Financial Management and Risk Analysis Assignment

Financial Management and Risk Analysis - Assignment Example The new automated assembly line will be requiring the purchase of five new robots, each costing $32,000 and associated gripping devices costing a total of 65,000. Roller tracking and new assembly fixtures will also be needed adding up to a cost of 15,000. The new assembly cells will be manned by three cell programmers/operators who will be paid 20,000 each. The finance department estimates that installing the automated system will generate an annual cost savings of 5,000 due to the reduction in reduction in scrap and rework. After five years, the robots can be sold each with market value of 1000. This report will analyse the possibility of investment in the new assembly line by utilizing financial management tools. The first section will look at the annual expected cash inflows and outflows. The next will be an analysis of the investment through the use of capital budgeting tools like payback period, return on investment, net present value, discounted payback period, internal rate of return, and sensitivity analysis. Recognizing that numbers don't tell all, this report also goes beyond quantitative analysis by also looking at the quantitative issues which should be considered by the firm. Table 1 shows the expected annual cash flow that our business organization hopes to incur in the installation of the automated assembly line. ... The first to fourth years are forecasted to generate cash inflows of 93,000 annually which reflects the cost savings from rework and scrap and the elimination of the cost incurred in hiring fitters offsetting the salaries of the computer technician. During the fifth year, the company will be incurring the same costs and benefits together with the expected salvage value of the robots. Table 1. Forecasted Cash Flow III. Payback Period The payback method is one of the most popular tools in conducting capital budgeting decision. The payback period tells the company the length of time required to recoup the original investment through investment cash flows. This is essentially the time when the company breaks even-the initial capital outlay is equal to the cash flows. Considering that the business organization invests in a project which generates the same level of cash flow annually, the payback period is computed as the follows: Payback = Initial Investment Annual Cash Flow (equation 1) However, if the investment generates unequal annual cash flows, then the individual annual cash flows are subtracted from the initial investment until a difference of zero is reached (Lightfoot 2003). The year when cash flow equals investment is the payback period. Other things being equal, the investment with a low payback period is chosen as it implies less risk for the company. Table 2. Payback Period Table 2 shows how the pay back period for the proposed automated assembly line. As the investment yields unequal cash flow for the five-year period, this report simply subtracted the yearly cash inflow to the total amount of the investment. The cash outlay for

The Marketing Mix Promotion Strategies Case Study

The Marketing Mix Promotion Strategies - Case Study Example This strategic plan saturated the market making it more difficult for newer entrants to gain a step hold in the huge market. This move was also aimed at rivaling the sporting wears giant Nike. The acquisition was done in order to make the company more viable for consumers where they can create a synergy between both the companies so that they can challenge the rival. However, the acquisition led to mixed responses from the consumers resulting in a share value decline as well. Just before the Olympics fever gained momentum, Adidas took the initiative to launch another promotional campaign where they have highlighted their products and the ambassadors. This massive promotional campaign was launched in Europe and one could see huge structures of either Adidas shoes being loaded on a truck, or football players standing in a circle. All these initiatives were highlighting the presence of the brand in the forefront of such a major even in sporting history, whereby players are supporting their attire etc. The combination of the two big brands present in the shoe industry can termed to be a positive sign for the company. They can combine their efforts; match their strengths together in order to create a new level of a brand. However, there are threats of brand cannibalization which led to the main slump in prices when the merger news was spread around.

