Assume the following information for question 1:

1.) Does interest rate parity (IRP) hold? Given your answer, does an opportunity for covered interest arbitrage exist for investors residing in either the U.S. or in Mexico? If covered interest arbitrage is possible, explain for whom and then calculate the currency profit (USD or peso) and expected yield (percentage return) on a 1,000,000 ___________ investment (1,000,000 USD or 1,000,000 Mexican pesos).

2.) Assume that the current spot rate for the Canadian dollar is 0.78 USD per CAD. How will this rate adjust according to Purchasing Power Parity (PPP) if Canada experiences a 3 percent inflation rate over the next 12 months while the U.S. experiences a 5 percent inflation rate over the same time period? Hint: calculate the expected spot rate for the CAD one year from now and explain how the spot rate is expected to change.

(a) Use Excel, MegaStat, or MINITAB to fit three trends (linear, quadratic, exponential) to the time series. (A negative value should be indicated by a minus sign. Do not round the intermediate calculations. Round your final answers to 2 decimal places.)

(b) Use each of the three fitted trend equations to make numerical forecasts for the next 3 years. (Round the intermediate calculations to 2 decimal places and round your final answers to 1 decimal place.)

T Linear| Exponential | Quadratic

9 _________ _________ _________

10 _________ _________ _________

11 _________ ___________ _________

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of? 1000, 25 years to maturity, and a coupon rate of 6.4 percent paid annually. If the yield to maturity is 7.5 percent, what is the current price of the bond?

______price?

USING UNITED STATES IBC CHAPTER 7:

1. Roofing inter-layment shall have a minimum width of ____ inches.

A. 12                           B. 18                           C. 34                           D. 36

2. What is the minimum roof covering classification for a roof assembly on a building of Type IA construction?

A. Class A                   B. Class B                   C. Class C                   D. Non-classified

3. Roof assemblies consisting of metal sheets of shingle are considered ____ as roof assemblies.

A. A                            B. B                             C. C                             D. Special purpose

4. Double underlayment application is required beneath asphalt shingles on roofs having a maximum slope of ______.

A. 2:12                        B. 3:12                        C. 4:12                        D. 5:12

5. In areas subject to high winds, underlayment beneath asphalt shingles shall be fastened along the overlap at a maximum spacing of ____ inches.

A. 12                           B. 18                           C. 24                           D. 36

6. Define the following terms as per code:
     a. Built-up roof covering:

     b. Positive roof drainage:

     c. Scupper:

     d. Roof recover

7. List the test(s) that are used to measure the wind resistance of asphalt shingles.

8. Describe a product that meets the material requirements for wood shingles in roof

9. For built-up roofs, what test standard is used for the use of asphalt in roof?

10. Describe the code requirement in an area where there is a history of ice-forming along the eaves.

USING UNITED STATES IBC CHAPTER 8:

1. Define the following:
   a. Shallow Foundation:
   
   b. Expansive Soil:

c. Foundation Drain:

2. Describe the situations when a sub-surface investigation for Ground-Water table is required and when it can be waived.

3. In the absence of a load-bearing test for foundation to be built on a crystalline bedrock, a vertical foundation pressure up to _______ may be used in design.
   
   A. 3000 psf                                 B. 4000 psf                          C. 6000 psf                          D. 12000 psf

4. For concrete used in foundation, the specified minimum compressive strength should be _________.  
   
   A. 3000 psi                                  B. 3500 psi                          C. 4000 psi                          D. 5000 psi
   
5. For precast pre-stressed deep foundations elements, the concrete cover must be at least _____ inches.

A. 1.5 inches                              B. 2.0 inches                       C. 2.5 inches                       D. 3.0 inches     

6. The minimum depth of a footing placed below undisturbed ground surface shall be _____ inches.

A. 12 inches                                B. 15 inches                        C. 18 inches                        D. 24 inches

7. Code waives the frost protection requirement of foundation for a free-standing building with maximum area of ______.

A. 400 sq. ft.                               B. 600 sq. ft.                       C. 800 sq. ft.                       D. 1000 sq. ft.

8. In the absence of design, the width of concrete footing supporting a 2-story light-frame construction shall be accepted to be _______.

A. 12 inches                                B. 15 inches                        C. 18 inches                        D. 24 inches

9. The edge thickness of plain concrete footings supporting walls other than light-frame construction shall not      
      be less than _______.

