27‏/11‏/2017

Financial leverage and uses

Financial leverage and uses

We stand a lot and many of us in front of the term financial leverage and use, but many of us do not really know what is the real financial leverage which leads in many cases to problems during trading.
To illustrate this, I explain the following example:
Suppose you want to invest in a property which expects its price to rise in two months by 20%, but you do not have the value of this property, but have an amount equal to 10% of the property value
What can you are doing in this case is to go to a bank and request a loan covered by the value of the property where he will buy the property and if the price rose Vstqom sold later and repayment of the loan and make a profit equivalent to 20% of the property and practically value equivalent to 200% of the share owner value.
To illustrate larger numbers Suppose that your capital is $ 10,000 and the value of the property is $ 100,000 in this case you buy the property after you get a loan worth $ 100,000 when the property rises 20% are sold at $ 120,000 and cover the $ 100,000 loan and has made a profit of $ 20,000 ie equivalent to 200% of the value of the real investment of $ 10,000
But does the bank will grant you the loan without insurance? of course not... ?The bank will ask you to start mortgage the property. Insurance in the event of the low price of the property also will be asked.
In this case, your capital of $ 10,000 would be the value of the insurance, which will keep him the bank has a deposit that the property value has fallen to the sale of the mortgaged property and the completion of the loan value of the remaining insurance reported to you.
         At a time when the currency became too is treated just like dealing in real estate is, they become bought and sold and can make a profit by banks began granting facilities in the form of loans against a pledge of purchased currency has in addition to the insurance and began our shows the principle of margin or what he knows mostly Balmarzin ( margin) It is insurance that keep it at the bank against the loan that you get a particular currency to sell it and buy another currency keep the bank has (encumber) until you sell either a profit or loss in the event of profit Vsicom the bank to release your insurer that you cum plus value earned In case of loss the bank will deduct the loss from the insurance and the release of the remaining amount.
The work is done in this way systematically where the bank allows you to get a loan equivalent to specific multiples of the insurance value you put in other words, if you put a $ 10,000 insurance you can get a loan equivalent to 100 times the insurance which you can get a million dollars as a loan but will not be able to get In cash, but this loan will be conditional on other currency by buying the bank pledged to keep it that has to sell them to cover this loan and then you can get the difference or pay the difference.
In this case, the term would be that the bank may give you leverage of 100: 1 meaning that the bank will allow you to borrow an amount equal to 100 times the insurance that you have a filing.
Hence, we get to a simplified definition of a system of financial leverage, a system gives the investor the opportunity to invest a specific weakening of its capital.
  Many of this system is a golden opportunity investor can maximize profits through it but the fact that the use of financial leverage is a double-edged sword and can be considered a disaster that was used in a manner not well thought out and invest exhibition failure, exposing the investor to risk the entire capital loss in this case.
You can understand the leverage in trade currencies through the following example:
• head of the owner $ 10,000. • Want to buy a standard contract worth ($ 100,000), while do not have this amount. • Financial your leverage (1: 100), ie, every dollar gives you the possibility to purchase $ 100.
• The broker book part of your balance ($ 1000 for example) to buy you a standard contract (so-called margin sevices). • remaining in your account ($ 9000) is called the margin available.
If the transaction is closed, for example, net profit ($ 2000), you will be able to get this full profit plus the value of the reserved margin ($ 1,000). Result: increases your account becomes $ 12,000
If, for example, the deal closed on a net loss of ($ 2000) Vsicom median book value of the losses from the margin available, given the reserved margin.Result: less Hspak becomes $ 8,000
This is the idea of ​​the leverage system margin, you require execution of the contract, who shall mediator to book part of your account and buy you the contract, if you win take the value of profit plus margin reserved, and if lost takes the broker of your account covers the value of your losses, and relive the reserved margin again.

Module 6: Basic Communication Skills مهارات الاتصال الأساسية

Module 6: 
Basic Communication Skills


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Table of Contents

Module 6:  Basic Communication Skills



Principles of Banking Certificate
Module 6:  Basic Communication Skills

Introduction

This module covers the communication process, the elements of communication, and the barriers to good communication.

Importance

Without clear communication you will not be able to deliver your message and achieve your communication goals.  Unless communication goes properly, there are many problems and troubles that occur that can cause miscommunication.

Overview

·         The Meaning of Communication
  • The communication process
  • Communication barriers
  • Verbal, vocal and visual elements in face to face communication
  • Geri's Game (movie)
  • Courtesy and etiquette
  • The importance of listening to customers
  • Risks and consequences of not listening
  • Exercise: Are you a good listener?
  • Hearing versus listening
  • Effective listening techniques

Learning Objectives

Upon the completion of this module, you will be able to:
·         Explain the meaning of communication.
·         Define the power of listening.
           

