...Herr Heinz Ruhnau decision to buy 20 airplanes from Boeing in 1985 for $500.000.000 was a mistake, so the Board of Lufthansa should fire him due to poor judgement. His strong feeling that the US exchange rate was going to drop, it wasn’t based on any evidence, so he should have postponed buying the planes until after the rate had actually dropped, in order to save company money. Regardless of the speculations that he had about the exchange rate, he should have put options on the money to save the company from higher losses if he’s intuition was not correct. There were 5 possible hedging alternatives. First was to remain uncovered, the riskiest option, which it depends on how the exchange rate will change in the coming year. In this case it would the the most profitable, but still a big risk to make such a decision. The second one was to apply a full forward cover which allows the company to buy forward contracts for the entire amount and eliminate the risk. In this case, Lufthansa pays $1.600.000.000 due to the current spot exchange rate and it doesn’t depend on how the rate would change. The third alternative was to buy Foreign Currency Options, this means to buy put options and let the expire, then purchase dollars for a lesser amount. This would have cost the company $1.246.000.000 and it would be the most profitable decision. The last alternative was to Buy Dollars Now which required the company to have all the money and hold them until the payment is done in January 1986...
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...In order to accomplish these tasks, I read Dispatches by Michael Herr. In this book, Michael Herr describes the Vietnam conflict from the point of view of the people of the ground and the view from the journalists covering the conflict. During the Vietnam...
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...Altenkirch eine Ansichtskarte zu schreiben. • | Richtig (correct answer, your response) | Im Fotoalbum waren Fotos von Altenkirchs Familie und Künstlern des Theaters. • | Richtig (correct answer) | Am Ende der Geschichte lebt Herr Altenkirch noch. • | Falsch (correct answer, your response) | Die Erzählerin arbeitet als Dramaturgin am Theater. • | Richtig (correct answer, your response) | Die Erzählerin findet ein Zimmer in einer Wohnung in Brandenburg. • | Richtig (correct answer, your response) | Herr Altenkirch zeigte der Erzählerin sein Fotoalbum. • | Richtig (correct answer, your response) | Im Theater haben alle ganz zufrieden gearbeitet. • | falsch (correct answer, your response) | Wenn die Erzählerin mittags zwischen den Proben nach Hause kommt, blättert sie mit Herrn Altenkirch durch alte Bücher. • | Falsch (correct answer, your response) | Die Erzählerin bereitet das Frühstück vor. • | Falsch (correct answer) | Der Herr, bei dem die Erzählerin wohnt, heißt Altenkirch. • | Richtig (correct answer) | Manchmal hatte Herr Altenkirch ein Paket aus dem Westen gekriegt, und er gab der Erzählerin den Schokoladenriegeln. • | Richtig (correct answer, your response) | Herr Altenkirch wollte die Schuhe von der Erzählerin putzen. • | Richtig (correct answer, your response) | Nach zwei Jahren zog die Erzählerin weg von Herrn Altenkirch. • | Falsch (correct answer, your response) | Es tut der Erzählerin...
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...Herr Heinz Ruhnau was the chairman of the German airline, Lufthansa. On February 14th, 1986 he faced losing his chairmanship over the partial hedging decision he made one year prior. The investment he made January 1985 was a purchase of seven hundred and thirty-seven jets from Boeing Aircrafts with an agreed upon cost of $500,000,000 due in one year. Ruhnau based his final hedging decision on the fact that the U.S dollar had been rising against the German Deutschmark at a fast pace over the previous five years. His instincts were that the U.S dollar was at its peak in 1985 and would decline over the next year. This expectation is what drove his executive decision to hedge half of the five hundred billion or $250,000,000 at the forward exchange rate of DM3.2/S and leave the other $250,000,000 completely uncovered. By the delivery date, Herr Ruhnau was correct in his assessment of the dollar to Deutschmark foreign exchange rate. Even though the dollar had depreciated he was still under scrutiny for, “recklessly speculating with Lufthansa’s money (3).” Background & Issues involved: Herr was summoned to meet with the Lufthansa board for the forward partial hedge and not for the $250,000,000 he left susceptible to foreign exposure risk. The board identified four main errors Herr made in the decision making process of acquiring those 737 jets: 1. Purchasing the Boeing aircraft at the wrong time. The U.S dollar was at an all-time high at the time of purchase in January 1985...