Developing Sensor Technology

Developing Sensor Technology Abstract The need for sensor devices has been growing to develop new applications in several technological fields. The current state-of-the-art of this sensor technology used in modern electronic nose designs to operate in a different manner. The chamber of the E-Nose sensor is to be upgraded mainly for reducing the nuisance alarms and to improve reliability to detect smoke which is caused by fire and non-fire particles. This paper gives a brief state of the art of different fire and non-fire particles that emits smoke and various chemical gas sensors used to detect smoke and a fire detection algorithm. Keywords- Sensors; Smoke; Electronic-Noses; Fire Detection Algorithm fire particles; non-fire particles Introduction The conception of an electronic nose could appear sort on an up-to-date technology. Scientists initial developed a synthetic nose within the 1930’s that used sensors to measure levels of ultra-violet light found in mercury. Currently these devices are employed in numerous technological fields for various applications. Presently these devices used as trendy fireplace detection frameworks for the simultaneous estimations of carbon monoxide gas (CO), carbon dioxide (CO2), and smoke. The concentration of the rates of CO and CO2 in smoke offers a path to cut back the frequency of nuisance alarms so as to extend the reliability of smoke detectors. The sensors that square measures incorporated during this fireplace sighting system at the side of fire detection algorithmic rule detect smoke that is caused by fire or non-fire particles, and alarmed accordingly. Previous fire detection systems used sensors for measuring temperature, smoke, and combustion products which include oxygen (O2), carbon monoxide (CO), carbon dioxide (CO2), water vapor (H2O), hydrogen cyanide (HCN), acetylene (C2H2), and nitric oxide (NO) but they does not give any reliable results. Some used Gas Chromatography – Mass Spectrometry (GC-MS) along with Fourier Transform Infrared (FTIR) Spectroscopy analyzed smoke [1]. Advances in fire detection systems are being sought to decrease the detection time and the frequency of unnecessary alarms. Most of the research works done with the Multi-Sensor Detectors for accomplishing these goals because there may have some trouble in using smoke detectors with a single sensor to discriminate the smoke produced from fire and non-fire sources. The 95% frequency of unnecessary alarms reported by smoke detectors during the 1980’s in the U.S. is due to that limitation. Section 1 briefly introduces the Fire Detection System incorporated in an Electronic-Nose and different Gas Sensors that detects smoke in Section 2. Later, section 3 gives a brief description about the Fire and Non-Fire Particles and how the sensory system is designed in an E-Nose for preventing Fire accidents in section 4. Finally, we concluded in Section 5. Chemical Gas Sensors The environment needs to be monitored [2] time to time as many accidents took place lack of it. So in order to control the Industrial Process, Chemical Sensing Technologies has been emerging out to mainly emphasize on Control of combustion processes (oxygen) Flammable gases in order to protect against Fire Explosion. Toxic gases for environmental monitoring. Solid Electrolyte Sensor SE sensor [3] [4] is based on the principle of electrochemical gas detection, which is used to detect chemicals or gases that can be oxidized or reduced in chemical reactions. It mainly contains three electrodes: A sensing or working electrode which reacts when gas is available by either oxidizing or reducing the target gas. A counter electrode which provides a comparing converse response to that occurring at the sensing electrode so as to provide a net current stream. A reference electrode that stays unaffected by the chemical reactions occurring on the sensing and counter electrodes and provides a stable potential against which measurements are frequently created. Figure 1. Solid Electrolyte Sensor SEC sensors (Figure 1) used in millions of vehicles to monitor the exhausted gases and minimize the toxic emissions. Thermal-Chemical Sensors Thermal-chemical sensors [2] works on principle that there will be a change in temperature (à ¢Ã‹â€ Ã¢â‚¬  T) when heat energy is released or absorbed (à ¢Ã‹â€ Ã¢â‚¬  Eh). The pellistor is the most common thermal-chemical sensor (other thermal sensors are based on either on thermistors or on thermopiles). They are used for monitoring of combustible gases. Figure 2.Thermal-Chemical Sensors Gravimetric Chemical Sensors They are also known as piezoelectric sensors [5]. They are of two types used for gas sensing – Surface Acoustic Wave (SAW) device and the Quartz Crystal Micro Balance (QCM) as in Figure 4. Figure 3. SAW Device Figure 4. Quartz Crystal Balance SAW device produces a surface wave that travels along the surface of the sensor while the QCM produces a wave