Explain what is meant in the Bible by the phrase “God is good.”

A) Explain what is meant in the Bible by the phrase â€Å"God is good. †Many worshippers of God like to believe that he is intrinsically good; this means that he is good in himself. People try to argue this by the Bible and through many things in the Bible such as the 10 commandments and the creation of the universe as well as the many miracles of the Saints. God is seen to act morally good as he creates a world which is seen to be good, therefore he must be. â€Å"God saw that it was good, and it was good. † The Ten Commandments show us what good is according to God.The Ten Commandments explain to us how we should act and what our religious and social duties should be. God could be said to be showing his love for this through these laws. Another common biblical image of God is that of a judge to whom we all answer to, however, if God is seen as a judge â€Å"Psalms 75:7 But God is the Judge; He puts down one and exalts another,† then he must be trying to divide the good from the bad, we could see this as God trying to protect the people who worship him from the sinners, however it is hard to distinguish the bad from the good.The Ten Commandments offer a guide for this, so that we can see what is wrong and what is right, so therefore we could see this as a good act of God as throughout the Bible God demonstrates his desire for justice for his people. People may follow the Ten Commandments because they are scared of the possibility of going to Hell or that they are so full of faith for the Lord that they follow them without thinking, that if it is the wish of God then they must act and follow these rules. The Old Testament displays God as being vengeful and punishing those who sin, whereas in the New he is seen as being forgiving and loving.These are two sides of God which keep people obeying the Ten Commandments, as there are two opinions of him, one that he is punishing and the other that he is forgiving. God also punishes those because he loves all people and love involves showing another what they have done is wrong so they can learn from it. God could be seen as good, as even though he punishes those who have sinned, if they repent they can go to Heaven, which means he gives everyone a chance.God is a transcendent being therefore some people believe that we cannot  understand God’s actions as it is far too complex for us to comprehend. This is written in the Bible with the story of Issac and Abraham. In Genesis 22 as a test for Abraham God says to him â€Å"Take your son, your only son, Issac, whom you love, and go to the region of Moriah. Sacrifice him there as a burnt offering. † Abraham responded to God’s command with immediate obedience. Christians believe that if we obey God without question and trust that His plan is best we exalt His qualities and praise Him. Due to Abraham’s unwavering trust and faith in God provides Christians with an example they must follow.As God saw Abrah am’s belief in Him an Angel came down to Abraham and told him he could sacrifice a ram instead. God uses Abraham’s faith as an example of the type of faith required for salvation. This type of faith in the Lord is the basis for the Christian religion and that we should follow in this way when we receive the Christian faith for the sacrifice God made for our sins, Jesus Christ. We may not know what He has planned but that it must be for the greater good so we must follow His wishes. Not only do people have faith in God, but in the Bible and that we are lead to believe God is good and nothing else.Jesus Christ preformed many miracles in the Bible such as feeding the 5,000, raising a widow’s son from the dead and healing a paralysed man as well as many more. Not only that but there are over 10,000 people that have been canonised including St. Joan of Arc, St. Francis of Assisi and St. Valentine. To become a Saint you have to perform a miracle and it be recognised b y the Catholic Church. Miracles bring much happiness and joy to people and the act can rarely be explained, surely these acts are a great act of God and must be good if they bring happiness. People also believe God is good because he keeps human kind in some sort of order.Law breaking is bad therefore we are punished if we do break the law. The law is there to make us be good individuals and do the right thing according to society. When we follow the law we are told we are being good and are rewarded with a chance to go to Heaven, this is told to us in the Bible. A chance at getting to Heaven is an incentive for us to do good deeds and abide the law. We then read from this that if we are good we are rewarded and if we are bad we are punished which keeps people abiding by the law and why so many people over thousands of years have been scared at the prospect of going to Hell.People could view this as God keeping us in line and not letting us stray and do the wrong thing; in essence h e is saving us from going to Hell by creating laws and putting them in place so we know what is right and wrong. In conclusion, the phrase â€Å"God is good† in the Bible means that God in himself is good, he can never be otherwise as he is just good. His acts are good and the punishment he inflicts on others is so they change their ways and realise what they’ve done and repent their sins. He does this out of love for every human as we are created in his image and he wants us all to be cleansed of sin and go to Heaven.He uses the Ten Commandments to set these guidelines for us and help us on our journey to Heaven as well as showing us some of his goodness with the miracles that can occur in this world. The miracles that we hear of in the Bible make many people wonder what Heaven is actually like if something so great is described and it makes people seek out repentance as well as being good ourselves so we are allowed to go to Heaven.B) â€Å"It is difficult to believ e in a God who is perfectly good. †(10) Many sceptics of God and the Christian faith think that it’s hard to believe there is a God that is good in himself and can’t be anything but that.Not only that but many people also believe that he is not good, as so much punishment is shown in the Old Testament and the idea that God created Hell in the first place to punish people who sin. People argue that if God is omniscient, omnipotent, omnipresent and omnibenevolent he would not let natural disasters to happen, even though Christians say natural disasters happen to punish humankind for our sins. The Lord God of the Scriptures says this about himself. â€Å"For the Lord your God is a consuming fire, a jealous God.†As well as this, it is also written in Psalm 5:5 â€Å"You hate all who do wrong,† therefore it is hard to believe that God is a forgiving and loving God who accepts everyone, if he hates all who do wrong, even if they are regretful about it. In many different scriptures God is described as wrathful and punishes those who do wrong, this was most likely written to stop people from sinning and obey the 10 Commandments. This still does not make people want to believe in him, however, and many people question whether God can be perfectly good if he is punishing those who do the slightest thing wrong even if it was to help someone else.If God is being described as jealous and hateful, then we can deduce that he is not all good as he has a capacity to hate, which is seen as negative by most. He is also described as warmongering as he constantly is battling evil and Satan. People could say these wars are necessary and that he must protect us from Hell and the Devil, however in the New Testament it completely goes against this describing him as peaceful and forgiving so it is difficult to know whether he is punishing the sinners for the rest of humankind’s benefit or that he is just being hateful towards anyway who slightly steps out of line.Moreover, the story of Abraham and Issac also challenge our idea of God being all peaceful as he asks Abraham to sacrifice his son which he is willing to do. A lot of non-believers would ask why God asks this in the first place as it seems completely morally wrong to tell a father to kill his only child. Christians argue this was to test Abraham’s faith in God, but surely Abraham would feel conflicted about doing this if he cared for Issac at all. This could tell people who do not believe in God that God almost corrupts people who worship him as they think that is the most important thing to do in life and nothing else.This could be an example of one of the ways God isn’t perfectly good if he commands the people who follow him to kill their own children to prove they have faith in him. Not only that but if there is evil in the world to start with, God must have created this evil, therefore how can he be all good? God created Hell and all his Angels, Lucifer, one of his angels was cast out from Heaven and sent to Hell where he became known as the Devil. God did not create evil as nothing evil can come from God. Satan and other demons were at first good angels, created by God, but they became evil of their own free will, given by God.This â€Å"fall† was a free choice of these created spirits, who rejected God and his reign. Therefore Christians would say that it was not God’s fault however he created Heaven and Hell therefore he must have known or considered there to be some evil in the world. Many people can see why Christians believe in God, that there are so many different texts saying he is our protector and that he loves humankind and is forgiving and all-knowing. However I do agree with the statement â€Å"It is difficult to believe in a God who is perfectly good,† as there are many texts that also say he is vengeful, wrathful and warmongering.It says he is hateful and that he condemns sinners so itâ⠂¬â„¢s hard to believe in a God when there are two sides to the story. When there are stories of God commanding people to kill their children to prove their faith and that God created Hell in the first place. Christians like to believe in God for security as they believe him to be intrinsically good, but how do they know this is true when there is so much punishment and hate in some of the scriptures describing him. This is why many people are sceptical that he exists and if he is actually all good.