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...Jan. 19, 2011 Lufthansa Case Analysis Lufthansa’s chairman, Herr Heinz Ruhnau, purchased twenty 737 jets from Boeing (U.S.) in January 1985. The agreed price of the jets was $500,000,000 payable in one year. The U.S. dollars has been rising steadily and rapidly since 1980, and was about DM3.2/$ in January 1985 (Chart 1). Chart 1- DM/$ Exchange Rate 1980-1985 Herr Ruhnau believed U.S. dollar will depreciate very soon based on its appreciation in last 5 years. That is, exchange rate between DM and USD will favor Lufthansa when the company pays $500,000,000 to Boeing. However, it would be too risky to leave the whole amount uncovered. In order to hedge some risk, Herr Ruhnau used forward contract to cover 50% of the payment, and left the other 50% uncovered. There are five alternative hedging ways to choose: 1. Remain uncovered It is the maximum risk approach. If e= DM2.2/$ by January 1986, payment to Boeing would be DM= 2.2 * 500 million= DM 1.1 billion If e= DM 4/$ by January 1986, payment to Boeing would be DM= 4* 500 million= DM 2 billion 2. Full forward cover This approach would lock in an exchange rate of DM 3.2/$. Payment to Boeing would be DM= 3.2 * 500 million= DM 1.6 billion 3. Partial coverage Cover part of the payment with forward contract. Like Herr Ruhnau did, 50% covered by forward contract, DM= 3.2 * 250 million= 0.8 billion. If e= DM 2.2/$ in January 1986, total cost would be 0.8 billion + 2.2 * 250 million= DM 1.35 billion 4. Foreign...
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...Exercise 1 Volkswagen Supervisory Board German Company Volkswagen, Europe’s largest carmaker had a supervisory board. Institutional investors demanded that the chairman of the supervisory board, Herr Piech resign because of alleged conflict of interest. They claimed that Herr Piech and his family held significant shares in Porsche, which held a near 20% stake in Volkswagen. German’s voluntary corporate governance code states that conflict of interest should result in the termination of a supervisory board member’s mandate. Herr Piech claimed that the conflict would be managed by him leaving the room whenever any Porsche related matter was discussed. Some American institutional investors called this naïve. Herr Piech was strongly supported by the ten employee representatives on the 20 strong board. Discussion questions: 1. Many boards require directors who declare a conflict of interest to leave the room when the relevant issue is discussed. What is your opinion of this practice? Is it naive as some investors in this case claimed? 2. Given that Herr Piech was strongly supported by all ten employee representatives on the supervisory board, do the shareholder representatives on that board have grounds for complaint? Corporate Governance, Tricker P. 2012, 2nd Edition, Oxford Press, London Deadline: 12 & 14 March 2016 Interesting reading: Porsche: The Hedge Fund that also made cars http://priceonomics.com/prosche-the-hedge-fund-that-also-made-cars/...
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...1. ------------------------------------------------- Dora: An Analysis of a Case of Hysteria From Modernism Lab Essays Jump to: navigation, search Contents[hide] * 1 Hysteria in the Twentieth Century * 2 Summary of Case Study * 3 Critical Receptions and Importance of the Work | | by Alex Gatlin An Analysis of a Case of Hysteria (1905), better known simply as “Dora,” is a case study written by the neurologist and founder of psychoanalysis, Sigmund Freud, which details the condition and treatment of Ida Bauer, a woman diagnosed with hysteria and given the pseudonym “Dora." One of Freud’s most famous works, the Dora case study is typically praised for the scientific empiricism of Freud’s method, as well as for its identification of, among others, the phenomenon known as transference. ------------------------------------------------- Hysteria in the Twentieth Century Although no longer a recognized illness, hysteria (specifically female hysteria) was until the mid-twentieth century a common medical diagnosis for extreme emotional excess. Since its earliest diagnoses in ancient Greece, it was deemed an exclusively female condition, which manifested itself in a wide range of symptoms. Freud believed that hysteria stemmed from psychologically traumatic sexual experiences in the patient’s past, or from problems in the patient’s sexual life; thus, it was to be treated typically, although not exclusively, with some sort of genital stimulation. By the twentieth century...
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...The themes of short stories are often relevant to real life? To what extent do you agree with this view? In the short stories “Miss Brill” and “Frau Brechenmacher attends a wedding” written by Katherine Mansfield, the themes which are relevant to real life in Miss Brill are isolation and appearance versus reality. Likewise Frau Brechenmacher suffers through isolation throughout the story and also male dominance is one of the major themes that are highlighted in the story. These themes are relevant to real life as women are likely to suffer more in their life than men. In Miss Brill one of the central theme is isolation as Miss Brill is mentally isolated this is portrayed when she takes her fur out of the box which is symbolic of Miss Brill’s situation as she starts to have conversation “dear little thing it was nice to feel you again” this represents Miss Brill’s mental state, the way she shares her feeling with fur which is a object, highlights how desperate she seeks acceptance from person whom she can have conversation. This is significant when old couple do not have conversation with her at the park “disappointed Miss Brill as she looked forward for conversation”. This shows she is being rejected by people of her own age and also shows her egoistic behaviour as she expects the couple to have conversation with her. The theme isolation is relevant to real life as Mansfield uses Miss Brill to suggest reader that as human age they begin to feel emptiness in their lives...
