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RESM 5510 Financial Performance Analysis Report Template

To complete this report, you must choose either a publicly traded company or a nonprofit organization and evaluate the chosen organization’s financial position and performance based upon what you have learned from this class. Please read the following instructions before working on the report. Since you have two options (e.g., for-profit or nonprofit), two separate instructions and templates are provided.

Instructions for For-Profit Organization

If you are to choose a publicly traded for-profit organization, the following are the contents that I expect you to include:

1. Title Page and Table of Contents (5 pts)

2. Introduction (10 pts)

3. Business Model (15 pts)

4. Financial Issues & Risk Factors (15 pts)

5. Financial Position and Performance (20 pts)

6. Competitor Analysis (15 pts)

7. Overall Evaluation (5 pts)

8. Future Trend (5 pts)

9. Appendices & References (5 pts)

· Screenshots of stock prices, financial documents (e.g., 10-K, proxy), etc.

· Bibliography of any sources you referenced in your text (APA format: APA Style Guide)

10. Organization & Formatting (5 pts)

Please DELETE this instruction section when you finalize your paper. The template provides the overall organization and style of the final paper. It also includes my expectations for each section/part, as well as the required contents. The following is the suggested template for a publicly traded for-profit organization.

RESM 5510 Financial Performance Analysis Report

Name of your target organization

Your name

Date

Table of Contents
Introduction x
Business Model x
Financial Issues & Risk Factors x
Financial Position and Performance x
Competitor Analysis x
Overall Evaluation x
Future Trend x
References x
Appendices x

Introduction

For this section, please locate and provide general information about your target organization. Some information you should include:

· Who is this company? (e.g., Founder, CEO, executive officers, original name, what does the company do, what industry are they in, how long have they existed, when did they become a publicly traded company, etc.)

· Company location (e.g., where are they located, how many locations, which countries, where is the headquarters, which state or country is the company incorporated in, etc.)

· How many employees do they have?

· Any general information you find about the company/organization can be included.

One of the simple ways to collect general information about your target organization is obtaining financial documents. In general, there are two ways to obtain financial documents of publicly traded companies:

· The U.S. Securities and Exchange Commission (SEC)

The SEC requires public companies, certain company insiders, and broker-dealers to file periodic financial statements and other disclosures. The SEC database for company filings, which includes quarterly and annual reports, registration statements for IPOs and other offerings, insider trading reports, and proxy materials, can be obtained in electronic form by using the SEC’s EDGAR system. Please go to the following link and search for the name of your target company or stock symbol: EDGAR.

Then, you will see financial documents (i.e., company filings) of your target company, as well as brief descriptions of the filings.

· Company Website

We can also obtain financial documents and SEC filings from a company’s website. Let’s say we are interested in American Express [APX]. Below are the steps you could follow:

· Go to the company’s website: American Express.

· You will find ‘Investor Relations’ under the ‘ABOUT’ menu at the bottom of the website.

· Once you click ‘Investor Relations,’ find the ‘SEC Filings’ and click the ‘View All SEC Filings’ menu.

· Then, you can find various types of SEC filings of the company.

Please note that not all companies have the same layouts. Some companies use ‘Investor Relations,’ while the others may use just ‘Investors.’ Accordingly, you could simply use Google and search for ‘American Express investor relations.’ Then, it will directly take you to the ‘Investor Relations’ menu of American Express. The useful financial documents (SEC filings) are listed on Module 2 Readings on Canvas. As you know, Form 10-K includes an overview of a company’s main operations and its products and services. That means you must obtain 10-K of your target company when completing this section. Please make sure to provide a snapshot of the company’s profile. This section should be less than one page, but more than a half-page (around 2-3 paragraphs).

When you start a new paragraph, make sure to indent one inch.

Business Model

In this section, you should describe the primary (core) business of your target company, its subsidiaries, and ownership structure. You will find your target company’s business model and revenue streams on Form 10-K and 10-Qs. Please refer to Part I of 10-K, which provides all the business activities of your target company. You will also find the most recent sources of revenues from Form 10-Qs.

In terms of subsidiaries, you will find information about subsidiaries or a parent company of your target organization from the 10-K. If your target company does not have any subsidiaries, please focus on its business units, brands, or products or services the company offers. Unlike the introduction section, where you briefly describe your company’s products and services, you should articulate specific products and services your target company offers to its customers and clients.

