Calculate the expected standard deviation on stock:

Use the well-ordering property to prove the division algorithm. Recall that the division algorithm states that if a is an integer and d is a positive integer, then there are unique integers q and r with 0 ≤ r < d and a = dq + r.

1.Write an HTML footer element to that states:

o“Copyright 2019. All rights reserved”, using the copyright symbol

oThe company e-mail, [email protected] as an e-mail link

The currency turmoil in Asia in 1997 was unexpected, but Avon Products was prepared to deal with it. An examination of what Avon did before the crisis and how it responded afterward illustrates many of the principles of managing operating exposures. It also provides insights into the role of financial officers as key members of strategic management teams.

Avon has a long history of international operations. As a general rule, Avon tries to hedge its currencies risk by buying almost all its raw materials and making nearly all its products in the markets in which they are sold. For example, Avon Asia-Pacific has factories that make cosmetics in its largest markets – China, Indonesia, the Philippines, and Japan – and contracts out production in six other Asian countries. It further hedged its currency risk by financing its local operations with local currency loans. Altogether, the 10 Asian countries in which Avon operated accounted for USD751 million of its USD4.8 billion in revenue in 1996.

When the crisis began in Thailand in July 1997, Avon’s executives did not anticipate that Thailand’s problems would spread but as a precaution decided to further reduce currency risk by having the Asian units remit earnings weekly instead of monthly. By late August 1997, however, the currency markets got nervous after the remarks of former Malaysian Prime Minister Tun Mahathir Mohamad, who complained that Asia’s economic crisis was provoked by an international cabal of Jewish financiers intent on derailing the region’s growth. The head of Avon’s Asia-Pacific region, Jose Ferriera, Jr., also considered possibility that other Asian countries would have to allow their currencies to depreciate to maintain their export competitiveness. In response, Avon decided to sell about USD50 million worth of five Asian currencies forward against the dollar for periods of up to 15 months.

Having done what it could financially, Avon turned to its operating strategy. Anticipating tough times ahead, Avon Asia-Pacific decided to redirect its marketing budget to hire more salespeople in Asia to bring in more customers rather than offering incentives to the existing sales force to get its current, cash-strapped customers to spend more money. Ferriera also urged his country managers to step up their purchase of local materials whenever possible and not allow local vendors to pass on all their cost increases. At the same time, Avon began planning to compete more aggressively against disadvantaged competitors who have to import their products and raw materials. Finally, Avon began to analyze the incremental profits it could realize by using its Asian factories to supply more of the non-cosmetic products sold in the United States. Avon Asia-Pacific was helped by a team of Latin America executives who traveled to Asia to share their experiences of how they had managed to cope in similar circumstances of currency turmoil in their countries. For example, during the Mexican crisis of 1994 and 1995, prices were raised slowly on price-sensitive brands aimed at low- and middle-income customers. Avon Mexico raise prices on premium brands much faster, since those brands were less price sensitive and competed with imports whose prices had doubled with the peso devaluation.

In all of these deliberations and decisions, Avon Treasurer Dennis Ling was a full and active participant. For example, he helped the head of Avon’s jewelry business renegotiate the terms of its contract with a Korean company that supplies jewelry for sale in the United States. The result was a substantial price discount based on the won’s steep decline against the dollar. According to Ling, “Part of my job is to help our managers of operations understand and take advantage of the impact of currencies on their business.”

Required:

Suggest other solutions to hedging the economic exposure in the long run for Avon Asia?

The currency turmoil in Asia in 1997 was unexpected, but Avon Products was prepared to deal with it. An examination of what Avon did before the crisis and how it responded afterward illustrates many of the principles of managing operating exposures. It also provides insights into the role of financial officers as key members of strategic management teams.

Avon has a long history of international operations. As a general rule, Avon tries to hedge its currencies risk by buying almost all its raw materials and making nearly all its products in the markets in which they are sold. For example, Avon Asia-Pacific has factories that make cosmetics in its largest markets – China, Indonesia, the Philippines, and Japan – and contracts out production in six other Asian countries. It further hedged its currency risk by financing its local operations with local currency loans. Altogether, the 10 Asian countries in which Avon operated accounted for USD751 million of its USD4.8 billion in revenue in 1996.

When the crisis began in Thailand in July 1997, Avon’s executives did not anticipate that Thailand’s problems would spread but as a precaution decided to further reduce currency risk by having the Asian units remit earnings weekly instead of monthly. By late August 1997, however, the currency markets got nervous after the remarks of former Malaysian Prime Minister Tun Mahathir Mohamad, who complained that Asia’s economic crisis was provoked by an international cabal of Jewish financiers intent on derailing the region’s growth. The head of Avon’s Asia-Pacific region, Jose Ferriera, Jr., also considered possibility that other Asian countries would have to allow their currencies to depreciate to maintain their export competitiveness. In response, Avon decided to sell about USD50 million worth of five Asian currencies forward against the dollar for periods of up to 15 months.

