...DERIVATIVES & RISK MANAGEMENT ASSIGNMENT – II By: ATTIKA RAJ, ROLL NO: MS10A009, MBA- 2012 BATCH, DOMS, IITM 2/21/2012 I. Case Analysis – Risk management Policy of Lufthansa Submitted in Assignment 1 II. Case Analysis: Commodity Market Derivatives Case Solutions: 1. Discuss the risk exposure of Amarnath hedge fund. Ans: The Amaranth hedge fund was exposed to following risks: a. Market risk: The risk that occurs from the volatility of investment returns b. Liquidity risk: It measures the degree of difficulty in exiting a given trading position c. Funding risk: It measures the extent to which they were able to meet margin calls on their natural gas position d. Capacity risk: The risk due to putting too much money into one particular strategy 2. What are the negatives to rolling a spread position? Ans: Negatives to rolling a spread position are: When rolling a spread position the investor expects the following months to which the contract was rolled over to be favourable and thus be able to unload its positions. But, if the market moves in a direction opposite to the one anticipated by the investor it can result in huge losses. Also, if the risk increases for a spread position with the increase in the leverage. In the case of Amaranth hedge fund, it had rolled its short positions prior to august into the next month, hoping that market conditions would change and enable it to unload its positions. There were now no more summer months into which it could roll these...
Words: 3366 - Pages: 14
...1. What are the compulsions that have been driving the top management of Infosys to seek migration of the company up the value chain? Infosys is a highly respected, India-based information technology (IT) software service provider, established in July 1981. The ramp-up of the company has been particularly spectacular during the last several years, starting from 1995. The initial business model related to labor arbitrage and was based upon differential wage rates for IT professionals in India and the developed countries. The boom of the late 1990s, catalyzed by the Y2K-related problems, resulted in opportunities that the company capitalized upon. Today the company serves clients drawn from global 2000 companies. Based upon its strong ethical and principled approach, execution excellence, relentless quest for quality and customer satisfaction, the company had astounding financial success and became a darling of the stock markets both in India and the United States. Notwithstanding its successful track record, Infosys has over the last several years, proactively been applying itself to a fundamental question of identifying the drivers of success for the next 10 years. Infosys has been deeply concerned about leveraging its current strong position, to evolve into a much stronger company, so as to ensure continued growth and success in the long-term. Main drivers that have contributed to drive the top management of Infosys to move up the value chain are below: * International...
Words: 3712 - Pages: 15
...Guillermo Furniture Store Analysis Introduction When looking at a budget there are many factors to discuss and apply. The Guillermo Furniture Company has been a staple in Mexico for numerous years. Guillermo will have to use the correct reports relating to both performance and budgets in many different ways. Guillermo's competitor has updated machinery and budget. The competitor has forced Guillermo to look at his budget, sales forecast, and analysis of ethical considerations in the preparation, use of the budget and ethical code of ethics. The authors of this paper will provide Guillermo’s Furniture Store with the tools needed to make decisions based on data using performance and budget reports. Sales Forecasts: Risks and Organizational Success Sales budget is the foundation of budgeting and the accuracy of this budget relies heavily on the accuracy of budgeted sales. Managers prepare the departmental budgets monthly based on the sales forecast. Several factors contributes to creating sales forecast, which are past patterns of sales, estimates made by the sales force, general economic conditions, competitors’ actions, changes in firm prices, changes in product mix, market research studies, advertising, and sales promotion plans. Specifically in Guillermo’s case, the four challenging instance to creating his sales forecast is in the 1990s, when foreign competition provided furniture to exact specifications at very low prices. Enabling Guillermo to make an...
Words: 1163 - Pages: 5
...history 4 b. Brazil during the oil crisis in the 70’s 6 III. Ethanol as bio-fuel 7 a. Extraction process 7 b. Energetically self sufficient ethanol plants in Brazil 8 c. Energy from Ethanol 9 d. Flex-Fuel Vehicles 10 IV. Economic Effects of Ethanol as Bio-Fuel 10 a. Brazil not endangered by a new oil crisis 10 b. Export 12 c. Vertical industries 13 d. Environmental benefits 14 V. Ethical and Social Implications 15 a. A market not dominated by oil barons 15 b. Independent economy 16 VI. Brazil in a global economy and ethanol in the US 18 a. Future of ethanol as bio-fuel in Brazil 18 b. Ethanol in the United States 19 c. E85 21 VII. Conclusion 22 VIII. Works Cited 23 I. Introduction Fuel, at its simplest, makes us go. It is a necessity to modern day life. Even if everyone were to walk, rather than drive, there would be a need for it. This is one thing that is in common around the world. The dependence on oil based gasoline has many of the most powerful countries forking out quite a bit for their fuel. This is, of course, the case in the United States. There is no doubt that this country needs an alternative fuel, or to cut back on its use of the current fuel. However, because we are so dependent at this time on oil based gasoline and other fuels, Americans tend to be a bit hesitant of truly switching over to some of the other products. We need examples. We need to know that it will work and that it will save us money...
