1The De Beers group, which maintained a monopoly on the global diamond trade since the early 20th century, had to change its business model by the turn of the 21st century. It adopted the 'Supplier of Choice' program as a response to several allegations of unethical business practices, the issue of conflict diamonds in Africa and the antitrust suits filed against it in the US and the UK. De Beers consciously transformed itself from being a controller to stimulator of global diamond business. However, it faces stiff competition from a number of competitors, prominent among them being Lev Leviev, who pioneered the concept of vertical integration in the diamond trade and has robbed De Beers of many lucrative deals.

Pedagogical Objective:

To understand how the global diamond industry used to run through a cartel in most part of the 20th century

To describe the competitive landscape of the global diamond industry in the 21st century

To analyse the business transformation at De Beers and its impact on the company and the global diamond trade as a whole.adag

FIELD: Exchange Rates and International Finance
The sales manager of a US company trades iPhones in three different markets, Europe (Eurozone), UK and the USA, has just received a total amount of $1million from the selling of 1,000 iPhones (each iPhone costs $1,000). He has a week available until the payment of firm’s suppliers and employees’ salaries. The current exchange rates between the currencies of the three markets (USD $, euro € and GBP £), are: ?¹_€⁄$=0.9110, ?²_€/£=1.1712 and ?³_{$ ⁄£}=1.2910.

a) If no transaction costs exist, could the manager take advantage of an arbitrage opportunity? Explain. [Mark 1.5]
b) When will there not be any room for profits? That is, there is no arbitrage opportunity. [Mark 0.5]
c) Suppose now that there is a cost each time currency is being traded, i.e., either bought or sold. Moreover, this transaction cost is equal to 1% of the value of currency that is traded. What will the manager’s decision be in this case? [Mark 1.0]

Note: Round your answers to the third decimal point.

Paton Corporation, a U.S. corporation, owns 100 percent of the stock of Tappan Ltd, a British corporation, and 100 percent of the stock of Monroe N.V., a Dutch corporation. Monroe has post-1986 undistributed earnings of €726 and post-1986 foreign income taxes of $484. Tappan has post-1986 undistributed earnings of £968 and post-1986 foreign income taxes of $242. During the current year, Tappan paid Paton a dividend of £520, and Monroe paid Paton a dividend of €520. The dividends were exempt from withholding tax under the U.S.-UK and U.S.-Netherlands income tax treaties. The exchange rates are as follows: €1:$1.50 and £1:$2.00. Assume the U.S. tax rate is 35 percent. (Enter your answers in dollars, with your final answers rounded to the nearest whole dollar amount. Do not round intermediate calculations.)

a. Compute Paton’s deemed paid credit on the dividends it received from Tappan and Monroe.

Monroe Tappen

deemed paid credit

In a Speech given on 16th March 2014 and titled “Reflections on the Financial Crisis,” former Assistant Governor (Financial System) of the RBA Dr. Edey said: “I am often asked why Australia was able to come through the GFC relatively unscathed. Unlike the US, the UK and the euro area, Australia didn't have a recession and we didn't have any bank failures. My usual response is that it was a mixture of good luck and good management.”
This sentiment is echoed in a Speech titled "Lessons and Questions from the GFC" given on the 6th of December 2018 in Sydney, by the Reserve Bank of Australia Deputy Governor Dr. Guy Debelle who stated: “Good luck certainly played a role. But the policy actions made an important contribution too” referring to the experience of Australia during the GFC.

Explain what they means by “a mixture of good luck and good management,” making specific reference to both ad-hoc measures during the GFC and the general approach to financial stability. (max 400 words)

4. Suppose that fixed cost for a firm in the automobile industry (start up costs of factories,

capital equipment, and so on) is $5 Billion and that the variable cost is $17,000 for each automobile produced. Because more firms increase competition in the market, the market price falls as more firms enter an automobile industry, or specifically, P = 17,000 + (150/n), where n represent the number of firms in the industry. Assume that the initial size of the automobile industry in the US and UK are 300 million and 533 million people respectively

a. Calculate the equilibrium number of firms in the US market and the European market in

Autarky.

b. What is the equilibrium price in each country?

c. Now suppose the US and Europe decide to trade, which adds the 533 million European demand to the US’ 300 million, how many firms will there be in Europe and the US combined? What is the new equilibrium quantity?

d. Why are prices different in the US in b and c above? Are consumers better or worse off? And why?

6. During mitosis cells use changes in the chromosome apparatus to accurately separate their chromatid pairs between two cells.

A. Please explain (and considering making a diagram) of how the spindle microtubules change across the process of mitosis. Please explain how chromosome attached microtubules change across mitosis and add those to your drawing.

B. Please explain where and how changes in polymerization of microtubules drive these changes and how motor proteins function in this process.

C. Please EXPLAIN HOW cells know that the steps in part A have been completed before moving on to the next phase of mitosis.

The Tax Cut and Jobs Act, 2017 The changes made by the Tax Cut and Jobs Act, 2017 to the tax provisions have changed tax rate for 2018 and people are getting a first hand experience of what it means to them. Go over the Act and address the questions below in full paragraphs: If you had the power to revise the Act, what changes would you make? How have the changes in taxes affected you personally? Many articles have been written analyzing the Tax Cut and Jobs Act, 2017. Infuse these expert opinions with your own.

1. The process for the cost of debt assumes the times interest earned is a good proxy for measuring credit risk, what other financial variable if any should be considered? Does this assumption limit the results? ( each time the level of debt changes. Will this occur and does this limit the applicability of your results?
2. The base level of interest rates, the risk free rate, changes over time. Is this important in calculating the optimal level. Since the estimate is based on the current environment does it matter if this changes?
3. The beta may change over time, does keeping it constant limit your results or is that an acceptable assumption?

The time taken by an automobile mechanic to complete an oil change is random with mean 29.5 minutes and standard deviation 3 minutes.

a. What is the probability that 50 oil changes take more than 1500 minutes?

b. What is the probability that a mechanic can complete 80 or more oil changes in 40 hours?

c. The mechanic wants to reduce the mean time per oil change so that the probability is 0.99 that 80 or more oil changes can be completed in 40 hours. What does the mean time need to be? Assume the standard deviation remains 3 minutes.