Who can enforce the articles of association Essay

Who can enforce the articles of association - Essay Example This sort of contract (statutory contract) has certain features distinct from an ordinary contract. These features were explained by the Court of Appeal in Bratton Seymore Service Co Ltd v Oxborough. These features include: i. Origin. The contract being a statutory one originates from the statute instead of an agreement between the parties. By virtue of the fact that it is statutory, it cannot be invalidated on grounds of misrepresentation, mistake, undue influence or duress. iii. Ammendment. The contract can only be amended by a special majority. This means that only a minimum of three-quarters of the members are required to vote in favor of the resolution. This is encapsulated under Sec. 21. With the contracts characterized by the above features the question of enforcement becomes a major issue mainly because of the last feature- Rights. Not all members of the company have the right to enforce rights contained in the articles. So this raises the question- who has such rights? The enforcement of statutory contracts has been the subject of constant academic debates due to contradictory case law. This will be illustrated by two cases. The following two cases illustrate the complexities that arise when a member tries to enforce a company’s articles. In this case, the articles contained a clause stating that a certain member would be appointed as the company’s solicitor. This member was not appointed as such and proceeded to unsuccessfully sue the company for breach. The court held that the member could not sue simply because there was no contractual relationship between a member as solicitor and the company. The company’s articles of association contained a clause stating that ‘no resolution of directors on certain matters would be valid if either of two named managing directors voted against the resolution’. The plaintiff was one of the managing directors and he voted against this resolution but the company

Causes & Symptons of Stress Research Paper Example | Topics and Well Written Essays - 3250 words

Causes & Symptons of Stress - Research Paper Example How people react to stress will depend a great deal on their own personal experiences and life conditions. Often, these experiences and conditions are the result of factors beyond their control, such as their age, race or gender. In addition, stress experienced will be different depending upon the factors causing it, whether they are economic/financial, regular life events or periods of great transition. In â€Å"Age and Gender as Determinants of Stress Exposure,† it was discovered that there are some significant differences between the way girls and boys experience stress. Researchers Takeuchi, Williams and Adair investigate â€Å"Economic Stress in the Family and Children’s Emotional and Behavioral Problems† to determine whether children’s behavior is adversely affected by the economic stress levels of the household and whether this effect is increased with persistent as opposed to one-time dependence on social services. Dual-income households have their own set of stressors to face, however, which are explored in Windle and Dumenci’s â€Å"Parental and Occupational Stress as Predictors of Depressive Symptoms among Dual-Income Couples† (1997). ... in helping these older adults deal with stresses caused by life events, but indicated a consistent steady rate of recovery for these individuals in studies such as â€Å"Transitory Impact of Life-Event Stress on Psychological Symptoms in Older Adults† (Norris & Murrell, 1987). Karen Rudolph and Constance Hammen (1999) concluded in their study on how experience and consequences of life stress varied depending upon age and gender differences that there are significant differences between the types of stress experienced between pre-adolescent and adolescent boys and girls. Of the 88 children who participated in their study, it was determined that while adolescent girls experienced the highest levels of interpersonal stress, adolescent boys experienced the highest levels of non-interpersonal stress. Preadolescent girls experienced the highest levels of independent stress and conflict in the family unit. In addition, it was determined that a great deal of this stress was generated by the children themselves. The study was designed to â€Å"examine bidirectional paths between children and stressful events in their environments. In particular, we examined whether a transactional perspective would shed additional light on observed age and gender differences in life stress† (Rudolph & Hammen, 1999, p. 660). The research also had a secondary goal of identifying â€Å"age and gender differences across multiple domains of stress† (Rudolph & Hammen, 1999, p. 660). Relevant areas of life stress research were discussed in the areas of stress exposure versus stress generation, the role of social context and stress reactions vulnerability to depressive outcomes. In discussing stress exposure versus stress generation, the authors stressed the importance of distinguishing between

Famine, Affluence, and Morality Essay Example for Free