750 Word Essay

Brianna Churchill Mr. Lee English 104 11 October 2012 George Strait George Strait is one of country’s living legends, but to me he is much more. He’s my hero and my idle when it comes to not giving up. George grew up with his brother and dad after his mother left them. He enlisted in the army after high school and married his high school sweetheart, Norma. George started singing while in the army. After he got out of the army he started trying to build a successful career in country music. It took George awhile to really launch his career. George Strait has more than 50 number one hits.George Strait was born on May 18, 1952 in Poteet, Texas. George’s father, John Strait, was a junior high school math teacher and his mother was a homemaker. George was in fourth grade when his mother and father divorced. George grew up with only his brother and their father taking care of them. After high school, George eloped to Mexico with his high school sweetheart. When they go t back, their families made them have a small ceremony for family and friends to make it really official. George enlisted and began serving in the army in 1971. While in the military he was stationed in Hawaii for three years.Norma moved to Hawaii to be with George. In 1972 George and Norma had their first child, Jenifer who died in a car accident at the age of 13. George taught himself how to play the guitar while in the army, playing country music from hit artists like Merle Haggard, George Jones, Hank Williams, and Bob Wills and His Texas Playboys. He started a band that only lasted two months. George found out that the commanding officer was auditioning groups to entertain the base. George was hired and didn’t have to wear a uniform and got to wear western style clothing.After being honorably discharged from the army in 1975, Strait went back to college and got a degree in agriculture. During and after college George played in a band for different bars and honkytonks. Thi s band was known as The Ace in the Hole. George joined this band after seeing their advertisement at college. One of the band member’s grandfather was Pappy Daily who was the manager of George Jones. George began playing for more and more bars and honkytonks. This started his singing career. Don Daily encouraged George and the band to come and record a demo to distribute to record companies.George played at The Prairie Rose (whose owner was Erv Woolsey until he sold it). Erv went back to Nashville and got a job as the promotions head at MCA Records. George went to Nashville and played some songs for promos, but nothing seemed to click. He kept going back and forth from Texas to Nashville with nothing to show for it for the next four years. In 1979 he almost gave up on his dream of becoming a country music singer and signed up for a job working for an outfit in Uvalde, Texas that designed cattle pens. Norma didn’t like George moping around, so she told him to give it an other try.He decided to give it one more year. In 1980 George went and talked to Erv Woolsey, and they formed a plan that George would come and record three songs. With the three songs they started shopping for a record deal. Finally, he hit it with MCA Records. When George finally started his career he was considered the hat act, so in the 1990’s every guy in country music tried the cowboy hat. In early country music, cowboy hats weren’t in high fashion, but with George Strait it became a signature style in country music and that led to George being known as the original hat act.In 1981 he released his first single, â€Å"Unwound. † That same year George and Norma had another child: George Harvey Strait, Jr. (Bubba). George then followed â€Å"Unwound† up with number one hits like â€Å"Fool Hearted Memory† and â€Å"Ocean Front Property† time and time again. In 1984, George was announced Top Male Vocalist for Academy of Country Music. In 1 985, George was announced Male Vocalist of The Year and had the Album of The Year for the Country Music Association (CMA) and Academy of Country Music (ACM).In 1986 he won Male Vocalist of The Year again for the CMA’s. In 1986 and 1987 he was Top Country Artists for Billboards. In 1988 George won Top Male Vocalist again for the ACM’s. George continued to win these awards year after year until 1990. In 1990 George became Entertainer of the Year, the award he wanted most. He won the award again in 2000. In 1992 George starred in the movie Pure Country. In the opening song to the movie, â€Å"Heartland,† his son, Bubba, sings the beginning of the song and the vocals fades into George Sr. singing the rest of the song.Even though the movie wasn’t as big as his music, the soundtrack to the movie was considered his best album ever. He still continues to produce number one hits and records. In 2006, he was inducted into the Country Music Hall of Fame. George was announced as Artist of the Decade in 2009. George has had the best track record for country music in history. On February 2, 2012 George became a grandfather with his grandson becoming George Harvey Strait, III. George will be ending his touring career after his The Cowboy Rides Away Tour in 2014, but will still be making and recording country music.George Strait has 59 number one hit records and is known as a living legend and the â€Å"King of Country Music. † I choose to do this paper for the final because I thought it was stronger than my 1500 word paper. This paper to me had more meaning and I was interested in it more than the other one. With this paper I have been given the opportunity to send it to George Strait, himself, to have it signed. I think this paper is going to help me out for a contest to win tickets to one of his shows. This paper has more meaning for me since I am such a big fan.

The Feasibility of Chili and Kamias as Mosquito Killer

Background of the Study: This study is done by the researcher to give importance to the chili and kamias fruit. Not just in food, but the researcher wanted to produce a mosquito killer out of them. For all we know that chili has been tested and proven to be the one good ingredient in mosquito killer making and what if it is added by the acidic property of kamias fruit? The researcher wanted to know the effect of the combined property of each fruit. Statement of the Problem: This study aims to determine the effect of the said mosquito killer (chili and kamias).Especially it will answer the following questions: 1) Does the said mosquito killer (chili and kamias) is cheaper than the commercial ones. 2) Will this mosquito killer (chili and kamias) can affect the health/kill the person who accidentally took it. Hypothesis: 1) This mosquito killer (chili and kamias) is cheaper than the commercial ones because the materials/ingredients used to produce this is cheap and are abundant in tropi cal countries like the Philippines. 2) Side effects will occur if accidentally taken by anyone. Significance of the Study:The said mosquito killer (chili and kamias) was made to compete to the commercial ones which were expensive. And help our country, for we have plenty of chili and kamias. Definition of Terms: antiscorbutic-a remedy for scurvy poisonous-toxic or venomous; harmful; having the qualities or effects of poison Scope and Limitations: If this study is already done, not only the poor ones can use it, also the rich ones. Not just because it’s cheaper but also on its effectiveness. Methodology: Materials: ? kilo of kamias fruit 1 ? kilo of chili mortar and pestle ettle gas stove product container Procedure: The researcher collected and prepared all the materials needed. The researcher then pounded the kamias and chili separately and gets their extracts. After pounding the kamias and the chili, the researcher boiled the two extracts separately for 5 minutes. Then the researcher mixed them and poured them inside the container. Review of related literature: In the past chili was used only as spices because of its taste. Later on, it was discovered as a good mosquito killer because of its pesticidal property.While kamias (ginger lily) was also used in food spices before. Later on, it was discovered by Battistelli in 1939 that it has properties such as astringent, stomachic, refrigerant and antiscorbutic. Some of the researchers now are having kamias as wine but in this study the researcher wants to test the properties of the kamias fruit together with the chili. http://techorati. com(chili/ fruit)(kamias fruit) http://news. bbc. co. uk/2%20americas/6367299. stm Bato Balani (ISNN 0117-7079) Vol. 21 No. 3sy www. batobalani. com

Gun control Essay Example | Topics and Well Written Essays - 1000 words - 1

Gun control - Essay Example They insist that strict regulations on gun ownership are not the solution to high crime rates. They point out that, since the 1997 ban on handguns in England, crime rates have more than doubled (Malcolm, 2003 as cited in Mackey & Levan, 2011). What has triggered this flurry of activity geared towards permitting people to carry guns in public places? Bruce & Wilcox (1998), note that in the U.S, when citizens learn of death occasioned by a gun attack, many believe that they stand a chance to survive such an incidence if they have a firearm. Pro-gun forces counter any criticism to gun-friendly legislation by pointing out that the government needs not worry about law abiding citizens who voluntarily go to have their backgrounds checked so as to acquire a gun license, but rather, the criminals who have no business in abiding by the law. Gun rights activists argue that law-abiding citizens carrying concealed guns may be able to save lives due to the history of mass shootings in the U.S. According to the Wall Street Journal (2012), in December 2007, there were 7000 people inside the new life church in Colorado Springs when an armed man stormed: He killed two people and wounded many others. What prevented him from killing and wounding more was a congregant who had permission to carry her licensed concealed gun in church property. On the other hand, advocates of gun control argue that even law-abiding citizens with authorization to carry weapons can lose their temper, with fatal results. Such a scenario is portrayed in a teen ager succumbed to gunshot wounds after a dispute over loud music (The New York Times, 2014). In an attempt to neutralize the strength of the pro-gun forces, advocates of gun control have been developing initiatives to make the battle in the legislature more vicious. In April 2014, billionaire Michael Bloomberg announced plans to inject $50

MUTUAL FUND (SLP) Essay Example | Topics and Well Written Essays - 500 words

MUTUAL FUND (SLP) - Essay Example This paper will discuss as to which mutual funds to be purchased from the available funds of $95000 and what criteria is used to purchase the same. Mutual Fund Purchase Decision One of the funds to be purchased with the available funds is High Dividend Equity Fund which tracks the performance of Morningstar Dividend Yield Focus Index.1 This fund is a relatively new fund and was launched during March 2011 however; one of the key reasons at to why this fund is picked is its low expense ratio. The overall expense ratio is 0.4% with no acquired fees and expenses. A low expense ratio is one of the key criteria to decide about purchasing a mutual fund though it is not the only criteria. (Barker, 2011). Further, the overall holding of the funs is in sectors which are relatively stable and provide regular dividends. Since its inception, fund has earned a total return of 4.39% whereas index returned 4.52%. 50% of the funds will be used in the purchase of this fund. Another fund to be purchase d with the available funds is the MSCI BRIC Index Fund which tracks this index2.

Social work essay- community care and vulnerable user groups Essay

Social work - community care and vulnerable user groups - Essay Example Health care provisioning in Scotland has been integrated at both the basic primary level and the advanced secondary stage. Moreover, for ease of convenience and excellence in health services delivery, the regional boards have narrowed down to provide the services at community level. Localized subgroups of community health partnerships are very effective in health care provision at the ground level here. All classes of health workers are well represented in the healthcare framework in Scotland. Also in existence are the â€Å"extended community care teams† who work hand in hand with the system of health care and social care teams. They were introduced to ensure the effectiveness of service delivery and management of resources to ensure equitable and efficient utilization of resources at the community level. The health care provisions have been centralized as regards the funding. It is the role of the government to fund the services and as such, the public health care is free. H owever, this does not refute the existence of private sector in medical healthcare provision in Scotland. There is equally a well-pronounced private healthcare system in the country, which helps regulate the public sector and thus control monopoly. The nationals are thus not restricted to the choice of the services that are wholly offered by the public system (Gibbins, 2007, 1-5). These are strategic for those who require the hospitalization services or well too those who cannot access the community health care services when needed. Therefore, the public hospital system, the community based care system and the private sector work hand in hand to guarantee basic health care to the population of Scotland. The NHS (National Healthcare System), providers are commissioned to provide high quality services to the deserving population. By quality, the sector is expected to offer safe, efficient and patient sensitive services. According to â€Å"a Health Services

