You recently returned from a trip to Berlin, Germany. You were there from April 1st to April 4th for a conference on World Tolerance. Before you left Abu Dhabi, on March 30th at 3:30pm, you called your bank, ADCB, and informed the bank that you were traveling and to ensure your credit card would not be blocked in Germany. The bank thanked you for the call, said the card would not be blocked and wished you a pleasant trip. Story About Your Trip in Berlin When you arrived in Berlin at 9am on April 1st, you got a taxi at the airport and took the taxi to the hotel. You paid 30euros for the trip with your credit card. Then you checked into the hotel at noon without problems because you booked and paid for the hotel online before your trip. At 1pm, you decided to go for a walk around Berlin before the conference started the next day. You saw a cute little tea-shop and decided to buy packages of tea for your family and friends. You took your packages to the counter and tried to pay. You were horrified to find out your credit card would not work. You have enough credit on your card and there shouldn’t be anything wrong. You are so embarrassed because you can’t pay for the tea and everyone in line is looking at you. On top of that, you now have 3 more days in Berlin and you can’t access money because your card is blocked. You run back to the hotel and call the bank. They confirm your card is blocked because you are in Germany. You explain that you called before your trip to make sure this would not happen. The bank said, “We are sorry for the inconvenience. There is nothing they can do at the time”. The bank said it would take 3-5 business days to fix the mistake, but that is too long. You are stuck in Berlin without any money. This means you have to take food from the hotel breakfast buffet and hide it in your room for dinner. You need to eat the snacks provided by the conference for your lunch. You must refuse invitations to lunch because you know you can’t pay. Also, you must ask someone at the conference for 10euros to take the subway back to the airport. You are absolutely humiliated. You couldn’t do anything in Berlin because you couldn’t access your credit card. You are so angry at the bank! Your trip was ruined. The only thing you could do in Berlin is to attend the conference and walk around the city and look at the stuff you couldn’t buy. You get home and decide to write a business letter to the customer service manager, Anke Kuse, at ADCB. The bank is in Abu Dhabi at the Airport Road Branch. The PO Box is 55567. You want the bank to refund your flight to Berlin and provide 5000aed in damages because their mistake ruined your trip. The total is 12400aed. This is your Abu Dhabi mailing address. You live in AlBateen in Villa #27 on 17th Street. Write your letter and submit both in the submission box (not comment box) and also upload the document.

You recently returned from a trip to Berlin, Germany. You were there from April 1st to April 4th for a conference on World Tolerance. Before you left Abu Dhabi, on March 30th at 3:30pm, you called your bank, ADCB, and informed the bank that you were traveling and to ensure your credit card would not be blocked in Germany. The bank thanked you for the call, said the card would not be blocked and wished you a pleasant trip.

Story About Your Trip in Berlin

When you arrived in Berlin at 9am on April 1st, you got a taxi at the airport and took the taxi to the hotel. You paid 30euros for the trip with your credit card.  Then you checked into the hotel at noon without problems because you booked and paid for the hotel online before your trip. At 1pm, you decided to go for a walk around Berlin before the conference started the next day.  You saw a cute little tea-shop and decided to buy packages of tea for your family and friends. You took your packages to the counter and tried to pay.  You were horrified to find out your credit card would not work.  You have enough credit on your card and there shouldn’t be anything wrong.  You are so embarrassed because you can’t pay for the tea and everyone in line is looking at you. On top of that, you now have 3 more days in Berlin and you can’t access money because your card is blocked.  

You run back to the hotel and call the bank. They confirm your card is blocked because you are in Germany. You explain that you called before your trip to make sure this would not happen. The bank said, “We are sorry for the inconvenience.  There is nothing they can do at the time”. The bank said it would take 3-5 business days to fix the mistake, but that is too long.  You are stuck in Berlin without any money.

This means you have to take food from the hotel breakfast buffet and hide it in your room for dinner. You need to eat the snacks provided by the conference for your lunch.  You must refuse invitations to lunch because you know you can’t pay. Also, you must ask someone at the conference for 10euros to take the subway back to the airport.  You are absolutely humiliated.  You couldn’t do anything in Berlin because you couldn’t access your credit card.  

You are so angry at the bank! Your trip was ruined.  The only thing you could do in Berlin is to attend the conference and walk around the city and look at the stuff you couldn’t buy. You get home and decide to write a business letter to the customer service manager, Anke Kuse, at ADCB.  The bank is in Abu Dhabi at the Airport Road Branch. The PO Box is 55567. You want the bank to refund your flight to Berlin and provide 5000aed in damages because their mistake ruined your trip. The total is 12400aed.  

This is your Abu Dhabi mailing address. You live in AlBateen in Villa #27 on 17th Street.

1- An MNC has an incentive to invest short-term funds in a foreign currency if investments denominated in the foreign currency have a ___(higher OR lower)     interest rate than investments denominated in the home currency of the MNC.

