hedge funds suffer from significant left tail risk which tends to coincide with severe market downturns. The performance of hedge fund in 2008 was very shocking like more than ten years ago. Teo, M (2009) stated that in the month of August 1998 alone LTCM lost 45% of its capital in the wake of the massive liquidity event triggered by the Russian rubble default. Lots of academic literature has shown that the year 2007 and 2008 was the worst performance of hedge fund. As we know that hedge fund managers make portfolio by taking position in equity market and another fund, but unfortunately the world equity market goes downside. As a result investors who wish to weather future financial maelstroms should take note of the non-linear relationship between hedge fund returns and the equity market. 2.3- Limitations (previous) With respect to lightly regulated investment vehicles with great treading flexibility, hedge funds often pursue highly sophisticated investment strategies. Hedge funds promise absolute returns to their investor leading to a belief that they hold factor-neutral portfolios. With this in mind, hedge funds have some limitations. In the early studies many researchers discussed and explain that obstacles. First of all if we consider the measurement model of hedge funds performance, most of the researcher use traditional performance measure model like, Sharpe ratio, Treynor ratio and Jensen alpha which are not adequate for the performance evaluation of hedge funds. Fung and Hsieh (2000) and Roy (2003) stated that is incorrect to use these performance measures t evaluate the hedge funds strategies. Brooks and Kat (2002), Kat (2003), Mahdavi (2004) and Murguia and Umemoto (2004) also mentioned that the Sharpe ratio does not represent the true performance of hedge funds because it does not take into consideration the asymmetry returns of these funds. As a result Perello (2007) propose to use the downside risk framework like Sortino ratio, the upside potential ratio and Omega measure as alternative performance measure. Moreover, Chung, Rosenberg and Tomeo (2004) and Scherer (2004) showed that Sortino ratio makes it possible to the investors to evaluate the risk and the performance of the h edge funds more sustainably than Sharpe ratio. Secondly, according to Ackermann et al. (1999) and to Fung and Hsieh (2000), two upward biases exist in the case of hedge funds. They do not exist in the case of mutual funds, and they both have an opposite impact to the survivorship bias. Survivorship bias is an important issue in hedge funds performance studies (see Carhart and al. 2000). This bias is present when a database contains only funds that have data for the whole period studies. In this case, there is a risk of overestimating the mean performance because the funds that would have ceased to exist because of their bad performance would not be taken into account. The two upward biases exist because, since hedge funds are not allowed to advertise, they consider inclusion in a database primarily as a marketing tool. The first phenomenon stressed by Ackermann and al. (1999) and called the self-selection bias is present because funds that realize good performance have less incentive to report their performance to data providers in order to attract new investors. Malkiel, B. and Saha, A. (2005) stated in their report that Databases available at any point in time tend to reflect the returns earned by currently existing hedge funds but they do not include the returns from hedge funds that existed at some time in the past but are presently not in existence (i.e., the truly dead funds) or exist but no longer report their results (the defunct funds). Unsuccessful hedge funds have difficulties obtaining new assets. Hence, they tend to close, leaving only the more successful funds in the database. But some funds stop reporting not because they are unsuccessful but because they do not want to attract new investment. The second point called instant history bias or backfilled bias (Fung and Hsieh 2000) occurs because after inclusion a funds performance history is backfilled. This may cause an upward bias because funds with less satisfactory performance history are less likely to apply for inclusion than funds with good performance history (Capocci Daniel 2001, An analysis of hedge fund performance 1984- 2000).