Famine, Affluence, and Morality Essay In Peter Singer’s 1972 article titled â€Å"Famine, Affluence and Morality†, he suggests that wealthy nations have an ethical duty to contribute much more than they do to other nations who are suffering through a natural disaster, extreme poverty, famine or other issues. In this paper, I will describe Singers objective and give his argument with regards to this issue. I will describe three counter-arguments to Singer’s view which he addresses, and after that reveal Singer’s reactions to those counterarguments. I will explain Singer’s idea of marginal utility and also differentiate how it pertains to his argument. I will compare how the ideas of duty and charity alter in his suggested world. To conclude, I will provide my own position in response to Singer’s argument. The primary objective of Singer’s article is to express that we as people have the capacity to assist those in dire need as it is our moral duty to do so. He uses the disaster in East Bengal as an example. â€Å"Continuous poverty, a cyclone, and a civil war have turned a minimum of 9 million people into abandoned refugees; nonetheless, its not beyond the capability of the wealthier countries to provide sufficient help to decrease further suffering to very small proportions (Singer 1972). He thinks that theres no reason at all for individuals to suffer if other people have the ability to assist and prevent it from happening or getting worse. It’s our moral responsibility to modify our way of living so as to achieve this important objective. They are overcrowded, hungry, dehydrated and need medical attention. Singer believes that we have the resources to decrease the suffering and pain yet we disregard the problem and do nothing at all, which can be immoral. We should modify our opinions of morality so as to develop a dedication to helping people in dire need. Singer provides counter-arguments in his work which I will talk about here. He offers his readers a scenario which involves a drowning kid and a witness. Most people would try to save the kid since its the â€Å"right† action to take. Singer proposes that this duty happens since lots of people know that a drowning kid is considered very bad and outweighs the fact they you have to get your clothes muddy and wet. The counter-argument in this situation proposes that because I am not the only individual seeing this event, why is it my duty to do something positive about it? Why must it be my ethical responsibility to assist this kid in case nobody else is doing anything regarding it? Singer explains, â€Å"In case its in our power to avoid something bad from occurring, without thereby compromising anything of comparable moral significance, we should, morally, to do it (1972). † He thinks that we are able to do whats right however we should decide to do whats right even when everybody else decides not to. Singer also touches on whether our moral responsibilities must be restricted to distance. The counter-argument in this instance proposes that because these suffering people are so far away, why is it my moral responsibility to help them instead of using it in my own area? According to Singer, â€Å"It makes no ethical difference whether the individual I can assist is a neighbors kid 10 yards from me or a Bengali whose name I shall never know, 10,000 miles away (pg. 232). † Its still our moral obligation to do whats right. Is it morally appropriate to discriminate against a suffering individual just due to their distance? Singer suggests, â€Å"In case we accept any rule of impartiality, universalizability, equality, or whatever, we cant discriminate against somebody just because he is far away from us (or we are far off from him) (pg. 232)†. A person’s distance must not restrict our moral duties. Singer believes that everybody must give when its required. Many people are not contributing, so how much must I give without making myself or my loved ones worse off? The counter-argument here is whether to give more than can cause financial stuggle. He discusses the probability of contributing to the point of marginal utility. As Singer states â€Å"Because the situation seems to be that not many people are likely to give considerable sums, it makes sense that I and everybody else in similar conditions must give as much as possible, that is, at least up to the level at which by giving more one would start to cause acute suffering for oneself and one’s dependents-perhaps even beyond this level to the stage of marginal utility, at which by giving more one would cause oneself and one’s loved ones just as much suffering as one would prevent in Bengal† (pg. 234). To conclude, we all must give as much as possible so long as it doesnt cause us to suffer in the process. Singer proposes that responsibility and charity is our ethical duty. We â€Å"ought† to assist unknown people in need of assistance if we are capable to and that it would be morally incorrect not to contribute. We must put on our old clothes instead of purchasing new ones just for the simple truth that you want to be well dressed. Duty and charity change in this future world since in this era, many people wont give up certain luxuries so as to give to other people. Most people are selfish and would prefer to indulge in the finer matters in life rather than worry about contributing their hard earned bucks to other people in need of assistance. Individually, I support Singer’s point for many reasons. I do think that we must assist people in need when we are capable of doing so as long as it does not cause us to suffer financially. I agree that a few luxuries must be overlooked if it implies that a life can be saved. In case we were suffering or in an identical condition, would we wish or expect assistance? I agree that its the correct thing to do morally. I dont believe that we must discriminate against a suffering person simply because that individual isnt in our society. The life of an individual is invaluable and must come first of all. To conclude, Singer’s primary point is that it is our moral obligation to assist other people in times of need with regards to medical care, food, shelter or reconstruction. I agree that we must contribute our money and time to assist other people if it doesnt create a bad impact on our own lives. In this era, lots of people are selfish as well as greedy and dont usually stop to take into consideration other people in need of assistance. People need to understand that there are lots of people around suffering and may ultimately pass away if they dont get the assistance they need as well as deserve. I agree that it is our moral duty to assist any person in urgent need even when its an individual thousands of miles away.

