Importance of Minor Characters in Shakespear Essay

In the main plot of Shakespeare’s famous play Hamlet, Hamlet’s father, the king, is murdered, and as a result, Hamlet swears revenge and ultimately succumbs to madness. Hamlet plays the role of the protagonist, while his uncle, Claudius, serves as the antagonist of the story. Besides the two main characters, there are a number of secondary characters, of unusual importance both to the action and to the themes of the play. Many of the themes of the play, including decay and corruption, revenge, and appearance vs. eality, are outlined through the description and progression of the secondary characters. Shakespeare creates minor characters Ophelia, the ghost and Polonius to play a very crucial role in Hamlet as they shape the thematic elements of the play. The character of Ophelia plays the role of Hamlet’s love interest and is easily manipulated by her family; portraying various themes of the play through her actions and behaviour. At the onset of the play Ophelia appears to have her wits about her, with the ability to be objective and coherent when she recognizes the mad behaviour of Hamlet. In act 3 scene 1 during a contentious conversation between Ophelia and Hamlet, he expresses his disgust with Ophelia and women in general, insisting that â€Å"it hath made me mad†. Ophelia is able to identify the frantic behaviour of Hamlet proclaiming â€Å"oh what a noble mind is here o’erthrown! † Although Ophelia is of sound mind during this portion of the play, she quickly spirals out of control, losing her mind as a result of the murder of her father. Ophelia’s insanity is witnessed during act 4 scene 5 when she proceeds to sing everything she says â€Å"How can you tell the difference between you true lover and some other? Ophelia’s madness is also described by Horatio when he tells the queen â€Å"she is importunate, indeed distract†¦ says she hears there’s tricks I’ th’ world, and hems, and beats her heart, spurns enviously at straws, speaks things in doubt that carry but hald sense†. The tragic downfall of Ophelia depicted in the play illustrates the theme of decay and corruption. The ghost of Hamlets dead father, King Hamlet, drives Hamlets determination to avenge his father, setting the revenge plot into motion, a major theme in the play. Upon Hamlet and the ghost’s first meeting, he informs Hamlet of his father’s horrible murder by Claudius, encouraging him to avenge the king â€Å"revenge his foul and most unnatural murder†. Before even explaining to Hamlet the details of the murder Hamlet insists â€Å"haste me to know’t, that I, with wings as swift as meditation or the thoughts of love, may sweep my revenge†, driving the action of the play forward and initiating the theme. Although Hamlet swears to get revenge quickly his procrastination and uncertainty prevents him from achieving his goal. When Hamlet begins to veer away from his attempt to kill Claudius, obsessing over his mother’s behaviour, the ghost returns to remind him of his true purpose â€Å"do not forget. This visitation is but to whet thy almost blunted purpose†. The ghost is a constant reminder throughout the play of the theme of revenge, encouraging Hamlet to avenge his father. At the beginning of Hamlet, Polonius is introduced as the father of Laertes and Ophelia and is later revealed to illustrate the theme of appearance vs. reality. Polonius’ has the appearance of a well natured wise old man yet in reality he is a poor excuse for a man who’s obsessed with self gain. Polonius enjoys giving advice, including â€Å"this above all: to thine ownself be true, and it must follow, as the night the day, thou canst not then be false to any man†, insisting that if you are true to yourself, you cannot deceive anyone else. In reality, Polonius is in no position to be preaching about honesty and truthfulness, due to his shady behaviour spying on his children and Hamlet. Polonius presents himself as a very caring father, concerned about his children; however, in an attempt to keep an eye on his son, Laertes, he does not consider the possible repercussions of his plan. Polonius instructs his servant to spread rumors about his son, in the hopes of possibly discovering Laertes’s true behavior, disregarding Reynaldo’s protest that â€Å"that would dishonour him! † Due to his constant use of subterfuge, the character Polonius is one of the play’s best examples of the major theme of appearance vs. reality. It is uncommon in pieces of literature for secondary characters to be of such importance, both to the action and to the themes, as they are in Hamlet. The themes of the play, including decay and corruption, revenge, and appearance vs. reality, are highlighted through the description and progression of the secondary characters. Shakespeare creates minor characters Ophelia, the ghost and Polonius with the intention for them to play a very crucial role in Hamlet; shaping the thematic elements of the play. Secondary characters are often used in a play to supplement the main characters and the story line; however Shakespeare creates them with a much greater importance to reveal the themes of the play.

Abnormal assessment Essay

Describe 3 abnormal assessment findings for a child, adolescent, pregnant woman, adult or older adult which indicate a nutritional problem. What additional questions should the nurse ask based on these findings? What are the Healthy People Goals for this population? How can the nurse promote health and adequate nutrition based on this problem? Does the nutritional problem have any legal or ethical implications? Adolescents Three abnormal assessment findings for an adolescent are as follows: malnutrition, obesity, eating disorders such as anorexia or bulimia. First and foremost, being sensitive to the patient’s self-image can be crucial. Talking with them in a non-judgmental way can be key in maintain a great relationship with them. Once we establish a trusting relationship, we as nurses may begin to promote health and adequate nutrition through teaching methods. Even if the nutritional issue is outside our comfort zone we may reach out to another professional for guidance, such as a Registered Dietitian. If we didn’t have to take that big of a step we can always use not only our knowledge, knowledge of coworkers and other medical professionals, but also the books and other various tools that we have used on our educational journey. Discussing BMI according to the adolescent’s gender and age is an important factor in health promotion. One helpful guide to healthy eating is the My Pyramid. Physical activity with healthy food choices is a great way to manage your weight and maintaining your overall healthy body. Many adolescents like to skip meals or have irregular meal patterns. I know first-hand that we have busy lives but being able to be consistent and eat healthy or the healthier of choice of meals will allow us to continue to maintain a healthier body. A healthy diet should be balanced with adequate physical activity. I know some people work late nights so food choices are much more limited in this scenario. Choosing foods that aren’t high in fat will definitely help with nutrition. Sometimes people see themselves as being a certain way which alters their eating habits. You could have someone that is of healthy size and weight that may see themselves as being overweight. In their mind they need to lose this weight which affects them in the future. As they start to diet and possibly exercise more, their body may not be receiving the necessary nutrients it needs in order to maintain a healthy status. This can lead to malnutrition. Some physical signs and symptoms suggestive of malnutrition are as follows (Jensen, 2011): * Hair that is dull, brittle, dry, or falls out easily * Swollen glands of the neck and cheeks * Dry, rough, or spotty skin that may have a sandpaper feel * Poor or delayed wound healing or sores * Thin appearance with lack of subcutaneous fat * Muscle wasting (decreased size and strength) * Edema of the lower extremities * Weakened hand grasp * Depressed mood * Abnormal heart rate, heart rhythm, or blood pressure * Enlarged liver or spleen * Loss of balance or coordination Abnormal findings of malnutrition are as follows (Jensen, 2011): Mild malnutrition: 80%-90% of ideal weight Moderate malnutrition: 70%-80% of ideal weight Severe malnutrition: < 70% of ideal weight Questions: What have you eaten in the last 24 hours? Is this intake typical? What did you drink in the last 24 hours? What is your typical meal pattern? Have you noticed a change in your weight? Are you concerned about your weight? Do you think that you are too fat? Do you think that you are too skinny? Do you ever use diet supplements or laxatives or limit the amount of calories you ingest? What type of physical activity do you get each week? According to healthy people 2020 the goal for nutrition and weight status is to promote health and reduce chronic disease risk through the consumption of healthful diets and achievement and maintenance of healthy body weights (Healthy People, 2012). In regards to the question, â€Å"does the nutritional problem have any legal or ethical implications,† it would depend on the situation. If the adolescent was in the care of a facility and they were not providing the necessary nutrients for them to survive then there would definitely be a legal issue at hand. If the adolescent was experiencing this issue on their own as say a self-identity issue then it is more of an ethical scenario. There are various situations and there may be a different answer to similar questions or maybe even different answers to the same question but given to different patients. This is why we do the assessments. We need to gather all the information and implement the best approach for that particular pati ent.

2500 1day Essay Example | Topics and Well Written Essays - 2500 words

2500 1day - Essay Example Some environmental management plans of the University include biodiversity management plan, carbon management plan, energy efficiency management plan and environmental sustainability policy. The University has joined the EcoCampus scheme that is aligned with ISO 14001 which is an international environmental management standard. The University building policy is based on preventing overheating of the building, ensuring utilization of natural ventilation and light, minimizing heat loss and equipping the buildings with energy efficient equipment. Generally, all the contractors must supply the university with a company environmental policy in order to show evidence on the ability to ensure the buildings meet the expected environmental building standards. The environmental sustainability plan aims at minimizing the impact of the University activities on the environment and ensuring that green IT systems are functional within all the campuses. The plan also ensures the carbon emissions are monitored and calculated according to the amount of energy utilized and all targets are achieved within the stipulated time period. The environmental sustainability is also geared at minimizing harmful chemical disposal, excessive carbon emissions, water wastage and improving the wellbeing of the stakeholders. The environmental management and sustainability system of Edinburgh Napier University includes environmental, economic, ethical and social factors (Edinburgh Napier University, 2013). The university is committed to entrenching the principles of sustainability in the planning and operations processes throughout all the activities of the organisation. The University has supported the carbon management programme. The current environmental sustainability plan promotes sustainability in all teaching and research activities in the University. The University has partnered with other stakeholders in encouraging the awareness of sustainability approaches and encourages the

Budget analysis of RDBS Corporation Essay Example | Topics and Well Written Essays - 1500 words