A. 6 inches                                  B. 8 inches                          C. 10 inches                        D. 12 inches

           10.   For Type ____ buildings, timber footings are allowed by the code.

     A. Type II                                        B. Type III                            C. Type IV                            D. Type V

Please Convert yearly data to quarterly data on excel

Income Level

Canada United States

Year Annual Annual

2000 22750 59938

2001 23110 58609

2002 23580 57947

2003 25480 57875

2004 29530 57674

2005 34300 58291

2006 37890 58746

2007 41530 59534

2008 44930 57412

2009 43220 57010

2010 44480 55520

2011 47180 54673

2012 51080 54569

2013 52800 56479

2014 52190 55613

2015 47580 58476

2016 43940 60309

2017 43000

2018 44860

1. Which 4 were the worst ideas? & Why? Crystal Pepsi, Ben-Gay Asprin, XFL United States Football League, Coca Cola Blak, Law Enforcement Bikes, Microsoft WebTV Plus, Pepsi AM, Maxwell House Brewed Coffee, Coca Cola Coke, & Frito Lay

2. Assess the possibilities of success from some relatively new products. This is not based on whether you like the product or not, its your assessment as to whether it can be successful and what needs to happen to ensure that it is successful.  In your write up, include specific target market(s).You are assessing 3 of them.

(Nair for Men), (Blk Water) & (True Lemon)

Case:

Forty years ago, Starbucks was a single store in Seattle’s Pike Place Market selling premium roasted coffee. Today, it is a global roaster and retailer of coffee with some 21,536 stores, 43 percent of which are in 63 countries outside the United States. China (1,716 stores), Canada (1,330 stores),

Japan (1,079 stores), and the United Kingdom (808 stores) are large markets internationally for Starbucks. Starbucks set out on its current course in the 1980s when the company’s director of marketing, Howard Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience. Schultz, who later became CEO, persuaded the company’s owners to experiment with the coffeehouse format—and the Starbucks experience was born. The strategy was to sell the company’s own premium roasted coffee and freshly brewed espressostyle coffee beverages, along with a variety of pastries, coffee accessories, teas, and other products, in a tastefully designed coffeehouse setting. From the outset, the company focused on selling “a third place experience,” rather than just the coffee. The formula led to spectacular success in the United States, where Starbucks went from obscurity to one of the best-known brands in the country in a decade. Thanks to Starbucks, coffee stores became places for relaxation, chatting with friends, reading the newspaper, holding business meetings, or (more recently) browsing the web. In 1995, with 700 stores across the United States, Starbucks began exploring foreign market opportunities. The first target market was Japan. The company established a joint venture with a local retailer, Sazaby Inc. Each company held a 50 percent stake in the venture, Starbucks Coffee of Japan. Starbucks initially invested $10 million in this venture, its first foreign direct investment. The Starbucks format was then licensed to the venture, which was charged with taking over responsibility for growing Starbucks’ presence in Japan.

To make sure the Japanese operations replicated the “Starbucks experience” in North America, Starbucks transferred some employees to the Japanese operation. The licensing agreement required all Japanese store managers and employees to attend training classes similar to those given to U.S. employees. The agreement also required that stores adhere to the design parameters established in the United States. In 2001, the company introduced a stock option plan for all Japanese employees, making it the first company in Japan to do so. Skeptics doubted that Starbucks would be able to replicate its North American success overseas, but by June 2015, Starbucks had some 1,079 stores and a profitable business in Japan. After Japan, the company embarked on an aggressive foreign investment program. In 1998, it purchased Seattle Coffee, a British coffee chain with 60 retail stores, for $84 million. An American couple originally from Seattle had started Seattle Coffee with the intention of establishing a Starbucks-like chain in Britain. In the late 1990s, Starbucks opened stores in Taiwan, Singapore, Thailand, New Zealand, South Korea, Malaysia, and—most significantly— China. In Asia, Starbucks’ most common strategy was to license its format to a local operator in return for initial licensing fees and royalties on store revenues. As in Japan, Starbucks insisted on an intensive employee-training program and strict specifications regarding the format and layout of the store. By 2002, Starbucks was pursuing an aggressive expansion in mainland Europe. As its first entry point, Starbucks chose Switzerland. Drawing on its experience in Asia, the company entered into a joint venture with a Swiss company, Bon Appetit Group, Switzerland’s largest food service company. Bon Appetit was to hold a majority stake in the venture, and Starbucks would license its format to the Swiss company using a similar agreement to those it had used successfully in Asia. This was followed by a joint venture in other countries. The United Kingdom leads the charge in Europe with 808 Starbucks stores. By 2014, Starbucks emphasized the rapid growth of its operations in China, where it had 1,716 stores and planned to roll out another 500 in three years. The success of Starbucks in China has been attributed to a smart partnering strategy. China is not one homogeneous market; the culture of northern China is very different from that of the east, and consumer spending power inland is not on par with that of the big coastal cities. To deal with this complexity, Starbucks entered into three different joint ventures: in the north with Beijong Mei Da coffee, in the east with Taiwan-based UniPresident, and in the south with Hong Kong-based Maxim’s Caterers. Each partner brought different strengths and local expertise that helped the company gain insights into the tastes and preferences of local Chinese customers, and to adapt accordingly. Starbucks now believes that China will become its second-largest market after the United States by 2020.