Impact of Obama on US Regulatory System

Impact of Obama on US Regulatory System Within the first few years when Obama was elected, there are certain things that he has done right, while there are things that he failed to reflect on the broader portion of society. Yet, one thing he is doing that almost no one noticed, even the liberals, is strengthening the countrys regulatory system. The U.S regulatory system has been heavily weakened by the previous Republican presidents, in order for businesses to soar without any interuptions. However, this seemed to be troubling as proven by the recession in 2008 where the global collapsed due to the inregulated big banks, such as, AIG, that were supposed to be overseen by regulators. The problem is that these regulators were paid by these banks, and one would imagine that these businesses were appointed specific regulators by the government, yet, it was not the case. Hence, these rating agencies and regulators were often understaffed or afraid of losing businesses that these banks had the chance to mess up badly. That is wh y Obama is looking to reform these regulatory agencies. The agencies created in the great reform periods (1901–1914, 1932–1938, and 1961–1972) were intended to regulate all the difficult aspects of the economy, i.e. corruption, polluted environment using their scientific knowledge. Because people in power believed back then that we could administrate our country using scientific methods, which would differentiate itself from prejudice and pressures from the lobbyists, the staffs of our regulatory came from social and natural science majors. The idea was heavily criticized as the staffs are often inadequate to response everchanging aspect of our economy. Many of our previous Presidents believed in this idea, it was not until 1980s when George W. Bush became the President, and the idea was ultimately challenged by the Republicans and his allies. All of the staffs were replaced with business executives, and lobbyists; which actually defeated the purpose of regulating based on scientific expertise. Most of the elected peo ple from the Republican Parties were often unfitted for their positions. One example is Edwin G. Foulke Jr, who was chosen to run the OSHA by Bush. It would have been perfectly fine, if it was not for the fact that Mr. Foulke was previously an enemy of the OSHA agency, and he had actively instructed companies on how to stop union organizations. Another fact is that these chosen candidates are often rendered useless to do their job. It is rather odd to see Jeffrey Holmstead appointed by Bush to run the Clean Air Act, even though he was a representative of the Chemical Manufacturers Association. One is then forced to question whether the purpose of appointing unfitted people for the jobs is to render the regulatory system useless. However, after Obama took the office, the candidates were more carefully selected and properly fitted for the job. For instance, Obama knew that state officials are often the ideal candidates to manage the regulatory system, because they know what the rules are and how they are enforced. That is why he chose several knowledgeable state environmental officials to be in charge of the EPA. Lisa Jackson was picked to run the agency, as she was a chemical engineer who also directed the New Jersy Department of Environmental Protection. Previous Republican Presidents didnt just weaken our regulatory system by choosing the wrong people, they also heavily reduced the agenciess financial plan. This ultimately forced the agencies to lay off employees, which then translates to poor inspections. The number of officers during George Bush time dropped thirty five percentages. What is the point of having regulatory rules if there are not enough inspectors to enforce the rules? Seemingly, that was ho w the Republicans wanted. With all of his efforts, Obama is undoing all the damages to our regulatory system, by having massive fundings to most of the regulatory agencies. In 2010, the EPA was funded with $10.5 billion dollars. Similarly, OSHAs budget increased by ten percentages in 2010, which permitted to employ another 130 inspectors. Remarkably, one important thing that Obama did was that he made it difficult for the Congress to obstruct these regulatory rules. The Office of Information and Regulatory Affairs (OIRA) was introduced 1981 under Reagans administration. It was created to oversee all the other agencys rules. It has the power to detain or put an end to a rule, if the costs exceed the benefits, which were subjective and elusive to measure. That is why the OIRA became an effective device for the Republicans to weaken the regulatory system. Currently, Obama appointed Cass Sunstein, a Harvard Law Professor to be in charge of the OIRA. Mr. Sunstein shifts the focus of OIRA from the costs-benefits pe rspective to taking care for our future generations. The regulating agencies are now once again functional.Mary Schapiro, appointed to run the SEC, made 1600 inspections on Wall Street money