True or False: If a currency’s LIBOR rate rises, the money market interest rates denominated in that currency also rise.

• True
• False

2- True or False: Short-term loans of six months or less, extended by banks to MNCs in Europe, are called eurocredit loans.

• True
• False

3- The United States Congress passed the Sarbanes-Oxley (SOX) Act in 2002. This act required all firms, including foreign firms, to provide more comprehensive financial information in order to list their stock on US stock exchanges.

True or False: The high cost of SOX compliance leads some non-US firms to withdraw from US exchanges.

True

False

Some of your family members are having a discussion about politics. You try to run away, but unfortunately you can’t. Your cousin says, “Man, poor people are bums! They just want to be on Instagram all day, showing off expensive stuff they bought instead of going to work.” Your aunt responds by saying, “I don’t know. When I came to the United States, you could get a decent paying job, but now a lot of people are working, but they’re still poor. They’re not getting paid enough, and they have no benefits.”

a. Explain what theory of poverty your cousin believes. How does this theory explain the existence of poverty in our society? How does this theory propose to solve poverty?

b. What theory of poverty is your aunt expressing? How does this theory explain the existence of poverty in our society? How does this theory propose to solve poverty?

Information from the American Institute of Insurance indicates the mean amount of life insurance per household in the United States is $126,000. This distribution follows the normal distribution with a standard deviation of $40,000.

1. If we select a random sample of 64 households, what is the standard error of the mean? (Round your answer to the nearest whole number.)

2. What is the expected shape of the distribution of the sample mean?

3. What is the likelihood of selecting a sample with a mean of at least $130,000? (Round your z value to 2 decimal places and final answer to 4 decimal places.)

4. What is the likelihood of selecting a sample with a mean of more than $118,000? (Round your z value to 2 decimal places and final answer to 4 decimal places.)

5. Find the likelihood of selecting a sample with a mean of more than $118,000 but less than $130,000. (Round your z value to 2 decimal places and final answer to 4 decimal places.)

CA1.11 (LO 2, 4) (Models for Setting GAAP) Presented below are three models for setting GAAP.

1. The purely political approach, where national legislative action decrees GAAP.
2. The private, professional approach, where GAAP is set and enforced by private professional actions only.
3. The public/private mixed approach, where GAAP is basically set by private-sector bodies that behave as though they were public agencies and whose standards to a great extent are enforced through governmental agencies.

Instructions

1. Which of these three models best describes standard-setting in the United States? Provide justification for your answer.
2. Why do companies, financial analysts, labor unions, industry trade associations, and others take such an active interest in standard-setting?
3. Cite an example of a group other than the FASB that attempts to establish accounting standards. Speculate as to why another group might wish to set its own standards.

A. ERISA. ERISA does not require that employers offer a pension plan. But if a company decides to have one, it is rigidly controlled by ERISA provisions. These provisions were designed to achieve two (2) goals. What are they?

B. Defined Contribution Plans. Why are defined-contribution pension plans gaining in popularity in the United States and defined benefit plans losing popularity?

C. Health Insurance. Name and describe the three general strategies available to benefits managers for controlling the rapidly escalating costs of health care. Identify which strategy your organization (or an organization with which you are familiar) has selected to strategically control health care costs. Explain why. Also share your view regarding whether the selected strategy was the best option for the organization.

D. Legally Required Benefits. Discuss the rationale for legally required benefits, varieties of legally required benefits, and the implications for strategic compensation.

Suppose that you flip a coin 11 times. What is the probability that you achieve at least 4 tails?

A sign on the pumps at a gas station encourages customers to have their oil checked, and claims that one out of 5 cars needs to have oil added. If this is true, what is the probability of each of the following:

A. One out of the next four cars needs oil.

Probability =

B. Two out of the next eight cars needs oil.

Probability =

C. 10 out of the next 40 cars needs oil.

Probability =

In the United States, voters who are neither Democrat nor Republican are called Independent. It is believed that 13% of voters are Independent. A survey asked 26 people to identify themselves as Democrat, Republican, or Independent.

A. What is the probability that none of the people are Independent?

Probability =

B. What is the probability that fewer than 5 are Independent?

Probability =

C. What is the probability that more than 2 people are Independent?

Probability =

Recently, mumps outbreaks have become more common, with many occurring among individuals 18-24 years of age living on college campuses. Two doses of the measles-mumps-rubella (MMR) vaccine are recommended for protection from mumps. Herd immunity refers to the proportion of individuals that must be immune to effectively prevent the spread of disease through a population. In order to prevent the spread of mumps, at least 96% of people in a community must have received two doses of the MMR vaccine.

a) Suppose that 94% of undergraduate students in the United States report having received two doses of the MMR vaccine. What is the probability that in one upperclassman House at MIT, enough students are vaccinated to achieve herd immunity? There are approximately 400 students in any house.

b) Calculate the probability that herd immunity is achieved in all 12 Houses.

c) Discuss the validity of the assumptions required to make the calculation in part i.