Words: 4566 - Pages: 19
...Mr. Scott Byron Freeman Compensation & Benefits Management, BUS4343 Holland Enterprises Benefit & Compensation Analysis Instructor: Jason Sheedy Tuesday April 11, 2011 Holland Enterprises Benefit & Compensation Analysis The purpose of this analysis is to review the current status of Holland Enterprises benefits program including the current philosophy, pay structure, base pay incentive, external versus internal equity, and principle benefits. Recognizing the current employee loss rate and understanding the results of the exit interviews; this analysis will give answer to why employees are leaving. This plan will also create a process that will sustain employment levels while creating a positive employee growth rate. The reasons and development process created for Holland Enterprises will attract and hold the type of employee that will allow them to be successful in the future. Current Status of Holland Enterprises Holland Enterprises is a company that currently employs 3,500 employees. Although this is a high number it needs to be understood that the company has actually lost 25% of the staff since 2007. At that time the personnel count was approximately 4,667 employees. When workers ended their time of service with the company exit interviews were held. The top reason given for leaving the establishment for other options was that the compensation and benefits offered by the Holland Enterprises were not competitive with other companies recruiting like-minded...
Words: 2096 - Pages: 9
...Case Study: Wal-Mart Stores “Every Day Low Prices” In China Webster University INTB 5000 1 Webster University 2 Wal-Mart Stores “Every Day Low Prices” In China FACTS: First opened in Shenzhen on August 12, 1996 As of December 2007 94 stores in 51 cities Employs 43,000+ associates Serves around 5 million customers per week Transition from rural US to metro/urban in China Competitive analysis a core value of the company Shopping 1,500 items and price matching them through “Special Buy” Analysis Major pressure from the Chinese regional governments to centralize in high growth regions About-face by Chinese govt. on Shanghai is of interest Has major implications on Wal-Mart’s ability to provide infrastructure for stores Supply Chain Challenges Abound Tier 1 cities include Beijing – Tianjin, Shanghai, Guangzhou Tier 2 cities include Chengdu, Nanjing, Chongqing, & Wuhan Tier 3 cities include Changzho, Jinhua, Mianyang Webster University 3 Wal-Mart Stores “Every Day Low Prices” In China 7,058 Units 1.9 Million Associates 23 offices sourcing from 70 countries UK 340 Units Canada 292 Units Japan 393 Units US 4,103 Units Mexico 943 Units Central America 433 Units China 86 Units Trust-Mart 101 Units India JV –Aug 2007 Puerto Rico 54 Units Brazil 297 Units Argentina 16 Units Webster University 4 Wal-Mart Stores “Every Day Low Prices” In China Webster University 5 Wal-Mart Stores “Every Day...
Words: 1186 - Pages: 5
...Skills Business Analyst with People Management Skills, Customer Relationship Management and expertise in Software project development and management in Agile methodology • Over 5 years of experience in gathering requirements for software application development projects • Eliciting requirements using interviews, document analysis, requirements workshops, site visits, product related descriptions, use cases, scenarios, business analysis, and task & workflow analysis. • Delivering IT Solutions involving requirement analysis and management, project scope definition, implementation and testing of applications built for Windows, Mobile devices and Web in internet/intranet infrastructure • Critically evaluate information gathered from multiple sources, reconcile conflicts, decompose high-level information into details, abstract up from low-level information to a general understanding, and distinguish user needs from the required system • Proficient in documenting business requirements in Agile methodology, creating Functional specifications, User Interface design, Use Case Modeling, Process flows and reviewing Test Case document • Expertise in Software Development Lifecycle (SDLC) management and Business to Business (B2B) integration concepts • Proficient at Scrum model & processes and Agile methodologies, Certified Scrum Product Owner (CSPO) • Posses good domain understanding and expertise in Healthcare and Retail & Personal Finance ...
