Hedging Barrier Options in GARCH Models with Transaction Costs

This study proposes a modified strike‐spread method for hedging barrier options in generalized autoregressive conditional heteroskedasticity (GARCH) models with transaction costs. A simulation study was conducted to investigate the hedging performance of the proposed method in comparison with several well‐known static methods for hedging barrier options. An accurate, easy‐to‐implement and fast scheme for generating the first passage time under the GARCH framework which enhances the accuracy and efficiency of the simulation is also proposed. Simulation results and an empirical study using real data indicate that the proposed approach has a promising performance for hedging barrier options in GARCH models when transaction costs are taken into consideration.     

Risk and its Management in Post-Financial Crisis Hong Kong

In the 1970s and up until the financial crisis occurred in the late 1990s, Hong Kong prospered in a relatively stable social, economic and political context. Since the financial crisis, however, its population has been increasingly exposed to risk: there has been job uncertainty and decreasing capacity for self‐reliance, leading to a growing reliance on public welfare and on families at a time when both are under pressure. The old welfare policies, unable to cope with the new risks, have been replaced by neo‐liberal reforms, redistributing the roles and responsibilities of the individual and the state, with a greater burden falling on the former. Individuals are required to be prudent to manage risk. While these reforms have relieved some of the burden on the state, both new social risk groups and ‘net taxpayers’ considered themselves to have borne disproportional costs. Society is facing serious problems resulting from ineffective old welfare policies, new social risks due to new policies, and the political upheavals arising from increased social conflicts and weakened social cohesion and solidarity. A further complication is that there is no acceptable platform or agent to negotiate a compromise between the polarized groups. This article argues that reliance on publicly funded risk coping strategies or on neo‐liberal risk prevention and mitigation strategies is not a desirable and sustainable policy. A commonly accepted political platform is required to negotiate a compromise which emphasizes shared and balanced roles and responsibilities, and a well‐conceived combination of risk prevention, mitigation and coping strategies.     

Religion and World Change: Violence and Terrorism versus Peace

Our article portrays religion as a double-edged sword that can both encourage and discourage world change, and can facilitate both violent and peaceful activism. The article demonstrates how the meaning system approach to religion can shed light on the complicated relationship between religion and world change by illuminating the meaning of world change and the means to achieve it, inherent differences across religious groups, the complexity and malleability of religious meaning systems, and processes that can facilitate either the status quo or violent and peaceful activism. The article discusses context and personality variables that may determine whether religion supports world change and either violent or peaceful activism. It recommends intensive collaboration between researchers, policy–makers, and religious leaders in the contexts of national and international conflicts and religious terrorism.     

Protecting the ageing poor or strengthening the market economy: the case of the Hong Kong Mandatory Provident Fund

The Mandatory Provident Fund (MPF) launched by the Hong Kong government seems to be a residual welfare state's strategy to cope with an ageing population and, at the same time, preserve a minimal welfare state and further enhance economic development. The MPF can only provide limited protection for a limited number of employees; many older people still have to depend on financial support from their families or have to work. On the other hand, the MPF immediately boosts the economy by creating more jobs for the financial services sector and by providing more business opportunities for banks and insurance companies. Thus, the MPF has consolidated the foundation of Hong Kong's capitalism by socialising and incorporating the whole working population in the market economy but has provided little protection for their old age.     

Reforming Supplementary Benefit: The impact on claimants

The Government bill to reform social security will become an Act in 1986, and is planned for implementation in April 1987. One of the most significant areas for change will be the supplementary benefit scheme, which now has some four million claimants, and supports over seven million people. It will be replaced by the income support scheme, which will differ in important respects from the current provision. The review of the SB scheme, set up by Norman Fowler, was the second major review of the scheme in less than a decade. The first review was set up by the Labour Government in 1976 and culminated in major changes introduced by the Conservative Government in the Social Security Act 1980. This article examines what impact the 1980 scheme had on claimants, on their standard of living, on their understanding of the scheme and on the extent to which the scheme meets their needs. It then goes on to examine whether the Fowler Act will meet some of the criticisms of the 1980 reforms and, in particular, if it will improve the position of claimants.     

Developing From Tranditional Microscale Chemistry to Microscale Green Chemistry

Microscale chemistry is appealing to all levels of education.In contrast to conventional macroscale chemistry,only minute amount of chemicals are required to undertaking a chemical investigation.