Communication Process

Communication happens between two parties, which we call the Source & Receiver.

The Source sends their encoded message to the Receiver.  In return, the Receiver decodes the message, understands it, and then sends their encoded feedback/response to the sender.

The encoding system used between the sender and the receiver is called language.  That's why language is considered to be the first and the most important barrier to communication.

The second barrier to communication is noise.  If the communication process is surrounded with noise, there is no hope that the messages between both parties (Source & Receiver) will be delivered clearly.  This will cause the message to be cut off and will cause Miscommunication.

Communication Exercise:  Activity 1

Instructions:
Instructor will ask for two volunteers to be seated in the middle of the room.  The instructor will whisper to one of the volunteers not to show any reaction to what the other volunteer will say.  No comments, no replies, and even no facial expressions are to be shown.  The other volunteer will be asked to tell his opponent any personal story he wants, whether a success, funny, or even embarrassing story.

Observe: 
How the volunteer who is telling the story communicates and that, because there is no exchange or acknowledgement from the receiver, the communication process doesn’t work.

Communication Story

Let’s look at the following story.  Keep in mind the barriers to effective communication as you read this story:

Do we need to communicate?

A man and his wife had been arguing all night, and as bedtime approached, neither was speaking to the other.  It was not unusual for the pair to continue this war of silence for two or three days.  However, on this occasion, the man was concerned.  He needed to be awake at 4:30 am the next morning to catch an important flight, and being a very heavy sleeper, he normally relied on his wife to wake him.

Cleverly, so he thought, while his wife was in the bathroom, he wrote on a piece of paper: 'Please wake me at 4:30 am - I have an important flight to catch'.  He put the note on his wife's pillow, and then turned over and went to sleep.

The man awoke the next morning and looked at the clock.  It was 8:00 am.  Enraged that he'd missed his flight, he was about to go in search of his errant wife to give her a piece of his mind when he spotted a hand-written note on his bedside cabinet.

The note said: 'It's 4:30 am - get up.'

Barriers to Communication

In our day to day communications, we experience barriers to effective communication.  Some examples are:
n  Language
n  Values, traditions, and customs
n  Level of understanding
n  Specialization
n  Difference of level
n  Gaps of geographic distribution
n  Excessive communications
n  Emotional barrier
n  Conclusion
n  Quick fix decision
n  Chaos
n  Distortion of message (omission or addition)
n  Background (receiver/sender)
n  Bad listening habits

Elements of Communication

We communicate with them in three ways:
1.      Verbal:  The words that shapes the message
2.      Vocal:  The tone, pitch, and volume used in presenting the message
3.      Visual:  The non verbal cues used in presenting the message. Body Language is one of the ways we communicate visually

Verbal Communication

In the business world, as in other aspects of our lives, most communication occurs verbally or by voice.  Talking is a skill we learn early and practice frequently.  Talking is also a very effective and quick way to communicate.
Unless mechanical media is used, verbal communication usually occur face-to-face, providing immediate feedback to the speaker.  This situation encourages the receiver to participate in the communication and allows the speaker to determine if the message has been fully understood.  If the message is not understood, the speaker can immediately provide more information, respond to the receiver’s feelings, or clear up any misunderstandings.
Also, an expression of feelings from either side allows the other person to respond with feelings, creating a more natural communication than occurs in writing.
However, verbal communication lacks permanence.  As thoughts or directions are verbally transmitted from one person to another, they often are filtered or distorted by the receiver.  They cannot be verified later against an original source.

Characteristics of Effective Verbal Communication

n  The vocabulary fits the listener, not the speaker.  Don’t use long words or industry jargon the listener does not understand.

“If you put your money in a CD or an IRA, you cannot access it at the ATM.”

n  A strong message sends a clear message.  Clear, concise sentences framed in good grammar are easy to understand.  Don’t lose the listener in rambling statements.

“Because of the large increase in customers, in order to processes customer transactions at the most expeditious rate, it is imperative that they adhere to all of the new requirements.”

n  The volume, inflection, and tone of voice help carry the verbal message.  Speaking in a calm, relaxed manner reassures the other person of your own comfort with the conversation.  Use the appropriate level of loudness, not too soft or too loud.  Yelling isn’t appropriate unless you’re alerting someone to a dangerous situation.  Avoid both monotone and highly modulated inflection.

n  The rate of speech is adjusted to the listener.  If the other person speaks slowly, then slow down your rate.  If the other person speaks quickly, then speed up your rate.

Nonverbal Communication

Though it is often overlooked, nonverbal communication occurs all the time.  In fact, more than 65% of a message, except in written communication, is carried non-verbally.  Consciously or unconsciously, we use nonverbal cues all of the time.  An awareness of both your listener’s and your own nonverbal behavior can result in more effective communication.