Having done what it could financially, Avon turned to its operating strategy. Anticipating tough times ahead, Avon Asia-Pacific decided to redirect its marketing budget to hire more salespeople in Asia to bring in more customers rather than offering incentives to the existing sales force to get its current, cash-strapped customers to spend more money. Ferriera also urged his country managers to step up their purchase of local materials whenever possible and not allow local vendors to pass on all their cost increases. At the same time, Avon began planning to compete more aggressively against disadvantaged competitors who have to import their products and raw materials. Finally, Avon began to analyze the incremental profits it could realize by using its Asian factories to supply more of the non-cosmetic products sold in the United States. Avon Asia-Pacific was helped by a team of Latin America executives who traveled to Asia to share their experiences of how they had managed to cope in similar circumstances of currency turmoil in their countries. For example, during the Mexican crisis of 1994 and 1995, prices were raised slowly on price-sensitive brands aimed at low- and middle-income customers. Avon Mexico raise prices on premium brands much faster, since those brands were less price sensitive and competed with imports whose prices had doubled with the peso devaluation.

In all of these deliberations and decisions, Avon Treasurer Dennis Ling was a full and active participant. For example, he helped the head of Avon’s jewelry business renegotiate the terms of its contract with a Korean company that supplies jewelry for sale in the United States. The result was a substantial price discount based on the won’s steep decline against the dollar. According to Ling, “Part of my job is to help our managers of operations understand and take advantage of the impact of currencies on their business.”

Required:
                                          

Conclude the benefits earn by Avon from its diversification internationally and diversification of its product.                       

Enron Corporation was an American energy, commodities, and Services Company based in Houston, Texas. It was founded in 1985, Kenneth Lay was the founder of the company, first founded in Omaha Nebraska and then it moved to Houston Texas .Before its bankruptcy on December 2, 2001, Enron employed approximately 20,000 staff and was one of the world's major electricity, natural gas, communications and pulp and paper companies, with claimed revenues of nearly $101 billion during 2000.

Enron’s line of business:

Enron was originally involved in transmitting and distributing electricity and natural gas throughout the United States. The company developed, built and operated power plants and pipeline. Enron owned large network of natural gas pipeline, which stretched ocean to ocean and border to border. Enron traded in more than 30 different products, including the following: Petrochemicals, Plastics, Power, Pulp and paper, Steel, Weather Risk Management, Oil and LNG transportation, Broadband, Principal Investments, Risk management for commodities, Shipping / freight, Water and wastewater. It was also an extensive futures trader, including sugar, coffee, grains, hogs, and other meat futures.

Review of Enron’s Rise and fall:

Throughout the late 1990s, Enron was considered one of the most innovative companies in the world. The company continued to build power plants and operate gas lines, but it became better known for its unique trading businesses. Besides buying and selling gas and electricity. it created whole new markets for such oddball "commodities" as broadcast time for advertisers, weather futures, and Internet bandwidth. Before it bankrupted in late 2001, its annual revenues rose from about $9 billion in 1995 to over $100 billion in 2000.

At the end of 2001 it was revealed that its reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud. The Enron scandal was the biggest bankruptcy in United States history which cost 4,000 employees their jobs. On December 2, 2001 Enron filed for bankruptcy. It was an event that will always be remembered as one of the most disastrous events in the financial world.

The reasons for collapse of Enron company:

There are some reasons that lead to the collapse of Enron:

•Cheating and manipulation by the board of directors to achieve their personal interests at the expense of the interest of the company.

•That the board of director has delegated the task of reviewing the company’s transactions to a sub-committee within the company. The committee has only conducted a quick review of these transactions. The board of directors has concealed very important information whose knowledge may have led to some appropriate action.

•The company’s management inflated the company’s profit to about $ 1 billion by raising the profit by 586 million and hiding debit of $ 2.6 billion in the year before the company’s collapse.

•The loss of the members of the audit committee is independent and neutral because of the enormous they charge from the administration and may reach up to $380000 per year per member.