Budget analysis of RDBS Corporation - Essay Example The essay discusses that a budget is a manuscript that translates plans into money. It is a financial plan where the estimation of expenditure and revenue is done. The budget is an estimate, forecast about what you will need in fiscal terms to do your work. The budget is the most important tool in the business. It is almost impossible to run a business without having the budget. Budgeting is the process of preparing the budget, where the operational plans are the plans for real work. At the time of budget preparation, trade-offs and prioritization with program are ought to be made to make sure that the budget fits government policies and priorities. The cost effective variants which should be the best option for the organization must be selected. At last, the means of rising operational efficiency, which is effective, must be sought. None of these can be fulfilled unless financial constraints are built into the course from the starting. Budgeting is very responsible and difficult job . So, all the companies always depend on the experts in the field for preparing the budget. Incremental budgeting is a budgeting method where the budget is organized using a preceding period’s budget or else actual performance as a foundation with incremental amounts added for the new budget period. In the incremental budgeting, the actual performance of the company in the last months is taken into consideration and appropriate changes will be made for better result in upcoming months. This budgeting method encourages the spending of money up to the budget. Benefits that can be Realized from a Budgetary Control System: Maximization of Profit: The budgetary control system has an aim at the maximization of profits of the project. To attain this objective, a suitable plan and co-ordination of various functions are to be conducted. There is appropriate control over a diverse capital and revenue expenditures. The available resources are put into the best uses. Co-Ordination: Bette r co-ordination always results better profits. The functioning of the various units and sectors is correctly co-ordinate as a result of budgetary control system. The co-ordination of different executives and subordinates is essential for attaining the targets as specified in budgets. Tool for Measuring Performance: By giving the specific aims to various departments, budgetary control acts as a tool for measuring performance of companies. The fixed targets are compared to actual achievements and deviations are taken into consideration. Economy: The setting up of expenses will be methodical and there will be optimum economy in spending. The money will be put to use on the best. The ultimate benefits will go to the nation and it will be a national profit. The national assets will be used cost-effectively and wastage will be reduced. Consciousness: The budgetary control system helps in creating budget consciousness among the employees. By setting up targets for the workers, the system t ries to make the employees responsible towards their jobs. Every person knows what he is anticipated to do and he can do his work without any interruption. Reduces Costs: Now days, the business is so competitive and the role of budgetary control is significant. All the businessmen try to diminish the cost of manufacturing and rising sales. They will try to have those perfect mixtures of products where profitability is at the maximum. â€Å"The budget process consists of activities that encompass the development, implementation, and evaluation of a plan for the provision of services and capital

Inclusion in Education Essay Example | Topics and Well Written Essays - 1500 words

Inclusion in Education - Essay Example This was replaced by a revised version which was issued in 2001, coming into effect in January 2002 (DFES 2001). The nature of provision for special educational needs has changed drastically over the last few years following the Warnock Report and the 1981 Education Act, with an increased awareness of educational needs and a consonant focus on improving the quality of provision for much larger numbers of children (Griffiths, 1998, 95 in Quicke, 2007, 2-15). This implies improvement of education of all and specially of those with special needs that would impart knowledge and power to all (QCA/DfEE, 2001). Department of Health has recently published a White Paper for people with learning disabilities in 2001 (Department of Health, 2001, 1-10). The United Kingdom has separate educational systems for England and Wales, Northern Ireland and Scotland. As far as education is concerned, the countries are split up into so-called local education authorities that carry a large part of the responsibility for organising education at local level. Historically, for a long time, England and Wales had separate systems for regular and special education. Since the Warnock Report in 1978, it has been assumed in the UK that about 20 per cent of school-aged children will have special educational needs requiring additional help at some point in their school careers. Furthermore, approximately 2 per cent of children will have severe physical, sensory, intellectual or emotional difficulties, some of which will remain with them throughout their lives. Historically this 2 per cent of children have been exclud ed from mainstream schools, receiving their education in special schools instead. In recent years, a growing sense of injustice regarding the idea of segregated special schooling for these pupils has led to calls for more inclusive educational opportunities as a matter of human right and equal opportunity (Amatea, 1988, 174-183). By the Education Acts 1981 and 1993, which latter consolidated into the Education Act 1996, the policy of parental choice in the field of special educational needs has in most respects been merely built on key recommendations in the Warnock Report in 1978, namely that the education system should pay heed to parental knowledge about their child's needs and respect parental wishes regarding the child's education (Farrell, 2001, 3-9). Warnock's other recommendation was to integrate the education, meaning pupils with special educational needs should, as far as possible, be educated alongside other children in mainstream schools (Lewis, 2004, 3-9). In relation to this, this process must acknowledge the diversity of needs of all students creating opportunity to support learning of all students inclusive of those who have impairments or needs for special educations. While the White Paper was explicitly a response of the authorities from the concerns to promote better life chances for people with special needs for education, it identifies the many barriers that such children and their families face in fully participating in their communities. This paper promotes the benefits to be obtained by these children through educational opportunities, good health, and social care while living with their families. It was evident later that constructive and sustainable relationships between pupils with speci

Writing Today by Richard Johnson and Sheehan Charles Paine Essay - 9

Writing Today by Richard Johnson and Sheehan Charles Paine - Essay Example In this, it would be easy to note that the book strives to show that writing can be engaged within an entertaining manner; thus, making it be easy to read, comprehend and apply dynamically to various aspects of life. At this phase in the volume, it is interesting to note that the authors clearly follow the guideline they provide by making the text brief, quick to navigate and easy to scan. In part three of the book, the main concern for the authors is in relation to the process to follow in developing a piece of writing. As such, it would be obvious to yearn for knowing the precise course of action to pursue in achieving successful writing, but still, afford questions such as how can one invent ideas? How can writing be organized and a draft formulated out of the general ideas? And, what are the core reasons for revising and editing a piece of writing before publishing it? In seeking to answer these questions and similar ones in the two parts, the authors present readers with case scenarios that entail the understanding of the nature of writing and the requirements for the development of a literary writing, as presented by the frequent headings and numbered lists of items. This part is largely concerned with the determination of the various strategies that are used in the shaping of ideas when writing literary pieces. This segment is imperative in the logic that it provides the playwright with insights such as on how to develop paragraphs for the text being written, how to develop various sections for the paper, how to use rhetorical patterns in the development of a literary text, how to use argumentative strategies in the development of ideas in one’s writing and how to have the writing piece developed exposed to peer review and collaborated with different writers. Largely, this is one the most critical parts of the book, given the significance, it plays in the defining the various contexts that are to be drawn in the improvement of a literary text.  Ã‚  

Accounting Quiz Assignment Example | Topics and Well Written Essays - 1000 words

Accounting Quiz - Assignment Example Today, accounting software is undergoing a revolution from the desktop to the web and it is just tricky to explain why the double-entry system still prevails. While there are a lot advantages with the system as will be discussed below, there are some disadvantages that have been brought forward by accountants who believe that it is about time people embraced change and adopted a system that is more accurate and reliable. This paper will be discussing the triple-entry bookkeeping system as an alternative to the current double-bookkeeping system used and why the fore will be of more use to accounts. Also, the paper will mention a few flaws with the proposed system, the triple-entry bookkeeping. To begin with, it is good to give a brief history on the current bookkeeping system and why it is supported by quite a good number of accountants. Double bookkeeping dates back to Venice. As suggested by its name, it involves entering a transaction twice into the ‘books’ of any enterprise. One of the entries is a debit while the other is supposed to be a credit. Below are the main advantages of using the system; First, the system provides a very unique and standard means of dealing with both opening and closing balance at the end of every financial year.Also, the system provides an arithmetic check on an accountant’s bookkeeping. This is given the fact that both sides of the entries must balance out. It follows the idea that if that does not happen, then there is something very wrong happening. The other advantage is that through the use of a Sales and Purchase ledgers, it is easy to track who owes the business and also who the business owes. Gives a clear view of the position the business is at any given time. Nonetheless, the single-entry bookkeeping system does this too, and with much ease. If done properly, the double-entry bookkeeping system can greatly be used to reduce accounting errors. All the above advantages translate to having a

Devil Facial Tumor Disease Essay Example | Topics and Well Written Essays - 1000 words

Devil Facial Tumor Disease - Essay Example As the report declares the DFTD is considered to have commenced in the Mount William National Park’s far north eastern region, from a prospect mutation. During 1996, Tasmanian devils with prominent facial tumors were snapped in the north-eastern Tasmania. After ten years, these features are found to be coherent with DFTD. This discussion declares that the cancer, DFTD, is found to be transmitted from one animal to another through biting either during fighting, eating or mating. It develops quickly, congesting the mouth of animal and then disseminates to other organs. The illness has consumed sixty percent of entire Tasmanian devils population since it was initially detected in 1996, and it has been predicted by some ecologists that it could efface the complete wild population till 2035. DFTD seems to be a cloned cell line, that is transmitted in the form of an allograft from one devil to another and this transmission may be found similar to that in CTVT and a communicable sarcoma infecting Syrian hamsters. The biology and prevalence of such vegetative cell parasites is typically unknown. The examinations of captivated Tasmanian devils suggest that this species has a tendency to develop tumors, specifically carcinomas. Nevertheless, DFTD is found to be significantly different from previously reported d evil cancers, and to determine its etiology is vital for the development of strategies to manage the disease.