Philosophy Assignment Example | Topics and Well Written Essays - 750 words - 2

Philosophy - Assignment Example of the things they say seem to parallel one another in that the same self-value is recognized though Kant says it is autonomous and comes from within and Mill seems to think it okay to take advantage of others to some degree in order to derive physical pleasure over pain. Kant was a believer in the â€Å"freedom of will† or what we call free will as it pertains to the individual. He also believed that we don’t morally sacrifice our conscience or what is â€Å"good† about us just to meet some expedient need. Mill seems to make the argument that self-preservation comes first. He isn’t going so far as to say it’s okay to trample on others for personal pleasure of the highest degree, but that self-valuation holds the highest place on the ladder. Kant believes that any reasonably sane adult, in possession of rationality and the need to be autonomous (separated from the crowd) in his moral beliefs, will answer the question â€Å"What should I do?† (in this situation) with a two-fold set of beliefs: How will it affect me, and how will it affect others? Moral virtue plus complete happiness equals Highest Good. What is our obligation, our duty, or the good will we must show others when making a determination about how to conduct ourselves in the moral universe? In Mill’s world, the only life’s happiness to be found is in rote self-gratification and the only thing mankind need fret himself about is making certain (s)he is surrounded with only that which makes him feel pleasure and no pain. All else is ‘morally’ expendable, meaning there is no such thing, really, as guilt if the person who derived the pleasurable benefit is happy. Then Kant unwittingly crosses that by saying (close enough) that true happiness comes from within. Mill’s hedonistic stance is that there is no moral guide or judge when a person is pleasuring themselves and that no one has to be surrounded by anything or anyone that does not make them happy or give them their highest pleasures in

Criminal assingnment Essay Example | Topics and Well Written Essays - 2000 words

Criminal assingnment - Essay Example Under this law, the jury is given wider latitude in determining the mens rea by giving it the ability to evaluate each given circumstances. In connection with the case at bar, let us therefore apply the principles of mens rea and the underlying laws that punishes criminal offenses. The actus reus can be established here as negligent act of Alan in loading the gun and accidentally firing it at his father. To recall, the actus reus maybe be the acts R. v. Majoram [2000]1, omission (R v. Dytham [1979]2; R v. Pittwood (1902)3 or negligence (see R v Stone and Dobinson (1977)4 of the parties involved. The mens rea of the case is loading of the gun which caused the accidental shooting. According to the case of Metropolitan Police Commissioner v. Caldwell [1981]5, where the actor recognized the danger of the act but still persist to perform such act; the requirements of mens rea are satisfied. However, the fact Alan confessed later that he was hearing voices; he never really had any criminal intentions of killing his father mitigates the degree of the act. Alan as a soldier knows about guns. In fact, as a soldier, he had formal trainings when it comes to guns. In the case of R v Cunningham (1957)6, the court decided that where the accused can reasonably foresee the consequences of his or her actions but did not really care whether the consequences of his or her action will actually happen or not, that person is considered guilty of recklessness. Since Alan did not have any intentions of really injuring or killing his own father, the offense will now fall within the ambit of sections 47 and 20 of the Offences Against the Persons Act. Under section 20 of the Act, a person who â€Å"unlawfully and maliciously wound or inflict any grievous bodily harm upon any other person, either with or without any weapons or instrument†¦Ã¢â‚¬  shall be guilty of battery. The use of the gun as a weapon

Business Law in Finance and Accounting Essay Example | Topics and Well Written Essays - 2000 words

Business Law in Finance and Accounting - Essay Example Upon the dissolution of the ongoing partnership, the assets are distributed equally. By continuing with the current form of business organization, Barbara, Helen and Maureen will experience various advantages and disadvantages as discussed below. Synergy. By combining their strengths, the three partners have sufficient potential to deal with the business challenges and achieve their objectives. Given the fact that each of them has a certain skill, they will be able to undertake various responsibilities for example marketing and innovation without incurring extra cost of hiring external personnel. Fewer regulations. As compared to corporations, joint ventures are subject to fewer regulations. This implies that the three partners owning Sweet Pleasures will not be restricted to undertake most of the activities (Sarah and Vida, 2013). Additionally, the partners will not incur high costs such as undertaking an initial public offer (IPO) which public companies engage in. As far as taxation is concerned, Sweet Pleasures, is exposed to fewer taxes, thus the partners are able to make high profits in future if they continue to work as a joint venture. Easy to form. Joint ventures are relatively easy to form. This is based on the fact that during their formation, the partners do not engage in extensive process. However, during the initial stages, considerable thought should be put while looking for the best partner who has a positive mentality towards business activities (Lucy, 2013). Accessibility of capital. By operating as joint venture, Sweet Pleasures will have stronger potential of accessing greater amount of capital (The Company Warehouse). Based on their interest in business activities and future expansion, financial institutions will likely be in a position to provide adequate funds to the partnership. Liability. By working jointly, the partners are liable for the actions of other in the partnership. This implies that if a partner fails in his or her roles,

Plato's Argument Essay Example | Topics and Well Written Essays - 1000 words

Plato's Argument - Essay Example One notable thing about the Allegory of the Cave is that it presents, although in brief form, a number of Plato’s philosophical assumptions. In this regard, I am referring to his belief that the way the world is revealed in our senses is not a replica of the real world but a very poor copy as such. This belief which forms one of the most prominent philosophical assumption is best manifested in the Allegory of the Cave by Plato’s likening of this state of unrealistic world view with chained prisoner’s who think that the shadows that they see behind their chained position is what constitute reality, which unfortunately is fundamentally wrong. There are those who might voice several objections on Plato’s allegory. First, they might question the huge gap that he draws between the intelligible and the invisible realm. It appear like to him it is either you are chained or not, but nothing in-between. Experience has shown me that the degree at which people acquir e Plato’s idea of ‘education’ is never in those two extremes that Plato describes in this allegory. Looking at real life, even the most simple-minded prisoner in this sort of a shadow interrogates the validity of what he/she sees while posing epistemological questions that point to a deeper understanding of the intelligible realm. Failing to undergo the entire painful transformation does not necessarily mean that a person is totally unaware or in denial of â€Å"reality and understanding†, as is the case with Plato’s prisoners. Perhaps we are supposed to understand that some people are further ahead of others in their exit from the cave, something that Plato capture perfectly when he acknowledge that a prisoner would require time to adjust before he/she get used to the world above (Kraut, 2011), which essentially suggests that enlightenment take time. However, he proceeds to paint a picture of two separate groupings; those who digest what they perce ive at face value and those others who strive to get truth and understanding via knowledge. I strongly believe that this allegory would have been more precise and easier to apply in today’s life if it had addressed the gray areas between somebody in the visible realm and the other completely immersed in the truth in the intelligible realm. Secondly, I fail to understand why enlightenment should end the moment a prisoner exit the cave. At first, the prisoner believed that the shadow of those artefacts that he/she saw constituted the truth. Since they were wrong in believing that, what assurance do they have that whatever they will see once out of the cave will be errorless? And as if to show that whatever the prisoners will see once out of the cave will not necessarily constitute the truth, Plato uses words like â€Å"truer and clearer† in describing the intelligible realm. According to me, it would make sense to assume that these prisoners, rather than being satisfied with â€Å"truer and clearer† world out of the cave, would be more doubtful of their observation of the world and

SPORT PSYCHOLOGY, Leadership Styles of coaching Term Paper

SPORT PSYCHOLOGY, Leadership Styles of coaching - Term Paper Example Coaches are expected to be able to take a long view, observe, and make constructive criticism that allows the person to be the best they can be. â€Å"A coach usually sits on the sidelines and provides encouragement and advice to the players on the field. During time outs the coach helps the players to see the big picture of what is happening†¦ in a similar way, mentors can coach beginning teachers to connect theory with practice† (Boreen et al, 35). Mentoring and coaching can be very enlightening and positive ways for experienced leaders to reach those new to the team, but there are also risks to these strategies, as well as pros and cons to different leadership styles. Coaches may follow authoritative leadership roles, or be more confrontational to authority. Understanding leadership is very important to coaching professionals because they have to be able to differentiate between different leadership styles, use them appropriately, and find which is best for the situation. For example, the official leader in team development is different from the emergent leader in that there is more likelihood that the official leader will represent traditional organizational forces and the status quo. The emergent leader, on the other hand, may represent a challenge to this sense of tradition and status quo, and thus may present old issues in a new way or seek to change the basic organizational structure. It is likely that the coaching professional will therefore be more attracted to the emergent type of leadership than the traditional, but they should know the styles and characteristics of both. It is also likely that the emergent leader is going to have less of a solid bureaucratic support-structure than the official leader, and may not have the trad itional, conservative authority within a school or organization that an official leader has. The coach acting in an official leadership role may be less willing to take as many risks. Many also think