Finally, this section should include information about ownership of your target company. You will find such information from 10-K and Proxy. Forms 3, 4, and 5 also provide changes in ownership of a company’s stock and securities. The proxy statement (Form DEF 14A) contains information about corporate governance (e.g., the board of directors and executive officers). It also provides stock ownership information about a company. A couple of examples of information to explain include:

· Who are the largest shareholders of the company and what percent share do they own (try to provide at least three entities and/or individuals who have the most shares)?

· Who are the company’s officers and/or executives (i.e., CEO, CFO, COO, President, Vice-President, Board of Directors, etc.)?


This section should be around one page. Make sure to indent one inch when you start a new paragraph.

Financial Issues & Risk Factors

As you may already know, Form 10-K contains any and all risks a company faces or may face in the future. Usually, risk factors that the company identified are listed in order of importance. Please select the top three risk factors on the 10-K that you think the ones are most critical for the organization’s survival. Please make sure to describe why each is a risk for your target company, not just copy and paste from the 10-K.

I also expect you to search for other risk factors from the most recent news articles. Please search for the most recent news articles which discuss risks and/or challenges your target company could be negatively affected by. News articles must be from reliable sources. For instance, the following list is considered reliable.

· Yahoo Finance

· Google Finance

· Wall Street Journal

· CNBC

· MarketWatch

· Reuters

· CNN

· USAToday

· Bloomberg

· USNews

· Guardian

· Financial Times

· FoxBusiness

· NPR

· Other major news media

Please note that the news articles do NOT have to be directly about your company; they can be about the industry your company is in (only if you cannot find ones about your target company). Once you locate a couple of news articles, briefly summarize the news articles and explain why you think the risk and/or challenge described in the news articles would negatively affect your target company.

This section should be 1-2 pages, but no more than two pages. Make sure to indent one inch when you start a new paragraph.

Financial Position and Performance

Financial Statement Analysis

Please recall that there are several ways to look at the financial performance of a company and understand what is happening with it. When conducting financial analysis, it is imperative to look at a collection of financial information rather than a single one. That means you should examine the three key financial statements to see how the company’s assets, liabilities, equity, revenues, expenses, and cash flow have changed over time, in addition to calculating financial ratios. Of course, you should examine financial statements before conducting ratio analyses.

In this section, please examine the three key financial statements (i.e., balance sheet, income statement, and cash flow statement) to explain how the number on the statements have changed. For instance, please explain how assets, liabilities, and shareholder equity have changed past 2-3 years by comparing the most recent balance sheet and previous ones. You can also track the changes in revenue and expenses, particularly net revenue, by examining the recent and past income statements. Finally, you can explore how the company’s cash positions (and various financial activities) have changed in recent years by analyzing the recent and past cash flow statements.

This sub-section should be around one page. That means I expect you to highlight only some of the notable changes and figures instead of listing how all numbers on financial statements have changed last several years. 

Financial Ratio Analysis

Please recall the Module 2 quiz. Like you calculated 15 financial ratios of Under Armour, you should calculate 15 financial ratios of your target company. I strongly recommend you create a table containing the calculated ratios instead of spelling out all financial ratios. After calculating financial ratios, please explain notable ratios. You don’t have to explain all ratios; please highlight only notable figures based on suggested threshold values.

When calculating firm valuation ratios, you need to obtain the most recent stock price of your target company. Please use Yahoo Finance, Google Finance, stock exchanges, or major news media (please refer to the previous section). This sub-section should be less than one page, meaning that a table containing all financial ratios is strongly recommended to reduce the length of the text. When you create a table, insert the table at the end of the section after stock price analysis. Please note that the table should also follow the APA style.

Stock Price Analysis

As I indicated in the guideline, you MUST provide three (3) screenshots that show the stock price of your company on three different dates throughout the semester. Please describe how the stock price has changed over time. If possible, please also include dividends information. For instance, please try to find how much your target company has provided (if any) dividends to shareholders over the past few years (or at least the last three dividends payouts). If your company does not provide dividends to shareholders, what is the benefit of owning stock in the company? This sub-section should be less than one page.

