Poverty Inequality Poverty And Income Inequality

Poverty Income Inequality How do we balance the assistance we give the poor but do not discourage work? The labor markets which determine how much workers are paid do not take into consideration how much a family really requires to pay for all expenses like health care, clothes, food, housing, and transportation. The labor markets actually create inequalities of income and as a result create issues leading to poverty. Poverty is measured by the U.S. Census Bureau as a direct result of the Office of Management and Budget s (OMB) Statistical Policy Directive 14. The Census Bureau uses thresholds that vary by size and composition of families to determine levels of poverty. To sum it up, if a families total income is less than the set†¦show more content†¦There are some economists who advocate for a national poverty line and still other economists who think that the poverty line should be adjusted for the twenty-first century, due to the various government assistance programs whose value are not currentl y taken into consideration when determining the poverty line. In addition to the poverty line we must consider the implications that the safety net programs and the poverty trap set for those that fall below the poverty live. Poverty Trap and Safety Net Programs Another way to balance assistance and not discourage work is to consider the poverty trap and the governmental safety net programs available to assist those below the poverty line. The poverty trap is found when a group within a society are provided with the basic necessities of living such as food, housing, healthcare, and income to name a few. This assistance becomes problematic when the people have reduced incentive to work due to the benefits of the assistance programs. When a person can have more disposable income when they do not work because the amount of assistance is reduced equally by the amount of money gained by working. Some of the more common safety net programs, in the U.S., are TANF (Temporary Assistance for Needy Families), EITC (Earned Income Tax Credit), SNAP (Supplemental Nutrition Assistance Program), and Medicaid, all of which are designed to help bring people aboveShow MoreRelatedIncome Inequality And Poverty989 Words   |  4 Pages â€Å"Income inequality has no necessary connection with poverty, the lack of material resources for a decent life, such as adequate food, shelter, and clothing. A society with great income inequality may have no poor people, and a society with no income inequality may have nothing but poor people† - Robert Higgs. When people think of income inequality they picture poverty and people not having basic necessities. However income inequality is not just a connection to the poor. Income inequality is stronglyRead MorePoverty And Poverty : America s Income Inequality1127 Words   |  5 Pagesrepeatedly in reference to America’s income inequality. Though ironic, it comes as no surprise that America, a continent that easily trumps other countries in terms of wealth would be affected by the issue of poverty at such high levels. While much has said regarding the poverty levels, many economists, educators and scholars feel that the income inequality in America may be the reason why it is difficult to l ive and maintain a middle class lifestyle or to rise out of poverty into the middle class in theRead MoreMarket Failure Poverty and Income Inequality1968 Words   |  8 PagesMarket Failure: Poverty and Income Inequality Donna Butler South University Online ECO2071 Principles of Micro-Economics Week 5, Assignment 1 Professor Brandt May 29, 2015 Market Failure: Poverty and Income Inequality Every country in the world needs basic information on the residents that live there. This information is needed for planning, for development and for trying to improve the quality of life for those residents. In order to have good planning, reliable, accurate, detailedRead MoreEssay on Poverty and Income Inequality in China1348 Words   |  6 PagesAnother Inquiry on the Economic Welfare and Poverty in China The trade-off between economic growth and redistribution has become one of the major notes concerning the emerging economies of post-Cold War world. Adding to this struggle the urge to integrate into the international system while keeping the balances right at home has been another macro-level concern. In conjunction such liabilities not only necessitates the examination of fiscal and structural reforms but also the international trendsRead MoreImproving Rural Poverty And Level Of Income Inequality1100 Words   |  5 Pages3.4 Data Analysis This section discusses the approaches used in augmenting the conventional household income accounts with incomes from CF, how these incomes do influence rural poverty and level of income inequality. 