managers. Jon Leibowitz, chairman of the Federal Trade Commission, sued Intel from averting computers makers using non-Intel chips. Even though Clinton tried to bring back the regulatory agencies in 1993, but he was overwhelmed by the Republicans domination in the Congress. Things are fine at the moment, yet, history tends to repeat itself. The political power is divided between the executive, legislative and judicial branch. Within the executive branch, the President is the most powerful leader. The process of electing the President is difficult, as our Founding Fathers did not wish for the President to be elected directly from the people. The idea of electing the President from a popular vote seemed too democratic or in another words, chaotic, as it would create imbalances between different classes of society. That is why the Electoral College was created. The numbers of Electoral College in each state depend on the numbers of members of Congress that state has. For instance, California has 55 electoral votes, while Wyoming has only 3 electoral votes. Having the Electoral College was not only meant to restore balances, but also to distribute the candidatess deficient amount of time and money, i.e, the candidates would concentrate their political campaigns on battlegrounds states instead of swing states, as George Bush did in 2004, where he ignored California, as results showed he was hopelessly behind. However, as practical as the idea seems, there were certain circumstances where the candidate received Presidency without having the majority of popular vote, such as, in 2000, even though George Bush received 500,000 less votes than Al Gore, he still managed to become the President by having the majority in electoral votes. Seemingly, this means one person vote is not practically equal to another, which ultimately challenges our fundamental idea of democracy, where one person is politically equal to another. The President is paid in salary annually. However, the Presidents compensation is often smaller compared to other companiess CEO. This reflects on the basic idea of capitalism where the President of a public sector is compensated less than other private sectors. This allows private ownerships to thrive, and reduce the publics cynicism about possible corruption.The powers of the President listed in the Constitution are the power to veto legislation passed by the Congress, to perform as the commander in chief of the armed forces, execute the laws, pardon criminals, make treaties, call Congress into special session, appoint government officials, and recognize foreign governments. But, it is safe to say that the Presidents powers may vary greatly depending on the circumstances. To expand on this thought, the President does not have the power to declare war, the Congress does (as specified in the Constitutions). Yet as proven in the Iraq war in 2001, Bush deployed 200,000 American troops into the war without the permission of the Congress. Only after the troops have arrived, he asked for their permissions, which proved to be completely useless. Furthermore, Bush advanced by freezing assets of suspected criminals involving the 9/11 incidents, and arrested people based on suspictions without any evidences. This was not challenged by the Congress since the issue was sensitive, and no one wanted to be remembered by being on the opposing team. The Presidents public image is equally important. By regular appearances on TV, Bush managed to convince 7/10 Americans that Saddam Hussein was involved in the 9/11 attack without having any supported evidences. Presidents often have different styles that they wish to operate with. Seemingly, John F. Kennedy appeared to be overconfident, while Lyndon Johnson was completely opposite. Reagons office was always a mess as he didnt pay attention to details; yet, he was excellent at communicating his idea to the public to the point none exceeded him. On the contrary, Jimmy Carter paid extremely close attention to details, which was a training that he obtained as an engineer. Clinton allowed his team to exercise their creativity and freedom in performing tasks, while Bush enjoyed restrictions and obidience. The President is elected to be a leader. They are elected to inspire change, to reach for a greater good. Their powers are shared between the Congress and the Judicial System, where the checks and balances remind them where they need to be. Hence there were times when the Congress and the President were alligned in the same page (Vietnam War), yet, naturally, the system was designed so that the Congress will always challenge the Presidents actions, vice versa. With the U.S raising as a super power, so are the Presidents political resources. At the same time, he is always challenged by interest group, lobbyists pursuing their ways that are often difficult for the President to overcome their obstacles. The Presidents goals are then to remain initiative when it comes to the interests of capital at home, and preserve coroparates interests overseas.