Words: 2061 - Pages: 9
...of various application software. For hardware functions such as input and output and memory allocation, the operating system acts as an intermediary between application programs and the computer hardware, although the application code is usually executed directly by the hardware and will frequently call the OS or be interrupted by it. Operating systems | | Common Features: * Process management * Interrupts * Memory management * File system * Device drivers * Networking (TCP/IP, UDP) * Security (Process/Memory protection) * I/o ------------------------------------------------- ------------------------------------------------- Types of Operating Systems: Real-time Operating System: It is a multitasking operating system hostel management system project report aims at...
Words: 15019 - Pages: 61
...Campbell Messner HPEZ 373 4/8/14 Motion Analysis Report: Hockey Slap Shot The hockey slap shot is a complex movement involving many different joints and muscles. In game situations the hockey slap shot is usually used by defenseman, but can be utilized successfully by forwards as well. There are six phases to a hockey slap shot: backswing, downswing, pre-loading, loading, release, and follow through. The hockey slap shot is most of the time made with a carbon fiber hockey stick that has a pre-determined amount of “flex” to the stick to get the puck moving at such high velocities. Accuracy of the puck placement usually depends of whether or not the puck is struck in the loading portion of the swing or in the release portion of the swing. The follow through is also important when determining placement. Unlike most primary sports movements, the hockey slap shot is a dynamic movement where the player is moving along the ice while striking the puck. This is what allows the slap shot to be so dangerous and interesting. To begin a slap shot a player must place the puck at around the middle of their stance for best power. The first movement of the slap shot is the backswing. Depending on which side the player stick handles, right or left, the dominant hand will be first on the stick and the non-dominant placed further down the stick. For the rest of the analysis we will use a player with a left-handed shot. In the backswing of the shot this is where the kinetic energy is developed...
Words: 1043 - Pages: 5
...occurring at General Hospital Conflict at General Hospital seems to have started before CEO Mike Hammer hired Marge Harding. When hiring Harding conflict just seemed to escalate to a new level. Harding lacked importance of commitment, she showed this when the new life altering technology was being installed, vacation time. It also seems like she displayed a little fight and flight minus the fight. Harding left her assistant in charge of handling the first week of a “New Way”. She also displays no regard to Team/Leader expertise, Harding solely based her decision to implement this new way of having tests read on advice from a former colleague with alternative political motives. Harding was sure with this cutthroat hardnosed decision she figured she would be able to skip a couple of rungs on the ladder to leadership. Bad decisions as this only escalated conflict, especially when the decision to fire co-worker Dr. Baker who was a trusty EKG reader, without consulting or informing co-worker. That one mistake caused a notion that there were never going be any likely hood of commitment from the staff Discuss the conflict management styles that are evident in the case. Most evident is an Intrapersonal Conflict, when Harding displays attributes that are clearly self-motivated and asserting. Harding shows many avoidance issues of others concerns. She has no ground for compromise, Harding’s avoidance of the meeting after returning from a week vacation really caused the staff to...
Words: 1246 - Pages: 5
...Emirate Airline: Connecting the Unconnected 1. Conduct a 5 C analysis using data from the case. Use bullets and short phrases; no need to write a lengthy essay! You may find it helpful to review the Core Curriculum reading: Framework for Marketing Strategy Formation. * Customer: business-oriented, want to experience premium service (both jets’ high-quality service and flight attendants’ personal attention), don’t want long layover or multiple stops. * Company: great location (Dubai is a central hub to many major cities), premium service, young fleet, large planes which could reach anywhere from Dubai, Flex-Track save cost and time traveling by taking advantage of favorable weather, high cargo logistics, competent, diverse and non-unionized employees, only one shareholder, short-line of command, personal attention to customers’ preferences. * Collaborator: large airplane manufacturers such as Boeing and Airbus to expand aircraft range, integrate new technology, and develop additional amenity; UAE government support for Emirate’ entry to its markets. * Competition: Established airlines claims that Emirate obtains unfair advantages such as subsidized fuel costs, tax-free and other governmental assistance. It could hurt Emirate’s reputation and potentially raise legal issues that could block Emirate’s entry to number of markets. Other local competitors such as Qatar Airways and Etihad also have great location. They invested in premium brands and had won many...