3.4.1 Income accounting Since our focus is primarily on forest resources (rather than the entire set of environmental resources), we attempt to account for consumptive forest products that households generate from forests such as timber, fuel wood, fodder, farm implements, constructionRead MorePoverty Inequality And Poverty And Inequality875 Words   |  4 Pagesimportant concepts which are poverty and inequality. Both inequality and poverty have mainly negatives impacts in the society therefore, it is almost a prerequisite to have an understanding of both for the sake of reduce them accurately. The first purpose of the essay is to give a thorough understanding of what poverty and inequality are. The second purpose is to display some similarity between poverty and inequality. Poverty Primarily, a simple definition of poverty is highly questionableRead MorePoverty in the U.S.961 Words   |  4 Pagesarticle in the Economist, the US currently boasts the highest post-tax level of income inequality of any high-income country in the world (Economist 2013). The nations Gini Coefficient – a measure of wealth inequality – currently stands at .42, well above that of other nations such as Switzerland and Sweden, which have Gini Coefficients of .31 and .33 respectively. Unfortunately this high level of income and wealth inequality is growing. Between 1979 and 2011, American earners in the top one percent sawRead MoreEconomic and Social Costs of Inequality in Australia785 Words   |  4 Pagessocial costs and benefits of inequality in distribution of income in Australia. Income inequality describes the extent to which income is distributed unevenly among residents of an area. High levels of inequality indicate that a small number of people receive most of the total income, and that most people receive only a small share of the total. There are many advantages and disadvantages associated with the inequitable distribution of income. Income inequality can lead to an increase in theRead MoreGlobalization Is Not A New Concept1465 Words   |  6 Pagescalled â€Å"Globalization and the Least Developed Countries: Potentials and Pitfalls† that Globalization has become one of the most emotional word like communism or capitalism. In some simple language the impact or importance of globalization on poverty and inequality can be explained in many ways. As Globalization is important part of world economy and because of this world economy is changing rapidly. Economists define it as the free movement of goods, services, labor and capital across borders. GlobalizationRead MorePublic Economics1471 Words   |  6 Pagesrespect to inequality and poverty how does Ireland compare to other Western industrialized countries? | Padraig Mc Govern | | 08604070 | 3/9/2012 | Lecturer: Professor Eamon O Shea Course code: 4BCM1 Introduction The following essay will compare Ireland with respect to inequality and poverty to the United States and the United Kingdom. I will use the country’s Gross Domestic Product (GDP) in order to analyse their position in the world’s economy; identify how to measure poverty; the main

Being Gay and Elderly in Toronto Free Essays

string(32) " have committed an abomination\." According to Peter Sprigg, author of â€Å"Gay Marriage Questions,† there are two reasons a civil marriage should not be granted for gay couples. One is that since they are relationships and not marriages, they should not be granted. Sprigg says that in order to have a marriage, there must be a union of a man and a woman, not a man and a man. We will write a custom essay sample on Being Gay and Elderly in Toronto or any similar topic only for you Order Now Traditional intercourse cannot take place with two men involved. The second one is that these type relationships are harmful. They do not provide the same benefits as a marriage between a man and a woman, and their consequences are far more negative than positive. (www. nogaymarriage. com/gaymarriagequestions. html) Either way, it’s looked at, even with the evidence standing alone, it is enough to not accept the claim that gay couples should be able to legally marry. The first argument is that marriage is an institution that predates the law and the Constitution. Marriage is sociological, not legal. Laws relating to marriage just acknowledge and keep in tact an institution that is already in existence. However, some people believe that marriage is a way of recognizing couples who are in love with each other. With that being said, they want to spend the rest of their lives together. Consider this. According to Sprigg, love and companionship were sufficient to define marriage, then there would be no reason to deny â€Å"marriage† to unions of a child and an adult, or an adult child and his aging parent, or to roommates who have no sexual relationship. Most people think that the sexual element is what defines a marriage. However, marriage is so much more than that. According to Webster, marriage is a mutual relationship between husband and wife; the institution whereby men and women are joined in a special kind of social and legal dependence for the purpose of founding and maintaining a family. Anthropologist Kingsley Davis says that marriage is â€Å"the unique trait of what is commonly called marriage is social recognition and approval†¦of a couple’s engaging in sexual intercourse and bearing and rearing children. † The question was raised, are married couples without children really in a marriage? If gay couples are denied to marry, shouldn’t straight couples without children be denied also? According to what Sprigg had to say concerning marriage and children, this would make sense, would it not? Not necessarily. If a couple wants children, and for some reason cannot have them, it is not their fault. A couple who decides not to have children may change their minds. At any rate, childless marriages are still acknowledged because if not, it would be an invasion of a heterosexual couples privacy to require that they show intent to bear children, or the ability to have children. So, what is the real purpose of marriage? Anthropologist Kingsley Davis says that a marriage’s purpose is to socially recognized and approved to engage in sexual intercourse and bear and rear children. Another marriage scholar, Maggie Gallagher says that â€Å"marriage across societies is a public sexual union that creates kinship obligations and sharing of resources between men, women, and the children