Essay --

Almonds Nuts, Cashew, Pecans and Walnuts They are concentrated sources of vitamin B, vitamin E, protein and magnesium. The vitamin E in nuts protects the cells from the ill effects of free radicals caused by air pollution, peroxides and ultra violet rays. They are rich sources of unsaturated fats fat, but are good for the overall health of heart. Their benefits are similar to those of olive oil. The phytochemicals including antioxidants make them heart disease and cancer fighters. They make the skin, hair and nails healthy. They provide immense energy to the body and their daily consumption helps to fight ageing and laziness. Eating about 4-5 nuts for five times a week will add extra two and a half years to life. Brazil nuts They contain high contents of selenium which slows down ageing. This mineral works well with Vitamin E to eliminate the oxidative stress caused by free radicals and check the damage to cells. Due to high fat contents just two nuts a day are enough. Berries They are the rich source of nutrition, and occupy the topmost position among the fresh fruits and vegetables. The antioxidants and chemicals contained in them repair and prevent the effects of aging. They should be taken without any sauces or sugars or additives. They are high in fiber and help in weight loss. The blueberries, blackberries, strawberries, cranberries and black grapes contain anthocyanin which is present in their color pigments. This antioxidant tones the muscles, checks the growth of some cancers, improves brain function or memory, lowers the disease risk and increases the power of Vitamin C. Oxygen forms free radicals in body. These molecules damage the cells and cause chronic inflammation, age-related memory loss and aging. The chro... ...the immune system. It has healthy chemicals and is more beneficial than milk. But due to calories it should be eaten moderately. Some chocolates are even good for skin. The compounds like resveratrol and flavonoids are found in dark chocolates. They promote blood circulation, maintain youthful function of blood vessels and protect against the harmful effects of UV light. The prevalence of heart disease is nine times less among the Kuna people of the San Blas islands, who profusely use cocoa in several beverages. It lowers the risk of high blood pressure, type 2 diabetes, kidney disease and dementia. Kiwifruit It promotes healthy bones, and gives clean and spotless skin. It contains more vitamin C than that of oranges. It acts as antioxidant and neutralizes the free radicals which cause inflammation related diseases like cancer, heart or Alzheimer’s disease etc.