Growing Up on Fast Food Essay Example for Free

Growing Up on Fast Food Essay Most Americans have eaten at a drive-in restaurant, diner and/or fast-food restaurant in their lives. Customers frequent these establishments for its convenience and affordability. Part of the fast-food lure is to satisfy the body; another part is a family sitting down and enjoying a meal together. Many people back in the 1950s and 1960s did not understand food safety and its dangers. Food was cooked in butter or lard instead of Trans oils, vegetable oil or margarine that are used today. Foods in the past were loaded with fat and cholesterol, which made consumers early candidates for cardiovascular diseases, stroke and other health issues. Food may have tasted delicious, but that came with a heavy price. Consumers of today are more educated concerning the risks and rewards of eating out and how food is prepared. They still face similar obstacles as their parents and grandparents did generations ago. How is the food made? What ingredients are used in making the selected dish? Is the place where the food is grown/processed/made reputable? Any of the aforementioned questions that are answered in the negative should be cause for concern.   Recent examples in the U.S. include the peanut recall. In that case, the product was tainted at the manufacturing plant. The items were put out for mass consumption, and that decision lead to many people getting sick and others dying. The Peanut Corporation of America (PCA) voluntarily recalled peanuts that were manufactured in either Georgia or Texas for fear that consumers would be exposed to Salmonella poisoning. (FDA, p.1) Although the outbreak did not affect jars or peanut butter commonly found in supermarkets, the tainted supply went to institutions and other establishments. (MSNBC, Fast Food 2 p.1) This meant restaurants could have received the contaminated peanut butter. Where hundred of people were injured and a half-dozen people died from Salmonella poisoning, this could have been even more tragic if not for the recall. (1) The news becomes important since many restaurants offer peanut and jelly sandwiches on their kids menu. It is a comfort food for many people—for the young and young-at-heart. (Phantom Gourmet, 2009) Having that option taken away would have been tough for restaurant owners who would have removed that item off its menu and the patrons who would have ordered the sandwich. (Phantom Gourmet, 2009) This is where the fast food industry can either be a friend or foe. They offer many choices for breakfast, lunch and dinner. Items range from bacon and eggs in the morning to prime rib in the evening. Many places like diners are open 24 hours, so people can get what they are craving any time. Being able to order what customers want when they want entices people to eat out. Another reason people go out to eat is the restaurant’s atmosphere. Certainly a fast-food facility such as McDonald’s will have a different motif than a diner, which will have a more distinctive ambiance than a mom-and-pop restaurant. The â€Å"Golden Arches† typically serves hamburgers, fast sandwiches with French fries and soft drinks. Kids are usually seen playing in a designated area. Not a place for people without kids who want to sit down to a quiet meal. The problem comes as much of the food is either fatty to begin with or comes with condiments that are also high in fat, calories and other things that can expand a waistline or harden an artery. Fast food companies are adapting to the way Americans eat by offering salads, parfaits and other healthier choices. McDonald’s has spent billions of dollars in advertising these menu changes (McDonald’s Corporate, p.1) Fast Food 3 Diners have been around this country for decades. Most people have one either in or near their town. These establishments offer good food and reasonable prices. That is often not the primary reason patrons flock to the diner, however. The restaurant set up is the main attraction. Some places have rally nights featuring vintage cars and motorcycles from the 1950s and 1960s. Other places house 50s-era memorabilia with photos of Singer/Actor Elvis Presley, Actress Marilyn Monroe, Actor James Dean and advertisements for Coke products that were very inexpensive in those days. Try getting a bottle of coke for a nickel today—it will not happen because of the cost of making the item and most companies use plastic instead of glass. There is less of a safety risk involved with plastic and it is cheaper to produce. Then there is the modern convenience of take-out or drive through. Being able to take home a bag from a fast-food place is certainly convenient and one does not mean unloading the family of the car. A menu is set up outside where people can give their orders, drive up to the window, pay the server, get their food and drive off to their next destination. Sounds easy in that the food still comes out fast (and correctly, one hopes), but what the experience lacks is people enjoying the food. Sure, the family sits in the car eating their hamburgers and French fries, but at the cost of getting the car dirty, having to throw out the garbage later and being cramped in a car seat without the benefits of stretching or using the restroom if needed. That type of convenience may be too much for some people. There is no wrong answer to how people dine. Time, the order itself, and other circumstances dictate if and when a person of family sits inside the restaurant, takes it out, or drives through. The bottom line for the restaurants is making sure the food is properly served to its customers so they return. Fast Food 4 This paper also hopes to debunk the myths surrounding fast food, how people who grew up eating at such places have adapted with the times, and how the restaurant industry has attempted to enlighten its customers about the choices they have. Iconic restaurants such as McDonald’s and Kentucky Fried Chicken (A.K.A. KFC) had a formula for encouraging return visitors. Offer customers good food at reasonable prices and they may come back again and bring friends. Both franchises have been going strong for more than five decades because their philosophy has not changed much during that time. Healthy Does Not Bad Tasting One problem fast food companies had to address is the quality of the ingredients used to make their trademark dishes.   Is the meat for the burgers made at McDonald’s or Burger King the best quality they can find? Are the chickens raised for use at Kentucky Fried Chicken (KFC) fed a solid diet of nutrients? Those questions and answers matter to a point. Everyone will demonstrate the excellence of their products to show they care about their customers. If they fail, then actions such as recalls (for peanuts as previously mentioned) happen. This puts the industry under negative light and those working within the industry must work harder to regain the customer’s trust. Restaurants that did not have any trouble with the recalled product will be challenged to make their products better or fall behind in the marketplace. McDonald’s has been proactive over the past three decades in educating consumers about their foods and service (McDonald’s, p.1). They began printing up nutrition information for their customers to read if they wish. They might not like the fact a â€Å"Big Mac† sandwich has 50 percent of the recommended daily allowance (RDA) of saturated fat. (1) Fast Food 5 Or, a McRib† sandwich has 48 percent of the RDA of saturated fat. (1) Clearly, these are not choices for people looking to either lose weight or remain physically fit. Their nutritional information may be found either by accessing the company website at www.mcdonalds.com or stopping in any one of their restaurants and picking up a brochure. Eating at McDonald’s—or any fast food place—for a prolonged period of time can have detrimental consequences. Morgan Spurlock wrote and directed a 2004 film about the fast-food industry, â€Å"Supersize Me!† The plot was simple: Spurlock would eat nothing but the contents of the McDonald’s menu for 30 consecutive days. He had to order everything off the menu at least once and had to supersize his order if asked. He would also refrain from exercising during the one-month period. (Spurlock, p.1) His point was to demonstrate the hazardous effects of eating out at fast food restaurants. Watching the film makes people cringe as he begins to gain too much weight, lose energy in wanting to do any real activities. Because of his McDonald’s diet and his lack of exercise, Spurlock not only gained a whopping 24 ½ pounds in 30 days, consumed a pound of sugar a day on average and his cholesterol rose an unbelievable 65 points from when this experiment started. (Spurlock Quotes, p.1) Besides the obvious physical ailments that befell Spurlock during his thirty days, there were also the psychological aspects. He said during the movie: â€Å"I nearly doubled my risk of coronary heart disease, making myself twice as likely to have heart failure. I felt depressed and exhausted most of the time, my mood swung on a dime and my sex life was non existent. I craved this food more and more when I ate it, and got massive headaches when I didnt. In my final The movie was nominated for an Academy Award had had quite the reaction from moviegoers. Although McDonald’s officials denied the moved at the time, they scrapped the supersize option several weeks after the movie was released. (Wikipedia, p.1) They also offered its customers healthier alternatives such as salads. Spurlock said those choices contained more sugar than a bag of cookies. (1) Spurlock accomplished what he set out to do: find the causes of overweight people in the US and the bigger problem of obesity in this country. McDonald’s and the rest of the fast-food industry had to take note that their foods, if taken as much as Spurlock had, would have devastating effects on people’s health and well being. Nobody suggested that families eat every meal at restaurants. That logic would be expensive as well and unhealthy and would not make much sense. His body changed for the worse after his 30-day McDonald’s binge. It took five months for Spurlock to lose the weight he gained during that period (Spurlock Quotes, p.1). He suffered from liver damage, high blood pressure and other damaging ailments while performing this experiment. Moderation for anything is the best course of action when attempting to so something. That McDonald’s food was not healthy struck a chord, that Spurlock damaged his body making a point struck an even louder chord.