To what extent was the First World War Essay Example for Free

To what extent was the First World War Essay World war one was not the sole cause of the revolution; it was a trigger that affected the timing of the revolution in 1917 as it exacerbated problems that already existed.   Such problems were limited constitutional change, the shortcomings of Stolypin’s reforms, and the negative side affects of industrialisation, mass protest and the limitations of Tsar Nicholas II. Paragraph 1 – Limited constitutional change   The Tsar continued to reinstate his autocratic rule by ignoring his people’s desires, such as the upper class and lower class, and promising to reform but progressed with minimal improvement. Limited constitutional change caused the Russian people to become distrusting of the Tsar and resort to a revolution to change the government’s policies themselves in order for Russia to become a more democratic state. An example of limited constitutional change is the October manifesto that was introduced on the 30th of October 1905, prompted by the 1905 revolution Bloody Sunday.   The working class and peasants had appealed to the Tsar concerning his superannuated form of government. Requesting for a share in representative government along with improved working conditions.   The October manifesto produced addressed these concerns, with a promise of free citizenship and no rule to be passed without the agreement of a state duma   However, despite the Duma being permitted to exist, their powers were restricted to such a great extent that the Duma didn’t have any significant impact upon the government. Nicholas did this by issuing a set of Fundamental laws on the 23rd of April 1906, the eve of the opening of the first Duma. The Fundamental laws only reinforced the Tsar’s autocratic power and disengaged any potential government reform of Parliament by seizing its power.   Nicholas’s half hearted idea of reform was not intended to satisfy the people’s desire for a share in representative government but to only safeguard his position as Tsar.   This started to become evident to the people when the third Duma (1907-1912) was more conservative as the Tsar had replaced members who seemed critical of his government.   The third Duma consisted of only 45 seats for the kadels. The First World War put strain on the constitution as Russia required an efficient government organisation, however the Tsar wouldn’t allow anyone to share his power thus resulting in a narrow-minded form of government that couldn’t meet the demands of war.   Additionally, the changes to the election laws were unrealistically high. This was yet another example of Nicholas trying to safeguard his position as Tsar as he thought repression would stop any opposition influencing his people in terms of democracy. However, it was already becoming clear to the people that autocracy was no longer suitable for the beginning of the 19th century as modernisation of industry required a modernisation of government. * Limited constitutional change was down to the Tsar’s inability to reform because of his stubborn personality. The First World War did not create these problems, as they already existed before 1914. Such an example would be Bloody Sunday. The liberal gentry also wanted more power given to the zemstva, as they were worried that if the Tsar didn’t share power, a revolution would take place. The 1917 march revolution was the revolution they were apprehensive for. The Shortcomings of Stolypin’s reforms   The Tsar’s insistence of receiving little help with the ruling of Russia allowed scarcely any reform to take place as the Tsar was not fully aware, or didn’t intend to be, with the problems that needed addressing, such as peasant farming.   This resulted with Stolypin introducing a land reform degree in November 1906.   Peasants were allowed to leave the commune freely, have a right to own their own land and consolidate strips. However, one of the downfalls of these reforms was that they were not compulsory.   The war put a lot of pressure on Russia’s agricultural production as it was their main export and so underinvestment in agriculture meant that the war exacerbated problems that already existed, such as the redistribution of land held by the nobility. This was one of the key issues that hadn’t been addressed by Stolypin, along with backward farming methods, lack of preserving land through not using fertiliser and high direct and indirect tax. By 1913 productivity rose by 1% per year with a record of 70 million ton harvest in 1913, however yields were still low compared to other countries.   25% of peasants made no change while 66% of peasants decided to own land privately, although by 1917 95% of peasants returned to the Mir. Despite the government’s intent to give the peasants some financial support by setting up a land bank between 1906 and 1913, most peasants were unable to afford the debt due to the expensive taxes. Redemption payments were abolished by 1917 and peasant purchasing power increased by 15% but there was still no change to the high direct and indirect tax. Land prices sore and produce prices fell. This left peasants in an all too familiar financial detriment, giving them more reason to revolt for improved living conditions as the first world war demanded produce by which they had no efficient methods to meet. The negative social affects of industrialisation   As the peasants were released from the Mir, they were able to work and live in towns benefitting industry. Nonetheless, there were negative social affects of industrialisation as by 1914 two fifths of factory workers were in factories with over 1000 members. Their average wages were below the ptiful of 1904 therefore workers began to protest about wages and went on strike in 1912 in the Lena goldfields where 170 were killed.   Development in industry from 1906-1914 with 8% per annum was beneficial for Russia, however Russia began from a low starting point and so it was easier to achieve large percentage increase at the expense of Russia’s working class. Workers in towns that were used to the quiet countrysides were more susceptible to opposition propaganda. Workers were an important part of the industrial boom as they contributed to the efficiency of factories. As their masses increased, it was more likely strikes would occur because of the poor, unhygienic, dangerous living and working conditions they were forced to live in.   Great masses in cramped spaces in towns also led to an increase in tension between them, raising the chance that the masses would join together and form a revolution to get the government to notice their propositions. The First World War demanded more military equipment and put pressure on working factories. Russia’s poor economic institution meant that the impact of war was too large a strain upon it and upon the working class. This lead to a revolution because laboring Russians wanted better lives and working conditions but the Tsar continued to ignore them. Growth of mass protest   As more workers revolted, so did the growth of mass protest.   The government used repression in order to solve this, in 1906 stolypin’s necktie was introduced. And the Okhrana were still intrusive and demanded passports on the spot. Despite freedom of press, in 1905 newspapers were still censored. World war one put the regime to new tests as repression was only a short term solution. In 1909, employers ignored the concessions of 1905 and the lack of the Tsar’s involvement meant the Duma intervened in 1912 producing an insurance scheme establishing protection for workers   Although order and control were issued through the Okhrana and repression using stolypin’s necktie, this only partially stabilized the regime. The war required an organised, efficient government, which Nicholas was not providing. Food distribution and army equipment were not being delivered efficiently, causing revolts in response. It was clear that repression wouldn’t last long, especially when the Tsar left his position to become commander in chief in 1915, leaving Russia without a Tsar. This would lead to a revolution because an unstable government wouldn’t survive the pressures of the war and its demands, therefore people would rebel. Limitations of Nicholas II   Nicholas often made bad decisions, despite his good intentions making him a poor leader. In 1915 he took control of the Russian army. He became the spotlight for criticism of deaths and shortage of ammunition, poor equipment and the shortage of boots.   People asked for consultative assembly however Nicholas had betrayed his people by issuing a set of Fundamental laws. This was because he had a weak character and was intimidated by criticism, so he didn’t allow it.   Poor leadership and incompetent communication among the leaders meant instructions were not followed carefully or not at all. Nicholas was personally responsible for Russia’s performance in the war.

The bounce of a Squash Ball Essay Example for Free

The bounce of a Squash Ball Essay However, some energy is lost as due to friction between the molecules in the air, and the surface of the ball. 3 This is during the time where the ball is in contact with the floor. There are really three stages here, I will show them below: i) ii) iii) In i, the ball has hit the ground, and because of inertia, the ball tries to keep moving and cant because the ground beneath it is solid. This causes the ball to change to a sort of oval shape, this change of shape causes some energy to be lost as heat and the kinetic energy to become Elastic Energy. Also, the ball hitting the ground will cause some energy to go on as sound and some will be sent through the surface as a wave. In ii, the ball is still, and has no energy other than Elastic Energy; it is exactly between i and iii. In iii, The Elastic Energy is being converted to Kinetic Energy, and causes the ball to go from the oval shape, back to its original shape, and bounces off of the ground. The Elastic Energy in the ball is now becoming Kinetic Energy again and the reshaping of the ball causes some more energy to be lost as heat. 4 Here the ball is going back up after bouncing off of the ground. The ball has Kinetic Energy, and again some energy is lost as heat due to friction between the air and the ball. 5 At this stage, the ball is stationary in the air because gravity has prevented it from rising any further. However, the ball is not as high as it was when it was dropped; this is because some energy was lost as heat. This stage links back to stage two repeatedly, until all of the energy from the ball has been lost, at which point it will become stationary on the ground. Prediction With this in mind, I am predicting that the higher the ball is dropped from, the higher it will bounce (due to increased energy). However, I predict that the ball will never reach the height it fell from because of energy which is lost as heat from friction and sound when it hits the ground. Calculating Epg The formula mgh (or Mass   Gravity   Height) will show the amount of Gravitational Potential Energy (Epg) the ball has at this stage. The mass of our ball was 0. 024 kg, which is constant (it doesnt change). The gravity here on Earth is 10N per kg of mass, for our ball this would mean 0. 24N, another constant. The height from which we drop the ball is a variable. Therefore to work out the Epg of the ball at any given height we would use the formula Height. We can shorten this to 0. 006 because mass and gravity are constant. For example, if we wanted to know how much Epg the ball had when held at 1. 00 m, we would do 0. 006 1. 00, which is 0. 006. The reason for calculating Epg is so that later on the kinetic energy (Ek) of the ball can be calculating, in turn allowing the velocity of the ball upon impact to be calculated. Method First of all, two metre sticks were placed vertically against a wall, one above the other, creating a makeshift double-metre stick, this was held against the wall. Next, the ball was held so that the bottom of it was aligned with the height (e. g. 1. 00 m). Meanwhile, another member of the team laid on the floor, facing the metre stick. The ball was then released when the member on the floor was ready. When the ball bounced up the member on the floor noted it down. This was repeated five times for each drop height (0. 8m, 1. 0m, 1. 2m, etc up to 2. 0m). After each drop height was done five times, the ball was heated to 40 degrees Celsius in a water bath. Our variable was the drop height of the ball. We chose the range 0. 6m 2. 0m because it achieves a good set of results, while not taking too much time after dropping from each height five times. We dropped the ball five times from each height and then obtained an average to try and get a good range of results, and also to eliminate anomalous results from our graphs. Results Table Drop Height (m) Gravitational Potential Energy (J) Bounce Height (m) Speed on Impact (m/sec) ms Analysis. The results in this table show that the Epg increases when the ball is held higher up. It also shows that the ball bounces higher when the drop height is higher, and that the ball will never bounce to the same height it was dropped from. One other thing my table shows is that the higher the drop height, the higher the speed of the ball on impact with the ground. This proves everything I predicted to be correct, and also correlates with my energy transfer diagram, which is what I based my prediction on. Ball Speed Epg = Ek on impact. To work out the velocity (speed) of the ball on impact we would use the formula v=VEk. First we need to know the value of Ek which is dependant on Evaluation There are just two anomalies, they are at 1. 4m and 1. 6m, they is quite far from the line of best fit. I believe the cause was human error perhaps in the inaccuracy of trying to see how high the ball was in a fraction of a second. If I had the chance to repeat this investigation, I would improve the procedure by improving the measuring system, perhaps by using a digital video camera to record how high the ball bounced and then playing it back frame by frame on a computer because it is very hard to see where the ball is in a fraction of a second with human eyesight. I would increase the range of results to be from 0. 2m maybe 5. 0m, because it would give a much larger range, in which perhaps the rule of the ball bouncing higher when dropped from higher would be incorrect.