————————————-

Insert financial ratio table here

————————————-

Competitor Analysis

Financial Statement Analysis

This section is similar to the previous section. For this section, you should first identify the target company’s competitors and select one major competitor. To identify competitors:

1. Please go to CSIMarket.com.

2. Search for your target company. Please use the ‘GREEN’ search box to search for your target company. When you search for your target company, you will be able to see your target organization’s ‘sector’ and ‘industry.’ For instance, if you search for Nike, you will notice that Nike belongs to the ‘Consumer Discretionary’ sector and ‘Apparel, Footwear & Accessories’ industry.

3. Find some competitors in the same industry sector. When you click the ‘industry’ of your target organization (e.g., Apparel, Footwear & Accessories), you will see companies in that industry. Please select ONE major competitor of your target organization from the list.

Most importantly, your major competitor MUST be a public company who is trading stocks on U.S. stock markets. Please select a U.S.-based company. Then it will make your life a little easier. Once you identified a major competitor, you should do another round of financial analysis of the competitor. For instance, let’s say you are targeting Fitbit. Then you could select Garmin as the major competitor and conduct competitor analysis focusing on Garmin. Most importantly, the major competitor, Garmin, must be a public company. Please refer to the previous section for the suggested contents and length of the texts.

Financial Ratio Analysis

Please refer to the previous section. Again, you are expected to another round of financial ratio analysis of your major competitor. You could also create a table containing the financial ratios of the competitor company at the end of the section, after stock price analysis.

Stock Price Analysis

Please follow the instruction in the previous section. For the competitor, you don’t have to provide screenshots of the competitor’s stock prices. Please briefly explain changes in stock prices over time and include dividends information.

————————————-

Insert competitor financial ratio table here

————————————-

Overall Evaluation

Please provide a financial summary of your target company based on previous sections. I expect you to compare the financial performance of your target company to that of your competitor. Please do not solely focus on financial ratios. You should also summarize some notable figures on the financial statements of both companies. In terms of financial ratios, you should compare your target company’s financial performance with the industry average in addition to those of a major competitor. Please use CSIMarket.com to find industry average values.

This section should be around one page. Please try to be as succinct as possible.

Future Trend

Predict the trend for this company in the next five years based upon your research (e.g., anticipate new business or new revenue streams which they can create in the near future). Please search for the most recent news articles, industry reports, or even research articles that address the future of your company or the industry where your company belongs. Please include at least three outside sources (references) that describe the future of your target company or the industry. Finally, based on the overall analysis of your target company, please discuss your opinion on whether to buy or sell the stocks of the company. Please include at least one outside source (or reference) which agrees with your recommendation or opinion.

This section should be around one page.

References

Please break a page before listing references. Include a bibliography of any sources you referenced in your text (make sure to put everything in APA format).

Refer to the following link: APA Style Guide

Appendix A

Please break a page before including any appendices. Include any information you feel the reader should have but not critical to put in the body of your analysis (e.g., pictures, research data, statistical information, etc.).

Please provide three (3) screenshots that show the stock price of your company on three different dates throughout the semester.

Please also attach the most recent 10-K and proxy (DEF 14A) of your target company.

Instructions for Nonprofit Organization

If you are to choose a nonprofit organization, the following are the contents that I expect you to include:

1. Title Page and Table of Contents (5 pts)

2. Introduction (10 pts)

3. Nonprofit Management and Operations (15 pts)

4. Financial Issues & Risk Factors (15 pts)

5. Nonprofit Financial Position and Performance (20 pts)

6. Competitor Analysis (15 pts)

7. Overall Evaluation (5 pts)

8. Future Trend (5 pts)

9. Appendices & References (5 pts)

a. Form 990(s) and annual report(s)

b. Bibliography of any sources you referenced in your text (APA format: APA Style Guide)

10. Organization & Formatting (5 pts)

Please DELETE this instruction section when you finalize your paper. The template provides the overall organization and style of the final paper. It also includes my expectations for each section/part, as well as the required contents. The following is the suggested template for a nonprofit organization.