Nonverbal communication ranges from a young child sticking out her tongue, to a clerk smiling as he hands you change, to a business associate hesitating before entering the boss’s office.

Nonverbal communication can be expressed by eye contact, posture, handshake, hand and arm gestures, a way of walking, the way someone dresses, tone of voice, facial expressions, charts, demonstrations, and even by silence.

Nonverbal communication can be planned, as in the well-prepared delivery of a speech, or it may be unconsciously transmitted, as we become angry, bored, or impatient with a situation.  Even being late for a meeting qualifies as nonverbal communication because your action conveys the attitude that the meeting was not as important as something else.

In a sense, the way we communicate non-verbally creates the most lasting impression.  Others are influenced more by our actions than by our words!  If you tell your employees that you are interested in their ideas and problems but somehow you can’t find the time to meet with them, they quickly believe your actions, not your words.  As Ralph Waldo Emerson put it, “What you are thunders so loud I cannot hear what you say.”

 

Characteristics of Effective Nonverbal Communication

n  The non-verbals must match the verbals.  If verbals and nonverbals are not congruent, the listener believes the nonverbal message.  For example, shaking your head while saying, “Yes, I would be glad to do that.”
n  Non-verbals are different from one culture to another.  Remember when you were a teenager and your group of friends had its own special nonverbal signs and symbols to mean certain things?  People who are in the same culture agree on the use and meaning of certain nonverbal messages.  For example, in the United States, when we greet a businessperson, we shake hands. In Japan, they usually nod or bow.
n  The same non-verbals used by different people do not always mean the same thing.  However, the same nonverbal used by the same person usually does mean the same thing.  The better you know someone, the easier it is to interpret the meaning of their nonverbal messages.
n  Eye contact shows that you are interested in the person.  Wandering eyes make the other person suspicious about whether you are telling the truth.  Excessive eye contact can produce anxiety in the other person.  Good eye contact lies somewhere between a fixed gaze and “shifty eyes.”
n  Nearness indicates approval and respect for the other person.  Distance between you and the other person may relay disapproval, disinterest, or lack of concern.  Move comfortably close.  Remove any physical barriers, unless you want to establish your authority behind a desk.  Remember, appropriate nearness is determined by cultural norms.  In the United States, a “personal space” of about 18 inches is appropriate.
n  Use an open body position to indicate acceptance of the conversation.  An open position shows that you are relaxed and attentive.  A closed or rigid body position indicates tension.  It’s best to use a relaxed, asymmetrical position.


We use different percentages of the three communication elements in different ways when we communicate:

Face to face:

Body language (58 %)            Voice tone (35 %)                   Words (7 %)    = the message

Over the phone:

Voice tone (84 %)                   Words (16 %)                                                  = the message

 

Communications Breakdown

Research indicates that we spend from 50% to 80% of our day communicating with people, staff, customer, suppliers and bosses – both formally and informally.

SKILLS
LISTENING
SPEAKING
READING
WRITING
Order in which skills are learnt as children
1
2
3
4
Percentage of use as adults
45%
30%
16%
9%
Order in which we are taught
4
3
2
1

 

Exercise:  Activity 2

Communicating With Body Language

Instructions:

Each group should have one flipchart page taped to the wall.  Ask each group to select one of their own to represent them in this exercise.  Provide a prepared drawing (geometric shapes) for each presenter and let him study it well.  Then he should assess and direct his group to draw this shape on the flip paper using only his body language.

Conclusion:

This exercise shows the importance of body language. 

How People Interact Face to Face

When people communicate face to face, 55% of their message is carried by the visual element of communication.  The vocal element carries 38% of their message and the verbal 7%.

How People Communicate Over the Phone

When people communicate over the phone, 16% of their message is carried by the verbal element and 84% by the vocal element.

Body Language

Body language is the main communicator of the visual element and includes:
n  Eye contact
n  Facial expression
n  Head movements
n  Gestures and body movements
n  Posture and stance
n  Proximity and orientation

Courtesy and Etiquette

There are many complexities around communicating effectively, but we can improve our communication by practicing some of the simple rules of courtesy and etiquette.  We can:

n  Select positive words and avoid negative ones
n  Avoid the use of jargons
n  Portray a positive attitude (always be proactive)
n  Demonstrate respect for your receiver’s perspective
n  Use the receiver’s name
n  Avoid interruption

The Importance of Listening to Customers

When we listen it:
n  Shows respect for our customers
n  Makes our customers feel cared about because their human needs are acknowledged
n  Helps us understand our customers’ needs
n  Diffuses angry or upset customers
n  Leads to successful resolution of issues
n  Builds trust and rapport, enhancing customer loyalty

 

Risks and Consequences If We Don’t Listen

If we don’t listen:
n  It puts us at a disadvantage
n  We miss important information
n  Issues can escalate
n  Customer loyalty  is damaged

In Order to be…

n  A Good Communicator
n  A Perfect Sales Representative
n  A Professional Objection Handler or
n  A Strong Negotiator
You Must Be An Effective Listener.