Performance of Hedge Fund Relatively in UK

Performance of Hedge Fund Relatively in UK 1.1- Introduction: Hedge funds are actively managed portfolios that hold positions in publicly traded securities. Gaurav S. Amin and Harry M. Kat (2000) stated on their report that A hedge fund is typically defined as a pooled investment vehicle that is privately organized, administrated by professional investment managers, and not widely available to the public. It charges both a performance fee and a management fee. It allows a flexible investment for a small number of large investors (usually the minimum investment is $1 million) can use high risk techniques. 1Now days it is very clear that in the matter of alternative investment mutual fund is not performing well. As a high absolute returns and typically have features such as hurdle rates and incentive fees with high watermark provision hedge fund gives a better align to the interests of managers and investors. 2Moreover mutual funds typically use a long-only buy-and-hold type strategy on standard asset classes, which help to capture risk premia as sociate with equity risk, interest rate risk, default risk etc. However, they are not very helpful in capturing risk premia associate with dynamic trading strategies. That is why hedge fund comes into the picture. In the year of 2009, this takes the greatest history of the world in the following century. In the year of 2008 the world saw the greatest fall down of the world economy. Lots of people missing their jobs, lots of company were stopped. The world economy faced the highest losses in the history. These all factors are showing only one way to makeover from that greatest downfall that is hedging. 3The last couple of decades have witnessed a rapidly growing in the hedge funds. Relative to traditional investment portfolios hedge funds exhibit some unique characteristics; they are flexible with respect to the types of securities they hold and the type of the position they take. 1 Agarwal, V. and Naik, N. (2000). Multi-period performance persistence analysis of hedge fund s. The journal of financial and quantitative analysis. Vol. 35, No,3. PP-327. 2 Agarwal, V. and Naik, N. (2004). Risks and portfolio decisions involving hedge funds. The review of financial studies, Vol. 17, No.1. PP-64. 3 Journal of banking and finance 32(2008) 741-753- Hedge Fund Pricing and Model Uncertainty by Spyridan D. Vrontos, Ioannis D. Vrontos, Daniel Giomouridies. Since the early 1990s, hedge funds have become an increasingly popular asset class. The amount invested globally in hedge funds rose from approximately $50 billion in 1990 to approximately $1 trillion by the end of 2004. And because these funds characteristically use stantial leverage, they play a far more important role in the global securities markets than the size of their net assets indicates. Moreover, investments in hedge funds have become an important part of the asset mix of institutions and ever wealthy individual investors (Malkiel, B. and Saha, A. (2005). 4The number of FOHFs increase by 40% between 2001 and 2003, and now comprised almost two third of the $650 billion invested in the USAs hedge fund market. Due to its nature it is difficult to estimate the current size of hedge fund industry. 5Van Hedge Fund Advisors estimates that by the end of 1998 there were 5380 hedge fund managing $311 in capital, with between $800 billion and $1 trillion in total assets, which indicates the higher number of recent new entries. So far, hedge fund is based on American phenomena. About 90% hedge fund managers are based in the US, 9% in Europe and 1% in Asia and elsewhere. Now a days around 5883 hedge funds are trading around the world. (*Barclay Hedge database). Chart 1: Assets of Hedge fund industry from 1997 to 2009. Source: http://www.barclayhedge.com/research/indices/ghs/mum/Hedge_Fund.html According to the Barclay hedge database the asset of hedge fund industry is $1205.6 billion dollar. 4 Financial times, 29th October, 2003. www.vanhedge.com http://www.barclayhedge.com/products/hedge-fund-directory.html 1.2- Research questions: Specifically in this paper, I want to address two main questions. First one is what is the performance of hedge fund and FTSE100 over the period of 2001 to 2008? To evaluate the performance I use three traditional risk adjusted performance measurement model. To give a better idea and matter of easily understand I use the Sharp ratio, the Treynor ratio, and the Capital Asset Pricing Model (CAPM). However, the equity market index is not necessarily the right benchmark for hedge funds, therefore, market betas and abnormal returns may not be the appropriate measures for risks and profits. To mitigate this problem, I calculate sharp ratios, which are defined as the ratio of the average excess fund returns over the standard deviation. Second question is does hedge funds gives better return from UK equity market (FTSE100)? To make this comparison I use regression analysis where the correlation will show how the hedge funds act against the FTSE 100. 1.3- Objective of the study: The main objective of this study is to find out the performance of Hedge fund relatively with the UK equity market FTSE 100. In addition, I address in this paper four major hedge funds performance correlation with FTSE100. As a result an individual investor can easily understand which portfolio will give better return at their investment perspective. This study focuses on UK investors perspective only. In the past several years, lots of studies had been done on this area like Park and Staum (1998), Brown et al. (1999), Agarwal and Naik (2000), Herzberg and Mozes (2003), Capocci and Hubner (2004), and Malkiel and Saha (2005) analysis the hedge fund performance. Most of the statistical methodology is on the regression with equity markets and rest of all are in the cross product ratio. Above all they tried to find out the return of different types of hedge fund depending on the market risk and market return. So finally, the purpose of this paper is clearly established, that is to understand hedge fund performance over the UK equity market (FTSE100). 1.5- Overview of the methodology: In this section I would like to describe an overview of my methodology. To find out the hedge fund performance and the FTSE100 markets performance I use three traditional risk-adjusted performance measurement models. First one is the Sharpe ratio, secondly, the Treynor ratio and finally, the Capital Asset Pricing Model (CAPM). I address the Sharpe ratio and the Treynor ratio because these two gives better easy view for an investor to evaluate the hedge fund performance by themselves. However, the Sharpe ratio and the Treyneo ratio measure the excess return of per unit of risk for an investment asset. These two are used to understand how well the return of an asset compensates the investor for the risk taken. When comparing two assets each with the expected return of fund against the same benchmark with risk free return, the asset with the higher Sharpe ratio gives more return for the same risk. As a result investor can easily understand where to invest. In this paper I use total 287 funds including different types of hedge funds like- Event driven (31), Hedge fund (54), Global macro (37) and Market neutral (165). As a benchmark I use FTSE100 and for the risk free rate I use UK 10 year Treasury bond. All data were collected from the DataStream which is run by Thomson Reuters the worlds leading source of intelligent information for businesses and professionals (http://thomsonreuters.com/). 1.6- Definition of the key terms: Hedge fund: In the early study by Francis C.C. Koh, Winston T.H. Koh , David K.C. Lee, Kok Fai Phoon (2004) stated in their report that Hedge Funds are innovative investment structures that were first created more than 50 years ago by Alfred Winslow Jones. He established a fund with the following features: (a) He set up hedges by investing in securities that he determined as undervalued and funding these positions partly by taking short positions in overvalued securities, creating a market neutral position; (b) He also designed an incentive fee compensation arrangement in which he was paid a percentage of the profits realized from his clients assets; and (c) He invested his own investment capital in the fund, ensuring that his incentives and those of his investors were aligned and forming an investment partnership. Most modern hedge funds possess the above listed features, and are set up as limited partnerships with a lucrative incentive-fee structure. In most hedge funds, managers also often have a significant portion of their own capital invested in the partnerships. The term hedge fund has been generalized to describe investment strategies that range from the original market-neutral style of Jones to many other strategies and opportunistic situations, including global/macro investing. On the other report by Liang, B. (1999) stated on his report that there are two major types of hedge funds, one is inshore and another is offshore. Onshore funds are limited partnerships of no more than 500 investors. Offshore funds are limited liability corporations or partnerships established in the tax neutral jurisdictions that allow investors an opportunity to invest outside their own country and minimize their tax liabilities. Due to the large variety of hedge fund investing strategies, there is no standard method to classify hedge funds smartly. There are at least 8 major databases set up by data vendors and fund advisors. I follow the classification used by Eichengreen and Mathieson (1998), which relied on the MAR/Hedge database. Under this classification, there are 8 categories of hedge funds with 7 differentiated styles and a fund-of-funds category. For my paper I chose three different categories, which are as follows: (a) Event driven funds. These are funds that take positions on corporate events, such as taking an arbitraged position when companies are undergoing re-structuring or mergers. For example, hedge funds would purchase bank debt or high yield corporate bonds of companies undergoing re-organization (often referred to as distressed securities). Another event-driven strategy is merger arbitrage. These funds seize the opportunity to invest just after a takeover has been announced. They purchase the shares of the target companies and short the shares of the acquiring companies. (c) Global/Macro funds refer to funds that rely on macroeconomic analysis to take bets on major risk factors, such as currencies, interest rates, stock indices and commodities. Opportunistic trading manager that makes profits from changes in global economies typically based in major interest rate shifts. To make profits managers uses leverage and derivatives. (d) Market neutral funds refer to funds that bet on relative price movements utilizing strategies such as long-short equity, stock index arbitrage, convertible bond arbitrage and fixed income arbitrage. Long-short equity funds use the strategy of Jones by taking long positions in selective stocks and going short on other stocks to limit their exposure to the stock market. Stock index arbitrage funds trade on the spread between index futures contracts and the underlying basket of equities. Convertible bond arbitrage funds typically capitalize on the embedded option in these bonds by purchasing them and shorting the equities. Fixed income arbitrage bet on the convergence of prices of bonds from the same issuer but with different maturities over time. This is the second largest grouping of hedge funds after the Global category. Source Eichengreen and Mathieson (1998). 