RESM 5510 Financial Performance Analysis Report

Name of your target organization

Your name

Date

Table of Contents
Introduction x
Nonprofit Management and Operations x
Financial Issues & Risk Factors x
Nonprofit Financial Position and Performance x
Competitor Analysis x
Overall Evaluation x
Future Trend x
References x
Appendices x

Introduction

For this section, please locate and provide general information about your target nonprofit organization. Some information you should include:

· Who is this nonprofit organization? (e.g., Founder, mission and vision statements, type or category of the nonprofit organization)

· Location (e.g., where are they located, how many locations, which countries, etc.)

· How many staff and employees do they have?

· Any general information you find about the organization can be included.

One of the simple ways to collect general information about your target organization is obtaining a financial document (i.e., Form 990). In general, there are a couple of ways to obtain Form 990 of a nonprofit organization:

· Internal Revenue Service (IRS)

The IRS requires nonprofit organizations to file periodic financial statements and other disclosures. Form 990 is intended to provide the government and interested members of the public with a snapshot of the organization’s activities for that year. Please go to the following link and search for the name of your nonprofit organization: IRS.

· Nonprofit Organization Website

Some nonprofit organizations provide their Form 990s and annual reports on their websites. Please note that not all nonprofits disclose their financial documents and annual reports online.

· Charity Navigator & Guidestar

Charity Navigator is a charity assessment organization that evaluates nonprofit organizations based in the U.S. The organization provides nonprofit financial documents and examines a nonprofit organization’s financial performance. Guidestar is an information service organization that provides a database of IRS-recognized nonprofit organizations. It also provides its own financial analyses of nonprofit organizations.

Please utilize various sources of information to describe your nonprofit organization. This section should be less than one page, but more than a half-page (around 2-3 paragraphs).

When you start a new paragraph, make sure to indent one inch.

Nonprofit Management and Operations

In this section, you should describe the structure, governance and leadership, and sources of revenue and expenses of your nonprofit organization. In terms of organizational structure and leadership, you can refer to the nonprofit organization’s website. You can also examine Part VII of the nonprofit’s Form 990, which contains information about officers, directors, trustees, and employees, as well as independent contractors. Form 990 Part I provides a summary of nonprofit governance, including a total number of employees and volunteers, and voting members. Please describe such stakeholders who are involved in managing and providing services to the nonprofit organization.

Part III of Form 990 involves the nonprofit organization’s accomplishments, including its mission statement and the expenses and revenues for the organization’s three largest program services. Part I also provides a summary of revenues, expenses, and net assets or fund balances of the nonprofit organization. Schedule G Part II involves fundraising events of the organization, while Schedule I Part II lists grant disbursements to other organizations. Using this information, please describe the nonprofit’s fundraising events and activities, as well as its expenses. You could also refer to the nonprofit’s website to check what nonprofit programs they provide to achieve its missions.

This section should be around one page. Make sure to indent one inch when you start a new paragraph.

Financial Issues & Risk Factors

Unlike Form 10-K of publicly traded companies, Form 990 does not provide any risks a nonprofit organization faces or may face in the future. Accordingly, please search for risk factors from the most recent news articles. Please search for the most recent news articles which discuss risks and/or challenges your target organization could be negatively affected by. News articles must be from reliable sources. Please try to read recent news articles from major news providers. You can also refer to research databases or research institutions, such as Giving USA, National Center for Charitable Statistics, Candid, Independent Sector, Council on Foundations, and many others.

Please note that the news articles do NOT have to be directly about your nonprofit organization; they can be about the recent trends and issues of the entire nonprofit sector. Once you locate a couple of news articles, briefly summarize the news articles and explain why you think the risk and/or challenge described in the news articles would negatively affect your organization.

This section should be 1-2 pages, but no more than two pages. Make sure to indent one inch when you start a new paragraph.

Nonprofit Financial Position and Performance

Financial Document Analysis

Please recall that nonprofit organizations are required to file Form 990 to the IRS, and some nonprofits publish annual reports to highlight a nonprofit organization’s mission and impact, thank volunteers and supporters, and make a case for donating to the organization. To complete this section, you must obtain and analyze Form 990 of your target nonprofit organization. If the organization also publishes an annual report, please obtain the report as well.

