Consumer Behaviour Assignment Example | Topics and Well Written Essays - 2750 words

Consumer Behaviour - Assignment Example This paper will be focused on the marketing practices of the Lloyd’s TSB bank in its endeavours to retain its customers. Lloyd’s TSB is a retail bank that is based in the United Kingdom. It was established in 1995 by the merger of Lloyd’s bank and the TSB group. Lloyd’s bank was originally founded in Birmingham in 1765 while the TSB group, a rival bank, was formed in 1810. The marketing mix of Lloyd’s TSB has seen it realise admirable profits through the years. The marketing mix elements, also known as the 4p’s, are price, place, product and promotion. In simple terms, a product includes all features as well as goods and related services that a business offers to its clients. The product is the most crucial component in the marketing mix. This is because products are the market expression of the manufacturer’s productive capabilities. Products determine a producer’s capacity to link with customers. A product policy or strategy is of enormous significance to a corporation; product decisions dictate the scope and direction of industry activity (Singh, 2011). Additionally, market indicators such as profits, sales, image and market share are also dependent on products. The products of companies also influence other components of the marketing mix. Therefore, without proper product policy, a corporation cannot pursue further elements of the marketing mix. With the rapid advancement of technology, a banking company has no choice but to advance as well in order to satisfy the desires of its clients and remain competitive. The Lloyd’s TSB group boasts a diverse array of services and products that cater for a large clientele. The banking options available to its customers include the phone bank as well as internet banking. Customers can also text financial information from a mobile phone and make use of cash point

Political Science 120 Essay Example | Topics and Well Written Essays - 750 words

Political Science 120 - Essay Example Firstly, the legislature exercises checks and balances on the executive by shutting down presidential vetoes through voting against them with a two-thirds majority. The legislature checks on the executive by either approving presidential appointments or new treaties. The legislature also has the power of impeaching a sitting president out of office by passing a vote of no confidence. On the other hand, the legislature checks on the judiciary by either approving or declining appointed judges, creating lower courts or impeaching a judge out of office. Secondly, the judiciary exercises checks on the legislative branch through declaring formulated laws as unconstitutional. On the other hand, the Judiciary, through the judicial review checks on the executive by declaring some deeds by the executive as unconstitutional. Thirdly, the executive exercises checks on the judiciary by nominating the persons to be appointed in the Supreme courts and the persons to be appointed in the federal cour ts. Additionally, the executive will check on the legislature by exercising a veto power against some legislations and recalling congressional sittings. The system of checks and balances had the objective of ensuring that no single branch of government becomes powerful that the other, which would lead to oppression of the citizens and a lack of justice. The system of checks and balances was put in the constitution with the intention of seeing to it that the rule of law prevails (Brannen & Lawrence, 2005). Question # 2 Cooperative Federalism Through Cooperative Federalism, the responsibility of governing people in a society is shared by the state and the national government. The different levels of government consult on which level is best suited on taking a particular responsibility in relation to governing and policy formulation. Cooperative federalism focuses on the idea that the overall governance of a nation is a partnership between the state and the national government. In esse nce, cooperative governance entails different levels of government exercising power in the same area (Hueglin & Fenna, 2006). Federalism works in a manner that the state governments are limited in terms of the powers that they can exercise in their states. This is contrary to the power that the national government can exercise. For instance, the state government cannot coin out currency, declare war, formulate immigration laws or raise an army. However, the national government has the power to coin out currency, declare war, formulate immigration laws and raise an army or a navy (Hueglin & Fenna, 2006). Cooperative federalism is different from dual federalism in that, in dual federalism the state and national governments are sovereign and equal partners. In dual federalism, a lot of power is directed to the states while the national government’s power is only spelt by the constitution. In cooperative federalism, the national government, through the constitution under article I in section 8 can exercise powers, which the state government cannot. The above fact was not possible under dual federalism (Hueglin & Fenna, 2006). Cooperative federalism came as a result of Congress’s intention of regulating trade and commerce in the whole of the United States. Another reason that led to cooperative federalism is the idea of eliminating the aspect of competition between the state governm