With the fall of Enron, the financial auditor ARTHER ANDERSON fell for his role in this process, culminating in the company’s disposal of most of the city document. But Enron’s scandal has prompted the US government to amend a number of market laws, most notably issuing legislation allowing employee to sell their shares three years after they own them, and more importantly, the Sarbanes-Oxley act, which explicitly tightens penalties for such crimes. The CEO and CFO are fully responsible for any manipulation of the financial statement. In September 2008, Enron shareholders won the lawsuit against the company and received $7.2 billion damages, the biggest settlement in the history of fraud involving listed company.

Questions:

a.Explain how the dramatic collapse of Enron has severely shaken the U.S. Capital markets in

2001.                                                                                                                                                

b.Suggest the measures that could be taken to restore the credibility of the accounting profession and investor confidence in the financial reporting process.                

Question 2

Describe the Financial Reporting practices followed in Oman quoting some practical instances. Also highlight the principles that govern the financial practices in Oman and the Organizations that form regulatory frame work in Oman.                                              

The currency turmoil in Asia in 1997 was unexpected, but Avon Products was prepared to deal with it. An examination of what Avon did before the crisis and how it responded afterward illustrates many of the principles of managing operating exposures. It also provides insights into the role of financial officers as key members of strategic management teams.

Avon has a long history of international operations. As a general rule, Avon tries to hedge its currencies risk by buying almost all its raw materials and making nearly all its products in the markets in which they are sold. For example, Avon Asia-Pacific has factories that make cosmetics in its largest markets – China, Indonesia, the Philippines, and Japan – and contracts out production in six other Asian countries. It further hedged its currency risk by financing its local operations with local currency loans. Altogether, the 10 Asian countries in which Avon operated accounted for USD751 million of its USD4.8 billion in revenue in 1996.

When the crisis began in Thailand in July 1997, Avon’s executives did not anticipate that Thailand’s problems would spread but as a precaution decided to further reduce currency risk by having the Asian units remit earnings weekly instead of monthly. By late August 1997, however, the currency markets got nervous after the remarks of former Malaysian Prime Minister Tun Mahathir Mohamad, who complained that Asia’s economic crisis was provoked by an international cabal of Jewish financiers intent on derailing the region’s growth. The head of Avon’s Asia-Pacific region, Jose Ferriera, Jr., also considered possibility that other Asian countries would have to allow their currencies to depreciate to maintain their export competitiveness. In response, Avon decided to sell about USD50 million worth of five Asian currencies forward against the dollar for periods of up to 15 months.

Having done what it could financially, Avon turned to its operating strategy. Anticipating tough times ahead, Avon Asia-Pacific decided to redirect its marketing budget to hire more salespeople in Asia to bring in more customers rather than offering incentives to the existing sales force to get its current, cash-strapped customers to spend more money. Ferriera also urged his country managers to step up their purchase of local materials whenever possible and not allow local vendors to pass on all their cost increases. At the same time, Avon began planning to compete more aggressively against disadvantaged competitors who have to import their products and raw materials. Finally, Avon began to analyze the incremental profits it could realize by using its Asian factories to supply more of the non-cosmetic products sold in the United States. Avon Asia-Pacific was helped by a team of Latin America executives who traveled to Asia to share their experiences of how they had managed to cope in similar circumstances of currency turmoil in their countries. For example, during the Mexican crisis of 1994 and 1995, prices were raised slowly on price-sensitive brands aimed at low- and middle-income customers. Avon Mexico raise prices on premium brands much faster, since those brands were less price sensitive and competed with imports whose prices had doubled with the peso devaluation.

In all of these deliberations and decisions, Avon Treasurer Dennis Ling was a full and active participant. For example, he helped the head of Avon’s jewelry business renegotiate the terms of its contract with a Korean company that supplies jewelry for sale in the United States. The result was a substantial price discount based on the won’s steep decline against the dollar. According to Ling, “Part of my job is to help our managers of operations understand and take advantage of the impact of currencies on their business.”

Required:

Why Avon Asia-Pacific decided to redirect its marketing budget to hire more salespeople in Asia rather than offering incentives to the existing sales force, and urged his country managers to purchase local materials instead of pass to local vendors?

1) Over the past hundred years, the major source of hospital revenues has changed three times. Which one of the following was NOT a major revenue source for the hospitals last hundred years?