As you know, Form 990 contains three key financial statements of a nonprofit organization (i.e., Part VIII Statement of Revenue, Part IX Statement of Functional Expenses, and Part X Balance Sheet). Please examine these three sections of Form 990 and explain the following items:

Part VIII (Statement of Revenue) – the amount of contributions, gifts, and grants, program service revenue, other revenue sources, and total revenue

Part IX – total functional expenses and categories and amount of program service expenses, administrative expenses (management and general), and fundraising expenses

Part X – assets, liabilities, and unrestricted and restricted net assets

Please try to obtain Form 990s for the past 2-3 years and explain how the numbers above have changed over time.

This sub-section should be around one page. That means I expect you to highlight only some of the notable changes and figures instead of listing how all numbers on financial statements have changed last several years.

Nonprofit Financial Ratio Analysis

Please recall the Module 3 quiz. Please calculate six (6) nonprofit financial ratios. I would also expect you to explain what the results mean. Please refer to Module 3 Lecture and try to explain as best as you can for each ratio. You may create a table containing the financial ratios of your nonprofit organization.

This sub-section should be less than one page. If you can explain all six financial ratios on one page, you don’t necessarily have to create a table. However, if you want to reduce the length of the text, please create a table and insert it at the end of the section. Please note that the table should also follow the APA style.

————————————-

Insert financial ratio table here

————————————-

Competitor Analysis

Financial Document Analysis

This section is similar to the previous section. For this section, you should first identify a major competitor or benchmark of your nonprofit organization. Please try to find one that shares a similar mission and provides similar programs and services to your target organization. Then conduct another round of financial document analysis of the competitor or benchmark organization. Please refer to the previous section for the suggested contents and length of the texts.

Nonprofit Financial Ratio Analysis

Please refer to the previous section. Again, you are expected to another round of nonprofit financial ratio analysis of your major competitor or a benchmark organization. As noted, please explain all six financial ratios. You may create a table containing the financial ratios of the competitor at the end of the section.

————————————-

Insert competitor financial ratio table here

————————————-

Overall Evaluation

Please provide a financial summary of your target organization based on the previous two sections. I expect you to compare the financial performance of your target organization to that of your competitor. Please do not solely focus on financial ratios. You should also summarize some notable figures on the financial statements of both organizations. In terms of financial ratios, you should compare your target company’s financial performance with the regional and national average in addition to those of a major competitor. Please refer to Charity Navigator’s 2017 Metro Market Study to find regional and national average values.

This section should be around one page. Please try to be as succinct as possible.

Future Trend

Predict the future of your nonprofit organization in the next five years based upon your research (e.g., anticipate new programs or new revenue streams which they can create in the near future). Please search for the most recent news articles, industry reports, or even research articles that address the future of your organization or the entire nonprofit sector. Please include at least three outside sources (references) that describe the future of your target organization or the nonprofit sector. Finally, based on the overall analysis of your target company, please discuss your opinion on whether the nonprofit organization is worth donating. Please include at least one outside source (or reference) which agrees with your recommendation or opinion.

This section should be around one page.


References

Please break a page before listing references. Include a bibliography of any sources you referenced in your text (make sure to put everything in APA format).

Refer to the following link: APA Style Guide

Appendix A

Please break a page before including any appendices. Include any information you feel the reader should have but not critical to put in the body of your analysis (e.g., pictures, research data, statistical information, etc.).

Please attach the most recent Form 990 of your nonprofit organization.

Please include the most recent annual report of your nonprofit organization, if any. No need to include one if your nonprofit organization does not publish an annual report.

Financial markets homework help

Module 2 Quiz

 