Effects of Colonial America Essay Example for Free

Effects of Colonial America Essay Despite the fact the regions of New England and the Chesapeake Bay were settled by people of English origin, the two areas evolved into two different societies. The changes in the formation of colonial America occurred because of the motivations for settlement, economic opportunities in the area, and the structure of towns and cities differed among the settlers. The New England colonies’ were established from the motivation of religious freedom and to cleanse the English church, while the Chesapeake region was settled to make a profit in the mother country, England. The New England colonies began with the settlement of the pilgrims likewise known as the Puritans. The Puritans first emerged in England, to escape religious persecution and to cleanse themselves of the corrupt English church the Puritans fled to the New England region The Puritans feared what the future of England held in store, so the majority of them immigrated with their families to New England all around the same time, which is known today as the great migration. This led the New England colonies to be primarily family based. On the other hand, the Chesapeake Bay colonies’ were founded quite differently. The Chesapeake settlers’ motivation in settlement was result of the poor economic conditions in England. Immigrants hoped for a better life and better economic standing in the new world. The majority of these immigrants were single men who came over as indentured servants, and served for five to seven years before being released as a free man. This in turn lead the Chesapeake region to be entirely male dominate. In addition to indentured servants, wealthy men also immigrated to the new world in hopes to find gold, but instead found an item worth far greater, tobacco. This discovery of tobacco in the fertile soils of the Chesapeake caused the complete dividing point in the foundation of the Chesapeake and the New English opportunities in the area. Because of the perfect conditions the area of the Chesapeake posed, tobacco became the largest profit for the mother county, England. Tobacco was known as the gold of Virginia, which was the first Chesapeake colony. England, having realized the importance of tobacco fought for control over these colonies and succeeded, making the Chesapeake apart of royal colonies of the New World. On the very contrast were the New England colonies that didn’t have the right condition to profit from the growing of tobacco, so instead wealthy merchants traded with the Indians to obtain furs and other needed items. This resulted in New England not to become targeted as a resource by England’s crown. Thus New England did not become part of the royal colonies such as the Chesapeake did. This in turn made the New England colonies more suitable for families to settle and establish homes and churches. With the immigration of families into the New England society, the establishment of towns and cities resulted in a stark contrast to the Chesapeake Bay colonies. Returning to the Puritan families, the settlement of groups of families caused towns and cities to be built, with the church creating religious principals. The living conditions made it ideal for families to reside and because of this birth rate and survival were higher in New England. The establishment of towns created a more stable foundation for the New England colonies. Never the less, the lack of families in the Chesapeake region caused a deficiency of towns to be built. This in return caused little social unity and no stable family life. Men outnumbered women in the region and the high death rate in this area caused large numbers of single men, widows, and orphans. Without the establishment of towns, large tobacco plantations became the soul of the Chesapeake. This resulted in very distinct societies of the Chesapeake and New England. All things considered, the contrast of the Chesapeake and New England societies is marked by motivation for settlement, thus shown in the types of immigrants’ beliefs. In addition, the area also gave a startling impact to how the land was settled, which resulted in the making of towns verses the running of large plantations. Even though the setters all came from the same place, these slight differences made a huge impact in the Chesapeake and New England colonies.

Metodologi atau kaedah