Words: 416 - Pages: 2
...a.m. and he knew he would need some luck to get to his 8:00 a.m. meeting at Teradyne’s Harrison Avenue headquarters on time. Traffic on Boston’s Central artery choked amidst the lingering construction from the interminable “Big Dig.” O’Brien was looking forward to today’s meeting with Teradyne senior executives to reflect on the lessons learned from the Jaguar project, which O’Brien had led for more than three years. The project had been one of the most important efforts in Teradyne’s 45-year-history. It had set out to create an entirely new semiconductor test-system platform. The resulting Ultra Flex system, designed to be flexible enough to allow customers to test a full range of semiconductor devices, was critical to the success of Teradyne’s new competitive strategy. The Jaguar project had marked a culmination of sorts in Teradyne’s eight-year effort to improve its product development process. The Jaguar team had used a number of project management practices, including intensive up-front project planning, formalized tools for tracking project progress, and a more structured development process. Most aspects of the Jaguar project went exceedingly well. All of the major hardware, for instance, had been developed in record time, and with minimal deviation from the plan. The product had met the vast majority of its target specifications. Yet, at the same time, software, a major component of the program, had run badly behind schedule and was still not completed. In addition, total...
Words: 10501 - Pages: 43
...Guillermo could use budgets and performance reports in the decision making process. This paper will also cover how ethics might influence his accounting decisions. Another part of this paper will explain what accounting information is most relevant for Guillermo to consider when making decisions.. Guillermo will use budgets and performance reports in the decision making process to evaluate their performance for score-keeping purposes. The production data provided shows where Guillermo is spending the money. The flex budget tells Guillermo that they produced more mid-grade than actually budgeted and less high-end than actually budgeted. The labor time was more on the mid-grade than budgeted and the less than budgeted on the high-end. On the variance analysis for June, the net earnings was a loss. By pinpointing where actual results differ from plans, performance reports can show Guillermo how they are doing and where to take action. Guillermo can use the flex budget information as attention directing reporting. The setup information data can be used to decide how to handle future business whether to become a representative for the company in Norway and change his focus from manufacturing to distribution. By using these reports, Guillermo can focus on operating problems, imperfections, inefficiencies, and opportunities. Attention directing reporting typically involves routine reports that compare actual results to before-the-fact expectations. Guillermo must use ethics...
Words: 857 - Pages: 4
...Case Study: Chase’s Strategy for Syndicating the Hong Kong Disneyland Loan (A) Q1. How should Chase have bid in the first round competition to lead the HK$3.3 billion Disneyland financing? 1.Three ways to approach this deal 1) bid to win, 2) bid to lose and3) no bid. Chase chose to bid to lose on the first round, but just enough to make it to the short list. Also, since Chase is one of Disney's relationship banks, Chase would not want to ruin this relationship by not bidding on their project. If Chase wanted to lead the competition from the first round, they should have made a bid that was more aggressive and aimed to win. This bid would have been closer to the desires of Disney, making them more appealing and increasing their probabilities of leading the financing. However, they chose to bid to lose, with just enough terms to get into the second round to "protect their reputation", but not to lead. The deal started to become more attractive with the possibility of Disney awarding a sole lead arranger mandate and with the increased potential for a successful syndication. At this point, after Chase made it through the first round, they decided on a more aggressive final proposal where they would be very close to meeting most of Disney’s demands in order to win the deal. 2. Standard Commitment Letter The standard commitment letter established by Chase for the Disneyland project would have the following terms: 1. HK$300 million loan. 2. 15-year maturity...
Words: 2378 - Pages: 10
...Hershey Marketing Case Analysis The Hershey Company Hershey’s customer base consists of wholesale distributors, chain grocery stores, mass merchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, department stores and natural food stores. The company has made significant changes over the past decade to strengthen its relationships with these customers. Primarily, the company has worked on improving its customer relationship management (CRM) which “enables companies to provide excellent real-time customer service through the effective use of individual account information.” (Kotler & Keller, 2009). In 1999 Hershey put in place a $112 million enterprise resource planning (ERP) and CRM system. The new technology was meant to bring the company’s business practices up to date and provide across-the-board automation that would span the process from order-taking to truck-loading. Unfortunately, due to initial problems in getting customer orders into the new system and transmitting the correct details of those orders to warehouse for shipping, Hershey got behind on their delivery and consequently lost over $100 million (Turk & Bligh, 2004). In an effort to repair damaged customer relationships stemming from the serious failures the year before, in 2000 Hershey implemented a new strategy that focused on fulfillment speed and agility. The company understood better than ever its key U.S. customers’ needs: efficient...
Words: 302 - Pages: 2
