Darwin Essay Example | Topics and Well Written Essays - 1250 words

Darwin - Essay Example This paper is a discussion in favor of Charles Darwin and natural selection theory. The paper will look at the components necessary for natural selection and examples that concur with the natural selection theory. It will investigate various ideas presented by Darwin (thesis). In the theory of natural selection, only the fittest species will exist. The paper will also highlight circumstances where natural selection does not play a part in survival (counter thesis). Response Charles Darwin presumed all animals and plants had progressed from a minimal usual ancestor through the process of natural selection. Both animals and plants give rise to a number of young ones, but several of the young plants and animals are extinct before they can grow into adulthood or reach maturity. Natural selection establishes which constituents of a species exist and reproduce, and which ones become extinct prematurely (Maynard 23). This is evident in our everyday life, for instance, in a location that exp eriences calamities such as war or famine, only people who are able to adapt to the harsh conditions of lack of food, shelter, or diseases, are the ones who are able to continue to exist during or after the calamities. In addition, all living elements must fight for an inadequate supply of space, water, food, and other necessary things in an environment. It is factual that the individual animals and plants whose features are adequately modified to situations have an upper hand in the struggle for resources, and consequently, the survival. On average, these species have a tendency to produce a large amount of young ones in comparison to other species in their unit. Accordingly, the population of the unit having the same features as the best-adapted species augments from one generation to the next. In my view, the term fitness may be utilized to refer to an organism’s capacity to produce offspring (Gould 47). Therefore it is appropriate to refer to the theory of natural selecti on as survival for the fittest. There are a number of natural selection forms. They comprise sexual selection, stabilizing selection, and directional selection. Sexual selection is primarily evident among the animal species. Similar to natural selection, adults of numerous populations have a preference for mating partners who exhibit specified external features or behaviors. It may be argued that sexual selection illustrates why males of numerous bird populations contain extra colorful feathers than their female counterparts. Stabilizing selection takes place if a group is adequately adapted to its surrounding. In this situation, the populations with common features produce the most offspring, and individuals who are the most dissimilar reproduce the least number of offspring. In addition, stabilizing selection removes tremendous traits, lessening the quantity of dissimilarity in a group. This makes stabilizing selection the most widespread form of natural selection. Finally, direct ional selection creates new traits that assist a population to become accustomed to its surrounding (Maynard 24). This is what is mostly perceived as natural selection by numerous individuals. Moreover, for natural selection to function appropriately, a number of requirements should be met. One, the members of the population should be different in their hereditary features. Organisms in different species illustrate a number of

Risk and Return Assignment Example | Topics and Well Written Essays - 2000 words

Risk and Return - Assignment Example According to CAPM, r = Rf +? (Km - Rf ) Where r= Expected return of the security Rf = Risk free rate ?=beta of the security Km= expected return of the market RA= 0.06+0.27(0.25-0.06) =0.1113 =11.13% RB =0.06+0.75(0.25-0.06) =0.2025 =20.25% Characteristic Lines of Securities A and B The SCL:Ri,t -Rf =?i +?i (RM,t - Rf ) + diversifiable risk ? is the excess return ?i (RM,t - Rf ) represents the non diversifiable risk The security characteristics line is drawn to show the excess return of the investment over that that of the market. The y-axis represents the excess return over the risk free rate. The x-axis represents the excess return over the market in general. The slope of the SCL represents the beta of the individual security. The main reason for the determination of the security characteristics line is to show the performance of a security relative to that of the market. Investors who want to put their finances in investments are interested in securities that will pose performance that is higher than the market or is at par with that of the market. From the slope of the security characteristics line, it is easier for investors to see the alpha of the security and also to compare the performance of the security relative to others. Moreover, a security characteristics line reveals the quantity of both the systematic and unsystematic risk (Roll & Ross 1980). Systematic risks are those that cannot be minimized through diversification and the investors must avoid investments with higher systematic risk. Likewise, the level of unsystematic risk can also be revealed from the diagram. To interpret the diagrams, the lines with high gradients re taken to have a higher beta factor and are therefore more risky than those with lower gradients. At the same time, the return of securities with higher gradients will exhibit high return level. In the diagram as well, the y-intercept represents the alpha value i.e. the excess of the return of an investments over the risk free r ate of return (Roll & Ross 1980). On the other hand, the x-intercept represents the excess of the security return over that of the market. A security with a high value of X-intercept has a higher return than those of the lower x-intercept values. It is therefore clear that a security characteristics line is an important tool that investors rely on when making investment decisions and should be able to help in the making of investment decisions. The security characteristics line therefore reveals the properties of the respective securities. Question 2 The arbitrage pricing theory is an asset pricing model that was developed due to the limitations of the capital asset pricing model. APT is a multifactor model that considers the various macroeconomic factors affecting the pricing of a security (Roll & Ross 1980). In this model, the risk free rate is added to all the macroeconomic factors affecting the pricing of the asset with each factor having its own beta. According to the arbitrage pricing theory, the return of a security is determined by the formula: r= Rf + ?2F2+ ?3F3+†¦..+ ?nFn Where r=return of a security ? i’s=betas of respective factors Fi’s= macroeconomic factors affecting the returns The APT is therefore a multifactor model and the arbitrage process is the selling of the inefficient securities in inefficient markets in order to maximize the return on the assets. In this process the overvalued assets are sold in order to get the profits and undervalued