Metodologi atau kaedah Pengenalan Metodologi atau kaedah yang digunakan dalam sesebuah kajian merupakan suatu bentuk kawalan dalam memperolehi data dan maklumat supaya mampu menjawab objektif-objektif yang digariskan dalam kajian yang dijalankan ini. Untuk lebih jelasnya, bab ini akan menjelaskan kaedah yang digunakan dalam kajian stres dalam kalangan pelajar sekolah menengah persekolahan satu sesi di daerah Nebong Tebal. Secara khususnya bab ini menerangkan metodologi kajian yang meliputi reka bentuk kajian, populasi kajian, sampel kajian, persampelan, instrumen kajian, kesahan kebolehpercayaan, kajian rintis dan penganalisisan data. Reka Bentuk Kajian Menurut Sulaiman Masri (2003), reka bentuk penyelidikan ialah perancangan yang menentukan cara penyelidikan yang dijalankan untuk menemukan jawapan kepada permasalahan penyelidikan yang telah ditetapkan pada bab I. Dalam kajian ini, pengkaji menggunakan kaedah kuantitatif yang dijalankan secara tinjauan (survey) terhadap responden kajian yang terlibat. Lokasi Kajian Lokasi kajian ini terhad kepada sebuah sekolah menengah satu sesi yang terlelak di daerah Nibong Tebal. Populasi dan Sampel Kajian Populasi kajian ini adalah terdiri daripada pelajar tingkatan 2 di sebuah sekolah menengah satu sesi yang terletak di Daerah Nebong Tebal. Pemilihan pelajar tingkatan 2 ini adalah kerana mereka tidak terlibat dengan peperiksaan awam yang boleh mengganggu mereka. Seramai 60 orang yang terdiri daripada 30 orang lelaki dan 30 orang perempuan dari sekolah satu sesi tersebut telah dipilih mengikut prosedur persampelan rawak. Menurut Chua Yan Piaw (2006), prosedur persampelan rawak mudah digunakan untuk memastikan setiap unit atau subjek dalam populasi mempunyai peluang yang sama untuk dipilih sebagai responden kajian. Instrumen Kajian Menurut Fraenkel dan Wallen (2007) The term instrumentation refers to the entire process of collecting data in a research investigation. (Hlm : 144) Instrumen yang digunakan dalam kajian ini terdiri daripada satu set soal selidik yang dibahagikan kepada dua bahagian, iaitu bahagian A (5 items) : yang berkaitan dengan Demografi responden. Bahagian ini terdiri daripada jantina, jarak ke sekolah, pergi ke sekolah, skor awal tahun dan skor akhir tahun. Bahagian B mempunyai 25 items yang berkaitan tentang tekanan pelajar tentang persekolahn satu sesi dan kesan yang dialami oleh pelajar akibat persekolahan satu sesi. Skala pengukuran yang digunakan dalam bahagian B adalah jenis likert yang terdiri daripada lima skor utama seperti berikut : 1 = Amat tidak setuju. 2 = Tidak setuju. 3 = Kurang setuju 4 = Setuju. 5 = Amat Setuju. Kajian Rintis Kajian rintis (pilot study) merupakan kajian sejarah kecil-kecilan yang dilaksanakan sebelum kajian sebenar dilakukan (Chua Yan Piaw, 2006). Dalam kajian ini, pengkaji menjalankan kajian rintis yang bertujuan untuk mendapatkan maklumat awal berhubung kesahan dan keboleh percayaan instrumen yang dibina. Item-item ini dalam soal selidik telah diuji bagi memastikan sama ada terdapat kekeliruan, kesukaran menjawab, ketidak jelasan, salah faham, dan lain-lain interpretasi yang tidak jelas. Sampel yang terlibat dalam ujian ini terdiri daripada 60 responden di sebuah sekolah yang berhampiran dengan sekolah kajian. Hasil kajian rintis ini mendapati bahawa semua item dalam bahagian B (Faktor stress dan beban belajar) yang berunsur positif perlu digugurkan dan digantikan dengan item yang lebih sesuai mengikut objektif kajian ini. Kesahan dan Kebolehpercayaan Kajian rintis (pilot study) juga telah digunakan untuk menguji kesahan soalan kajian. Borang soal selidik telah dianalisis bagi melihat darjah kebolehpercayaan (cronbach alpha). Ujian kebolehpercayaan (reliability test) dilakukan terhadap soalan yang berkaitan dengan faktor stres, kesan stres dan beban belajar kepada kesihatan diri dan kehidupan dalam keluarga. Kepentingan ujian ini adalah untuk mengetahui tentang item soal selidik yang disediakan mempunyai kebolehpercayaan yang tinggi. Kesesuaian soalan telah dinilai dari segi kefahaman pelajar terhadap tatabahasa, kandungan dan masa yang diambil untuk menjawab semua soal selidik tersebut. Menurut Mohd Majid Konting (2004), pekali kebolehpercayaan yang lebih daripada 0.60 sering digunakan. Oleh itu, nilai alpha yang digunakan untuk ujian kebolehpercayaan ini ialah 0.60. Hasil kajian ini mendapati bahawa soalan faktor stres, kesan stres dan beban belajar kepada kesihatan diri dan kehidupan dalam keluarga mempunyai kebolehpercayaan yang tinggi. Jadual 3.1 di bawah menunjukkan hasil yang diperolehi daripada ujian kebolehpercayaan yang dilakukan. Jadual 3.1 : Nilai alpha ujian kebolehpercayaan (reliability test) faktor diri dan latar belakang kehidupan dalam keluarga. Stres yang disebabkan oleh faktor diri, interpersonal, dan organisasi adalah sebagai berikut : Analisis Data Pengkaji menganalisis data dengan menggunakan statistik deskriptif bagi menjawab soalan-soalan kajian. Data daripada borang soal selidik akan dianalisis menggunakan program SPSS for windows version 15.0 untuk mendapatkan kekerapan (frekuensi) dan peratusan bagi setiap soalan kajian. Data kajian diwakilkan dalam bentuk jadual dan rajah serta dibuat tafsiran umum. Manakala analisis data dibuat dengan membandingkan peratusan tertinggi dan terendah serta nilai skor min dan skor piawai bagi setiap soalan kajian. Kesimpulan Dalam kajian ini, pengkaji telah menggunakan kaedah soal selidik sepenuhnya untuk mendapatkan dapatan kajian daripada responden yang dipilih secara rawak tentang faktor-faktor yang menyebabkan stres dan beban belajar dan kesan stres dan beban kerja kepada kesihatan diri dan kehidupan dalam keluarga. Sebuah sekolah menengah harian satu sesi di daerah Nibong Tebal telah dijadikan lokasi kajian dan 60 responden telah dipilih sebagai sampel kajian yang terdiri daripada 60 pelajar daripada sekolah menengah tersebut. Hasil dapatan kajian ini akan disenarai dan dihuraikan secara terperinci dalam bab 4 akan datang.