Factors Influencing Stock Prices in Indonesia Exchange

Factors Influencing Stock Prices in Indonesia Exchange There are many definitions of stock with different point of view. Bernstein states that stocks are partial ownership of companys assets which are subordinated with debt (Bernstein, R. 2002). Stock is a device that implies an ownership position in a company and signifies a claim on its proportional share in companys assets and profits. Only certain companies have stock called corporation. Limited partnership and Sole proprietorship do not issue stock (WebFinance, Inc., 2010). According to Vernimmen et al. (Vernimmen et al. 2009, p. 527), A stock or a share is a security that is not redeemed. The investment can only be recognized through disposal and whose revenue flows is uncertain. Corporations need financial resources and this required resources usually come from ordinary or common stocks, preferred stocks, and medium to long term lenders or debenture holders. Common stock is everlasting capital for the corporation. The owners who invest in this type of stock are called ordinary or common shareholders and any profit retained after paying debenture interest will be distribute to them called dividend. Preferred stocks are issued to public in order to acquire capital and these stocks have rights to specified yearly fixed percentage dividend on the paid-up capital. Preferred stocks are less common in stock market (Anandarajah, Aseervatham, and Reid 2005). The following are the characteristics of common stock and preferred stocks: (Scott et al. 1999). Preferred Stock A hybrid security which has similar characteristics to bonds and common stocks. It is similar to bonds in its dividends which are limited in amount. It is similar to common stocks in that it has no fixed maturity date, dividends are not deductible in terms of tax purposes, and non-payment of dividends will not cause bankruptcy. Common Stock. Common stock shares imply an ownership in corporation which does not have maturity date and exists as long as the firm does. Stock exchange is an organization which helps connection between potential buyers and potential sellers of stocks. Stock exchange can be physical place, network of computers, system of telephone link, etc. A stock market is a place where stocks can be purchased and sold (Samuel, J.M., Wilkes, F.M., and Brayshaw, R.E. 1996). Most of countries around the world have stock exchanges. The number of stock exchanges around the world is growing significantly. Based on continents, stock exchanges around the world can be divided into 6: Africa, Asia, Europe, Middle East, North America, and South America. Indonesia Stock Exchange called IDX is one of the stock exchanges in Asia (Stock Exchanges Worldwide Links, n.d., 2010). Principally, there are 2 advantages are obtained by investor who buying or having stocks in stock exchanges (Indonesia Stock Exchange, 2007): Dividend. Dividend is sharing profit awarded by a company because of holding stock for a relatively long period until ownership term is in period where an investor is recognized as shareholder who has right to get dividend. Capital Gain. Capital gain is the difference between selling price and buying price acquired from trading activities. Those advantages cause investors choose stocks as an attractive alternative than put their money in fixed deposits that have low interest rates (Chuan, 2004). Basically, investors who buying or having stocks will also have some risks (Indonesia Stock Exchange, 2007): Capital Loss. Capital loss is a situation when an investor is selling the stocks at lower price than the buying price. Liquidity Risk. A company with shares held by public is declared for its bankruptcy by the Court. Shareholders or investors will have the last priority of claiming their rights after all liabilities are fulfilled. The rest of the companys wealth will be shared proportionally to the shareholders. Shareholders will not obtain anything from the liquidation if there is no rest left. The overall price movements of common stocks of corporations traded on stock markets are called stock market price indexes. Corporate stockholders will get benefit from company through dividends and have right to vote in company. Investors capital gains and losses will affected by increasing and falling of stock prices (Frumkin 2000). Norman (Frumkin, N. 2000, p. 277) states that The dividend yield, which is the rate of return on a share company stock, is a companys annual cash dividend percentage of companys annual stock price. Nowadays, the price of stocks in Indonesia Stock Exchange is changing rapidly. The average price of stocks in Indonesia Stock Exchange increased significantly (approximately 20%) during 2006. The average price decreased approximately 19% during January 2008 and declined again approximately 16% during March 2008. The significant change of stock prices in Indonesia Stock Exchange is caused by external environmental factors or macroeconomics factors (Frensidy, B. 2008). There are many external environmental factors that impact financial system including stocks. Those factors are economic growth, inflation, exchange rates, interest rates, etc (Evans, et al. 2000). Many investors lost their money because of the significant change of stock prices in Indonesia Stock Exchange. Investors lost their capital because they sell their stocks at lower price than the buying price (Indonesia Stock Exchange, 2007). By analyzing external environmental factors, investors can predict the future price of stocks more accurately. To minimize the risk or capital loss, investors have to understand external environmental factors influencing stock prices in order to make correct decision whether they have to buy, sell, or hold the shares. The research will identify external environmental factors which have significant influence on stock prices and explain the relationship between those factors and stock prices in order to accomplish that goal. Objectives, Research Question, and Research Hypotheses The objectives of the research are: To identify the variables of external environmental factors influencing the stock prices in Indonesia Stock Exchange. To analyze the influence of external environmental factors on stock prices in Indonesia Stock Exchange. Based on the objectives, the research questions are as follow: Which external environmental factors influence stock prices in Indonesia Stock Exchange? How does external environmental factors influence on stock prices in Indonesia Stock Exchange? Based on the research question, the research hypotheses are built up: External environmental factors encourage the change of stock prices in Indonesia Stock Exchange. External environmental factor have strong correlation with stock prices in Indonesia Stock Exchange. Scope This research study will focus on external environmental factors influencing the stock prices in Indonesia stock exchange, which will be explained more briefly in chapter 2 literature reviews. Some external environmental factors influencing stock prices are applied to explain the correlation between external environmental factors and stock prices in Indonesia Stock Exchange. The analysis of what kind of relationship (positive or negative) between external environmental factors and stock prices will also be clarified in this research. The literature reviews will consist of some external environmental factors which influence stock prices especially in Indonesia Stock Exchange. A survey will be performed in order to collect data about the change of several external factors and stock prices in Indonesia Stock Exchange. Based on collected data, a model will be offered to analyze the relationship between stock prices and external environmental factors. Lastly, this research will be limited and focused on the following: The research is only focused on JSX composite index or (Indonesian: Indeks Harga Saham Gabungan, IHSG). This research is only focused on external environmental factors which influence stock prices. The data collection period of this research is 5 years from 2005 to 2009. Chapter 2 LITERATURE REVIEW Literature Review of External Environmental Factors and Stock Prices in Indonesia Stock Exchange This chapter will summarize external environmental factors which influence stock prices. Factors and frameworks will be appeared by joining and integrating adopted theories. Lastly, the major external environmental factors influencing stock prices in Indonesia Stock Exchange will be provided in this chapter. Categories of Stocks and Types of Orders In the market, there are various names of stocks that refer to different categories of stocks (Chuan, 2004): Figure 2.1 Categories of Stocks Source: adapted from Chuan, 2004 Blue Chips refer to stocks that are steady with good fundamentals. Undervalued Stocks refer to stocks which are well-established by companies with solid balance sheet. Such stocks are generally unnoticed by investors, traded with small volume, and receive little reporting from media and analysts or experts. Growth Stocks refer to stocks which are established by recognized companies that have high growth sectors and their business are predicted to enlarge quickly over the coming years. Such stocks are generally traded with higher PER (Price Earnings Ratio) even though they lack of history of strong earnings base. While companies show continual rise in their earnings, the price of these stocks will increase. Penny Stocks refer to stocks that have small capitalization and traded bellow one dollar. Small-Cap Stocks refer to stocks that have very few issued shares and traded in low price at stock market. Such stocks are usually not bought by foreign institutions and funds. Small-Cap Stocks have some risks as follow: Smaller companies tend to less flexible to major crisis because they are less diversified and more prone to market shocks and monetary crisis. Trading volumes are low and less liquid. Therefore, investors may not find the buyers in stock market when they want to sell the stocks. Small-Cap Stocks are more sensitive to news and rumors. There are 3 types of orders used in the buying and selling of stocks as follow (Chuan, 2004): Market Order Market order is an order to buy or sell stocks instantly at the best current price. For example, investors place market order to sell AAA shares. It means investors buy AAA shares at current offering price. Limit Order Investors which place limit order will set a certain suitable price to buy or sell a particular stock. Stop Order Stop order is an order to buy or sell the stocks that are traded at certain price level immediately. This certain price level is known as stop price. For instance, investors place stop order to buy AAA shares at $5.00. If AAA shares begin to trade at $5.00, the order becomes market order and broker will buy shares at the best current price. In terms of selling stop order, the order is placed bellow current price to help investors decrease their possible losses and keep their profit. Timing and Stock Investment Investor would discourage when the price of their stocks decreased significantly after they had bought the stocks or to be trapped in market crash after they had invested their money in the stock market. Good timing is the most crucial factor for investors in stock market. Even the best stocks will become useless investments if investors buy them at wrong time (George, A. 2008). The major problem is good timing cannot be determined easily because stock market is influenced by large amount of factors and events that are beyond prediction. Investors have to understand factors influencing stock price and involve some insight to determine good timing whether they have to buy, sell, or hold their stocks (Chuan, 2004). In stock investment, price is mechanism by which practically all goods and services are exchanged. In this case, price has strong power or price is a king because price will determine whether stocks become excessively expensive or inexpensive (George, A 2008). The price of stocks tends to increase when there are more buyers than sellers in stock market. Buyers are tense in stock market based on expectation of future price increase. There are some signals which make buyers believe that future stock price will increase (Chuan, 2004): Positive indication from market trend. Rumors in stock market. Information concerning better earnings prospects for company. External Environmental Factors Influencing Stock Prices There are several external environmental factors influencing the uptrend or downtrend of stock prices in stock market. Those external environmental factors are: Worldwide stock market. Local economy. Political factor. Inflation. Foreign Exchange Rates. Interest Rates. Commodity Prices. Worldwide Stock Market The performance of world economy will have effect on local economy or Indonesian economy due to globalization. The worldwide economy especially US, China, Japan, and Singapore economy will help to enhance Indonesian economy because those countries are major trading partners of Indonesia (CIA, 2010). Therefore, positive economic performance of those countries will give favorable result for Indonesian Stock Market (Chuan, 2004).Indonesian stock prices get significant impact from US, China, Japan, and Singapore stock prices. JCX composite index or IHSG obtain significant influence from worldwide stock market especially DJIA (Dow Jones Industrial Average), Nikkei 225, Hang Seng and Strait Times. Investors