A. charity

B. insurance

C. HMOs

D. government

2.   The introduction of a new drug for use in the United States:

A. usually does not result in a patent until after the drug has been finally approved for use, so that no patient life will be wasted

B. is almost always eventually successful if the product can get FDA approval as an Investigational New Drug (IND)

C. currently requires approximately ten years from the first research of the product to final permission to sell the drug

D. is along-process, but has been speeded up considerably since 1962 when the Harris-Kefauver amendments were passed

E. required extensive testing for safety and toxicity but not for actual efficacy.

3. More than half of the U.S. population is covered by employer group health insurance. One of the underlying reasons is that

A. covering a large group under a single contract increases transaction costs.

B. group coverage increases adverse selection.

C. employer payments towards health insurance premiums reduce tax benefits.

D. many of the most expensive patients are heavily subsidized or excluded.

E. it is both the most preferred and the most common method for part-time employees to obtain affordable coverage.

4. MCOs often are credited with the following advantages in health care:

A. Emphasis on reduced health care coverage

B. Integrate health care funding with delivery of health care services

C. Reimbursement methods other than URC

D. All of the above

5. Does a surplus of hospital beds in an area make it _________ to start an HMO?

A. easier

B. harder

C. depends on government policies

D. no impact.

6. If the laws of the United States changed and you could sell one of your kidneys legally for $10,000 or more, we would expect which of the following?

A. Supply of kidneys for transplant would increase

B. Cost of kidneys would increase

C. The supply curve for kidneys would go flat

D. None of the above

7. A monopolist that experiences long run economies of scale over the entire market demand curve has a _______________.

A. Perfect competition

B. Monopolistic competition

C. Oligopoly

D. Natural monopoly

8. Alcohol and cigarettes have an _________________ demand according to your textbook which makes them a good steady source of government revenue.

A. Elastic

B. Inelastic

C. Static

D. Dynamic

9. Which is the largest payer for the nursing homes?

A. Medicare

B. Medicaid

C. Private Insurance

D. HMOs

E. None of the above

10. You fraudulently subscribe to an insured group of lower risk individuals than you truly should belong to with your health problems to get lower premiums. This is known as:

A. Selection of the fittest

B. Adverse selection

C. Cherry picking

D. Moral hazard

11. A physician has just been charged _____________, the newspaper says this means the physician being charged has been abusing his role as a medical advisor to increase his own economic self interests.

A. Adverse possession

B. Physician practice hypothesis

C. Physician cost shifting

D. Supplier induced demand or SID

12. What is the motivation behind the cost-control features of managed care?

A. To ensure access to specialty care through general practitioner gatekeepers.

B. To influence the way physicians practice medicine by changing the financial incentive structure of medical care delivery.

C. To shift the financial risk onto patients.

D. To eliminate all the guesswork from diagnoses by establishing practice guidelines.

E. To create competition by providing patients with a wide range of providers.

Cross Border Alliances Collaborative agreements with foreign companies in the form of strategic alliances or joint ventures are widely used as a means of entering foreign markets. They are also used as a means of acquiring resources and capabilities by learning from foreign partners. They are used to put together powerful combinations of complementary resources and capabilities by accessing those resources and capabilities of a foreign partner.

The Case Study below provides an example of a strategic alliance that Walgreens participated in with Alliance Boots. What was this partnership designed to achieve and why would it make sense for a company like Walgreens?

Case:

Read the case below and answer the questions that follow. Walgreens pharmacy began in 1901 as a single store on the South Side of Chicago, and grew to become the largest chain of pharmacy retailers in America. Walgreens was an early pioneer of the “self-service” pharmacy and found success by moving quickly to build a vast domestic network of stores after the Second World War. This growth-focused strategy served Walgreens well up until the beginning of the 21st century, by which time it had nearly saturated the U.S. market. By 2014, 75 percent of Americans lived within five miles of a Walgreens. The company was also facing threats to its core business model. Walgreens relies heavily on pharmacy sales, which generally are paid for by someone other than the patient, usually the government or an insurance company. As the government and insurers started to make a more sustained effort to cut costs, Walgreens’s core profit center was at risk. To mitigate these threats, Walgreens looked to enter foreign markets.

Walgreens found an ideal international partner in Alliance Boots. Based in the UK, Alliance Boots had a global footprint with 3,300 stores across 10 countries. A partnership with Alliance Boots had several strategic advantages, allowing Walgreens to gain swift entry into foreign markets as well as complementary assets and expertise. First, it gave Walgreens access to new markets beyond the saturated United States for its retail pharmacies. Second, it provided Walgreens with a new revenue stream in wholesale drugs. Alliance Boots held a vast European distribution network for wholesale drug sales; Walgreens could leverage that network and expertise to build a similar model in the United States. Finally, a merger with Alliance Boots would strengthen Walgreens’s existing business by increasing the company’s market position and therefore bargaining power with drug companies. In light of these advantages, Walgreens moved quickly to partner with and later acquire Alliance Boots and merged both companies in 2014 to become Walgreens Boots Alliance. Walgreens Boots Alliance, Inc. is now one of the world’s largest drug purchasers, able to negotiate from a strong position with drug companies and other suppliers to realize economies of scale in its current businesses.