their sexual union may produce. The mere biological conception and birth of children are not enough to make sure that reproduction of a healthy and successful society. Paul Nathanson, the homosexual scholar says that there are at least five functions that marriage serves—things that every culture must do in order to survive and thrive. They are: 1. Foster the bonding between men and women 2. Foster the birth and rearing of children 3. Foster some form of healthy masculine identity 4. Foster the bonding between men and children 5. Foster the transformation of adolescents into sexually responsible adults Maggie Gallagher puts it more simply, saying that â€Å"children need mothers and fathers† and â€Å"marriage is the most practical way to get them for children. Actually, when you look at it, homosexuals already have the right the right to marry just like anyone else. When applying for marriage licenses, the application does not ask for a person’s sexual orientation. Now, the freedom of homosexuals to marry is another story. Their marriage, just as any marriage stipulates that any person is legally sanctioned from marrying a child, a close blood relative, a person who is already married, or a person of the same sex. Just because homosexuals have a desire to marry, does not make it right or legal anymore than the desires of other tiny (but less vocal ) minorities of Americans gives them a right to pedophilic â€Å"marriages†, â€Å"incestuous marriages,† or polygamous â€Å"marriages. † Some feel that prohibiting same sex marriages is just as discriminatory as interracial marriages. However, that is not valid thinking. The purpose of the law against interracial marriage was to protect the social system of racial segregation, not to protect the nature of marriage. Preserving â€Å"racial purity† was an unworthy goal, certainly not one of the fundamental purposes of marriage common to all human civilizations. One of the arguments against gays is the fact that God is not pleased with that union. According to the Bible, Men should not be lovers of themselves and neither should women. If God said it, then, that settles it. Among all the sins mentioned in the Bible, perhaps none is more disgusting to God than that of homosexuality. God destroyed two cities in the plains of Jordan, called Sodom and Gomorrah, because their wickedness was great (Genesis 13:10-13). The English word, â€Å"sodomy† is a derivative of the word â€Å"Sodom† for the cities were full of the sins of sodomy. Now, with that in mind, how many times are people arrested for sodomizing young children or sodomizing another man? If one can get arrested for sodomizing, then evidently, it would stand to reason, that homosexuality is not right Biblically or lawfully. God created Adam and Eve, not Adam and Steve. â€Å"If a man lies with a male as he lies with a woman, both of them have committed an abomination. You read "Being Gay and Elderly in Toronto" in category "Papers" They shall surely be put to death and their blood {shall be} upon them. † (Leviticus 20:13). Homosexuality is not a disease that is inherited or a disease from birth. Homosexuality is a learned behavior, much like lying, stealing, fornication, etc. Those that learn and practice such must stop. 1 Corinthians 6:9 says, â€Å"Do you not know that the unrighteous will not inherit the kingdom of God? Do not be deceived. Neither fornicators, nor idolater, nor adulterers, nor homosexuals, nor sodomites, nor thieves, nor covetous, nor drunkards, nor revilers, nor extortioners will inherit the kingdom of God. † The homosexuals will not inherit the kingdom of God. They must bring forth fruits worthy of repentance. Now, the purpose of this paper is to argue whether or not same sex marriages should take place in Toronto or anyplace else. Though the Bible or religion is not in question here, there is still the argument of whether gays should be legally married? The scripture clearly states, that this union should not be sanctioned. Consider this. It is not a sin for the color of one’s skin to be white, red, yellow, or lack, and we shouldn’t discriminate against another because of it. However, it is a sin to be a homosexual. It is not a matter of discrimination. It is a matter of right or wrong in the sight of Almighty God. Some say homosexuals are born that way and cannot change. This is another effort of men trying to justify themselves while practicing homosexuality. Homosexuality is condemned from the beginning of time to the end. One of these days, we will have to stand before God and give an account of what was we do to our bodies, smoking, homosexuality, illegal drugs, etc. In Nova-Scotia, two men were married, but they were told, that they could not receive communion, unless they were celibate. These two men, both 69 are now trying to make the decision whether to leave the Catholic Church because now, they must make a choice between their religion and their marriage. They were refused, because Communion wafers are considered the body and blood of Christ. To Catholics, receiving communion is one of the faith’s most sacred rituals. Additionally, they were told that their marriage was a public scandal. Many people wonder why defending marriages and defending the family require different views regarding same-sex unions. In other words, how can a homosexual marriage affect a heterosexual marriage? Well, homosexuals unions often have a more direct impact on heterosexual marriages than we know. For instance, the Boston Globe reported June 29, 2003, that â€Å"nearly 40 percent† of the 5,700 homosexual couples who have entered into â€Å"civil unions† in Vermont â€Å"have