Tommy Bush

February 9, 2022

Financial Ratios

Armour’s 2019 annual report

1

Current assets

$ 2,702, 209

2

Current liability

$ 1,422,009

3

Inventory

$ 892,258

4

Net sales

$ 5,267,132

5

Average total assets

$ 4,544,277

6

Costs of goods sold

$ 2,796,599

7

Average inventory

$ 955,877

8

Average accounts receivable

$ 680,630

9

Total liabilities

$ 2,693,444

10

Total assets

$ 4,843,531

11

Earnings before interest and taxes

$ 209,842

12

Interest expense

$ 21,240

13

Net income

$ 92,139

14

Sales or revenues

$ 5,267132

15

Shareholders’ or owners’ equity

$ 2,150,087

16

Price per share of common stock

$ 0.0009

17

Number of outstanding shares

$ 454,274

18

Earnings per share

$ 0.2

LIQUIDITY RATIOS

Current Ratio

Current Ratio = current assets / current liabilities

= 2,702, 209 / 1,422,009

= 1.900

Quick Ratio

Quick Ratio = (current assets – inventory ) / current liabilities

=(2,702, 209 – 892,258) / 1,422,009

= 1.2728

Net working capital

Networking capital = current assets – current liabilities

= 2,702,209 – 1,422,009

= 1,280,200

ACTIVITY (EFFICIENCY) RATIOS

Total asset turnover

Total asset turnover = net sales / average total assets

= 5,267,132 / 4,544,277

= 1.1591

Inventory turnover

Inventory turnover = costs of goods sold / average inventory

= 2,796,599/ 955,877

=2.9257

Receivable turnover

Receivable turnover = revenues (net sales) / average accounts receivable

= 5,267,132 / 680,630

= 7.7386

FINANCIAL LEVERAGE (SOLVENCY) RATIOS

Debt (debt-asset)

Debt (debt-asset) = total liabilities / total assets

= 2,693,444 / ,843,531

= 3.1931

Debt-to-equity (D/E)

Debt-to-equity (D/E) = total liabilities / total shareholders’ equity

= 2,693,444 / 2,150,087

= 1.2527

Interest coverage

Interest coverage = earnings before interest and taxes / interest expense

= 209,842/ 21,240

= 9.8796

PROFITABILITY RATIOS

Net profit margin

Net profit margin = net income / sales or revenues

= 92,139/ 5,267132

= 0.017

Return on equity

Return on equity = net income / shareholders’ or owners’ equity

= 92,139/ 2,150,087

=0.0429

Return on assets

Return on assets = net income / total assets

= 92,139 / 4,843,531

= 0.0190

FIRM VALUATION (MARKET PROSPECT) RATIOS

Market value

Market value = price pre share of common stock × number of outstanding shares

= 92,139 / 454,274

= 0.2028

Price-to-earnings

Price-to-earnings = price per share of common stock / earnings per share Balance & Income

=0.0009/0.2

=0.00045

Earnings per share

Earnings per share = net income / number of outstanding shares of common stock

= 92,139 / 454,274

= 0.2028

 

Financial markets homework help

Kingdom of Saudi Arabia

Ministry of Education

Saudi Electronic University

A picture containing text, outdoor, sign  Description automatically generated

المملكة العربية السعودية

وزارة التعليم

الجامعة السعودية الإلكترونية

College of Administrative and Financial Sciences

Assignment-3

FIN-405-Financial Derivatives

Due Date: 05/05/2022@ 23:59

Course Name: Financial Derivatives

Student’s Name:

Course Code: FIN-405

Student’s ID Number:

Semester: Second

CRN:

Academic Year:2021-22-2nd

For Instructor’s Use only

Instructor’s Name:

Students’ Grade:

Marks Obtained/Out of 10

Level of Marks: High/Middle/Low

General Instructions – PLEASE READ THEM CAREFULLY

· The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.

· Assignments submitted through email will not be accepted.

· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.

· Students must mention question number clearly in their answer.

· Late submission will NOT be accepted.

· Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.

· All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).

· Submissions without this cover page will NOT be accepted.


Assignment 3

Submission Date by students: 05 May 2022-11:59 PM(Thursday)

Place of Submission: Students Grade Centre via blackboard.

Marks: 10 Marks

Q1. Explain the classification of Future traders by trading style? ( Marks-3)

Q2. Suppose there is a commodity in which the expected future spot price is $60.To induce investors to buy futures contracts, a risk premium of $4 is required. To store the commodity for the life of the futures contract would cost $5.50.