that travels through the bulk of the sensor as shown in Figure 3. Both work on the principle that a change in the mass of piezoelectric sensor coating due to gas absorption results in a change in the resonant frequency of exposure to a vapor. Conducting Polymer Sensor: Conducting polymers [2] are plastics and they change their resistance while they adsorb or desorb specific chemicals (Figure 5). The adsorption of these chemicals mainly emphasized on the polarity (charge) and their molecular structure (shape and size). Figure 5. Conducting Polymer Sensor Due to their high sensitivity, low price and rapid response time at room temperatures, Conducting Polymer Sensor best suits for chemical sensing. IR Spectroscopy Sensors: The Spectroscopic Sensors [2] determine the concentration of several gases at a time and they work on the principle that all the gases interfere and adsorb infrared spectrum at specific wavelengths due to their natural molecular vibration. Some systems with narrow band interference filters or laser light sources for a specific gas (like CO2) are termed as monochromatic systems. Figure 6. IR Spectroscopy Sensors In the above Figure 6, some concentration of CO2 present in the sample gas is absorbed by the infrared detector at a wavelength of 4.3 ÃŽ ¼m while an infrared light periodically emitted from the light source. These sensors are most suitable for CO2 gas and shows low cross-sensitivity with different gasses and are moderate at the reaction, fairly good at accuracy and linearity but are cumbersome and costly. Optical Fiber Sensors The optical fiber utilized as a locality of those sensors [6] is coated with fluorescent dye. On association with the vapor, the Polarity variations within the fluorescent dye will changes the dyes optical properties such as wavelength shift in fluorescence, intensity and spectrum changes. These optical as in Figure 7 changes are used as the retaliation mechanism for gas. Figure 7. Optical Fiber Sensor Optical gas sensors are mostly used to detect concentrations of ammonia (NH3). They have very fast response times, short of what 10 micro sec for sampling and analysis and are compact; lightweight can be multiplexed on a single fiber network, immune to electromagnetic interference (EMI) and can operate in high radiation areas. MOSFET Sensors: The metal oxide semiconductor field-effect transistor (MOSFET) sensors [4, 7] based on a change of electrostatic potential. They comprise of three layers, they are catalytic metal also called the gate (palladium), a silicon oxide insulator (platinum) and a silicon semiconductor (iridium or rhodium) as in Figure 8. When polar compounds interact with this metal gate, the current flowing through the sensor is modified. Figure 8. MOSFET Sensor [7] As no hydrogen atoms are released, molecules such as ammonia or carbon monoxide cannot be detected with a thick metal layer. But it can be possible to detect them when the metal gate is thinned. These MOSFET sensors or MOS sensors are very robust and have a relatively low sensitivity. E-Nose as Fire Detection System An electric or artificial nose can sense different types of chemicals and even distinguish particles not only for identifying individuals, but also used for the detection of fire. They work on the principle that smoke is made up of different chemical compounds. These devices consist of dozens of sensors that sense different types of chemical compounds found in the air. Some of the chemicals that cause smoke leads to flames are discussed below. Smoke It is a collection of solid and liquid particulates in air and emits gases when a material undergoes combustion or pyrolysis [8]. This is a commonly an unwanted by-product of fires (including candles, stoves, fire ramp and oil lamps), but may also be used for fumigation i.e., pest control. Smoke signals is communication for long distances like smoke signals to transmit signals, news or to indicate the people to gather in a place, offensive and defensive capabilities in the military (smoke-screen), cooking, or smoking like marijuana, tobacco and etc.). Heptane: It is a non-polar solvent and minor component of gasoline [9] with chemical formula H3C (CH2)5CH3 or C7H16. This is a colorless liquid and very hazardous chemical that appears which sense like petrolic odor. The structure of Heptane is shown in Figure 9. Figure 9. Heptane Structure It is commercially available as mixed isomers for use in paints and coatings and mainly applied in pharmaceutical manufacturing laboratories and for research development. It has a melting point at −91.0 to −90.1 °C; −131.7 to −130.3 °F; 182.2 to 183.0K Toluene It is a fragrant hydrocarbon (Its IUPAC deliberate name is methylbenzene) [10] is broadly utilized as a solvent and as an industrial feedstock. It is a water-insoluble clear liquid with the typical smell of paint thinners. In some cases toluene is also used as an inhalant drug for its intoxicating properties; on