Question:

2. Many would argue that Starbucks coffee is expensive, and yet customers get “value” for their money. How do you think Starbucks has been able to transfer this business model and value proposition to international markets?

Case:

Forty years ago, Starbucks was a single store in Seattle’s Pike Place Market selling premium roasted coffee. Today, it is a global roaster and retailer of coffee with some 21,536 stores, 43 percent of which are in 63 countries outside the United States. China (1,716 stores), Canada (1,330 stores),

Japan (1,079 stores), and the United Kingdom (808 stores) are large markets internationally for Starbucks. Starbucks set out on its current course in the 1980s when the company’s director of marketing, Howard Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience. Schultz, who later became CEO, persuaded the company’s owners to experiment with the coffeehouse format—and the Starbucks experience was born. The strategy was to sell the company’s own premium roasted coffee and freshly brewed espressostyle coffee beverages, along with a variety of pastries, coffee accessories, teas, and other products, in a tastefully designed coffeehouse setting. From the outset, the company focused on selling “a third place experience,” rather than just the coffee. The formula led to spectacular success in the United States, where Starbucks went from obscurity to one of the best-known brands in the country in a decade. Thanks to Starbucks, coffee stores became places for relaxation, chatting with friends, reading the newspaper, holding business meetings, or (more recently) browsing the web. In 1995, with 700 stores across the United States, Starbucks began exploring foreign market opportunities. The first target market was Japan. The company established a joint venture with a local retailer, Sazaby Inc. Each company held a 50 percent stake in the venture, Starbucks Coffee of Japan. Starbucks initially invested $10 million in this venture, its first foreign direct investment. The Starbucks format was then licensed to the venture, which was charged with taking over responsibility for growing Starbucks’ presence in Japan.

To make sure the Japanese operations replicated the “Starbucks experience” in North America, Starbucks transferred some employees to the Japanese operation. The licensing agreement required all Japanese store managers and employees to attend training classes similar to those given to U.S. employees. The agreement also required that stores adhere to the design parameters established in the United States. In 2001, the company introduced a stock option plan for all Japanese employees, making it the first company in Japan to do so. Skeptics doubted that Starbucks would be able to replicate its North American success overseas, but by June 2015, Starbucks had some 1,079 stores and a profitable business in Japan. After Japan, the company embarked on an aggressive foreign investment program. In 1998, it purchased Seattle Coffee, a British coffee chain with 60 retail stores, for $84 million. An American couple originally from Seattle had started Seattle Coffee with the intention of establishing a Starbucks-like chain in Britain. In the late 1990s, Starbucks opened stores in Taiwan, Singapore, Thailand, New Zealand, South Korea, Malaysia, and—most significantly— China. In Asia, Starbucks’ most common strategy was to license its format to a local operator in return for initial licensing fees and royalties on store revenues. As in Japan, Starbucks insisted on an intensive employee-training program and strict specifications regarding the format and layout of the store. By 2002, Starbucks was pursuing an aggressive expansion in mainland Europe. As its first entry point, Starbucks chose Switzerland. Drawing on its experience in Asia, the company entered into a joint venture with a Swiss company, Bon Appetit Group, Switzerland’s largest food service company. Bon Appetit was to hold a majority stake in the venture, and Starbucks would license its format to the Swiss company using a similar agreement to those it had used successfully in Asia. This was followed by a joint venture in other countries. The United Kingdom leads the charge in Europe with 808 Starbucks stores. By 2014, Starbucks emphasized the rapid growth of its operations in China, where it had 1,716 stores and planned to roll out another 500 in three years. The success of Starbucks in China has been attributed to a smart partnering strategy. China is not one homogeneous market; the culture of northern China is very different from that of the east, and consumer spending power inland is not on par with that of the big coastal cities. To deal with this complexity, Starbucks entered into three different joint ventures: in the north with Beijong Mei Da coffee, in the east with Taiwan-based UniPresident, and in the south with Hong Kong-based Maxim’s Caterers. Each partner brought different strengths and local expertise that helped the company gain insights into the tastes and preferences of local Chinese customers, and to adapt accordingly. Starbucks now believes that China will become its second-largest market after the United States by 2020.

Question:

1. Starbucks prefers a combination approach to foreign market entry: the use of joint ventures and licensing. Do you agree with this approach? Why or why not?