The Electoral College is obsolete and should be abolished in American Essay

The Electoral College is obsolete and should be abolished in American politics. Do you agree Justify your answer - Essay Example However, it is a time-tested success, another testament to the forward thinking of the creators of the Electoral College system of voting for President, the Founding Fathers. Members of the Constitutional Convention of 1787 faced the difficult question of how to elect a president. They were severely at odds with each other over the question of presidential selection and anguished over the concept of creating a workable system. The Electoral College system that emerged during the very last week of the Convention did seem to satisfy all the diverse factions (Katz, n.d.). The intent of this system was that the selection of a president be based solely on merit and without regard to state of origin or political party by that state’s most informed and educated individuals. Each state has a number of electors equal to the number U.S. Representatives plus its (2) U.S. Senators. These electors then vote for President. The method of choosing the electors was remanded to the individual state legislatures thereby calming those states already distrustful of a centralized government. This understanding built upon an earlier compromise in the design of the congress itself and thus satisfied both large and small states. The nation of thirteen states wanted to retain their own governmental powers and the prevalent thought of the time was that political parties were detrimental to liberty. These founders were of the opinion that men should not campaign for public office. ‘The office should seek the man. The man should not seek the office.’ In 1787, the country’s population was distributed along a thousand miles of Atlantic coastline that was hardly, if at all, connected by reliable communication or transportation. â€Å"How, then, to choose a president without political parties and national campaigns without upsetting the carefully designed balance between the presidency and the Congress on one hand and states and the federal

Managing Risk with Derivatives Essay Example | Topics and Well Written Essays - 1250 words

Managing Risk with Derivatives - Essay Example This paper attempts to discuss derivatives as a tool for financial risk management and its effectiveness in business risk management. In the finance literature, hedge refers to a technique in which an investment is made in certain securities to reduce or eliminate the risk of loss resulting from the fluctuations in the price of another security by taking two offset positions in the related security. Hedging is defined as a risk management strategy designed to offset risk of loss causing from fluctuations in the prices of commodities, currencies or securities ( LiPuma, 2004). Hedging helps to transfer the various risks without the need of buying any insurance policies. Hedging was commonly used in the commodities market by the traders to reduce the risk of loss caused by fluctuations in the price of a commodity. It was used by the trader to buy as well as sell the equal quantities of the same commodities in two different markets at same time with the expectation that a change in price in future in one market will help to offset by an opposite change in the other market. But now hedging could also be used in the sec urities and foreign exchange market. Source: One of the instrument or tool used to hedge risk is derivatives. ... Derivatives refer to the financial contracts or instruments that derive their value from the underlying asset like stocks, equity, bonds, commodities etc. Nowadays derivatives are also used by the investors and institutional borrowers. The people who use derivatives as a way of managing risk are called hedgers. The derivative instruments used for hedging purposes include forwards, futures, options, swaps and combination on these (hybrid). Derivatives are becoming increasingly important in international markets as a tool for risk management. Derivatives help lot to the corporate clients to separate their risks and transfer them to those who are ready to bear their risks. In addition to these derivatives are the cheapest and convenient means of hedging because in derivatives there is no actual delivery of underlying assets only the profit or loss on the derivative contract is adjusted. Moreover all the derivative instruments are very simple to operate without any tedious process in it. They can also be used by the companies to hedge their long tern risks (i.e., 10-15 year risk), which enable the companies to focus more on management decisions other than funding decisions. Further all derivative instruments are low cost products and offer high liquidity to the companies. Due to these reasons derivatives have become one of the essential tool for the companies to hedge their complex exposures and volatilities that they hav e to face in the financial markets today. However it is seen that the derivative instruments in recent times have come under general scrutiny because of its misuse made by the companies in managing the financial risks. Hence depending upon how it is used the derivatives can be both advantageous