the other hand, breathing in toluene can possibly cause serious neurological damages. Figure 10. Toluene Structure Toluene (Figure 10) is principally utilized as a precursor to benzene. The second positioned application includes its disproportionation to a mixture of benzene and xylene. Methanol Methanol is the simplest alcohol, and is a light, unstable, colorless, ignitable fluid with a unique smell as same as to, however marginally sweeter as that of drinking alcohol which we called as ethanol [11]. It is otherwise referred as methyl alcohol, wood alcohol, which is produced as a by-product of the destructive distillation of wood, wood naphtha or wood spirits, with the formula CH3OH for the structure in Figure 11 (often abbreviated MeOH). Figure 11. Structure of Methanol It is likewise utilized for delivering biodiesel by means of transesterification response. At room temperature, it is a polar fluid, and is utilized as a liquid catalyst, dissolvable, fuel, and as a denaturant for ethanol. Methanol is created regularly in the anaerobic metabolism of numerous mixtures of microbes, and is normally present in little sums in the earth. HDPE Beads High Density Poly Ethylene Beads [1] are white hermoplastic base resin and looks like wax and have the properties of electric wire. Figure 12. HDPE Beads HDPE Beads in the above Figure.12 used for extrusion packaging film, rope, woven bags, fishing nets, water pipes; injection of low-end commodity and housing, non-bearing load components, plastic box, turnover box; extrusion blow moulding containers, hollow products, bottles and it has society of plastic industry resin ID code is 2. Mixed Plastics Blended plastic [12] shown in Figure 13 is a term that covers all non-container plastic bundling sourced from the wastage of households, and it incorporates inflexible and adaptable plastic things of different polymer types and shades. It excludes plastic bottles and non-packaging items. Figure 13. Mixed Plastics Dry Ice: Figure 14 shows that it is the strongest manifestation of Carbon dioxide and fundamentally utilized as a cooling agent. It transmutes at −78.5  °c (−109.3  °f) at Earth atmospheric pressures. This great frost makes the strong perilous to handle without protection due to burns caused by freezing (frostbite). It is referred as Card ice [13]. Figure 14. Dry Ice Fire Detection Mechanism in E-Nose A Novel technique should be employed in E-Nose to respond immediately whenever the fire accidents took place [14]. The main objective of this mechanism is to reduce the nuisance alarms. Several experiments are conducted on various materials that causes smoke and observed how the materials go on burning while ignited them. The table 1 indicates that the ignition method and fire type (how the material burns) of the particular material which causes fire. Every E-Nose contains a sensory system (two components in E-Nose one is sensory system and the other component is a pattern recognition system [15]) and we need to enhance it so that it can be used as the fire detection system. In the sensory system, one among the above mentioned gas sensors are selected such that they detects particular material’s smoke and according to the classification algorithm and differentiate it whether the smoke is from fire and non-fire particles. Table 1: List of Particles Causes Fire The following Figure 15 shows the internal design of sensory system to be deployed in the E-Nose for reducing nuisance alarms as well as to react accordingly to the material that causes a fire. Figure. 15: Mechanism of Fire Detection System Based on type of these chemical compounds, the system can give information to the clients about the Fire and Non-Fire particles [16]. The system will perform the perfect action by ringing alert and empowers the fire extinguisher to keep the spreading of kindle to some degree by grouping fire and non-fire particles. The accompanying Table 2 gives the brief description of distinct fire extinguishers feasible in the market. Table 2: Types of Fire Extinguishers Where each Extinguisher specifies the classes of fires and they are listed below gives the details of their contents for which they belong to. Table 3: Classes of Fire Conclusion and Future Work Presently many more fire accidents are taking place and most of them are regarded as nuisance alarms i.e., the sensors that detect smoke will ring the alarm even though it is not necessary. In order to overcome this problem, this paper provided a novel technology that which holds the potential to give numerous benefits in terms of fire accidents like to reduce the nuisance alarms and to increase the reliability of the sensors. This mechanism not only reduces the false alarms, but also prevents the danger by enabling the in-built extinguisher whenever the fire particle is sensed. In future, we have a tendency to develop the precise classifier algorithm to distinguish the smoke from fire and non-fire particles.