Exposing Child Abuse and Neglect Essay -- Violence Against Children

In 2012 it was reported that over five million children were abused and neglected in the United States. More than five children die each day as a result of abuse and neglect. (Prevent Child Abuse America). There are many factors that cause child abuse and neglect. The parent factor states that parents who have been abused physically, sexually, or emotionally or were neglected, as children will do the same to their children. Stress plays a major role in the parent factor. Overly stressed parents often take their frustrations out on their children. Alcohol and drug abuse also play a major role in the parent factor. Another factor is the child factor. It states that some children are more vulnerable to abuse or neglect than others from parents or guardians due to their age, size, emotional stability, as well as their social development. A third factor is the family factor states that the situations that occur in the family can increase the likelihood of child abuse and neglect. That was the case with young Dave from the above passage. Because his mother no longer got the attention she needed from his father she began to take out her anger and frustrations on him. Finally, the environmental factor states abuse and neglect is often caused by a combination of the previous three factors (U.S. Department of Health and Human Resources). When dealing with the issue of child abuse and neglect several questions are often raised: when does disciplining a child turn into child abuse, what happens to these children that survive the abuse and neglect, and is there a solution to stopping child abuse?   Ã‚  Ã‚  Ã‚  Ã‚  Whenever the issue of child abuse and neglect is raised, the statement is often made that I have the right to discipline my child however I see fit. Parents often feel that disciplining their children is a right that they have. My mother would often tell me, â€Å"I brought you into this world and I sure will take you out.† Now days the government tells the children that if their parent or guardian put their hands on them the children have the right to call the police on the parents. This leads to the question when is it okay and how do I discipline my child? Children should only be disciplined to let them know that their actions or behavior in a certain situation was not acceptable. There are many ways to discipline a child. One way is to put the child in time out wh... ... of abuse has made you pay. I never knew how you felt; Your self-esteem so low. I only knew you crept away, And never let your feelings show. I never knew what I could do; That I could help somehow. That all you needed was a friend; Just someone to be your pal. But now I know that I can help; I can make a difference, too. I’ll shout with you, and All the rest can’t say, â€Å"I never knew.† (Pelzer 175). Child abuse and neglect is greatly affecting the lives of young children. It is a dangerous epidemic that seems to be growing by the day. Work Cited Landau, Elaine. Child Abuse: An American Epidemic. New Jersey: Silver Burdett Press, Inc. 1984 Prevent Child Abuse America. Child Abuse and Neglect Statistics. 2014. http://www.menweb.org/throop/abuse/studies/child-ma.html Pelzer, Dave. A Child Called â€Å"It†. California: Health Communications, Inc. 1995. U.S. Department of Heath and Human Resources. Child Abuse & Neglect. 2014 http://www.acf.hhs.gov/programs/cb/focus-areas/child-abuse-neglect Walker, C. Eugene, Bonner, Barbara L., and Kaufman, Keith L. The Physically and Sexually Abused Child Evaluation and Treatment. New York: Pergamon Books, Inc. 1988.

Crime and Punishment Quotes :: essays research papers

1. â€Å"†¦all is in a man's hands and he lets it all slip from cowardice, that's an axiom. It would be interesting to know what it is men are most afraid of.† –Rodion Romanovich Raskolnikov   Ã‚  Ã‚  Ã‚  Ã‚  By saying this Raskolnikov suggests that men are capable of doing whatever they wish, and the only thing that holds them back are their fears. Because of this Raskolnikov wonders what man’s greatest fear is, and with that comes the one thing that no man is capable of doing. 2. â€Å"†¦for though Pyotr Petrovitch has been so kind as to undertake part of the expenses of the journey, that is to say, he has taken upon himself the conveyance of our bags and big trunks.† -Pulcheria Alexandrovna Raskolnikov   Ã‚  Ã‚  Ã‚  Ã‚  This is a passage from the letter that Rodion’s mother sent to him, his mother is telling him that Dounia’s fiancà © has taken care of the traveling expenses for Dounia and her mother to St. Petersburg. 3. â€Å"I see that I want nothing. Do you hear? Nothing at all . . . no one's services . . . no one's sympathy. I am by myself . . . alone. Come, that's enough. Leave me alone.† - Rodion Romanovich Raskolnikov   Ã‚  Ã‚  Ã‚  Ã‚  After burying the goods he stole from the pawn broker, Raskolnikov is walking around and decides to visit his friend Razumihin. At first it is almost as if Raskolnikov planned on asking his friend for advice about what he should do about the murders he committed. However, he becomes very nervous and leaves his friend’s home as quickly as possible. 4. â€Å"Life is real! haven't I lived just now? My life has not yet died with that old woman! The Kingdom of Heaven to her--and now enough, madam, leave me in peace! Now for the reign of reason and light . . . and of will, and of strength!† –Raskolnikov   Ã‚  Ã‚  Ã‚  Ã‚  Through speaking with Marmeladov’s daughter, Polenka, Raskolnikov realizes that life is worth living, and that it can still hold an important meaning. This sheds light on the fact that Raskolnikov realizes that even if a person is not capable of doing good, their life should not be ended. 5. â€Å"Ordinary men have to live in submission, have no right to transgress the law, because, don't you see, they are ordinary. But extraordinary men have a right to commit any crime and to transgress the law in any way, just because they are extraordinary.