always look at those stocks before and during trading stocks in Indonesia Stock Exchange. Export partners and import partners of Indonesia will affect local economy and price of JSX composite index in Indonesian Stock Exchange (Samsul, M. 2006). For example, JCX composite index in 7 May 2010 decreased significantly (71.29 points or 2.54%) because of the decrease of worldwide stock market. Dow Jones Industrial Average decreased 407.05 points or 3.75%, Nikkei decreased 331.1 points or 3.1%, Hang Seng decreased 213.12 points or 1.06%, and Strait Times decreased 6.7 points or 0.59%. The decrease of worldwide stock market had significant influence on Indonesian stock prices (Meryani, A. 2010). Figure 2.2 Indonesia Export Partners 2009 Source: adapted from CIA, 2010 Figure 2.3 Indonesia Import Partners 2009 Source: adapted from CIA, 2010 Local Economy GDP or Gross Domestic Product is regularly used as an indicator of economic performance of the country. Brux (Brux, J.M. 2008, p. 351) states that Gross Domestic Product (GDP) is defined as the market value of all final goods and services produced in the economy in a given time period (usually one year). There are two different types of GDP as follow: Nominal GDP. Nominal GDP is GDP that determined at current prices or actual prices of a particular year. Real GDP. Real GDP is GDP which adjusted for inflation. GDP is generally used as indicator of standards of living in a country. If GDP is high, there is an assumption that economy in a country is doing well and this country has high standards of living. When GDP is growing, there is an assumption that economic activity in a country and standards of living are rising (Brux, 2008). When GDP of a country shows positive growth, it is usually followed by positive trend in stock market. Therefore, GDP is often used by investors to estimate turning points of their stocks and to time their investment.GDP growth and other economic data are published in newspaper. When investors read this information, investor should know how to use the information wisely. For instance, when banking sector is predicted to perform badly, investors should leave out banking stocks in their stock investment. This information will help investors to choose their stocks and make correct decision whether they have to buy, sell, or hold the shares. When economic condition in a country is good, stock prices generally tend to increase. However, investors have to be careful because it is also a sign that good days are numbered. Economy which is growing too fast will be difficult to maintain its growing or to be sustained (Chuan, 2004). Political Factor Stock price can be affected by regional, national, and international political situation. Political crisis usually will have negative impact in stock market trends. Stock prices generally will drop significantly because of political crisis (Chuan, 2004). Inflation According to Hook (Hook, J.A. 2003, p. 110), Inflation is A condition in which the economy experiences a continuous increase in the average price level of all goods and services. The price of certain goods and services may decrease but the average price of all goods and services increases. Financial service industries and banking are influenced significantly by inflation (Hook, J.A. 2003). Inflation can also be defined as a state that has continuous increase in prices of goods and services. Inflation will increase the cost of doing business because price of goods and services increases significantly. Therefore, it is expensive to do business during inflation and profit margins of business will decrease due to higher price of raw materials, rentals, etc (Chuan, 2004). Potential earnings of companies will determine the demand for a stock. Therefore, potential earnings of many companies generally decreased during inflation period due to the lower demand for stock. The lower demand for a stock will cause the decrease of stock prices in stock market. Investors should look at the growing of inflation and sell their stocks before inflation happens. Investors can use commodity prices and interest rates as indicators of inflation trend. When commodity prices and interest rates are rising, those factors indicate the coming of inflation. Investors should have carefulness to enter the stock market (Chuan, 2004). Foreign Exchange Rates Taylor, F. states that foreign exchange rate is the ratio which is used to convert one currency into another. Most countries around the world have their own currencies released by certain official agency which is called monetary authority or central bank. Currency is medium of exchange which is used to buy goods and services (Taylor, F. 2003). According to Philip (Philip et al. 2000), there are types of exchange rate system as follow: Flexible Exchange Rates. Flexible exchange rates system is an exchange rate system which the value of currency is permitted to react to market forces without any intervention by central banks or monetary authority. Fixed Exchange Rates. Fixed exchange rates system is an exchange rate system which associate countries agree to fix the value and changes only occur under certain particular condition. This exchange rate system can reduce uncertainty from international trade and support long term investment in international trade. Managed Floating. Managed floating is an exchange rate system which currency is allowed to respond to market changes but central banks are allowed to interfere in order to protect the value of the currency especially when central banks believe that depreciation is only temporary. Stock-Oriented models of exchange rates which also known as portfolio-balance approaches view exchange rates as equating demand and supply for certain assets especially stocks and bonds. Financial assets are valued by present values of future cash flows, expectations of relative currency values have significant role in price movements especially for internationally held financial assets. Therefore, stock prices are influenced by exchange rates movement (Ajayi and Mougoue, 1996). JCX Index or IHSG gets significant influence from the fluctuation of USD/IDR exchange rate. USD/IDR indicates how many IDR (Indonesia currency) per US dollar. The decrease of IDR currency in term of US dollar is generally followed by the decrease of several Indonesia stock prices such as Telkom, ASTRA International, Bakrie Telecom, Kalbe Farma, etc (Sihombing,G. 2008). Figure 2.4 shows that the fluctuation of USD/IDR exchange rate is very high. Therefore, Indonesian investors should look at USD/IDR exchange rate as consideration in trading stocks (Yahoo, 2010). Figure 2.4 USD/IDR Exchange Rates from 2005 to 2010 Source: Yahoo, 2010 Interest Rates Frumkin (Frumkin, N. 2000, p. 190) states that Interest is the cost of borrowing money, and interest rates are the price of money. Interest rates which refer to yields are the annualized percentage that interest is of the principal of the loan. Interest rate is a good indicator of inflation trends because of its role as regulatory device to monitor the inflation trends. If interest rate increases, the cost of borrowing money will become higher and more expensive. Investing and developing business will be more expensive. Therefore, the economic growth is decrease and the inflation is under control. Besides as an indicator of inflation trends, interest rates also affect stock market and have significant influence in stock prices. When interest rate in a country is low that indicates stable or low inflation rates, stock market generally shows its positive trends and has tendency to be more active. Many investors prefer to put their money on other investments rather than put their money in bank deposits due to lower fixed interest rate. Investors will obtain lower return from bank deposits than return which comes from other investments especially stocks or shares. In addition, the cost of borrowing money becomes cheaper and this makes investors advance their additional borrowing for investment. Therefore, low interest rate will give positive impact to stock market in terms of rising stock prices. Investors have to be more careful when there is news about increasing interest rates. Investors should look at the change of interest rates regularly because of the impact of interest rates on their stock prices (Chuan, 2004). Increasing interest rates will give a negative effect on many companies which have large debts or loans because of the rising of cost of borrowing. The profit of the companies and ability to grow will decrease. When the profit of companies decrease, stock prices generally becomes less attractive and their stock prices decrease. When interest rates become high, investors usually react in two possible outcomes as follow (Mladjenovic, P. 2009): Investors may sell some of their stocks to pay their interest loans or debts. If many investors sell their stock, it will give negative effect on stock prices. Stock prices tend to decrease because there are more sellers than buyers in stock market. Higher interest rates may cause investors swap change their investment from stocks to bonds or bank deposits which offer higher return. In Indonesia, interest rate decisions are decided by Central Bank of Republic of Indonesia. Indonesia interest rates dropped significantly over the years that can be seen in figure 2.5. The decrease of interest rates will attract more investors to invest their money on stock market (Trading Economics, 2010). Figure 2.5 Indonesia Interest Rates from 2006 to 2010 Indonesia Interest Rate Source: Trading Economics, 2010 Commodity Prices Basic commodities which are required in the production process of most goods and services are good indicators of inflation trends. Those commodities are oil, rubber, steel, etc. When the prices of those commodities increase, the cost of goods and services will also increase. Therefore, when the prices of most commodities increase, it may be an indication of inflation. Investors should have carefulness to enter the stock market. Besides as an indicator of inflation trends, commodity prices especially oil prices also affect stock market and have significant influence in stock prices (Chuan, 2004). Higher oil prices will have significant impact on stock market returns especially the aggregate effect of stock prices. Higher oil prices may cause the rising of production cost which will give great forces on industry equity returns. In oil exporting countries, higher oil prices will increase profits from oil, gas, coal, and vary resources industries. Higher oil prices may cause the rising of stock prices especially for oil exporting countries which depends on relative significance of the industries (Chen, A. H. 2008). JCX composite index or IHSG gets significant influence from the fluctuation of oil prices. For instance, the price of oil in early 2008 increased significantly to US$ 147 per barrel and then decreased drastically to US$ 36 per barrel. The price of JCX composite index followed the fluctuation of oil prices. In the early 2008, JCX composite index increased to IDR 2800. At the end of this year, JCX composite index decreased to IDR 1100 (more than 100%) because of the decrease of oil prices. Indonesian stock prices generally follow the fluctuation of oil prices. When the oil prices decrease, stock prices usually also decrease and otherwise. Therefore, Indonesian investors should look at the movement of oil prices as consideration in trading stocks (Sidarta, W. 2010). Research Framework Stock price in Indonesia Stock Exchange is the main axis in the research framework. The potential external environmental factors which influence stock price are: Economic factors. Economic factors consist of worldwide stock market (DJIA, Hang Seng, Nikkei, and Strait Times), local economy (GDP), inflation, interest rates, exchange rates (USD/IDR exchange rates), and commodities prices (oil price). Interest rates and commodities prices have correlation with inflation because the movements of those factors are indicator of inflation trends. Political factors. Stock price can be affected by regional, national, and international political situation such as political crisis. All of those potential factors will become consideration factors for Indonesian investors in order to make correct decision whether they have to buy, sell, or hold their stocks. The research framework can be seen in figure 2.6. Figure 2.6 Research Framework POLITICAL FACTOR ECONOMIC FACTORS STOCK PRICE (JCX Composite Index or IHSG) INTEREST RATES INFLATION OIL PRICES EXCHANGE RATES (USD/IDR) LOCAL ECONOMY (GDP) WORLDWIDE STOCK MARKET (DJIA, NIKKEI, HANG SENG, STRAIT TIMES) Source: The Researcher Summary The research topic in this study is An Empirical Study of Factors Influencing Stock Prices in Indonesia Stock Exchange. The report consists of introduction, literature review, and reference. Chapter 1 introduction identifies background of the research, objectives of the research, research question, research hypotheses, and scopes. Chapter 2 literature review provides knowledge and theories that are related to research topic. Summary and explanation of external environmental factors which influence stock prices will be provided in this chapter. At the end of this chapter, the author provides research framework in this report. Factors and frameworks will be appeared by joining and integrating adopted theories. Lastly, references show the sources of all information used in this