Find the future s price? (Marks-3)

Q3. Explain the difference between a short hedge and a long hedge. ( Marks-2)

Q4. Briefly explain Interest rate swap and currency swap . (Marks-2)

Financial markets homework help

Kingdom of Saudi Arabia

Ministry of Education

Saudi Electronic University

A picture containing text, outdoor, sign  Description automatically generated

المملكة العربية السعودية

وزارة التعليم

الجامعة السعودية الإلكترونية

Practical Training Registration

Student Name

Student ID

Major

Training Organization

Name:

Shouaa for electric industrial development

Address: Alsolai, Riyadh, Saudi Arabia

Training Supervisor Contact Details

Designation: Financial Supervisor

Department: Finance

Email: ha@shouaa.com.sa

Telephone #:

Trainee Responsibilities

1. Review and forecast 2022 budget versus balance sheet and income statement.

2. Month end close for the planned versus actual cost.

3. Review Q1 budget and forecast Q2 budget.

4. Review and approve the raised PRs against the budget.

5. Recording a weekly basis sales monitoring regarding internal budget limits; an internal policy limits for financing the payments.

Work Hours

Per Week: 25

Total Work Hours: 300

Joining date

23/01/2022




By the Training Organization Representative:

By signing this registration form, I understand that:

· The student is required to undergo rigorous formal training in the responsibilities mentioned above for the agreed hours.

· Any update about student, his performance, behaviour would be promptly communicated to college via assigned email address and will be kept confidential from the student.

· The organization understands that student responsibilities in the organization are purely voluntary, and no monetary exchange is mandated by the college.

· In case of any information furnished by the student proving wrong, both parties have right to terminate the training program after intimation.

Trainee Supervisor Name:

Trainee Supervisor Designation:

Trainee Supervisor Signature:



By the Student:

I hereby state that all information provided above is correct and the responsibility of its authenticity solely lies on me. In case of any fallacious information, college hold the right to cancel the training registration.

Student Name

Student ID

Student Signature

Comments:

Job Vacant Trainee Availability?

Company Stamp

Yes, we can accept 1 trainee.

No

Submission Instruction:

The student-training supervisor, after getting the details filled in, is required to sign and stamp the document and get it signed from the student as well. After completing, the training supervisor is requested to send the scanned form on following email address and the course supervisor: caf.coop@seu.edu.sa Field Experience Training Guide (from the quality department).pdf

Note: Without receiving of filled registration form, the college will assume the training not to have initiated.

1st Report

Internship Student Weekly Report | Month of February

Start Date: 01__/__02_/_2022__ End Date: __28_/_02__/_2022__

(Report Components)

Task(s)

What are the activities and tasks given to you during this month?

· Month end close for the planned versus actual cost.

· Review Q1 budget and forecast Q2 budget.

· Review and approve the raised PRs against the budget.

· Completing application for new fund to expand production.

New skill(s)

What skills did you learn through the month?

· Budget forecasting.

· Asset pricing.

Meeting(s)

How many meetings did you attend?

3 meetings

Difficulty/ Challenge(s)

What are the difficulties you had during the month of February?

Working on eSRP.

How did you overcome these difficulties?

· 4 hours online eSRP course.

· Comparing paper work to eSRP recordings.

Learning

What did you learn from completing the tasks

· Budget closing, analyzing, and predicting.

· Valuing assets.

What did you want to learn more?

Analyzing financial statements to predict future demand.

*Note:

1. This report is a summary of the training activities performed.

2. You may attach additional pages if needed. And student can attach any extra note to this form.

2nd Report:

Internship Student Weekly Report | Month of March

Start Date: 01__/__03_/_2022__ End Date: __31_/_03__/_2022__

(Report Components)

Task(s)

What are the activities and tasks given to you during this month?

· Month end close for the planned versus actual cost.

· Review Q1 budget and forecast Q2 budget.

· Review and approve the raised PRs against the budget.

· Working on Accounting department.

New skill(s)

What skills did you learn through the month?

· Building financial statements.

· Recording financial transactions.

Meeting(s)

How many meetings did you attend?

3 meetings

Difficulty/ Challenge(s)

What are the difficulties you had during the month of March?

Working on QuickBook.

How did you overcome these difficulties?

· 2 hours online QuickBook course.

Learning

What did you learn from completing the tasks

· Financial statements building and analyzing.

· Processing PRs regarding the approved budget.

What did you want to learn more?

Analysing financial statements to predict future demand.