had a previous heterosexual marriage. † Children are the ones who suffer the most of homosexual unions because these children grow up without a mother and a father. These children are also products of heterosexual marriages that ended up in divorce or death. These children also face being ridiculed at school and among their peers. The question is will these children, after being exposed to homosexuality in the home, grow up to be gay, or does this help them to choose heterosexuality vs. homosexuality? How do the mothers of these children feel about their now gay ex-husband, having custody or visitation rights? Some would approve it, and some would not. In Toronto, June 30, 2006, (LifeSiteNews. com) – The mainstream media brought to life the phantom of the gay gene theory7 in covering a Canadian study on the origin of homosexuality. â€Å"Homosexuality influenced by biological factors, Canadian researcher says, â€Å"proclaimed the CBC, the first to break the story. This study was regarding sexual orientation of men determined before birth. However, the study was most intriguing for what the mainstream media failed to cover. Namely that, if true, the study suggests that homosexuality is a congenital abnormality, and shares its origins with other disorders developed in the womb. (www. lifesite. net/ldn/2006/jun/06063003. html Westen, John Henry, 2006) Some researchers at Brock University in St. Catherine’s Ontario published a study in the journal Proceedings of the National Academy of Sciences entitled â€Å"Biological versus non biological older brothers and men’s sexual orientation. The results of this study proved that same-sex sexual orientation is a result from having older brothers, even though the brothers may have not been raised together. To put it simpler, by way of explanation the researchers suggest that same sex relationships result from an immune reaction of the mother to the male child in her womb. â€Å"A theory of male homosexuality is consistent with the present finding that maternal immune response to succeeding male pregnancies,† says the study. If in fact, this study is correct, then the link between the mother’s immune reaction and the child’s future sexual orientation would probably be some effect of maternal anti-male antibodies on the sexual differentiation of the brain. † Dr. John Shea, medical advisor to Campaign Life Coalition, explained to LifeSiteNews. com that the study explains the significance of its findings suggesting that â€Å"the immune response of the mother’s body, damages the sexual differentiation of the brain of the male child in the womb, thus producing an abnormality in the fetus. † In 1998, almost 3. 7 million Canadians were 65 years of age and older. Over the next fifteen years, this number is expected to grow to approximately 5. 9 million. However, it is impossible to tell how many lesbians and gay men live in Canada. However, the numbers of older gay adults are estimated between 296,000 and 370,000, and should incr4ase proportionately to the general older population of the country to between 471,000 and 590,000 people. (Newsletter of the centre for Applied Social research Faculty of Social Work, University of Toronto, Vol. no. 2/Fall/Winter, 2002). Gerontological research has begun to look at the issues pertaining to gay and lesbian seniors only in the late 1970s, and most of these studies in the area have not succeeded in the experience of gay aging from the viewpoint of women, ethnocultural minorities, low-income individuals, and chose not actively involved in the gay and lesbian communities. (Ibid, 2002) In summary, if all studies conducted on whether or not gay marriage should be sanctioned y the church in regard to marriage, the evidence shows and proves that homosexual couples, male or female should not be sanctioned because of the following reasons: 1. An abomination in the eyesight of God 2. In these relationships, the marriage cannot be sanctioned because no union really took place. 3. Children, cannot be born of these marriages, unless they were brought in from a heterosexual marriage. One of the purposes of marriage is to have children. 4. Foster the bond between many women, and a list of other reasons mentioned above. References (www. nogaymarriage. com/gaymarriagequestions. html (Leviticus 20:13, King James Version of Holy Bible) (www. lifesite. net/ldn/2006/jun/06063003. html Westen, John Henry, 2006) (Newsletter of the centre for Applied Social research Faculty of Social Work, University of Toronto, Vol. no. 2/Fall/Winter, 2002). How to cite Being Gay and Elderly in Toronto, Papers

Capital Budgeting Decision an Investment

Question: Discuss about the Capital Budgeting Decision an Investment. Answer: The capital budgeting decision is the evaluation of an investment based on the future returns. The evaluation of an investments potential is done on the basis of various assumptions and variety of factors. The estimated accuracy of future returns and therefore, the accuracy of the investment decisions would to a great extent depend upon the precision with which these factors are forecasted. There are strong reasons to believe that howsoever carefully these factors are forecasted, the actual returns will vary from the estimate. This is technically referred to as risk. Capital Budgeting decision involves two steps first, determination of relevant cash flows and second evaluation of cash flows. The NPV and IRR provide two major parameters for the capital budgeting decisions. NPV where considers the time value of money, IRR provides a compounded rate of return at which the firm will be indifferent between two