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...“To remember or to forget – which is healthier” (pg.52) Funders Stasiland argues that remembering the past is important, to what extent do you agree? INTRODUCTION * Funder is fascinated by the question of how those who lived in the former GDR, whether believers in the regime or not, deal with the past. * For victims like Miriam, Julia and Frau Paul, recalling the past is extremely painful. Each has suffered experiences that some would prefer to forget. * Funder also possesses a personal mission: to understand how former East Germans lived behind the Wall and their experiences once the Wall fell. She is fascinated by people who suffered at the hands of the regime as well as those who worked for it, and their responses when the world as they knew it changed overnight. * ‘The stories of ordinary people’ PARAGRAPH ONE * Characters from the story who remember, that Funder praises * Julia - Julia is seeing a psychotherapist during the time period in which she slowly reveals her past experiences to Funder. She withdrew from the world after her imprisonment and experiences with the Stasi, as well as having to deal with the trauma of being raped soon after the fall of the Wall. Julia’s psychotherapist wants her to confront her past, in order to move on with her life, hence her search for the letters from the Italian boyfriend. Stasiland ends with the reader finding out Julia has embraced a new life in California * Miriam - Miriam has suffered immense...
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...fLufthansa Case Study Herr Heinz Ruhnau decision to buy 20 airplanes from Boeing in 1985 for $500.000.000 was a mistake, so the Board of Lufthansa should fire him due to poor judgement. His strong feeling that the US exchange rate was going to drop, it wasn’t based on any evidence, so he should have postponed buying the planes until after the rate had actually dropped, in order to save company money. Regardless of the speculations that he had about the exchange rate, he should have put options on the money to save the company from higher losses if he’s intuition was not correct. There were 5 possible hedging alternatives. First was to remain uncovered, the riskiest option, which it depends on how the exchange rate will change in the coming year. In this case it would the the most profitable, but still a big risk to make such a decision. The second one was to apply a full forward cover which allows the company to buy forward contracts for the entire amount and eliminate the risk. In this case, Lufthansa pays $1.600.000.000 due to the current spot exchange rate and it doesn’t depend on how the rate would change. The third alternative was to buy Foreign Currency Options, this means to buy put options and let the expire, then purchase dollars for a lesser amount. This would have cost the company $1.246.000.000 and it would be the most profitable decision. The last alternative was to Buy Dollars Now which required the company to have all the money and hold them until the...
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...University of Maryland Medical Center The University of Maryland Medical Center (UMMC) is one of the biggest medical institutions in Baltimore, Maryland. Its biggest competition is John Hopkins Medical Center, which is famous for the work of Heart Surgeon Ben Carson. Much of UMMC’s external organizational structure revolves around competitive factors. UMMC originated in 1823 and over the years has changed its name from the Baltimore Infirmary formed by the faculty of the University of Maryland School of Medicine and in 1998 to what is now known as University of Maryland Medical Center (University Of Maryland Medical Center, 2012). UMMC provides patient care, education, and research. UMMC offers patient care for emergency visits, pediatric, geriatric care, obstetrics, shock trauma, and all other health and medical related issues. University of Maryland Medical Center also houses the University of Maryland School of Medicine. This school offers career in different medical fields and all of the teachers at the school are the practicing residents in the hospital. Some 656 beds are maintained by the Center, which includes the R Adams Cowley Shock Trauma Center; the Marlene and Stewart Greenebaum Cancer Center; and the University of Maryland Hospital for Children. The hospital and the school’s organizational design are run as a corporation and answers to a Board of Directors, Shareholders, and Stakeholders (University Of Maryland Medical Center, 2012). With UMMC being in constant...