The Existence Of God Essay -- essays research papers

The Existence of God   Ã‚  Ã‚  Ã‚  Ã‚  The existence of a God has for generations been the topic of fierce debate. This most usually occurring between members of the religious society and, everybody else. As a matter of fact the religious world itself has not always been able to agree on God. This has resulted in many a holy man to take up the fight for his deity through the realm of words. Many theories have been proposed, and all think that theirs proves beyond a doubt on whether or not God exists. To write this paper I read four of those theories by assorted men of the cloth, who all attempt to make the argument for a God in the Christian sense.   Ã‚  Ã‚  Ã‚  Ã‚  The first of the theories I looked at was that of St.Anslem of Canterbury. He supplies the ontological argument for the existence of God. The ontological argument states that by understanding the nature of God himself, we come to realize he exists. He explains this argument by first defining what God is. Anslem says that God is a being than which nothing greater can be conceived to exist, that it can not even be considered not to exist. In short, the fact that said being can not be considered not to exist, would thereby make it greater than any that could be considered not to exist. This would in all reality be the secret to God's omnipotence in Anlsem's eyes. Another point that he stresses is that just be understanding the concept of what a God is, you are proving his existence. This is because if you understand who God is, you can also accept his existence, and therefore cannot conceive that he does not exist. Therefore making him that which nothing greater can be conceived of, and which cannot be conceived not to exist which we have already defined as God.   Ã‚  Ã‚  Ã‚  Ã‚  The second argument for a God comes from St. Tomas Aquinas, who argues for the cosmological point of view. The cosmological argument states that all things in this universe have a cause, and since these causes cannot go on for ever there must be a first cause, i.e. God. He argues that there are five ways to argue for the existence of God, the first is the argument from motion. This states that everything in this world has certain potentials for motion. It also states that for these potentials to be met another object n motion must set off said potential. That object in turn would have ... ...ad and the point would be moot.   Ã‚  Ã‚  Ã‚  Ã‚  So by looking at these paths Pascal decided to look at the risks of each wager. In the first you get infinite rewards from only one life of believing. Plus he felt that you also probably had a fulfilling and enjoyable life too. So the first, can be looked at as a win win situation in which you risked very little, and won much. The second and fourth possibilities did not really concern Pascal much because by thinking of it in terms of odds, neither seemed probable, and again wouldn't matter anyhow because you would no longer exist. The third possibility however, in which you could end up in hell, seemed to help persuade Pascal into believing in a God. He felt that for the amount you had to lose in this situation, no intelligent human would take the risk. So in conclusion, Pascal came to believe that believing in a God was a safe bet, in that it had the least risk with the highest returns.   Ã‚  Ã‚  Ã‚  Ã‚  As for myself, after reading these papers I find myself tending to side with Pascal the most. I don't think that a little insurance could hurt, because until there is proof otherwise none of us really know.

Anne Lamott’s Overture: Lily Pads

Anne Lamott’s â€Å"Overture: Lily Pads†, presents a chain of stumbled steps throughout her life by showing that each stagger has made her stronger and demonstrated that every misfortune and tribulation of her existence has allowed her to become one step closer to God. My objective is to obtain an enhanced understanding of the nature and function of Anne Lamott’s journey into her selected religion, which ends with her choosing Christianity by accepting Jesus’ everlasting love into her life. I will explain her journey as well as how I think she understands the concept of being â€Å"born again†. I wish to present how her definition, perspective and understanding resembles or possibly even differs from that of my own, enabling me to examine and understand from another’s point of view. Anne Lamott’s mother and father were far from that of faith and had the mindset that believing meant that you were dim-witted. I think Lamott’s father had a huge impact on her prolonged journey into Christianity as she clearly explains his hatred of the faith. Growing up yearning for his contentment and approval she pretends to dismiss God to make him happy. Her journey starts with a love for Catholic Church. Her ideas and