projects. Sensitivity Analysis Sensitivity Analysis is a visualizing particularly the way change in the projects various investment factors like the NPV/IRR for a given range of variables. It is an analysis of a projects sensitivity as described by its NPV/IRR to a particular variable. It provides with the reasons to oversee that how sensitive are the parameters to the overall result of the project. Sensitivity analysis takes a number of possible outcomes and estimates the chances of errors while evaluating a project. The sensitivity analysis measures the cash flow estimates based on three assumptions which are mentioned under:- The NPV/IRR of project is calculated under these different assumptions. In most of the cases, the Worst assumption gives the least or negative NPV, the Expected assumption gives a neutral NPV and the Best assumption provides the highest possible NPV. This method of calculating NPV/IRR by evaluating under various estimates is called sensitivity analysis. The actual selection of project under above assumptions however, depends on what is the investors risk appetite. The decision maker could be a risk taker, risk averter or risk neutral. The sensitivity of the NPV provides the investor to take decisions based on his perception for risk under various situations. The more the NPV deviates, the more the variable is risky. It can be normally applied to number of variables, which is a part of input for the cash flows after tax. The one more added name for sensitivity analysis is break-even analysis. The investor is in no profit and no loss situation. Margin of Safety is another important term for break-even analysis. It shows the positive aspects of a project. The more the margin of safety, the more profitable is the project for the investor. One can ask what shall be the consequences of volume or price or cost changes. In capital budgeting decision one more variable i.e. life of the project is also included for sensitivity analysis. In other words, we can say, how much lower (Break even value) can the sales volume or sales price or project life become or how much higher costs (Break even value) can be incurred before the project becomes unprofitable in terms of NPV. Here break-even point means a point where NPV is zero. The decision rule is, higher the Margin-of-Safety (MOS), lesser the sensitivity of the variable. It can be performed on a spreadsheet format to provide easy and timely analysis for decision making.(Southampton, n.d.) Scenario Analysis Scenario Analysis, as the name suggests, is similar to sensitivity analysis in the way it is calculated. However, in practice, the variables on the basis of which a projects sensitivity analysis is done will be interrelated. Based on the interrelated variables, the decision maker can develop some expected scenarios. For example, by reducing unit-selling price, it may be possible to increase volume. This is called Scenario Analysis. Sensitivity analysis is an old and ever accepted measure but in spite of being crude it does not provide the decision maker an insight into more than one estimate of the projects outcome and the variability of the returns. Scenario analysis provides superior results compared to the single future forecast. It gives a more accurate precision about the variability of the returns. However, scenario analysis also has a limitation that the frequencies with which a variable may occur remain undisclosed. To remedy this shortcoming of scenario analysis, sometimes, probabilities are assigned to the possible variables. This gives a more accurate idea of the profit or loss from a given project under various possible situations. The capital budgeting techniques like a projects Net present value, Internal Rate of Return, Profitability Index or Accounting Rate of Return etc. provide us an insight into different projects profitability aspects.(ICAI, 2016). The scenario analysis, thus, brings the capital budgeting outcomes into more detailed versions providing us information about how different projects may perform under various scenarios like when the selling price gets reduced how much the sales volume is needed for profit or when the material costs increases how much the selling price needs to be increased for profit or when the labor availability gets scarce or when the labor gets costly how much more revenue the project needs to earn for required profitability. One of the important variables for analyzing a project is the capital costs required. The capital costs may include buying some machinery, equipment, setting up a plant or incurring the initial expenditure for the project. The capital costs included in a project is one of the significant factors for considering the feasibility of a project. Apart from availability and market factors, one of the important other factor is the absorption capacity of the revenue earned from the project for the amortization costs of the capital outlay. Scenario analysis takes into account all these factors and provides an investor an opportunity to invest his money in most profitable project. Scenario analysis is therefore an important capital budgeting tool and can be used by different investors for different purposes. The Capital Asset Pricing Model is introduced by Jack Treynor, William Sharpe, John Lintner and Jan Mossin and the Capital Market line is introduced by Henry Markowitz in his risk-return assessment articles; provide useful parameters for the portfolio management.