The market has thus far responded favorably to the merger. Walgreens Boots Alliance’s stock has more than doubled in value since the first news of the partnership in 2012. However, the company is still struggling to integrate and faces new risks such as currency fluctuation in its new combined position. Yet as the pharmaceutical industry continues to consolidate, Walgreens is in an undoubtedly stronger position to continue to grow in the future thanks to its strategic international acquisition.

Note: Developed with Katherine Coster.

Sources: Company 10-K Form, 2015, investor.walgreensbootsalliance.com/secfiling.cfm?filingID=1140361-15-38791&CIK=1618921; L. Capron and W. Mitchell, “When to Change a Winning Strategy,” Harvard Business Review, July 25, 2012, hbr.org/2012/07/when-to-change-a-winning-strat; T. Martin and R. Dezember, “Walgreen Spends $6.7 Billion on Alliance Boots Stake,” The Wall Street Journal, June 20, 2012.

1. What was the partnership with Alliance Boots designed to achieve and why would it make sense for a company like Walgreens?

2.. What are some of the challenges that Walgreens is now facing with the merged entity?

The consumer food database contains five variables: Annual Food Spending per Household, Annual Household Income, Non-Mortgage Household Debt, Geographic Region of the U.S. of the Household, and Household Location. There are 200 entries for each variable in this database representing 200 different households from various regions and locations in the United States. Annual Food Spending per Household, Annual Household Income, and Non-Mortgage Household Debt are all given in dollars. The variable Region tells in which one of four regions the household resides. In this variable, the Northeast is coded as 1, the Midwest is coded 2, the South is coded as 3, and the West is coded as 4. The variable Location is coded as 1 if the household is in a metropolitan area and 2 if the household is outside a metro area. The data in this database were randomly derived and developed based on actual national norms.The consumer food database contains five variables: Annual Food Spending per Household, Annual Household Income, Non-Mortgage Household Debt, Geographic Region of the U.S. of the Household, and Household Location. There are 200 entries for each variable in this database representing 200 different households from various regions and locations in the United States. Annual Food Spending per Household, Annual Household Income, and Non-Mortgage Household Debt are all given in dollars. The variable Region tells in which one of four regions the household resides. In this variable, the Northeast is coded as 1, the Midwest is coded 2, the South is coded as 3, and the West is coded as 4. The variable Location is coded as 1 if the household is in a metropolitan area and 2 if the household is outside a metro area. The data in this database were randomly derived and developed based on actual national norms.

Provide a 1,600-word detailed, statistical report including the following:

• Explain the context of the case
• Provide a research foundation for the topic
• Present graphs
• Explain outliers
• Prepare calculations
• Conduct hypotheses tests
• Discuss inferences you have made from the results

This assignment is broken down into four parts:

• Part 1 - Preliminary Analysis
• Part 2 - Examination of Descriptive Statistics
• Part 3 - Examination of Inferential Statistics
• Part 4 - Conclusion/Recommendations

Part 1 - Preliminary Analysis (3-4 paragraphs)

Generally, as a statistics consultant, you will be given a problem and data. At times, you may have to gather additional data. For this assignment, assume all the data is already gathered for you.

State the objective:

• What are the questions you are trying to address?

Describe the population in the study clearly and in sufficient detail:

• What is the sample?

Discuss the types of data and variables:

• Are the data quantitative or qualitative?
• What are levels of measurement for the data?

Part 2 - Descriptive Statistics (3-4 paragraphs)

Examine the given data.

Present the descriptive statistics (mean, median, mode, range, standard deviation, variance, CV, and five-number summary).

Identify any outliers in the data.

Present any graphs or charts you think are appropriate for the data.

Note: Ideally, we want to assess the conditions of normality too. However, for the purpose of this exercise, assume data is drawn from normal populations.

Part 3 - Inferential Statistics (2-3 paragraphs)

Use the Part 3: Inferential Statistics document.

• Create (formulate) hypotheses
• Run formal hypothesis tests
• Make decisions. Your decisions should be stated in non-technical terms.

Hint: A final conclusion saying "reject the null hypothesis" by itself without explanation is basically worthless to those who hired you. Similarly, stating the conclusion is false or rejected is not sufficient.

Part 4 - Conclusion and Recommendations (1-2 paragraphs)

Include the following:

• What are your conclusions?
• What do you infer from the statistical analysis?
• State the interpretations in non-technical terms. What information might lead to a different conclusion?
• Are there any variables missing?
• What additional information would be valuable to help draw a more certain conclusion?