perception of God stemmed from her friends beliefs and her own youthful personal viewpoints. She grew up in a house overflowing with alcohol, pot, and atheism, altogether unmistakably interfering with her walk with Christ. As a child she prayed alone: â€Å"I just know I always believed and that I did not tell a soul† (Lamott 624). The quote shows the loneliness and confusion she must have experience at such a young age. Later Lamott begins to surround herself with her friend’s family who all read the bible, quote scripture and pray for their children each day, finally influencing her in a way that she seems comfortable and eager about. But as Lamott entered her mid teens she gradually drifted from faith and replaced it with alcohol, drugs and sex. I believe college made an enormous impact on why she chose Christianity as her religion of choice. She becomes drawn to Judaism as an effect of having many Jewish college friends, but doesn't actually convert. However after reading a Christian bible story in one of her classes she states, â€Å"I left class believing – accepting – that there was a God† (Lamott 635). Throughout the next few pages her views on Christianity continue to change, as she goes back and forth from having faith in Christ to revisiting her drug and sex crazed life. The meeting of a new preacher and visiting the Church from time to time guides her the way back to God. Towards the last few pages of the writing Lamott is visited by Jesus after illness following a recent abortion, evaporating all of her disbeliefs, fears and enabling her to gradually dispose of the things she felt was immoral in her life, ending with a solid and blessed foundation of trust and faith. Anne Lamott clearly expresses the highs and lows of her Christian walk, enabling the audience to grasp the variety of influences and furthermore illustrating that her spirituality is actually the tie that binds them all together. My understanding of the concept being â€Å"born again† refers to being born from above. From my viewpoint being â€Å"born again† means knowing that God and Jesus are real. Being overflowed with the Holy Spirit that brings the sensation of peace and understanding. To be born again is being forgiven for all past sin, no matter what obscurities or crimes you have committed in the past, as the glorious mercy of God is given freely. To be born again is to wipe your slate clean, to eliminate all bad habits and sins as well as sticking to the rules of the bible. Anne Lamott’s teenage understanding of â€Å"born again† was that of a negative one as a result of her newly saved English teacher. Lamott writes; â€Å"I wept in Sue’s class at the betrayal, and the gentle patronizing efforts to console me† (631). This was a consequence of her teacher’s decision to now portray and educate her student’s through Christ’s eyes. This had a negative effect on Lamott, leading her in the opposite direction of Jesus, forcing her to obtain aggravated and argumentative behavior towards other Christians. Anne Lamott’s passage describes the moment of her conversion into Christianity, she writes; â€Å"I hung my head and said â€Å"Fuck it: I quite. I took a long deep breath and said out loud, â€Å"All right. You can come in† (643). My personal idea of being born again perhaps wouldn’t include coarse language and just ‘allowing† Jesus in, but would include graveling at his feet, praying and yearning for his forgiveness of all my thoughtless sins. Which is why Anne Lamott’s understanding of being saved differs so very much from my own. Nearing the end of the text we learn of Anne Lamott’s baptism, following pregnancy through a man she was dating. This additionally shows the difference between my own and Lamott’s beliefs. It demonstrates that she isn’t completely following Gods will, untraditionally creating a human life outside of the family structure God intended for every child. In ‘Corinthians 7:2’ of the ‘Holy Bible’ it explains that countless sinful people have immoral sex outside of wedlock and should first be married, so the saved can fulfill their passions in a moral way. Although I consider myself to be a fresh believer, I feel that I should practice Gods requests, in return teaching me right from wrong. Although Anne Lamott’s Christian beliefs may not be considered perfect to some, in her defense she does not pretend to have her life entirely in order. It is a remarkable story of how Jesus has had such a prominent impact on her life. ‘Overture: Lily Pads’ is a clear and genuine example for any reader to relate to, as it is similar to our own journeys in life. It immediately goes to show that what we believe in the beginning is not always the conclusion we come to in the end. However the journey is all about the ride, helping us to grasp the process and exercise what we discover along the way.