Listening Exercise

Form the class room into a U-shape using only your chairs.  Each person should be a distance of 50 cm from his colleague.

Instructions:

1)      Instructor will whisper a word to the first person, and then he will transfer this word to the one beside him.  Everyone carries on transferring the word to the next person.
2)      Instructor will stand beside the last person in the U-shape and wait to receive the word.
3)      The participants will listen for the word.

Hearing versus Listening

Hearing is…

n  A purely physical function
n  A simple activity (you just hear sounds)
n  Automatic; does not take effort
n  A natural function (unless hearing is impaired)
n  A prerequisite for listening

Hearing is one of the five basic senses.  Hearing happens when sound waves are transformed into audible impulses.  In other words, hearing is the physiological event of noise coming into your ear. 

Listening …

n  Requires an extra effort – attention and long-term concentration
n  Is a mental and emotional experience (using feeling)
n  Is a complex activity (requires analysis, interpretation, and translation)
n  Is a learned skill
n  Isolates sounds and looks for specific meanings and ideas
n  Can be difficult and tiring
n  Is something few people are excellent at
n  Yields personal and career benefits
Excellent listeners are fully present and focused.

Levels of Listening

In his book, the 7 Habits of Highly Effective People, Stephen Covey talks about the five levels of listening.  They are:
n  Ignoring
The listener ignores the speaker and does not pay attention to him.
n  Pretending
The listener pretends that he is listening while he is really interested in something else.
n  Selecting
The listener selects what interests him and drops irrelevant issues.
n  Attentive
The listener gives his full attention to the speaker and listens with a high level of concentration.
n  Empathetic
The listener is not only fully attentive while listening to the speaker.  He also understands the speaker's position and values by using his mental and emotional feelings to connect with the speaker.

Where do you spend most of your time?

How can you become a better listener?

 

Types of Bad Listeners

Unfortunately, people practice some bad listening habits as well as good ones.  Are you guilty of any of these?
n  Mind Reading:  You'll hear little or nothing as you think, "What is this person really thinking or feeling?"
n  Rehearsing:  Your mental tryouts for "Here's what I'll say next.”
n  Filtering:  Hearing only what you want to hear.  
n  Dreamer:  Drifting off during a face-to-face conversation.  
n  Identifier:  You refer everything you hear to your experience.   
n  Derailer:  Changing the subject too quickly tells others you're not interested in anything they have to say.
n  Placate:  Agreeing with everything you hear just to be nice or to avoid conflict does not mean you're a good listener.  

Effective Listening Techniques

The job of the receiver in the communication process is to listen, watch, and interpret the message.  This process looks easy, and we all assume that we are good listeners.  However, good listening skills take years to develop.  Here are some techniques that good listeners use:

Characteristics of an Effective Listener

n  Focusing on the sender - - Giving full attention and concentration to the person sending the message.  Besides focusing your attention on the sender and the message, give nonverbal clues, like eye contact and open body position, so that the sender knows you are listening
n  Paraphrasing - - Repeating in your own words what you think the sender said
n  Probing - - Asking open questions to encourage complete information about the message.  Open questions start with “what” and “how.”  “Why” can also start an open question, but it is discouraged because “why” tends to make the sender defensive.  You can reword every “why” question to start with “what” or “how.”
n  Reacting - - Be careful not to react to the message until you understand the complete message

How to Listen Actively

CARESS Model

The Caress Model of Listening teaches you how to develop active listening skills by using these 6 steps:

C…… oncentrate
A…… cknowledge
R …..  esearch
E…… motional Control
S…… ensing
S…… tructure

n  Concentrate
On what the speaker says in order not to miss any information
n  Acknowledge
Acknowledge what you are listening to so you can benefit from it
n  Research
The subject so you will be able to know how logical, realistic, and possible it is
n  Emotional control
You have to control your emotions while listening to make sure that you are listening actively without being affected by your feelings towards the speaker or towards the subject itself. Emotional control means controlling your negative and positive emotions
n  Sensing
Use your sense in judging and evaluating what you have listened to
n  Structure
After listening to the whole subject, start mentally structuring it to have the complete picture, then start responding to the speaker

Summary

In this module, you learned how to:
·         Explain the meaning of communication.
·         Define the power of listening.