Regent Park

Chapter 7 Essay Q’s 1. ABC Corporation, a Canadian firm, wants to float a bond issue in the United Kingdom. Which choices does the company have? Discuss the main characteristics of each option. What do you recommend? Answer: ABC Corporation can issue foreign bonds (Bulldogs) or Eurobonds. Foreign bonds are bonds issued by a foreign borrower in a national market, in the national currency, and subject to the national securities regulations. Eurobonds are bonds sold in countries other the country that issued the denominating currency.Foreign bonds tend to be registered bonds and subject to the local regulations while Eurobonds tend to be bearer bonds. Generally, foreign bonds are more costly than Eurobonds. Therefore, Eurobonds are likely the better option. page: 157-158 2. A- Canada Inc. has issued a dual-currency bond that pays $555. 10 at maturity per SF1,000 of par value. The company’s cash flows are exclusively in Canadian dollars. a) What is the implicit $/SF exchang e rate at maturity? b) Will the company be better or worse off if the actual exchange rate at maturity is $0. 6123/SF? Answer: a) $555. 10/SF 1,000 = $ 0. 5551 b) The company will be better off.Page: 175, problem 3 3. ZZZ Corp. wants to issue zero-coupon bonds with a 10-year maturity. The implied yield to maturity on these bonds is 5% and ZZZ Corp. wants to raise $10,000,000. (Assume no transaction costs). How much money will ZZZ Corp. have to pay at maturity of the bond? Answer: 10,000,000 (1. 05)10 = $16,288,946. 27 4. Assume Bank of Montreal has two zero-coupon bonds outstanding, each for a face value $100,000,000. Bond A matures in 10 years and sells at a discount of 35% off face value and bond B matures in 20 years and sells at a discount of 60% off face value. Calculate the implied yield to maturity of each bond.Answer: Bond A: 650,000,000(1 + i)10 = 100,000,000 i = 4. 4% Bond B: 400,000,000(1 + i)20 = 100,000,000 i = 4. 67% 5. What happens to the present value of the bonds in 4. , if the implied yield to maturity increases by 1%? Answer: Bond A: 100,000,000/(1. 054)10 = 59,100,872. 35 The present value of the bond decreases by 65,000,000 59,100,872. 35 = 5,899,127. 65 Bond B: 100,000,000/(1. 0567)20 = 33,186,836. 18 The present value of the bond decreases by 40,000,000 33,186,836. 18 = 6,813,163. 82 Chapter 8 [Question] 1. Assume that Nestle shares are trading at SF 300 in Zurich and $ 51 in New York. Each share equals 4 ADRs.The current exchange rate is SF1. 5/$. In the absence of transaction costs, can you make an arbitrage profit? Answer: Yes. Buy one share in Zurich for SF 300 or $ 200 (300/1. 5), exchange to ADRs and sell the ADRs for 4*51 = $204; profit $4 [Question] 2. Assume that Nestle shares are trading at SF 300 in Zurich and $ 51 in New York. Each share equals 4 ADRs. The current exchange rate is SF1. 5/$. If transaction costs are $1 per ADR, can you make an arbitrage profit? Answer: No, transaction costs = potential profit Potential profit in the absence of transaction costs: Buy one share in Zurich for SF 300 or $ 200 (300/1. ), exchange to ADRs and sell the ADRs for 4*51 = $204; profit $4 [Question] 3. What factors go into the decision to cross-list on a foreign exchange? Answer: When deciding whether to cross-list shares on a foreign exchange, the firm has to consider the expected benefits and costs. The benefits may be: to establish a broader investor base for its stock, to establish name recognition in foreign capital markets, thus paving the way for the firm to source new equity and debt capital from investors in different markets, and to expose the firm’s name to a broader investor and consumer groups.The costs include: listing fees, reconciliation of the accounting standards of two countries, compliance with the regulations of the foreign exchange, and investor relations. page: 187. [Question] 4. Assume that Accor shares are trading at A$2. 5 in Sydney and $28 in New York. Each ADR equals 20 shares. The current exchange rate is A$1. 5/$. In the absence of transaction costs, can you make an arbitrage profit? Answer: Yes. Buy one ADR in New York for $28 (or A$42), exchange to shares and sell the shares for A$50; profit A$8 [Question] 5. Assume that Accor shares are trading at A$2. 5 in Sydney and $28 in New York.Each ADR equals 20 shares. The current exchange rate is A$1. 5/$. At what transaction cost per share would there be no profit opportunity? Answer: A$8/20 = A$0. 4 Buy one ADR in New York for $28 (or A$42), exchange to shares and sell the shares for A$50; profit A$8 less transaction cost of 20*. 