International Development in Developing Countries Essay -- Developing

International Development in Developing Countries â€Å"†¦increasing international trade and financial flows since the Second World War have fostered sustained economic growth over the long term in the world’s high-income states. Some with idle incomes have prospered as well, but low-income economies generally have not made significant gains. The growing world economy has not produced balanced, healthy economic growth in the poorer states. Instead, the cycle of underdevelopment more aptly describes their plight. In the context of weak economies, the negative effects of international trade and foreign investments have been devastating. Issues of trade and currency values preoccupy the economic policies of states with low-income economies even more than those with high incomes because the downturns are far more debilitating.1† The topic that I have selected for my chapter evaluation essay is that of â€Å"Economic Development†. This paragraph above is the best summary of the chapter’s contents. In this chapter the author discusses the influence of development on the three worlds of countries. These worlds are benchmarks set to assess countries economic states relative to each other. When looking through the topic of development, two drastically different ways to assess it arise. The majority of the western world looks at development in terms of per capita GNP. This means each country is evaluated on a level playing field, comparing the production of each country in economic value. Opposite this style of evaluation is that of the alternative view, which measures a country’s development on its ability to fulfill basic material and non-material needs. Cultural ties are strong in this case as most of the population does not produce for wealth but merely survival and tradition. Throughout the chapter the text exerts more emphasis on the economical evaluation of a country's development rather than the alternative method. It begins to branch off quickly into the classification of countries deriving new topics all relating back to the economical approach. Beginning this discussion is the topic of underdevelopment. Many factors can lead to the underdevelopment of a country. The most common sign of underdevelopment is that of a â€Å"Dual Economy†, this takes place when a â€Å"small modern elite and middle class make up about 20-30% of a country’... ...an overabundance of information all applicable to the topic. My feeling was that such an overwhelming load of facts and systems directed me away from the most important facts of the chapter. Its imperative that the student understands the small scale relationship to economic development. Therefore my attempt was to highlight the main topics of the chapter and relate them to the reader to provoke intrest and thought towards many of these important life changing situations that occur everyday. If one can see past all the theories primarily and see the cause and effects behind them, they’re appreciation for the ideas stated in the theories. Bibliography: 1. Global perspectives/ Kelleher, Ann./ Upper Saddle River, N.J. : Prentice Hall, c1999. 2. The Globalization Of World Politics/Baylis,John & Smith, Steve/Oxford University Press Inc., New York, c2001. 3. Poverty And Development/Allen, Tim & Thomas, Alan/ Oxford University Press, Milton Keynes, U.K., c2000. 4. Globalization And International Relations Theory/Clark, Ian/Oxford University Press Inc., New York, c1999. 5. Civilizing World Politics/Albert,Mathias/Rowman & Littlefield Inc. Lanham, Maryland, c2000.

Basic of Stock Market

Wouldn't you love to be a business owner without ever having to show up at work? Imagine if you could sit back, watch your company grow, and collect the dividend checks as the money rolls in! As you've probably guessed, we're talking about owning stocks. This fabulous category of financial instruments is, without a doubt, one of the greatest tools ever invented for building wealth.Stocks are a part, if not the cornerstone, of nearly any investment portfolio. When you start on your road to financial freedom, you need to have a solid understanding of stocks and how they trade on the stock market.Over the last few decades, the average person's interest in the stock market has grown exponentially. What was once a toy of the rich has now turned into the vehicle of choice for growing wealth. This demand coupled with advances in trading technology has opened up the markets so that nowadays nearly anybody can own stocks. This paper is intended to explain all the basic questions about the inv esting. This will help new investors to lighten up their confusions and equip them the basic idea of Stock Market. Basic of Stock Market What Are Stocks?Stock is a share in the ownership of a company. Stock represents a claim on the company's assets and earnings. As you acquire more stock, your ownership stake in the company becomes greater. Shares, equity, or stock, it all means the same thing. Being an Owner Holding a company's stock means that you are one of the many owners (shareholders) of a company and, as such, you have a claim (albeit usually very small) to everything the company owns. This means that technically you own a tiny sliver of every piece of furniture, every trademark, and every contract of the company.As an owner, you are entitled to your share of the company's earnings as well as any voting rights attached to the stock. A stock is represented by a stock certificate. This is a