2.1.2- Current scenario of hedge funds: Chapter two Literature review: 2.1- History of hedge fund Despite the increasing interest and recent development, few studies have been carried out on hedge funds comparing to other investment tools like mutual funds. An analysis of Hedge Fund performance 1984-2000 by Capocci Daniel using one of the greatest hedge fund database ever used on his working paper (2796 individual funds including 801 dissolved), to investigate hedge funds performance using various asset-pricing models, including an extension from of Carharts (1997) model combined with Fama and French (1998), Agarwal and Naik (2000) models that take into account the fact that some hedge funds invest in emerging market bond. At the end they found that their model does a better job describing hedge funds behaviour. That appears particularly good for the Event Driven, Global Macro, US Opportunistic, Equity non-Hedge and Sector funds. Since the early 1990s, when around 2000 hedge funds were managing assets totalling capital of $60 billion, the subsequent growth in the number and asset base of hedge funds has never really been refuted. The industry only suffered from a relative slowdown in 1998, but since then has enjoyed a renewed vitality with an estimated total of 10,000funds managing more than a trillion US dollars by the end of 2006. The growing trend of the sector remained remarkably sustained during the stock market collapse that started in March 2000, when the NASDAQ composite Index reached an all-time high of 5,132 and finished three years later with a floor level of 1,253. In the meantime, the global met asset value (NAV) of hedge funds continued to grow at a steady rate of 10.6% (Van Hedge Funds Advisors International, 2002), contrasting with a decrease of 2.7% in the worldwide mutual fund industry ( Investment Company Institute, 2003). In 2001, Capocci and Hubner(2004) estimated that there were 6,000 he dge fund managing around $400 billion. In 2007, Capocci, Duquenne and Hubner (2007) estimated that there were 10,000 hedge funds managing around $1 trillion. This is a growth of 11% in the number of funds and 26% in assets over six years (6PhD thesis paper by Daniel P.J. Capocci). Other studies from practitioners Hennessee (1994), and Oberuc (1994) also showed an evidence of superior performance in the case of hedge funds. Ackernann and Al. (1999) and Liang (1999) who compared the performance of hedge funds to mutual funds and several indices, found that hedge funds constantly obtained better performance than mutual funds. Their performance was not better than the performance of the market indices considered. They also indicated that the returns in hedge funds were more unstable than both the returns of mutual funds and those of market indices. According to Brown and Al. (1997) hedge funds showing good performance in the first part of the year reduce the volatility of their portfolio in the second half of the year (Capocci Daniel- An analysis of hedge fund performance 1984-2000). Taking all these results into account hedge funds seems a good investment tool. 6 PhD thesis paper by Daniel P.J. Capocci. Electronic copy available at: http//ssrn.com/abstract=1008319. 2.1.1- Facts and finding of development in hedge funds: As a result of flexible investment strategies, a better manager inventive alignment, sophisticated investors, and limited SEC regulations hedge funds have gained incredible popularity. In the report of Agarwal, V. and Naik, N. (2004) stated that it is well accepted that the world of financial securities is a multifactor world consisting of different risk factors, each associated with its own factor risk premium, and that no single investment strategy can span the entire risk factor space. Therefore investors wishing to earn risk premia associated with different risk factors need to employ different kinds of investment strategies. Sophisticated investors, like endowments and pension funds, seem to have recognized this fact as their portfolios consist of mutual funds as well as hedge funds.1 Mutual funds typically employ a long-only buy-and-hold-type strategy on standard asset classes, and help capture risk premia associated with equity risk, interest rate risk, default risk, etc. Howe ver, they are not very helpful in capturing risk premia associated with dynamic trading strategies or spread-based strategies. This is where hedge funds come into the picture. Unlike mutual funds, hedge funds are not evaluated against a passive benchmark and therefore can follow more dynamic trading strategies. Moreover, they can take long as well as short positions in securities, and therefore can bet on capitalization spreads or value-growth spreads. As a result, hedge funds can offer exposure to risk factors that traditional long-only strategies cannot. However, investor can create exposure like hedge funds by trading on their own account, in practice they encounter many frictions due to incompleteness of markets like the publicly traded derivatives market and the financing market. Moreover, the derivatives market for standardized contracts has grown a great deal in recent years, still it is very costly for an investor to create a customized payoff on individual securities. The same is true for the financing market as well, where investors encounter difficulties shorting securities and obtaining leverage. These frictions make it difficult for investors to create hedge fund-like payoffs by trading on their own accounts. According to Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) in 1990, the entire hedge fund industry was estimated at about US$20 billion. At of 2004, there are close to 7000 hedge funds worldwide, managing more than US$830 billion. Additionally, about US$200-300 billion is estimated to be in privately managed accounts. While high net worth individuals remain the main source of capital, hedge funds are becoming more popular among institutional and retail investors. Funds of hedge funds and other hedge fund-linked products are increasingly being marketed to the retail market. While hedge funds are well established in the United States and Europe, they have only begun to grow aggressively in Asia. According to Asia Hedge magazine, there are more than 300 hedge funds operating in Asia (including those in Japan and Australia), of which 30 were established in year 2000 and 20 in 2001. In 2003, 90 new hedge funds were started in Asia, compared with 66 in 2002, according to an estimate by th e Bank of Bermuda. In 2004 more than US$15 billion, hedge fund investments in Asia are expected to grow rapidly. Several factors support this view. Asian hedge funds currently account for a tiny slice of the global hedge fund pie and a mere trickle of the total financial wealth of high net worth individuals in Asia. Hedge funds have posted attractive returns. From 1987 to 2001, the Hennessee Hedge Fund Index posted annualised returns of 18%, higher than the SPs 13.5%. Hedge funds are seen as a natural hedge for controlling downside risk because they employ exotic investment strategies believed to generate returns that are uncorrelated to traditional asset classes. Hedge funds vary in their strategies. So-called macro funds, such as Quantum Fund, generally take a directional view by betting on a particular bond market, say, or a currency movement. Other funds specialize in corporate events, such as mergers or bankruptcies, or simply look for pricing anomalies the stock markets. Hedge funds vary widely in both their investment strategies and the amount of financial leverage. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) There are a number of factors behind the meteoric rise in demand for hedge funds. The unprecedented bull-run in the US equity markets during the 1990s expanded investment portfolios. This led an increased awareness on the need for diversification. The bursting of the technology and Internet bubbles, the string of corporate scandals that hit corporate America and the uncertainties in the US economy have led to a general decline in stock markets worldwide. This in turn provided fresh impetus for hedge funds as investors searched for absolute returns. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) Unlike registered investment companies, hedge funds are not required to publicly disclose performance and holdings information that might be construed as solicitation materials. Since the early 1990s, there has been a growing interest in the use of hedge funds amongst both institutional and high net worth individuals. Due to their private nature, it is difficult to obtain adequate information about the operations of individual hedge funds and reliable summary statistics about the industry as a whole. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) Hedge funds are known to be growing in size and diversity. As at the end of 1997, the MAR/Hedge database recorded more than 700 hedge fund managing assets of US$90 billion. This is only a partial picture of the industry, as many funds are not listed with MAR/Hedge. In practical terms, it is not easy to estimate the current size of the hedge fund industry unless all funds are regulated or obligated to register their operations with a common authority. Brooks and Kat (2001) estimated that, as at April 2001, there are around 6000 hedge funds with an estimated US $400 billion in capital under management and US $1 trillion in total assets. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) According to Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) three interesting features differentiate hedge funds from other forms of managed funds. Most hedge funds are small and organized around a few experienced investment professionals. In fact, more than half of U.S Hedge Funds manage amounts of less than US$25 million. Further, most hedge funds are leveraged. It is estimated that 70 per cent of hedge funds use leverage and about 18% borrowed more than one dollar for every dollar of capital. (See Eichengreen and Mathieson (1998). Another peculiar feature is the short life span of hedge funds. Hedge funds have an average life span of about 3.5 years (See Stefano Lavinio (2000) pp 128). Very few have a track record of more than 10 years. These features lead many to view hedge funds, as risky and opportunistic. In the early study by Fung and Hsieh (2001), they use option like payoffs to view the risks of trend following hedge funds. They saw that the trend followers are typically commodity trading advisors (CTAs) who attempt to profit from trends in commodity prices using technical indicators. According to Fung and Hsieh (2001) trend followers are particularly interesting in that not only are their returns uncorrelated with the standard equity, bond, currency, and commodity indices, but their returns tend to exhibit option like features. They tend to be large and positive during the best and worst performing months of world equity indices. They cite evidence by Fung and Hsieh (1997) who show that if one divided up the states of the world into five states based on the return on the MSCI equity world index, trend followers tend to outperform when the MSCI equity return is at its lowest and highest. The relationship between trend followers and the equity market is non-linear and U-shaped. Alth ough returns of trend following funds have a low beta against equities on average, the state-dependent betas tend to be positive in up-markets and negative in down markets. As a result, Fung and Hsieh (2001) assume that the simplest trend following strategy has the same payout as a structured option known as the look back straddle. The owner of a look back call option has the right to buy the underlying asset at the lowest price over the life of the option. Similarly, a look back put option allows the owner to sell at the highest price. The combination of these two options is the look back straddle, which delivers the ex-post maximum payout of any trend following strategy. Fung and Hsieh (2001) then demonstrate empirically that look back straddle returns resemble the returns of trend following hedge funds. Building on this pioneer work, Fung and Hsieh (2004) propose seven factors that explain aggregate hedge fund returns. These seven factors include the excess return on the SP 500 index, the Wilshire small cap minus large cap index return, the term spread, the credit spread, and trend following factors for