4 = A$8; profit = 0 Chapter 9 – I don’t believe there will be anything from here tho Chapter 10 [Question] 1. The following information is given: Both parties want to engage in an interest rate swap. Assume that S Bank will arrange for an interest rate swap between X Company and Y Company for 0. % . Also, assume that X Company gets 2/3 of the interest savings available. a) Which company has a better credit rating? b) What is the quality spread differential? c) What is X Company’s preferred type of debt? What rate of interest does it pay on this debt after the swap? d) What is Y Company’s preferred type of debt? What rate of interest does it pay on this debt after the swap? e) Illustrate the cash flows from this swap. Assume that X Company pays LIBOR to S Bank. Answer: a) X Company b) QSD = 2 1. 3 = 0. 7 c) Floating LIBOR . 4 d) Fixed 6. 8% e) [Question] 2.The following information is given. ABC Inc. and XYZ Inc. have agreed to swap their debt payments so that each firm gets its preferred debt terms. They can arrange an interest rate swap through Big Bank. Big bank charges 0. 15% for its services. The remaining savings from the interest rate swap are equally shared by A and B. QSD: 1% . 25% = . 75%; after bank fees: . 75% . 15% = . 60% savings available a) Does ABC Inc. prefer fixed or floating rate debt? What rate does it pay on its p referred debt? b) Does XYZ Inc. prefer fixed or floating rate debt? What rate does it pay on its preferred debt? ) What are the total interest savings available in this interest rate swap? d) Which company has a better credit rating? Answer: a) ABC Inc. prefers floating and pays LIBOR + . 2 b) Interest Savings: 0. 6%. QSD bank fees = (6 5) (LIBOR + . 75 LIBOR + 0. 50) 0. 15 c) XYZ Inc. prefers fixed and pays 5. 7% d) Company ABC has a better credit rating [Question] 3. The following information is given. Boeing and Airbus have agreed to swap their debt payments so that each firm gets its preferred debt terms. Each firm will save the same amount in percentage terms. ) Does Boeing prefer fixed or floating rate debt? What rate does it pay on its preferred debt? b) Does Airbus prefer fixed or floating rate debt? What rate does it pay on its preferred debt? c) What are the total interest savings available in this interest rate swap? d) Which company has the advantage in fixed rate debt? Answer: a) Boeing prefers floating and pays LIBOR + 0. 05%. b) Airbus prefers fixed and pays 5. 5%. c) Interest Savings 0. 4%. d) Boeing has the advantage in fixed dollar debt. [Question] 4. ABC Corporation has entered into a 10-year interest rate swap with a swap bank. ABC Corp. ays the swap bank a fixed-rate of 6 percent annually on a notional amount of EUR100,000,000 and receives LIBOR – ? percent. What is the price of the swap on the seventh reset date, assuming that the fixed-rate at which ABC can borrow has decreased to 5%. Answer: PV of a hypothetical bond issue of EUR100,000,000 with three remaining 6 percent coupon payments at the new fixed rate of 5 percent is EUR100,000,000/1. 1576 = EUR86,385,625. 54 PV of the three coupon payments is: (6,000,000/1. 05) + (6,000,000/1. 1025) + (6,000,000/1. 1576) = EUR 16,339,488. 18 PV of the Bond and its coupon is = 102,725,113. 1 Therefore, the price of the swap = 100,000,000 102,725,113. 61 = 2,725,113. 61 [Question] 5. Canada Corporation enters into a 2-year interest rate swap with Bank A in which it agrees to pay the swap bank a fixed-rate of 5 percent annually on a notional amount of US$1,000,000 and receive LIBOR – 1 percent. Determine the price of the swap on the first reset date, assuming that the fixed-rate at which Canada Corporation can borrow has stayed unchanged. Answer: PV of a hypothetical bond issue of US$ 1,000,000 with one remaining 5 percent coupon payments at the fixed rate of 5 percent is US$1,000,000Therefore, the price of the swap = 1,000,000 1,000,000 = 0 Chapter 11 [Question] 1. A US investor bought shares in ABC Inc. on the Frankfurt Stock Exchange 2 years ago for EUR 10,000. The exchange rate at that time was EUR 1. 20/USD. Currently, the shares are worth EUR 11,000 and the exchange rate is EUR 0. 80/$. Calculate the investor’s annual percentage rate of return in terms of the U. S. dollars. Answer: The annual percentage rate of return is: 28. 45%. 2-year rate of ret urn = (11,000/0. 8 10,000/1. 2)/(10,000/1. 2) = 0. 65 (1 + r)2 = 1. 65 r = 0. 2845 [Question] 2. A US investor bought shares in ABC Inc. n the Frankfurt Stock Exchange 2 years ago for EUR 10,000. The exchange rate at that time was EUR 1. 20/USD. Currently, the shares are worth EUR 11,000 and the exchange rate is EUR 0. 80/$. The investor had sold EUR 10,000 (the principal investment amount at the same time that the stock was purchased) forward at the forward exchange rate of EUR 1. 15/$. What is the dollar rate of return? Assume that the unhedged portion of the investment is exchanged at the current exchange rate. Answer: The annual dollar rate of return is 9. 25%. 