fancy piece of paper that is proof of your ownership. In today's computer age, sharehol ders won't actually get to see this document because the brokerage keeps these records electronically, which is also known as holding shares. In the past, when a person wanted to sell his or her shares, that person physically took the certificates down to the brokerage. Now, trading can be done with a click of the mouse or a phone call.Debt vs. Equity Why does a company issue stock? Why would the founders share the profits with thousands of people when they could keep profits to themselves? The reason is that at some point every company needs to raise money. To do this, companies can either borrow it from somebody or raise it by selling part of the company, which is known as issuing stock. A company can borrow by taking a loan from a bank or by issuing bonds. Both methods fit under the umbrella of debt financing. On the other hand, issuing stock is called equity financing.Issuing stock is advantageous for the company because it does not require the company to pay back the money or m ake interest payments along the way. All that the shareholders get in return for their money is the hope that the shares will someday be worth more than what they paid for them. The first sale of a stock, which is issued by the private company itself, is called the initial public offering (IPO) (Mladjenovic, 2002). When buying a debt investment such as a bond, shareholders are guaranteed the return of their money (the principal) along with promised interest payments.But in equity investment, being one of the owners of the company, shareholders assume the risk of the company not being successful – just as a small business owner isn't guaranteed a return, neither is a shareholder. Shareholders earn a lot if a company is successful, but they also stand to lose their entire investment if the company isn't successful. Risk It must be emphasized that there are no guarantees when it comes to individual stocks. Some companies pay out dividends, but many others do not.And there is no obligation to pay out dividends even for those firms that have traditionally given them. Without dividends, an investor can make money on a stock only through its appreciation in the open market. On the downside, any stock may go bankrupt, in which case shareholders investment is worth nothing. Although risk might sound all negatives, there is also a bright side. Taking on the greater risk also demands a greater return on investment. This is the reason why stocks have historically outperformed other investments such as bonds or savings accounts.Over the long term, an investment in stocks has historically had an average return of around 10-12%. Different Types of Stocks There are two main types of stocks: common stock and preferred stock. Common Stock A common stock is the basic stock a corporation issues. It just shows that shareholder own a fraction of the company. The common stocks are directly influenced by failures and successes of the company. Common stocks are more of a gamble . Since there is a higher chance of making profit, common stock owners are issued their dividends or profits after the preferred stock.Over the long term, common stock, by means of capital growth, yields higher returns than almost every other investment. If a company goes bankrupt and liquidates, the common shareholders will not receive money until the creditors, bondholders and preferred shareholders are paid. Preferred Stock Preferred stock represents some degree of ownership in a company but usually doesn't come with the same voting rights (Wikipedia, 2006). After all the common stock has been issued, companies begin to distribute preferred stock. The preferred stock owners are given their dividends before the common stock owners are.Also, if the company goes out of business, and liquidates, the preferred stock owners are paid back the money they invested before the common stockholders are reimbursed. The main drawback of preferred stocks is that they cannot benefit as much from company profits because they are only paid a fixed dividend payment. How Stocks Trade Most stocks traded on exchanges, which are places where buyers and sellers meet and decide on a price. Some exchanges are physical locations where transactions are carried out on a trading floor.The other type of exchange is virtual, composed of a network of computers where trades are made electronically – Internet trading. The purpose of a stock market is to facilitate the exchange of securities between buyers and sellers, reducing the risks of investing. The New York Stock Exchange The most prestigious exchange in the world is the New York Stock Exchange (NYSE) (Encarta, 2006). The â€Å"Big Board† was founded over 200 years ago in 1792, with the signed of the Buttonwood Agreement by 24 New York City stockbrokers and merchants.Orders come in through brokerage firms that are members of the exchange and flow down to floor brokers who go to a specific spot on the floor where the stock trades. At this location, known as the trading post, there is a specific person known as the specialist whose job is to match buyers and sellers. Prices are determined using an auction method: the current price is the highest amount any buyer is willing to pay and the lowest price at which someone is willing to sell. Once a trade has been made, the details are sent back to the brokerage firm, who then notifies the investor who placed the order.Although there is human contact in this process, computers