bonds, currencies, and commodities. They show that their seven factor model well explains variation in aggregate hedge fund returns. In addition, they find that equity long/short hedge funds tend to load positively on the SP 500 index factor and the small cap minus large cap factor. These results are consistent with the observation that equity long/short hedge funds typically have a small positive exposure to stocks and tend to be long small stocks and short large stocks. Fung and Hsieh (2004) also find that fixed income funds on the other hand tend to load negatively on the change in the credit spread, where the credit spread is measured as the difference between the yield on Moodys Baa bonds and the yield on the 10-year constant maturity Treasury bond. The reason is that fixed income funds typically buy bonds with lower credit ratings and/or less liquidity and then hedge the interest rate risk by shorting US Treasury bonds, which have the highest credit rating and are more liquid. However, Agarwal and Naik (2004) also propose a multi-factor model to explain hedge fund risks. They find that non-linear option like payoffs are not restricted to trend followers and risk arbitrageurs, but are an integral feature of payoffs for a wide range of hedge fund strategies. In particular they observe that the payoffs on a large number of hedge fund strategies look like those from writing a put option on the equity index. These strategies include risk arbitrage, distressed debt, convertible arbitrage, and relative value arbitrage. Consistent with the exposure of these strategies to the risks borne by sellers of equity index put options, Agarwal and Naik (2004) find that these hedge funds suffer from significant left tail risk which tends to coincide with severe market downturns. The performance of hedge fund in 2008 was very shocking like more than ten years ago. Teo, M (2009) stated that in the month of August 1998 alone LTCM lost 45% of its capital in the wake of the massive liquidity event triggered by the Russian rubble default. Lots of academic literature has shown that the year 2007 and 2008 was the worst performance of hedge fund. As we know that hedge fund managers make portfolio by taking position in equity market and another fund, but unfortunately the world equity market goes downside. As a result investors who wish to weather future financial maelstroms should take note of the non-linear relationship between hedge fund returns and the equity market. 2.3- Limitations (previous) With respect to lightly regulated investment vehicles with great treading flexibility, hedge funds often pursue highly sophisticated investment strategies. Hedge funds promise absolute returns to their investor leading to a belief that they hold factor-neutral portfolios. With this in mind, hedge funds have some limitations. In the early studies many researchers discussed and explain that obstacles. First of all if we consider the measurement model of hedge funds performance, most of the researcher use traditional performance measure model like, Sharpe ratio, Treynor ratio and Jensen alpha which are not adequate for the performance evaluation of hedge funds. Fung and Hsieh (2000) and Roy (2003) stated that is incorrect to use these performance measures t evaluate the hedge funds strategies. Brooks and Kat (2002), Kat (2003), Mahdavi (2004) and Murguia and Umemoto (2004) also mentioned that the Sharpe ratio does not represent the true performance of hedge funds because it does not take into consideration the asymmetry returns of these funds. As a result Perello (2007) propose to use the downside risk framework like Sortino ratio, the upside potential ratio and Omega measure as alternative performance measure. Moreover, Chung, Rosenberg and Tomeo (2004) and Scherer (2004) showed that Sortino ratio makes it possible to the investors to evaluate the risk and the performance of the h edge funds more sustainably than Sharpe ratio. Secondly, according to Ackermann et al. (1999) and to Fung and Hsieh (2000), two upward biases exist in the case of hedge funds. They do not exist in the case of mutual funds, and they both have an opposite impact to the survivorship bias. Survivorship bias is an important issue in hedge funds performance studies (see Carhart and al. 2000). This bias is present when a database contains only funds that have data for the whole period studies. In this case, there is a risk of overestimating the mean performance because the funds that would have ceased to exist because of their bad performance would not be taken into account. The two upward biases exist because, since hedge funds are not allowed to advertise, they consider inclusion in a database primarily as a marketing tool. The first phenomenon stressed by Ackermann and al. (1999) and called the self-selection bias is present because funds that realize good performance have less incentive to report their performance to data providers in order to attract new investors. Malkiel, B. and Saha, A. (2005) stated in their report that Databases available at any point in time tend to reflect the returns earned by currently existing hedge funds but they do not include the returns from hedge funds that existed at some time in the past but are presently not in existence (i.e., the truly dead funds) or exist but no longer report their results (the defunct funds). Unsuccessful hedge funds have difficulties obtaining new assets. Hence, they tend to close, leaving only the more successful funds in the database. But some funds stop reporting not because they are unsuccessful but because they do not want to attract new investment. The second point called instant history bias or backfilled bias (Fung and Hsieh 2000) occurs because after inclusion a funds performance history is backfilled. This may cause an upward bias because funds with less satisfactory performance history are less likely to apply for inclusion than funds with good performance history (Capocci Daniel 2001, An analysis of hedge fund performance 1984- 2000). Performance of Hedge Fund Relatively in UK Performance of Hedge Fund Relatively in UK 1.1- Introduction: Hedge funds are actively managed portfolios that hold positions in publicly traded securities. Gaurav S. Amin and Harry M. Kat (2000) stated on their report that A hedge fund is typically defined as a pooled investment vehicle that is privately organized, administrated by professional investment managers, and not widely available to the public. It charges both a performance fee and a management fee. It allows a flexible investment for a small number of large investors (usually the minimum investment is $1 million) can use high risk techniques. 1Now days it is very clear that in the matter of alternative investment mutual fund is not performing well. As a high absolute returns and typically have features such as hurdle rates and incentive fees with high watermark provision hedge fund gives a better align to the interests of managers and investors. 2Moreover mutual funds typically use a long-only buy-and-hold type strategy on standard asset classes, which help to capture risk premia as sociate with equity risk, interest rate risk, default risk etc. However, they are not very helpful in capturing risk premia associate with dynamic trading strategies. That is why hedge fund comes into the picture. In the year of 2009, this takes the greatest history of the world in the following century. In the year of 2008 the world saw the greatest fall down of the world economy. Lots of people missing their jobs, lots of company were stopped. The world economy faced the highest losses in the history. These all factors are showing only one way to makeover from that greatest downfall that is hedging. 3The last couple of decades have witnessed a rapidly growing in the hedge funds. Relative to traditional investment portfolios hedge funds exhibit some unique characteristics; they are flexible with respect to the types of securities they hold and the type of the position they take. 1 Agarwal, V. and Naik, N. (2000). Multi-period performance persistence analysis of hedge fund s. The journal of financial and quantitative analysis. Vol. 35, No,3. PP-327. 2 Agarwal, V. and Naik, N. (2004). Risks and portfolio decisions involving hedge funds. The review of financial studies, Vol. 17, No.1. PP-64. 3 Journal of banking and finance 32(2008) 741-753- Hedge Fund Pricing and Model Uncertainty by Spyridan D. Vrontos, Ioannis D. Vrontos, Daniel Giomouridies. Since the early 1990s, hedge funds have become an increasingly popular asset class. The amount invested globally in hedge funds rose from approximately $50 billion in 1990 to approximately $1 trillion by the end of 2004. And because these funds characteristically use stantial leverage, they play a far more important role in the global securities markets than the size of their net assets indicates. Moreover, investments in hedge funds have become an important part of the asset mix of institutions and ever wealthy individual investors (Malkiel, B. and Saha, A. (2005). 4The number of FOHFs increase by 40% between 2001 and 2003, and now comprised almost two third of the $650 billion invested in the USAs hedge fund market. Due to its nature it is difficult to estimate the current size of hedge fund industry. 5Van Hedge Fund Advisors estimates that by the end of 1998 there were 5380 hedge fund managing $311 in capital, with between $800 billion and $1 trillion in total assets, which indicates the higher number of recent new entries. So far, hedge fund is based on American phenomena. About 90% hedge fund managers are based in the US, 9% in Europe and 1% in Asia and elsewhere. Now a days around 5883 hedge funds are trading around the world. (*Barclay Hedge database). Chart 1: Assets of Hedge fund industry from 1997 to 2009. Source: http://www.barclayhedge.com/research/indices/ghs/mum/Hedge_Fund.html According to the Barclay hedge database the asset of hedge fund industry is $1205.6 billion dollar. 4 Financial times, 29th October, 2003. www.vanhedge.com http://www.barclayhedge.com/products/hedge-fund-directory.html 1.2- Research questions: Specifically in this paper, I want to address two main questions. First one is what is the performance of hedge fund and FTSE100 over the period of 2001 to 2008? To evaluate the performance I use three traditional risk adjusted performance measurement model. To give a better idea and matter of easily understand I use the Sharp ratio, the Treynor ratio, and the Capital Asset Pricing Model (CAPM). However, the equity market index is not necessarily the right benchmark for hedge funds, therefore, market betas and abnormal returns may not be the appropriate measures for risks and profits. To mitigate this problem, I calculate sharp ratios, which are defined as the ratio of the average excess fund returns over the standard deviation. Second question is does hedge funds gives better return from UK equity market (FTSE100)? To make this comparison I use regression analysis where the correlation will show how the hedge funds act against the FTSE 100. 1.3- Objective of the study: The main objective of this study is to find out the performance of Hedge fund relatively with the UK equity market FTSE 100. In addition, I address in this paper four major hedge funds performance correlation with FTSE100. As a result an individual investor can easily understand which portfolio will give better return at their investment perspective. This study focuses on UK investors perspective only. In the past several years, lots of studies had been done on this area like Park and Staum (1998), Brown et al. (1999), Agarwal and Naik (2000), Herzberg and Mozes (2003), Capocci and Hubner (2004), and Malkiel and Saha (2005) analysis the hedge fund performance. Most of the statistical methodology is on the regression with equity markets and rest of all are in the cross product ratio. Above all they tried to find out the return of different types of hedge fund depending on the market risk and market return. So finally, the purpose of this paper is clearly established, that is to understand hedge fund performance over the UK equity market (FTSE100). 