2-year rate of return = (10,000/1. 15 + 1,000/0. 8 10,000/1. )/(10,000/1. 2) = 0. 1935 (1 + r)2 = 1. 1935 r = 0. 0925 [Question] 3. In May 2003 when the exchange rate was Yen 110/$, Nissan Motor Company invested ? 1,100,000,000 in pure-discount U. S. bonds and liquidated the investment one year later when the exchange rat e was Yen 105/$. The Yen rate of return earned on this investment was 10%. a) Calculate the dollar amount that the bonds were sold at. b) Calculate the dollar rate of return of this investment. Answer: a) The dollar amount that the bonds were sold at is: $11,523,809. 0. 1 = (X*105 1,100,000,000)/1 ,100,000,000) b) The dollar rate of return is:15. 4%. (11,523,809 10,000,000)/10,000,000 = . 1524 [Question] 4. A Canadian investor buys shares in DaimlerChrysler on the New York Stock Exchange when the stock’s price and the exchange rate were US$ 40 and US$0. 70/C$ respectively. One year later the investor sells the shares for US$ 41 and the exchange rate is US$0. 80/$. a) Calculate the investor’s annual percentage rate of return in terms of the U. S. dollars. b) Calculate the investor’s annual percentage rate of return in Canadian dollars. Answer: a) Rate of return: (41 40)/40*100 = 2. 5% b) Purchase price in Canadian dollars = 40/. 70 = 57. 4 Selling price in Canadi an dollars = 41/. 80 = 51. 25 Therefore, the Canadian dollar rate of return is: R(C$) = [(51. 25 57. 14)/51. 25] 100 = 10. 313% Chapter 12 1. How can operating exposure be managed? Answer: The object of managing operating exposure is to stabilize cash flows when exchange rates are fluctuating. There are a number of ways in which operating exposure can be managed: (1) selecting low cost production sites (2) using a flexible sourcing policy (3) diversification of the market (4) product differentiation and R&D efforts (5) financial hedging page: 302-304 [Question] 2.Banff Inc. is headquartered in Calgary and produces high-end living room furniture. The firm has a subsidiary in Germany. The wooden frames of the sofas are made in Calgary by an independent contractor and then shipped to Germany. The German subsidiary then upholsters the sofas using Belgium fabrics. Each frame costs the subsidiary C$1,500. The materials and labour for the upholstery amount to euro 2,000 per sofa. Fixed ove rhead costs are euro 1,500,000 for the subsidiary. Banff Inc. expects to be able to sell 3,000 Sofas for 5,000 euros each. The firm can depreciate 1,000,000 euros per year.The German income tax rate is 40%. The current exchange rate is C$1. 5/euro. How would the operating cash flows (expressed in Canadian dollars) change if the exchange rate is C$1. 6/euro, all else equal? Answer: The operating income would increase by C$340,000. [Question] 3. Banff Inc. is headquartered in Calgary and produces high-end living room furniture. The firm has a subsidiary in Germany. The wooden frames of the sofas are made in Calgary by an independent contractor and then shipped to Germany. The German subsidiary then upholsters the sofas using Belgium fabrics.Each frame costs the subsidiary C$1,500. The materials and labour for the upholstery amount to euro 2,000 per sofa. Fixed overhead costs are euro 1,500,000 for the subsidiary. Banff Inc. expects to be able to sell 3,000 Sofas for 5,000 euros each. The firm can depreciate 1,000,000 euros per year. The German income tax rate is 40%. The current exchange rate is C$1. 5/euro. How would the operating cash flows (expressed in Canadian dollars) change if the exchange rate is C$1. 4/euro, all else equal? Answer: The operating income would decrease by C$ 340,000. [Question] 4. Banff Inc. s headquartered in Calgary and produces high-end living room furniture. The firm has a subsidiary in Germany. The wooden frames of the sofas are made in Calgary by an independent contractor and then shipped to Germany. The German subsidiary then upholsters the sofas using Belgium fabrics. Each frame costs the subsidiary C$1,500. The materials and labour for the upholstery amount to euro 2,000 per sofa. Fixed overhead costs are euro 1,500,000 for the subsidiary. Banff Inc. expects to be able to sell 3,000 Sofas for 5,000 euros each. The firm can depreciate 1,000,000 euros per year.The German income tax rate is 40%. The current exchange rate is C$1. 5/e uro. How would the operating cash flows (expressed in Canadian dollars) change if the exchange rate is C$1. 