play a huge role in the process too. The Nasdaq The second type of exchange is the virtual sort called an over-the-counter (OTC) market, of which the Nasdaq is the most popular. These markets have no central location or floor brokers. Trading is done through a computer and telecommunications network of dealers. A market maker provides continuous bid and ask prices within a prescribed percentage spread for shares for which they are designated to make a market.They may match up buyers an d sellers directly but usually they will maintain an inventory of shares to meet demands of investors. Other Exchanges The third largest exchange in the U. S. is the American Stock Exchange (AMEX). The AMEX used to be an alternative to the NYSE, but Nasdaq had filled that role since. In fact, the National Association of Securities Dealers (NASD), which is the parent of Nasdaq, bought the AMEX in 1998. Almost all trading now on the AMEX is in small-cap stocks and derivatives. Buying StocksYou've now learned what a stock is and a little bit about the principles behind the stock market, but how do investors actually go about buying stocks? Investors don't have to go down into the trading pit yelling and screaming your order. There are two main ways to purchase stock: Using a Brokerage The most common method to buy stocks is to use a brokerage. Brokerages come in two different kinds. Full-service brokerages offer to investors (supposedly) expert advice and can manage the investorâ€℠¢s account; they also charge a lot.While discount brokerages offer little in the way of personal attention but are much cheaper. At one time, only the wealthy could afford a broker since only the expensive, full-service brokers were available. But when Internet came, the online discount brokers have been available, more affordable. DRIPs & DIPs Dividend reinvestment plans (DRIPs) and direct investment plans (DIPs) are plans by which individual companies, for a minimal cost, allow shareholders to purchase stock directly from the company. Drips are a great way to invest small amounts of money at regular intervals. Bull and Bear MarketsIn addition to the three market theories mentioned above, there are other ways of thinking about the market as a whole, that are less theoretical and more grounded in what is actually happening to them. One way is to describe the overall trends in the market, such as by defining them as bearish or bullish. The Bulls A bull market, loosely defined, is a m arket in which the major stock indexes have risen by over 20% over a substantial period of time, usually measured in months or years. Bull markets can happen as a result of an economic recovery, an economic boom, or simple investor psychology (Khan, 1998).The longest and most famous of all bull markets is the one that began in the early 1990s in which the U. S. equity markets grew at their fastest pace ever. The Bears Bear markets are the exact opposite of bull markets: they are markets in which the major indexes have declined by 20% or more over a period of at least two months (a decline that large for any shorter time period is simply called a â€Å"correction†, especially if it followed a substantial rise). Bear markets usually occur when the economy is in a recession and unemployment is high, or when inflation is rising quickly.The most famous bear market in U. S. history was, the Great Depression of the 1930s. Price Chart/ Stock Table A price chart graphically illustrate s a stock's price action over a selected period — one year, for instance. Some investors, called technical analysts or chartists, feel it's a waste of time examining financial statements, dissecting analysts' forecasts or pondering a firm's prospects vis-a-vis the competition. Instead, they believe that a price chart tells them everything they need to know about a stock. Chartists say stock prices move in trends.That is, a stock that has already been moving up in price (up trend) will continue its winning ways, while one going the other way (downtrend) will continue to disappoint its shareholders. The analysis is easy. If the stock is in an up trend, the price will be higher on the right side than in middle or left side of the chart. Conversely, the right side will be lower than the middle or the left side if it's in a downtrend. Conclusion In conclusion, people around us might say that Stock Market is a gamble and investors might lose their money anytime.It will only happen if the investor will not do his responsibility as investors. Investing is not easy, investor need to do his assignment in order to gain. There have been untold ways about how to make the stock market easier and safer for the new investors. Few, if any, are likely to prove useful or effective. But in order to minimize the risks of financial market imbalances, it is important that there be a well thought-out laws for investing, rules and regulations that implement properly, smoothly, and honestly. This task requires the participation of all concerned investors.Bibliography Khan, A. (1998). Stock Investing for Everyone: Tools for Investing Like the Pros (p. 136). San Jose, CA: Bookworld Services Microsoft ® Encarta ® Online Encyclopedia (2006). Stock Exchange. Retrieved last December 03, 2006, from http://encarta. msn. com/encyclopedia_761560145/Stock_Exchange. html#s1 Mladjenovic, P. (2002). Stock Investing for Dummies (p. 9). Indianapolis, Indiana: Wiley Publishing, Inc. Wikipedi a, the free encyclopedia (2006). Preferred stock. Retrieved last December 03, 2006, from http://en