Borrowers prefer to have the use of funds for as long as possible, while investors generally prefer to be able to get their money back as soon as possible. A major function of the financial markets, and of the stock market in particular, is to reconcile these conflicting requirements. The stock market enables shareholders and bondholders to realise their investment independently of the company by selling their holdings to other investors. This is called the secondary capital market, to distin
Author(s): The Open University

The maturity of an investment is the date when the investor is contractually entitled to demand repayment of the investment and the associated return. Some investments (such as company shares, as discussed in Section 3.1) actually have no contractual maturity. Others â€“ such as demand deposits at banks â€“ are subject to contractual repayment at
Author(s): The Open University

Our first question was: what is the mean expected total return for next year? We calculate this by taking each of the possible returns and weighting it by its relative probability. As our table is so simple and symmetrical, it is not difficult to see that the weighted mean return is 7% per annum.

Our second question was: what is the degree of risk or uncertainty in this mean figure? In other words, how widely dispersed are the possible outcomes around the mean expected outcome? The most
Author(s): The Open University

Investment risk is synonymous with uncertainty of outcome, so it is logical to try to quantify risk by looking at the relative uncertainty, or probability, of each of the possible alternative outcomes.

Suppose that we are interested in investing in the shares of Company X, and want to know:

• What is the mean or average expected total return for the next year?

• What is the degree of risk or uncertainty in this mean figure?

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We will define â€˜risk premiumâ€™ as an extra reward required by investors to compensate for perceived uncertainty in the amount or timing of an expected return.

But do investors in fact require an extra premium for uncertainty, or is this perhaps just a convenient assumption?

The following activity is designed to give you an opportunity to test your own reactions.

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As we noted earlier, both the rational-economic and psychological perspectives on decision making tend to ignore the social context in which we live and work. We turn now to consider this social context.

<
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You should now have built up a realistic picture about what you want to achieve and what you have to offer and be able to match up all of these against some possible activities.

Here are some different ways to get you started:

Have another look at some of the statements in Section 1.3. These are just to get you thi
Author(s): The Open University

• The results of successive editions of the Eurobarometer show that in most EU countries only a very small percentage of people, around 5 per cent, declare having an exclusive European identity, while up to 50 per cent do not have any sense of European identity.

• European political identity is weak and there is a great variation across states.

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In 1973 the Directorate of Information of the European Commission instituted a survey of public opinion amongst the members of the EEC. So now, twice a year, a sample of about 1,000 people from each country are interviewed on topics related to European integration and EU policy and institutions. This survey of public opinion is usually referred to as Eurobarometer. The reports are initially published by the Commission in French and English, though they are subsequently made available i
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Balibar, E. (2007) â€˜Uprisings in the Banlieuesâ€™, Constellations, vol. 14, no. 1, pp. 47â€“71.
Bradshaw, L. and Slonsky, L.B. (2005) â€˜The real heroes and sheroes of New Orleansâ€™, Socialist Worker (US, 9 September; also available online at http://www.socialistworker.org (Access
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From the earlier extract it is clear that Lynsey Hanley sees estates as a symbol of failure for everyone but particularly for those who live in them. Estate life forms a â€˜wall in the headâ€™ (Hanley, 2007, pp. 148â€“9), a particular state of mind producing a distinctive set of aspirations. These social psychological claims strongly parallel ideas that council estates generate their own subcultures that signal such places as different from others. This is also replicated by some journalists:
Author(s): The Open University

You might think that learning from audio visual sources is very different from learning from written sources, yet, somewhat surprisingly, it is much the same. As you may be familiar with watching videos mainly for leisure, this section will help you to think about how you can turn the familiar, but usually passive, process of watching a video into the active process of learning. Watching the video clips will involve the skills of engaging with the material and making sense of it for yourself,
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Consequently, some academics have increasingly voiced concerns about whether it is possible to define family satisfactorily at all â€“ or, indeed, whether it serves any useful purpose even to try. The extract you will look at in the following activity is taken from an Introduction to a four-volume collection of readings on Family: Critical Concepts in Sociology. In this Introduction, the author seeks to find a way of defining family that will work across the four volumes of readings on
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Christiansen, K.O. (1977) â€˜A review of studies of criminality among twinsâ€™ in Mednick, S.A. and Christiansen, K.O. (eds) Bisocial Bases of Criminal Behaviour, New York, Gardner Press, pp. 45â€“88.
Clarke, R.V. and Coleman, D. (1980) Designing Out Crime, London, HMSO.
Cohen, S. (1973) Folk Devils and Moral Panics, London, Paladin.
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After studying this course, you should be able to:

• understand how arguments may be presented in the Social Sciences.

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The work of the Chicago School, despite the potential pitfalls of participant observation, does demonstrate that if you want to know why people commit crimes it makes sense to ask them. In his memoir of a criminal career in the early twentieth century entitled Jail Journey, Jim Phelan wrote:

The robber is a tradesman who, from economics or other motivation, chooses a trade with greater rewards and dangers th
Author(s): The Open University

After studying this course, you should be able to:

• appreciate different understandings of the new economy

• understand claims about the benefits and costs of the new economy.

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