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...¿Debe despedir el consejo de Lufthansa a Herr Heinz Ruhnau como presidente? ¿Cómo justificaría Ruhnau sus acciones y en consecuencia, como justificaría de no perder su trabajo? Considero que el Consejo no debería despedir a Herr Ruhna ya que actuó de manera racional para no poner en riesgo el capital de los accionistas. No creo el hecho de que Herr Ruhnau actuó solamente por instinto, aunque el caso no lo menciona, lo más seguro es que el realizó los respectivos análisis sobre que era más conveniente para la empresa. Considero que el cómo CEO de Lufthansa tomó la decisión más adecuada por la incertidumbre que existía en relación al tipo de cambio, lo más adecuado fue cubrir el riesgo proporcionalmente. Si bien es cierto que la proporción para la cobertura fue arbitraria, se intentó equilibrar el riesgo al 50% combinando una estrategia de cobertura con una estrategia especulativa, esperando resultados futuros. A pesar de la seguridad que el tenia no siguió irracionalmente sus proyecciones, ya que eran muy arriesgadas; lo cual no habría sido financieramente adecuado. La opción de permanecer descubierto era muy arriesgada, si bien es cierto las ganancias pudieron haber sido muchas, también las perdidas pudieron ser catastróficas en caso de que el dólar no se hubiese desplomado. Considero que al final las expectativas de Ruhnau fueron acertadas. El dólar cayó al año siguiente a DM2.3000/$ para enero de 1986. Lo más sorprendente fue la velocidad a la que se desplomo, por...
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...Caso 3.5 Lufthansa El caso Lufthansa se trata sobre evaluar una acción financiera que tomo en su entonces presidente Herr Ruhnau en el Enero del 1985. La acción era comprar una flota de 20 aviones tipo jet a Boeing por un monto de $500,000,000 pagaderos contra entrega en un lapso de un año. El dólar en su momento se encontraba en el mejor precio de la historia y se mantenía incrementando de esta manera el cambio en su momento (enero 1985) era de DM 3.2/$. Las opciones que tenía en su momento el Sr. Ruhnau, eran: 1. Permanecer al descubierto 2. Cubrir la exposición completa con contratos a plazos. 3. Cubrir una parte de la exposición y dejar el resto sin cubrir. 4. Obtener dólares en su momento y mantenerlos hasta que se deba efectuar el pago. El señor Ruhnao utilizo la opción 3, protegiendo el 50% de la inversión a DM3.2/$ y dejando el resto al incognito si sube o baja el cambio de DM/$. Para mala fortuna de Lufthansa y el señor Ruhnau sucedió lo que él pensaba que iba a suceder el dólar tenía que devaluarse y para enero del 1986 cuando tocaba hacer los pagos el cambio era de DM2.3/$ de esta manera los costos de las opciones eran los siguientes: Alternativas Tipo Relevante Costo total en DM 1. Descubierto DM 2.3/$ 1,150,000,000 2. Cobertura 100% DM 3.2/$ 1,600,000,000 3. Cobertura 50/50 ½ DM 2.3/$ + ½ DM 3.2/4 1,375,000,000 4. Compra de dólares cierre DM 3.2/$ 1,246,000,000 Viendo que en se nota que la acción...
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...His attempts were very clear on many different occasions. In the story, Bruno had just finished having a conversation with his father and was leaving his office. “‘Heil Hitler,’ he said, which, he presumed, was another way of saying, ‘Well, goodbye for now, have a pleasant afternoon’”(54). Father had made sure that Bruno was being loyal to Hitler, but Bruno didn’t know what this statement actually meant. Father was attempting to indoctrinate Bruno to honoring Hitler. Later in the fable, Bruno began tutoring sessions with a man named Herr Liszt, who was obviously trying to indoctrinate him, based on the subjects he mainly taught. Boyne writes, “Herr Liszt was particularly fond of history and geography, [...] ‘is far more important in this day and age.’” (97) Even though Father wasn’t directly involved in this indoctrination attempt, he still hired someone to teach his children about Germany’s history and only their history. Herr Liszt was. To wrap up,throughout the whole story Ralph tries to Indoctrinate Bruno and his sister...
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...What is a better Monetary System: Bargaining or Money? So far, every monetary system ever implemented has been problematic. For instance, money, in its various forms, has been liable to manipulation. Metal money made from precious metals may be degraded by the issuer or filed, shaved, or chipped by individuals. Paper currency makes it more difficult for individuals to alter money but is more easily manipulated by the issuer, whether central authorities of individual banks. Bargaining and money are the two principal systems that markets utilize in buying or selling of both services and goods. Notwithstanding its weaknesses, money remains a better monetary system compared to bargaining. The imposition of limiting monetary policy in a disjointed wage bargaining context where workers have considerable bargaining rights can have perverse effects. Notwithstanding the tendency of liberal economists to point labor-market rigidities arising from government regulation and active trade unions as the source of unemployment, evidence exist that the nature of macroeconomic policy can also play a role. Macroeconomic policies are essential, especially in ensuring that wage-bargaining systems are able to deliver wage moderation that is favorable to low unemployment levels (OECD, 2011, p. 328). Centralized bargaining systems only work best under an accommodating monetary policy while bargaining systems organized at the industry level works efficiently under a non-accommodating policy. Therefore...
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