Comment on the Three Conditions on Market Efficiency

An efficient capital market is one in which stock prices fully reflect available information. Professor Andrei Shleifer has suggested three conditions lead to market efficiency. (1)rationality, (2)independent deviations from rationality, and (3)arbitrage. This essay will examine investors’ behavioral biases and then discuss the behavioral and empirical challenges to market efficiency. In the attached article, James Montier suggested three behavioral biases that investors had. (1) illusion of control, (2)self-attribution, and (3)over-confident. Illusion of control means people fell they are in control of a situation far more than they are.Self-attribution means good outcomes are contributed to their skill while bad outcomes are contributed to external, such as back luck. These two biases lead people to be over-optimistic and exaggerate their own abilities. People are always over-confident as well. They always think they are smarter and have better information than they actually do. These three behavioral biases form a potential combination and lead investors to overestimate their ability and knowledge and understate the risks. In reality, there are some other behavioral biases. Investors usually prefer to put their money into a company that they know or familiar with.This is known as familiarity bias. They will invest heavily in the company they work for. They will also allocate a larger fraction of their investments to domestic stock even though it is easier to diversify investments across geographies. In addition, people tend to perceive probabilities and resonate with their own pre-existing ideas even though the conclusions drawn are statistically invalid. And this is called representativeness. The next bias exists in reality is conservatism, it means that people are too slow in adjusting their beliefs to new information.They clings to prior views or forecasts at the expense of acknowledging new information. The last bias I want to mention is herd beha vior. This is a tendency for individuals to mimic the actions(rational or irrational) of a larger group. It may comes from social pressure of conformity and/or believing the larger group knows something that they don’t. Most of the above-mentioned behavioral biases contradict Professor Andrei Shleifer’s three conditions for market efficiency. One of the conditions he suggested was rational.People will adjust their estimates of stock prices in a rational way after new information is released in the marketplace. Are people really rational? Not always. People will exert familiarity bias. They will be too favor the investments in companies they are familiar with. Tendency by investors to invest in domestic stock or the companies they work for. They do not achieve the degree of diversification that they can easily achieve. Others are over-confident and over-optimistic to believe they can pick winners and losers when, in fact, they cannot; this leads them to trade too much, generating both commissions and taxes.The behavioral view is that not all investors are irrational. Rather, it is some, perhaps many, investors are. Independent deviation from rationality was the second condition for market efficiency suggested by Andrei Shleifer. However, psychologists have long argued that people deviate from rationality in accordance with a number of basic principles. Some of them can apply to finance and market efficiency. One of the most examples in recent memory would be the bursting of the internet bubble. The behavior bias, representativeness can be used to explain this phenomenal.People perceive their pre-existing idea and draw conclusions from insufficient data. They saw a short history of high revenue growth and extrapolate that it will continue forever. Another behavior bias to explain internet bubble is herd behavior. Investors face pressure of conformity and trust large group irrationally. Result into a tendency for individuals to mimic the actions of a larger group that contributed to Internet bubble as well. Another behavior bias contradict independent deviations from rationality is conservatism. People are too slow in adjusting their beliefs to new information.In 2005, Kolasinski and Li have done a research by ranking companies by the extent of their earnings surprise. They found that prices adjust slowly to the earning announcements with the portfolio with the positive surprises outperforming the portfolio with the negative surprises. Behavioral finance suggests that investors exhibit conservatism. Professor Andrei Shleifer suggests that domination of rational professional will carry the stock meet its efficient prices by simultaneous purchasing and selling of misprice stock. However, in a world of many irrational amateurs and a few professionals, prices would not adjust to correct level.The risk of further mispricing may reduce the size of arbitrage strategies. In 1907, Royal Dutch Petroleum and Shell Transport merge interes t and split the cash flow in a 60/40 basis. However, empirical finding shows that two parties have rarely traded at parity (60/40) over the 1962 to 2004 period. Deviation from parity could increase in the short run, implying losses for the arbitrageur. There are also a numbers of empirical challenges to market efficiency. The common features among those empirical studies were all in an international basis.A number of studies of relationship between the return and its market capitalizations have been replicated over different periods and in different countries. They found that return on small stocks was quite a bit higher than the average return on large stocks. It may be not all but merely a compensation for the extra risk. In 1998, Fama and French found the average return on value stocks was above the average return on growth stocks in 12 to 13 major international stock markets. The return difference is so large and these ratios can be obtained so easily.The results constitute stro ng evidence against market efficiency. Security prices sometimes move wildly above their true values and eventually fall back to original level. The crashes and bubbles of Internet stock in late 1990 consistent with this bubble theory and constitute evidence against market efficiency. Size, value versus growth, crashes and bubbles were all found in international stock market. And those behavioral biases studies were carried around the world. Therefore, we may expect those behavioral and empirical challenges discussed above may hold in all counties or market setting.