research. Factors Influencing Stock Prices in Indonesia Exchange Factors Influencing Stock Prices in Indonesia Exchange There are many definitions of stock with different point of view. Bernstein states that stocks are partial ownership of companys assets which are subordinated with debt (Bernstein, R. 2002). Stock is a device that implies an ownership position in a company and signifies a claim on its proportional share in companys assets and profits. Only certain companies have stock called corporation. Limited partnership and Sole proprietorship do not issue stock (WebFinance, Inc., 2010). According to Vernimmen et al. (Vernimmen et al. 2009, p. 527), A stock or a share is a security that is not redeemed. The investment can only be recognized through disposal and whose revenue flows is uncertain. Corporations need financial resources and this required resources usually come from ordinary or common stocks, preferred stocks, and medium to long term lenders or debenture holders. Common stock is everlasting capital for the corporation. The owners who invest in this type of stock are called ordinary or common shareholders and any profit retained after paying debenture interest will be distribute to them called dividend. Preferred stocks are issued to public in order to acquire capital and these stocks have rights to specified yearly fixed percentage dividend on the paid-up capital. Preferred stocks are less common in stock market (Anandarajah, Aseervatham, and Reid 2005). The following are the characteristics of common stock and preferred stocks: (Scott et al. 1999). Preferred Stock A hybrid security which has similar characteristics to bonds and common stocks. It is similar to bonds in its dividends which are limited in amount. It is similar to common stocks in that it has no fixed maturity date, dividends are not deductible in terms of tax purposes, and non-payment of dividends will not cause bankruptcy. Common Stock. Common stock shares imply an ownership in corporation which does not have maturity date and exists as long as the firm does. Stock exchange is an organization which helps connection between potential buyers and potential sellers of stocks. Stock exchange can be physical place, network of computers, system of telephone link, etc. A stock market is a place where stocks can be purchased and sold (Samuel, J.M., Wilkes, F.M., and Brayshaw, R.E. 1996). Most of countries around the world have stock exchanges. The number of stock exchanges around the world is growing significantly. Based on continents, stock exchanges around the world can be divided into 6: Africa, Asia, Europe, Middle East, North America, and South America. Indonesia Stock Exchange called IDX is one of the stock exchanges in Asia (Stock Exchanges Worldwide Links, n.d., 2010). Principally, there are 2 advantages are obtained by investor who buying or having stocks in stock exchanges (Indonesia Stock Exchange, 2007): Dividend. Dividend is sharing profit awarded by a company because of holding stock for a relatively long period until ownership term is in period where an investor is recognized as shareholder who has right to get dividend. Capital Gain. Capital gain is the difference between selling price and buying price acquired from trading activities. Those advantages cause investors choose stocks as an attractive alternative than put their money in fixed deposits that have low interest rates (Chuan, 2004). Basically, investors who buying or having stocks will also have some risks (Indonesia Stock Exchange, 2007): Capital Loss. Capital loss is a situation when an investor is selling the stocks at lower price than the buying price. Liquidity Risk. A company with shares held by public is declared for its bankruptcy by the Court. Shareholders or investors will have the last priority of claiming their rights after all liabilities are fulfilled. The rest of the companys wealth will be shared proportionally to the shareholders. Shareholders will not obtain anything from the liquidation if there is no rest left. The overall price movements of common stocks of corporations traded on stock markets are called stock market price indexes. Corporate stockholders will get benefit from company through dividends and have right to vote in company. Investors capital gains and losses will affected by increasing and falling of stock prices (Frumkin 2000). Norman (Frumkin, N. 2000, p. 277) states that The dividend yield, which is the rate of return on a share company stock, is a companys annual cash dividend percentage of companys annual stock price. Nowadays, the price of stocks in Indonesia Stock Exchange is changing rapidly. The average price of stocks in Indonesia Stock Exchange increased significantly (approximately 20%) during 2006. The average price decreased approximately 19% during January 2008 and declined again approximately 16% during March 2008. The significant change of stock prices in Indonesia Stock Exchange is caused by external environmental factors or macroeconomics factors (Frensidy, B. 2008). There are many external environmental factors that impact financial system including stocks. Those factors are economic growth, inflation, exchange rates, interest rates, etc (Evans, et al. 2000). Many investors lost their money because of the significant change of stock prices in Indonesia Stock Exchange. Investors lost their capital because they sell their stocks at lower price than the buying price (Indonesia Stock Exchange, 2007). By analyzing external environmental factors, investors can predict the future price of stocks more accurately. To minimize the risk or capital loss, investors have to understand external environmental factors influencing stock prices in order to make correct decision whether they have to buy, sell, or hold the shares. The research will identify external environmental factors which have significant influence on stock prices and explain the relationship between those factors and stock prices in order to accomplish that goal. Objectives, Research Question, and Research Hypotheses The objectives of the research are: To identify the variables of external environmental factors influencing the stock prices in Indonesia Stock Exchange. To analyze the influence of external environmental factors on stock prices in Indonesia Stock Exchange. Based on the objectives, the research questions are as follow: Which external environmental factors influence stock prices in Indonesia Stock Exchange? How does external environmental factors influence on stock prices in Indonesia Stock Exchange? Based on the research question, the research hypotheses are built up: External environmental factors encourage the change of stock prices in Indonesia Stock Exchange. External environmental factor have strong correlation with stock prices in Indonesia Stock Exchange. Scope This research study will focus on external environmental factors influencing the stock prices in Indonesia stock exchange, which will be explained more briefly in chapter 2 literature reviews. Some external environmental factors influencing stock prices are applied to explain the correlation between external environmental factors and stock prices in Indonesia Stock Exchange. The analysis of what kind of relationship (positive or negative) between external environmental factors and stock prices will also be clarified in this research. The literature reviews will consist of some external environmental factors which influence stock prices especially in Indonesia Stock Exchange. A survey will be performed in order to collect data about the change of several external factors and stock prices in Indonesia Stock Exchange. Based on collected data, a model will be offered to analyze the relationship between stock prices and external environmental factors. Lastly, this research will be limited and focused on the following: The research is only focused on JSX composite index or (Indonesian: Indeks Harga Saham Gabungan, IHSG). This research is only focused on external environmental factors which influence stock prices. The data collection period of this research is 5 years from 2005 to 2009. Chapter 2 LITERATURE REVIEW Literature Review of External Environmental Factors and Stock Prices in Indonesia Stock Exchange This chapter will summarize external environmental factors which influence stock prices. Factors and frameworks will be appeared by joining and integrating adopted theories. Lastly, the major external environmental factors influencing stock prices in Indonesia Stock Exchange will be provided in this chapter. Categories of Stocks and Types of Orders In the market, there are various names of stocks that refer to different categories of stocks (Chuan, 2004): Figure 2.1 Categories of Stocks Source: adapted from Chuan, 2004 Blue Chips refer to stocks that are steady with good fundamentals. Undervalued Stocks refer to stocks which are well-established by companies with solid balance sheet. Such stocks are generally unnoticed by investors, traded with small volume, and receive little reporting from media and analysts or experts. Growth Stocks refer to stocks which are established by recognized companies that have high growth sectors and their business are predicted to enlarge quickly over the coming years. Such stocks are generally traded with higher PER (Price Earnings Ratio) even though they lack of history of strong earnings base. While companies show continual rise in their earnings, the price of these stocks will increase. Penny Stocks refer to stocks that have small capitalization and traded bellow one dollar. Small-Cap Stocks refer to stocks that have very few issued shares and traded in low price at stock market. Such stocks are usually not bought by foreign institutions and funds. Small-Cap Stocks have some risks as follow: Smaller companies tend to less flexible to major crisis because they are less diversified and more prone to market shocks and monetary crisis. Trading volumes are low and less liquid. Therefore, investors may not find the buyers in stock market when they want to sell the stocks. Small-Cap Stocks are more sensitive to news and rumors. There are 3 types of orders used in the buying and selling of stocks as follow (Chuan, 2004): Market Order Market order is an order to buy or sell stocks instantly at the best current price. For example, investors place market order to sell AAA shares. It means investors buy AAA shares at current offering price. Limit Order Investors which place limit order will set a certain suitable price to buy or sell a particular stock. Stop Order Stop order is an order to buy or sell the stocks that are traded at certain price level immediately. This certain price level is known as stop price. For instance, investors place stop order to buy AAA shares at $5.00. If AAA shares begin to trade at $5.00, the order becomes market order and broker will buy shares at the best current price. In terms of selling stop order, the order is placed bellow current price to help investors decrease their possible losses and keep their profit. Timing and Stock Investment Investor would discourage when the price of their stocks decreased significantly after they had bought the stocks or to be trapped in market crash after they had invested their money in the stock market. Good timing is the most crucial factor for investors in stock market. Even the best stocks will become useless investments if investors buy them at wrong time (George, A. 2008). The major problem is good timing cannot be determined easily because stock market is influenced by large amount of factors and events that are beyond prediction. Investors have to understand factors influencing stock price and involve some insight to determine good timing whether they have to buy, sell, or hold their stocks (Chuan, 2004). In stock investment, price is mechanism by which practically all goods and services are exchanged. In this case, price has strong power or price is a king because price will determine whether stocks become excessively expensive or inexpensive (George, A 2008). The price of stocks tends to increase when there are more buyers than sellers in stock market. Buyers are tense in stock market based on expectation of future price increase. There are some signals which make buyers believe that future stock price will increase (Chuan, 2004): Positive indication from market trend. Rumors in stock market. Information concerning better earnings prospects for company. External Environmental Factors Influencing Stock Prices There are several external environmental factors influencing the uptrend or downtrend of stock prices in stock market. Those external environmental factors are: Worldwide stock market. Local economy. Political factor. Inflation. Foreign Exchange Rates. Interest Rates. Commodity Prices. Worldwide Stock Market The performance of world economy will have effect on local economy or Indonesian economy due to globalization. The worldwide economy especially US, China, Japan, and Singapore economy will help to enhance Indonesian economy because those countries are major trading partners of Indonesia (CIA, 2010). Therefore, positive economic performance of those countries will give favorable result for Indonesian Stock Market (Chuan, 2004).Indonesian stock prices get significant impact from US, China, Japan, and Singapore stock prices. JCX composite index or IHSG obtain significant influence from worldwide stock market especially DJIA (Dow Jones Industrial Average), Nikkei 225, Hang Seng and Strait Times. Investors