4/euro, the German inflation rate is 3% but the firm will not be able to raise the price for its products and due to new competition from the Russian market (with a more favorable exchange rate) unit sales drop to 2,500? Answer: The operating income would decrease by C$ 1,276,000. [Question] 5. ABC Inc. , a Canadian paper manufacturer, has a subsidiary in the United States which sources its wood from Canada.The US dollar depreciates rapidly. Discuss the likely competitive and conversion effects of the depreciation of the US dollar. Answer: The depreciation of the US dollar may alter the firm’s competitive position in the US market place. First of all, the input costs of the subsidiary in terms of US dollars are increasing. If the competitors source their raw materials in the United States, the competitive position of ABC Inc. ’s subsidiary will be eroded. The con version effect implies in this case that the US dollar operating cash flows will be translated into a lower Canadian dollar value. page: 297-298Chapter 13 1. Sonnenschein A. G. , a German retailer of solar panels just bought panels for US $ 100,000 to be paid in 120 days. As the financial manager, you are responsible for making a recommendation on the best hedging choice available to Sonnenschein A. G. You check with your banker and find out the following: The spot bid and ask rates are USD 1. 1001/EUR and USD 1. 0953/EUR respectively and the 120-day forward rates are EUR 0. 8850/USD and EUR 0. 8950/USD. Determine the net payables if Sonnenschein uses a forward hedge to manage its payables. Answer: US$ 100,000*0. 8950 = EUR 89,500 Question] 2. Pile-of-Bones Inc. , headquartered in Regina, just bought snowblowers for US $ 100,000 to be paid in 90 days. As the financial manager, you are responsible for making a recommendation on the best hedging choice available to Pile-of-Bones Inc. You check with your banker and find out the following: The current spot rate is C$ 1. 35/US$ and the 90-day forward rate is C$1. 36/US$. The interest rates are 5% in the United States and 6% in Canada. a) What are the net payables if Pile-of-Bones uses a forward hedge? b) What are the net payables if Pile-of-Bones uses a money market hedge? ) Which type of hedge should Pile-of-Bones use? Answer: a) 100,000*1. 36 = 136,000 b) 100,000/(1 + . 05/4) = 98,765. 43 98,765. 43*1. 35 = 133,333. 33 133,333. 33*(1 + . 025) = 136,666. 67 c) Pile-of-Bones should use forward hedge. [Question] 3. Soleil Inc. , a French manufacturer of sunscreen, has agreed to sell sunscreen to a Danish retailer for 2 million Danish kroner to be received in 180 days. The current spot rate is DKR5. 02/EUR and the 180-day forward rate is DKR5. 23/EUR. The current interest rates are 5% in Denmark and 4% in France. Should the firm use a forward hedge or a money market hedge?Explain. Answer: The net proceeds from a forw ard hedge are: 2,000,000/5. 23 = 382,409. 17 The net proceeds from a money market hedge are: 2,000,000/(1. 05) = 1,903,761. 90 1,903,761. 90/5. 02 = 379,434. 64 379,434. 64*1. 04 = EUR394,612. 02 Since the net proceeds from the money market hedge are higher than from a forward market hedge, Soleil should use the money market hedge. [Question] 4. Quebec Inc. , manufactures prefabricated houses in Quebec and sells them all over the world in local currencies. The firm has just received an order from China for renminbi 8,280,000 to be paid at delivery in 1 year.The Chinese renminbi is pegged to the US dollar at an exchange rate of 8. 28 per dollar. Does Quebec Inc have a transaction exposure? Explain. Answer: Quebec Inc is exposed to exchange rate risk. First of all, the Chinese government may choose to change the exchange rate at which the renminbi is pegged or drop the peg altogether within the next year. Even if the government does not intervene, Quebec Inc. is exposed to the US doll ar-Canadian dollar exchange rate since the renminbi is pegged to the US Dollar and not the Canadian dollar. [Question] 5. Fashion Shoes Inc. anufactures its shoes in Milano, Italy. The company just received an order from the United States for USD 1 million to be received in one year. The current spot rate is EUR 1 /USD and the 1 year forward rate is EUR 1. 01/USD. The current interest rates are 4% in the United States and 5% in Italy. A call option on the US dollar is available with a strike price of EUR 1. 01/USD and a premium of EUR 0. 03 and a put option is available with a strike price of EUR 1/USD and a premium of EUR 0. 025/USD. Determine the net proceeds from a forward hedge and an options hedge. Which option should Fashion Shoes use?Answer: Forward hedge: USD 1,000,000*1. 01 = EUR 1,010,000 Option hedge: Use the put option on the USD. Net proceeds from the options hedge: Strike price: USD 1,000,000*1 = EUR 1,000,000 Less premium in year 1 euros: 1,000,000*0. 025(1 + . 05) = 26,250 net proceeds: 1,000,000 26,250 = 973,750. The choice of the hedging strategy depends on exchange rate expectations. The option will provide a minimum of EUR 973,750 but if the dollar strengthens (i. e. the spot rate in one year is greater than EUR1. 03625/USD) the option will provide higher cash flows than the forward hedge.