1.5- Overview of the methodology: In this section I would like to describe an overview of my methodology. To find out the hedge fund performance and the FTSE100 markets performance I use three traditional risk-adjusted performance measurement models. First one is the Sharpe ratio, secondly, the Treynor ratio and finally, the Capital Asset Pricing Model (CAPM). I address the Sharpe ratio and the Treynor ratio because these two gives better easy view for an investor to evaluate the hedge fund performance by themselves. However, the Sharpe ratio and the Treyneo ratio measure the excess return of per unit of risk for an investment asset. These two are used to understand how well the return of an asset compensates the investor for the risk taken. When comparing two assets each with the expected return of fund against the same benchmark with risk free return, the asset with the higher Sharpe ratio gives more return for the same risk. As a result investor can easily understand where to invest. In this paper I use total 287 funds including different types of hedge funds like- Event driven (31), Hedge fund (54), Global macro (37) and Market neutral (165). As a benchmark I use FTSE100 and for the risk free rate I use UK 10 year Treasury bond. All data were collected from the DataStream which is run by Thomson Reuters the worlds leading source of intelligent information for businesses and professionals (http://thomsonreuters.com/). 1.6- Definition of the key terms: Hedge fund: In the early study by Francis C.C. Koh, Winston T.H. Koh , David K.C. Lee, Kok Fai Phoon (2004) stated in their report that Hedge Funds are innovative investment structures that were first created more than 50 years ago by Alfred Winslow Jones. He established a fund with the following features: (a) He set up hedges by investing in securities that he determined as undervalued and funding these positions partly by taking short positions in overvalued securities, creating a market neutral position; (b) He also designed an incentive fee compensation arrangement in which he was paid a percentage of the profits realized from his clients assets; and (c) He invested his own investment capital in the fund, ensuring that his incentives and those of his investors were aligned and forming an investment partnership. Most modern hedge funds possess the above listed features, and are set up as limited partnerships with a lucrative incentive-fee structure. In most hedge funds, managers also often have a significant portion of their own capital invested in the partnerships. The term hedge fund has been generalized to describe investment strategies that range from the original market-neutral style of Jones to many other strategies and opportunistic situations, including global/macro investing. On the other report by Liang, B. (1999) stated on his report that there are two major types of hedge funds, one is inshore and another is offshore. Onshore funds are limited partnerships of no more than 500 investors. Offshore funds are limited liability corporations or partnerships established in the tax neutral jurisdictions that allow investors an opportunity to invest outside their own country and minimize their tax liabilities. Due to the large variety of hedge fund investing strategies, there is no standard method to classify hedge funds smartly. There are at least 8 major databases set up by data vendors and fund advisors. I follow the classification used by Eichengreen and Mathieson (1998), which relied on the MAR/Hedge database. Under this classification, there are 8 categories of hedge funds with 7 differentiated styles and a fund-of-funds category. For my paper I chose three different categories, which are as follows: (a) Event driven funds. These are funds that take positions on corporate events, such as taking an arbitraged position when companies are undergoing re-structuring or mergers. For example, hedge funds would purchase bank debt or high yield corporate bonds of companies undergoing re-organization (often referred to as distressed securities). Another event-driven strategy is merger arbitrage. These funds seize the opportunity to invest just after a takeover has been announced. They purchase the shares of the target companies and short the shares of the acquiring companies. (c) Global/Macro funds refer to funds that rely on macroeconomic analysis to take bets on major risk factors, such as currencies, interest rates, stock indices and commodities. Opportunistic trading manager that makes profits from changes in global economies typically based in major interest rate shifts. To make profits managers uses leverage and derivatives. (d) Market neutral funds refer to funds that bet on relative price movements utilizing strategies such as long-short equity, stock index arbitrage, convertible bond arbitrage and fixed income arbitrage. Long-short equity funds use the strategy of Jones by taking long positions in selective stocks and going short on other stocks to limit their exposure to the stock market. Stock index arbitrage funds trade on the spread between index futures contracts and the underlying basket of equities. Convertible bond arbitrage funds typically capitalize on the embedded option in these bonds by purchasing them and shorting the equities. Fixed income arbitrage bet on the convergence of prices of bonds from the same issuer but with different maturities over time. This is the second largest grouping of hedge funds after the Global category. Source Eichengreen and Mathieson (1998). 2.1.2- Current scenario of hedge funds: Chapter two Literature review: 2.1- History of hedge fund Despite the increasing interest and recent development, few studies have been carried out on hedge funds comparing to other investment tools like mutual funds. An analysis of Hedge Fund performance 1984-2000 by Capocci Daniel using one of the greatest hedge fund database ever used on his working paper (2796 individual funds including 801 dissolved), to investigate hedge funds performance using various asset-pricing models, including an extension from of Carharts (1997) model combined with Fama and French (1998), Agarwal and Naik (2000) models that take into account the fact that some hedge funds invest in emerging market bond. At the end they found that their model does a better job describing hedge funds behaviour. That appears particularly good for the Event Driven, Global Macro, US Opportunistic, Equity non-Hedge and Sector funds. Since the early 1990s, when around 2000 hedge funds were managing assets totalling capital of $60 billion, the subsequent growth in the number and asset base of hedge funds has never really been refuted. The industry only suffered from a relative slowdown in 1998, but since then has enjoyed a renewed vitality with an estimated total of 10,000funds managing more than a trillion US dollars by the end of 2006. The growing trend of the sector remained remarkably sustained during the stock market collapse that started in March 2000, when the NASDAQ composite Index reached an all-time high of 5,132 and finished three years later with a floor level of 1,253. In the meantime, the global met asset value (NAV) of hedge funds continued to grow at a steady rate of 10.6% (Van Hedge Funds Advisors International, 2002), contrasting with a decrease of 2.7% in the worldwide mutual fund industry ( Investment Company Institute, 2003). In 2001, Capocci and Hubner(2004) estimated that there were 6,000 he dge fund managing around $400 billion. In 2007, Capocci, Duquenne and Hubner (2007) estimated that there were 10,000 hedge funds managing around $1 trillion. This is a growth of 11% in the number of funds and 26% in assets over six years (6PhD thesis paper by Daniel P.J. Capocci). Other studies from practitioners Hennessee (1994), and Oberuc (1994) also showed an evidence of superior performance in the case of hedge funds. Ackernann and Al. (1999) and Liang (1999) who compared the performance of hedge funds to mutual funds and several indices, found that hedge funds constantly obtained better performance than mutual funds. Their performance was not better than the performance of the market indices considered. They also indicated that the returns in hedge funds were more unstable than both the returns of mutual funds and those of market indices. According to Brown and Al. (1997) hedge funds showing good performance in the first part of the year reduce the volatility of their portfolio in the second half of the year (Capocci Daniel- An analysis of hedge fund performance 1984-2000). Taking all these results into account hedge funds seems a good investment tool. 6 PhD thesis paper by Daniel P.J. Capocci. Electronic copy available at: http//ssrn.com/abstract=1008319. 2.1.1- Facts and finding of development in hedge funds: As a result of flexible investment strategies, a better manager inventive alignment, sophisticated investors, and limited SEC regulations hedge funds have gained incredible popularity. In the report of Agarwal, V. and Naik, N. (2004) stated that it is well accepted that the world of financial securities is a multifactor world consisting of different risk factors, each associated with its own factor risk premium, and that no single investment strategy can span the entire risk factor space. Therefore investors wishing to earn risk premia associated with different risk factors need to employ different kinds of investment strategies. Sophisticated investors, like endowments and pension funds, seem to have recognized this fact as their portfolios consist of mutual funds as well as hedge funds.1 Mutual funds typically employ a long-only buy-and-hold-type strategy on standard asset classes, and help capture risk premia associated with equity risk, interest rate risk, default risk, etc. Howe ver, they are not very helpful in capturing risk premia associated with dynamic trading strategies or spread-based strategies. This is where hedge funds come into the picture. Unlike mutual funds, hedge funds are not evaluated against a passive benchmark and therefore can follow more dynamic trading strategies. Moreover, they can take long as well as short positions in securities, and therefore can bet on capitalization spreads or value-growth spreads. As a result, hedge funds can offer exposure to risk factors that traditional long-only strategies cannot. However, investor can create exposure like hedge funds by trading on their own account, in practice they encounter many frictions due to incompleteness of markets like the publicly traded derivatives market and the financing market. Moreover, the derivatives market for standardized contracts has grown a great deal in recent years, still it is very costly for an investor to create a customized payoff on individual securities. The same is true for the financing market as well, where investors encounter difficulties shorting securities and obtaining leverage. These frictions make it difficult for investors to create hedge fund-like payoffs by trading on their own accounts. According to Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) in 1990, the entire hedge fund industry was estimated at about US$20 billion. At of 2004, there are close to 7000 hedge funds worldwide, managing more than US$830 billion. Additionally, about US$200-300 billion is estimated to be in privately managed accounts. While high net worth individuals remain the main source of capital, hedge funds are becoming more popular among institutional and retail investors. Funds of hedge funds and other hedge fund-linked products are increasingly being marketed to the retail market. While hedge funds are well established in the United States and Europe, they have only begun to grow aggressively in Asia. According to Asia Hedge magazine, there are more than 300 hedge funds operating in Asia (including those in Japan and Australia), of which 30 were established in year 2000 and 20 in 2001. In 2003, 90 new hedge funds were started in Asia, compared with 66 in 2002, according to an estimate by th e Bank of Bermuda. In 2004 more than US$15 billion, hedge fund investments in Asia are expected to grow rapidly. Several factors support this view. Asian hedge funds currently account for a tiny slice of the global hedge fund pie and a mere trickle of the total financial wealth of high net worth individuals in Asia. Hedge funds have posted attractive returns. From 1987 to 2001, the Hennessee Hedge Fund Index posted annualised returns of 18%, higher than the SPs 13.5%. Hedge funds are seen as a natural hedge for controlling downside risk because they employ exotic investment strategies believed to generate returns that are uncorrelated to traditional asset classes. Hedge funds vary in their strategies. So-called macro funds, such as Quantum Fund, generally take a directional view by betting on a particular bond market, say, or a currency movement. Other funds specialize in corporate events, such as mergers or bankruptcies, or simply look for pricing anomalies the stock markets. Hedge funds vary widely in both their investment strategies and the amount of financial leverage. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) There are a number of factors behind the meteoric rise in demand for hedge funds. The unprecedented bull-run in the US equity markets during the 1990s expanded investment portfolios. This led an increased awareness on the need for diversification. The bursting of the technology and Internet bubbles, the string of corporate scandals that hit corporate America and the uncertainties in the US economy have led to a general decline in stock markets worldwide. This in turn provided fresh impetus for hedge funds as investors searched for absolute returns. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) Unlike registered investment companies, hedge funds are not required to publicly disclose performance and holdings information that might be construed as solicitation materials. Since the early 1990s, there has been a growing interest in the use of hedge funds amongst both institutional and high net worth individuals. Due to their private nature, it is difficult to obtain adequate information about the operations of individual hedge funds and reliable summary statistics about the industry as a whole. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) Hedge funds are known to be growing in size and diversity. As at the end of 1997, the MAR/Hedge database recorded more than 700 hedge fund managing assets of US$90 billion. This is only a partial picture of the industry, as many funds are not listed with MAR/Hedge. In practical terms, it is not easy to estimate the current size of the hedge fund industry unless all funds are regulated or obligated to register their operations with a common authority. Brooks and Kat (2001) estimated that, as at April 2001, there are around 6000 hedge funds with an estimated US $400 billion in capital under management and US $1 trillion in total assets. (Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) According to Koh, F., Koh,W,. Lee, D,. and Phoon, K. (2004) three interesting features differentiate hedge funds from other forms of managed funds. Most hedge funds are small and organized around a few experienced investment professionals. In fact, more than half of U.S Hedge Funds manage amounts of less than US$25 million. Further, most hedge funds are leveraged. It is estimated that 70 per cent of hedge funds use leverage and about 18% borrowed more than one dollar for every dollar of capital. (See Eichengreen and Mathieson (1998). Another peculiar feature is the short life span of hedge funds. Hedge funds have an average life span of about 3.5 years (See Stefano Lavinio (2000) pp 128). Very few have a track record of more than 10 years. These features lead many to view hedge funds, as risky and opportunistic. In the early study by Fung and Hsieh (2001), they use option like payoffs to view the risks of trend following hedge funds. They saw that the trend followers are typically commodity trading advisors (CTAs) who attempt to profit from trends in commodity prices using technical indicators. According to Fung and Hsieh (2001) trend followers are particularly interesting in that not only are their returns uncorrelated with the standard equity, bond, currency, and commodity indices, but their returns tend to exhibit option like features. They tend to be large and positive during the best and worst performing months of world equity indices. They cite evidence by Fung and Hsieh (1997) who show that if one divided up the states of the world into five states based on the return on the MSCI equity world index, trend followers tend to outperform when the MSCI equity return is at its lowest and highest. The relationship between trend followers and the equity market is non-linear and U-shaped. Alth ough returns of trend following funds have a low beta against equities on average, the state-dependent betas tend to be positive in up-markets and negative in down markets. As a result, Fung and Hsieh (2001) assume that the simplest trend following strategy has the same payout as a structured option known as the look back straddle. The owner of a look back call option has the right to buy the underlying asset at the lowest price over the life of the option. Similarly, a look back put option allows the owner to sell at the highest price. The combination of these two options is the look back straddle, which delivers the ex-post maximum payout of any trend following strategy. Fung and Hsieh (2001) then demonstrate empirically that look back straddle returns resemble the returns of trend following hedge funds. Building on this pioneer work, Fung and Hsieh (2004) propose seven factors that explain aggregate hedge fund returns. These seven factors include the excess return on the SP 500 index, the Wilshire small cap minus large cap index return, the term spread, the credit spread, and trend following factors for bonds, currencies, and commodities. They show that their seven factor model well explains variation in aggregate hedge fund returns. In addition, they find that equity long/short hedge funds tend to load positively on the SP 500 index factor and the small cap minus large cap factor. These results are consistent with the observation that equity long/short hedge funds typically have a small positive exposure to stocks and tend to be long small stocks and short large stocks. Fung and Hsieh (2004) also find that fixed income funds on the other hand tend to load negatively on the change in the credit spread, where the credit spread is measured as the difference between the yield on Moodys Baa bonds and the yield on the 10-year constant maturity Treasury bond. The reason is that fixed income funds typically buy bonds with lower credit ratings and/or less liquidity and then hedge the interest rate risk by shorting US Treasury bonds, which have the highest credit rating and are more liquid. However, Agarwal and Naik (2004) also propose a multi-factor model to explain hedge fund risks. They find that non-linear option like payoffs are not restricted to trend followers and risk arbitrageurs, but are an integral feature of payoffs for a wide range of hedge fund strategies. In particular they observe that the payoffs on a large number of hedge fund strategies look like those from writing a put option on the equity index. These strategies include risk arbitrage, distressed debt, convertible arbitrage, and relative value arbitrage. Consistent with the exposure of these strategies to the risks borne by sellers of equity index put options, Agarwal and Naik (2004) find that these hedge funds suffer from significant left tail risk which tends to coincide with severe market downturns. The performance of hedge fund in 2008 was very shocking like more than ten years ago. Teo, M (2009) stated that in the month of August 1998 alone LTCM lost 45% of its capital in the wake of the massive liquidity event triggered by the Russian rubble default. Lots of academic literature has shown that the year 2007 and 2008 was the worst performance of hedge fund. As we know that hedge fund managers make portfolio by taking position in equity market and another fund, but unfortunately the world equity market goes downside. As a result investors who wish to weather future financial maelstroms should take note of the non-linear relationship between hedge fund returns and the equity market. 2.3- Limitations (previous) With respect to lightly regulated investment vehicles with great treading flexibility, hedge funds often pursue highly sophisticated investment strategies. Hedge funds promise absolute returns to their investor leading to a belief that they hold factor-neutral portfolios. With this in mind, hedge funds have some limitations. In the early studies many researchers discussed and explain that obstacles. First of all if we consider the measurement model of hedge funds performance, most of the researcher use traditional performance measure model like, Sharpe ratio, Treynor ratio and Jensen alpha which are not adequate for the performance evaluation of hedge funds. Fung and Hsieh (2000) and Roy (2003) stated that is incorrect to use these performance measures t evaluate the hedge funds strategies. Brooks and Kat (2002), Kat (2003), Mahdavi (2004) and Murguia and Umemoto (2004) also mentioned that the Sharpe ratio does not represent the true performance of hedge funds because it does not take into consideration the asymmetry returns of these funds. As a result Perello (2007) propose to use the downside risk framework like Sortino ratio, the upside potential ratio and Omega measure as alternative performance measure. Moreover, Chung, Rosenberg and Tomeo (2004) and Scherer (2004) showed that Sortino ratio makes it possible to the investors to evaluate the risk and the performance of the h edge funds more sustainably than Sharpe ratio. Secondly, according to Ackermann et al. (1999) and to Fung and Hsieh (2000), two upward biases exist in the case of hedge funds. They do not exist in the case of mutual funds, and they both have an opposite impact to the survivorship bias. Survivorship bias is an important issue in hedge funds performance studies (see Carhart and al. 2000). This bias is present when a database contains only funds that have data for the whole period studies. In this case, there is a risk of overestimating the mean performance because the funds that would have ceased to exist because of their bad performance would not be taken into account. The two upward biases exist because, since hedge funds are not allowed to advertise, they consider inclusion in a database primarily as a marketing tool. The first phenomenon stressed by Ackermann and al. (1999) and called the self-selection bias is present because funds that realize good performance have less incentive to report their performance to data providers in order to attract new investors. Malkiel, B. and Saha, A. (2005) stated in their report that Databases available at any point in time tend to reflect the returns earned by currently existing hedge funds but they do not include the returns from hedge funds that existed at some time in the past but are presently not in existence (i.e., the truly dead funds) or exist but no longer report their results (the defunct funds). Unsuccessful hedge funds have difficulties obtaining new assets. Hence, they tend to close, leaving only the more successful funds in the database. But some funds stop reporting not because they are unsuccessful but because they do not want to attract new investment. The second point called instant history bias or backfilled bias (Fung and Hsieh 2000) occurs because after inclusion a funds performance history is backfilled. This may cause an upward bias because funds with less satisfactory performance history are less likely to apply for inclusion than funds with good performance history (Capocci Daniel 2001, An analysis of hedge fund performance 1984- 2000).