(ICAI, 2016) Similarities between two Models: Henry Markowitz in his studies always considers risk as an important factor. Even the smallest investments have to bear some amount of risk. He assumes that there is nothing called as risk free investment from which returns could be earned without bearing any risks. In fact, in real market situation also, investors do shift to risky investments to obtain higher returns. Therefore, the CML gives a straight line depicting various risk-return scenarios. Similarly, the graphical presentation of CAPM expresses the basic theme of the model i.e. the expected return and risk of a security depends on each others frequency, as measured by Beta. This presentation is called Security Market Line (SML). The SML also shows a straight line depicting various scenarios of relationship between risk and return. Both considers risk benefits with risky securities In a Capital Market Line situation, the investor has different options. First is to invest the entire capital in risk free securities. This kind of investment will yield fixed returns with no risk at all. Second option will be to invest the entire capital in the risky securities available in the market which we call as Portfolio M.(ICAI, 2016). This investment will be the riskiest one where expected return will be equal to the anticipated risk of the portfolio. The last option will be to make different combinations of the both the securities i.e. the risk free security and the Portfolio M. In this situation, the investor may further borrow from the market at risk free rate and invest entire amount in the risky securities of market. Alternatively, he may divide the investment based on his risk return attitude. Similarly, the CAPM model also considers combining the return expected from a portfolio into risk free return plus risk premium. As it is seen, an investor will always be ready for more return and bear some risk for earning same. The security risk premium {(Rm-Rf)} can be calculated as the difference between the expected markets return and risk free rate which we multiply by the securitys risk factor.(ICAI, 2016) Both helps in gaining arbitrate benefits Both the CML and CAPM help the investors in gaining arbitrage benefits. The investor when finds it unprofitable for himself in the investment then he may switch to other options available in the given risk-return perceptions. The various risk-return scenarios can be adopted serially or the graph should be revised day after day to get a closer picture of the expected results. The investors in both the models may consider the graphs and update them according to the market situations to gain arbitrage benefits. Differences between two Models: The CML uses Standard Deviation as the measure of risk of various securities. The CML equation(ICAI, 2016), can be read as- Er = Rf + (Rm-Rf) x SDp The CML equation helps in calculating the amount of Portfolio M and risk free security in a portfolio for a given amount of return. Further, there is a thing called slope of CML which shows the rate of relationship between the expected return and risk. The CML means that for differently hedged portfolios, the systematic risk and the unsystematic risk yields the total returns. It believes that all unsystematic risk could be hedged and diversified and systematic risk has to be accepted. Therefore, the slope shows a linear relationship between risk and return. CAPM, on the other hand, provides a structure for calculating the systematic risk of an individual security. The systematic risk only could be related to the portfolio. The CAPM believes that the unsystematic risk can only be eliminated and the systematic risk cannot. Therefore, the returns are the results of systematic risk only. Therefore, while measuring the performance of a portfolio using CAPM the systematic risk is the only risk factor which contributes in earning the desired returns and it should be compensated. It means that greater expected returns accompany higher levels of Beta. Accordingly SML equation(ICAI, 2016), can be written as- Er = Rf + B (Rm-Rf) The CML, as discussed earlier, takes into account both risky and risk free securities and maintains a portfolio of a combination of both. The investor according to his risk appetite decides as to whether he should invest his 100% investment in the risky Portfolio M or he should make a combination of risky and risk free securities to play safe. This risk free and risky combination provides investor with the hedging facility. CAPM however only considers investing in risky securities and doesnt makes a combination of risky and risk free securities. It is based on the assumption that some portion of the portfolio will always be the risk free securities and the return from that part will be constant. Therefore, this model does not use weight factor in its equation. Unsystematic risk has nothing to do with CAPM The CML model uses Standard deviation as the risk measurement factor. Standard Deviation is an absolute measure, which can be applied when the projects are giving same NPV. Thus, it measure both systematic and unsystematic risk. According to the CAPM model, the performance of a security under various circumstances in the comparison of the market portfolio is the measure of the risk. Beta is a measure the systematic risk of a security. It measure how sensitive the price of a stock to market movements. The market portfolio beta factor is 1.0. Bibliography ICAI, 2016. Portfolio Theory. [Online] Available at: https://www.icaiknowledgegateway.org/littledms/folder1/chapter-7-portfolio-theory.pdf[Accessed 22 January 2017]. Southampton, n.d. Spreadshe et Sensitivity Analysis. [Online] Available at: https://www.southampton.ac.uk/~jps7/D8%20website/sensitivity%20analysis.pdf[Accessed 22 January 2017].