always look at those stocks before and during trading stocks in Indonesia Stock Exchange. Export partners and import partners of Indonesia will affect local economy and price of JSX composite index in Indonesian Stock Exchange (Samsul, M. 2006). For example, JCX composite index in 7 May 2010 decreased significantly (71.29 points or 2.54%) because of the decrease of worldwide stock market. Dow Jones Industrial Average decreased 407.05 points or 3.75%, Nikkei decreased 331.1 points or 3.1%, Hang Seng decreased 213.12 points or 1.06%, and Strait Times decreased 6.7 points or 0.59%. The decrease of worldwide stock market had significant influence on Indonesian stock prices (Meryani, A. 2010). Figure 2.2 Indonesia Export Partners 2009 Source: adapted from CIA, 2010 Figure 2.3 Indonesia Import Partners 2009 Source: adapted from CIA, 2010 Local Economy GDP or Gross Domestic Product is regularly used as an indicator of economic performance of the country. Brux (Brux, J.M. 2008, p. 351) states that Gross Domestic Product (GDP) is defined as the market value of all final goods and services produced in the economy in a given time period (usually one year). There are two different types of GDP as follow: Nominal GDP. Nominal GDP is GDP that determined at current prices or actual prices of a particular year. Real GDP. Real GDP is GDP which adjusted for inflation. GDP is generally used as indicator of standards of living in a country. If GDP is high, there is an assumption that economy in a country is doing well and this country has high standards of living. When GDP is growing, there is an assumption that economic activity in a country and standards of living are rising (Brux, 2008). When GDP of a country shows positive growth, it is usually followed by positive trend in stock market. Therefore, GDP is often used by investors to estimate turning points of their stocks and to time their investment.GDP growth and other economic data are published in newspaper. When investors read this information, investor should know how to use the information wisely. For instance, when banking sector is predicted to perform badly, investors should leave out banking stocks in their stock investment. This information will help investors to choose their stocks and make correct decision whether they have to buy, sell, or hold the shares. When economic condition in a country is good, stock prices generally tend to increase. However, investors have to be careful because it is also a sign that good days are numbered. Economy which is growing too fast will be difficult to maintain its growing or to be sustained (Chuan, 2004). Political Factor Stock price can be affected by regional, national, and international political situation. Political crisis usually will have negative impact in stock market trends. Stock prices generally will drop significantly because of political crisis (Chuan, 2004). Inflation According to Hook (Hook, J.A. 2003, p. 110), Inflation is A condition in which the economy experiences a continuous increase in the average price level of all goods and services. The price of certain goods and services may decrease but the average price of all goods and services increases. Financial service industries and banking are influenced significantly by inflation (Hook, J.A. 2003). Inflation can also be defined as a state that has continuous increase in prices of goods and services. Inflation will increase the cost of doing business because price of goods and services increases significantly. Therefore, it is expensive to do business during inflation and profit margins of business will decrease due to higher price of raw materials, rentals, etc (Chuan, 2004). Potential earnings of companies will determine the demand for a stock. Therefore, potential earnings of many companies generally decreased during inflation period due to the lower demand for stock. The lower demand for a stock will cause the decrease of stock prices in stock market. Investors should look at the growing of inflation and sell their stocks before inflation happens. Investors can use commodity prices and interest rates as indicators of inflation trend. When commodity prices and interest rates are rising, those factors indicate the coming of inflation. Investors should have carefulness to enter the stock market (Chuan, 2004). Foreign Exchange Rates Taylor, F. states that foreign exchange rate is the ratio which is used to convert one currency into another. Most countries around the world have their own currencies released by certain official agency which is called monetary authority or central bank. Currency is medium of exchange which is used to buy goods and services (Taylor, F. 2003). According to Philip (Philip et al. 2000), there are types of exchange rate system as follow: Flexible Exchange Rates. Flexible exchange rates system is an exchange rate system which the value of currency is permitted to react to market forces without any intervention by central banks or monetary authority. Fixed Exchange Rates. Fixed exchange rates system is an exchange rate system which associate countries agree to fix the value and changes only occur under certain particular condition. This exchange rate system can reduce uncertainty from international trade and support long term investment in international trade. Managed Floating. Managed floating is an exchange rate system which currency is allowed to respond to market changes but central banks are allowed to interfere in order to protect the value of the currency especially when central banks believe that depreciation is only temporary. Stock-Oriented models of exchange rates which also known as portfolio-balance approaches view exchange rates as equating demand and supply for certain assets especially stocks and bonds. Financial assets are valued by present values of future cash flows, expectations of relative currency values have significant role in price movements especially for internationally held financial assets. Therefore, stock prices are influenced by exchange rates movement (Ajayi and Mougoue, 1996). JCX Index or IHSG gets significant influence from the fluctuation of USD/IDR exchange rate. USD/IDR indicates how many IDR (Indonesia currency) per US dollar. The decrease of IDR currency in term of US dollar is generally followed by the decrease of several Indonesia stock prices such as Telkom, ASTRA International, Bakrie Telecom, Kalbe Farma, etc (Sihombing,G. 2008). Figure 2.4 shows that the fluctuation of USD/IDR exchange rate is very high. Therefore, Indonesian investors should look at USD/IDR exchange rate as consideration in trading stocks (Yahoo, 2010). Figure 2.4 USD/IDR Exchange Rates from 2005 to 2010 Source: Yahoo, 2010 Interest Rates Frumkin (Frumkin, N. 2000, p. 190) states that Interest is the cost of borrowing money, and interest rates are the price of money. Interest rates which refer to yields are the annualized percentage that interest is of the principal of the loan. Interest rate is a good indicator of inflation trends because of its role as regulatory device to monitor the inflation trends. If interest rate increases, the cost of borrowing money will become higher and more expensive. Investing and developing business will be more expensive. Therefore, the economic growth is decrease and the inflation is under control. Besides as an indicator of inflation trends, interest rates also affect stock market and have significant influence in stock prices. When interest rate in a country is low that indicates stable or low inflation rates, stock market generally shows its positive trends and has tendency to be more active. Many investors prefer to put their money on other investments rather than put their money in bank deposits due to lower fixed interest rate. Investors will obtain lower return from bank deposits than return which comes from other investments especially stocks or shares. In addition, the cost of borrowing money becomes cheaper and this makes investors advance their additional borrowing for investment. Therefore, low interest rate will give positive impact to stock market in terms of rising stock prices. Investors have to be more careful when there is news about increasing interest rates. Investors should look at the change of interest rates regularly because of the impact of interest rates on their stock prices (Chuan, 2004). Increasing interest rates will give a negative effect on many companies which have large debts or loans because of the rising of cost of borrowing. The profit of the companies and ability to grow will decrease. When the profit of companies decrease, stock prices generally becomes less attractive and their stock prices decrease. When interest rates become high, investors usually react in two possible outcomes as follow (Mladjenovic, P. 2009): Investors may sell some of their stocks to pay their interest loans or debts. If many investors sell their stock, it will give negative effect on stock prices. Stock prices tend to decrease because there are more sellers than buyers in stock market. Higher interest rates may cause investors swap change their investment from stocks to bonds or bank deposits which offer higher return. In Indonesia, interest rate decisions are decided by Central Bank of Republic of Indonesia. Indonesia interest rates dropped significantly over the years that can be seen in figure 2.5. The decrease of interest rates will attract more investors to invest their money on stock market (Trading Economics, 2010). Figure 2.5 Indonesia Interest Rates from 2006 to 2010 Indonesia Interest Rate Source: Trading Economics, 2010 Commodity Prices Basic commodities which are required in the production process of most goods and services are good indicators of inflation trends. Those commodities are oil, rubber, steel, etc. When the prices of those commodities increase, the cost of goods and services will also increase. Therefore, when the prices of most commodities increase, it may be an indication of inflation. Investors should have carefulness to enter the stock market. Besides as an indicator of inflation trends, commodity prices especially oil prices also affect stock market and have significant influence in stock prices (Chuan, 2004). Higher oil prices will have significant impact on stock market returns especially the aggregate effect of stock prices. Higher oil prices may cause the rising of production cost which will give great forces on industry equity returns. In oil exporting countries, higher oil prices will increase profits from oil, gas, coal, and vary resources industries. Higher oil prices may cause the rising of stock prices especially for oil exporting countries which depends on relative significance of the industries (Chen, A. H. 2008). JCX composite index or IHSG gets significant influence from the fluctuation of oil prices. For instance, the price of oil in early 2008 increased significantly to US$ 147 per barrel and then decreased drastically to US$ 36 per barrel. The price of JCX composite index followed the fluctuation of oil prices. In the early 2008, JCX composite index increased to IDR 2800. At the end of this year, JCX composite index decreased to IDR 1100 (more than 100%) because of the decrease of oil prices. Indonesian stock prices generally follow the fluctuation of oil prices. When the oil prices decrease, stock prices usually also decrease and otherwise. Therefore, Indonesian investors should look at the movement of oil prices as consideration in trading stocks (Sidarta, W. 2010). Research Framework Stock price in Indonesia Stock Exchange is the main axis in the research framework. The potential external environmental factors which influence stock price are: Economic factors. Economic factors consist of worldwide stock market (DJIA, Hang Seng, Nikkei, and Strait Times), local economy (GDP), inflation, interest rates, exchange rates (USD/IDR exchange rates), and commodities prices (oil price). Interest rates and commodities prices have correlation with inflation because the movements of those factors are indicator of inflation trends. Political factors. Stock price can be affected by regional, national, and international political situation such as political crisis. All of those potential factors will become consideration factors for Indonesian investors in order to make correct decision whether they have to buy, sell, or hold their stocks. The research framework can be seen in figure 2.6. Figure 2.6 Research Framework POLITICAL FACTOR ECONOMIC FACTORS STOCK PRICE (JCX Composite Index or IHSG) INTEREST RATES INFLATION OIL PRICES EXCHANGE RATES (USD/IDR) LOCAL ECONOMY (GDP) WORLDWIDE STOCK MARKET (DJIA, NIKKEI, HANG SENG, STRAIT TIMES) Source: The Researcher Summary The research topic in this study is An Empirical Study of Factors Influencing Stock Prices in Indonesia Stock Exchange. The report consists of introduction, literature review, and reference. Chapter 1 introduction identifies background of the research, objectives of the research, research question, research hypotheses, and scopes. Chapter 2 literature review provides knowledge and theories that are related to research topic. Summary and explanation of external environmental factors which influence stock prices will be provided in this chapter. At the end of this chapter, the author provides research framework in this report. Factors and frameworks will be appeared by joining and integrating adopted theories. Lastly, references show the sources of all information used in this research.