*Note:

1. This report is a summary of the training activities performed.

2. You may attach additional pages if needed. And student can attach any extra note to this form.

Company Information:

Overview

Shouaa Factory Co is proud to be one of the pioneer companies in the field of electrical manufacturing since the establishment of shouaa co in 2001. its basic goal, is to produce high quality products with competitive prices to cover the requirements of the growing market of electrical panel boards. and that was a key impetus to stimulate the national companies and factories to reach the self-sufficiency of local products. it has also attracted the best cadres of high efficiency for the betterment of the company to the highest competitive levels. Shouaa sought to keep up with the vision of the Kingdom of Saudi Arabia 2030 and contribute to raising the gross domestic product (GDP) by placing skilled. qualified Saudis in career fields to create economic growth for the Kingdom of Saudi Arabia. SHOUAA’s Quality policy is to maintain its reputation as one of the leaders in the field of low voltage Panels Board manufacturing in Saudi Arabia and Abroad through; Implementing and maintaining the Quality System in accordance with ISO 9001:2008 Standard to enable us to consistently deliver products of lasting value to the customers.

Website


http://www.shouaa.com.sa

Industry

Appliances, Electrical, and Electronics Manufacturing

Company size

51-200 employees

30 on LinkedIn Includes members with current employer listed as Shouaa Factory, including part-time roles.

Founded

2001

Specialties

Panel Board , Low Voltage Switch Boards , Low Voltage Motor Control Center (MCC), Automatic Transfers Switches (ATS), Automatic Power Factor Correction Panel (APFC), Generator Synchronization Panels , MDB,SMDB,FDP, Type Tested Panels, ABB, Schneider Electric , Siemens, and Mitsubishi

LinkedIn:

shouaa-factory

Financial markets homework help

3

RESM 5510 Financial Performance Analysis Report

Nike

Tommy T. Bush

April 20, 2022

Contents
Introduction 2
Business Model 3
Financial Issues and Risk Factors 4
Financial Position and Performance 6
Financial Ratios analysis 6
Discussion & Recommendations: 9
Conclusion: 10
References 11

Introduction

Nike, Inc., which was formerly known as Blue Ribbon Sports from 1964- 78, is an American sportswear company, which its headquarters located in Beaverton, Oregon. The company was initiated in 1964 as Blue Ribbon Sports. The company’s founder is Bill Bowerman, who was a track-and field couch at the University of Oregon. He founded the company in partnership with his former student Phil Knight (Wild, 2019). Today at the time of composing this report, the CEO and the president of the Company is John Donahoe. He supposed to steer the progressive growth of Nike Brand together with the company’s global business portfolio, including Jordan Brand, and Converse Inc. John was serving a Board member of Nike since 2014 before he eventually joined the company in the capacity of a CEO and President in 2020.

The key executive officers at Nike include but not limited to John Donahoe serving as the CEO/President of the company; Andy Champion-chief operating officer; Hilary Krane-EVP chief administrative offer and general counsel; Monique Matheson EVP, chief human resource officer; Heidi O’neil- President, consumer and market place, among others (Wild, 2019).

According to its current Form 10-K released in May 31, 2021, regarding securities registered as stipulated in Section 12 (G) of the Act; the company has stipulated some of the risks connected to their securities, investments and liquidity. In this case, they have suggested that their financial outcomes may be under siege supposing that some critical investments in businesses and operations will fail to yield the anticipated returns (Wild, 2019). This is to say, that from time to time, the company perhaps could invest in technology, the infrastructure of the business, new capabilities and businesses, product offering and manufacturing innovations, plus the widening of the current businesses, like the NIKE Direct operations, with a requirement of some substantial cash investments and management attention. With the objective of undertaking cost-effective investments, some of these investments have been highlighted to be subject of typical risks and uncertainties, which are intrinsically present in the development of the new business or in the widening of the already existing ones. Therefore, the failure of any of these critical investments to offer the anticipated outcome and profitability could have a ripple impact which is adverse in nature, on the company’s financial results and this can potential shift management attention from more profitable business operations.


Business Model

As of 2020, the organization operates in over 45 countries worldwide. They have excelled in generating value to itself and the fitness industry as a whole. To being with, the organization internally created value by devising a strong foresight, insight, and cross-sight. Their foresight propagates that they seek to elevate human potential in every possible way by bringing innovation and instilling inspiration to every athlete worldwide. Their insight lived up to their expectations as they are able to provide customers with the latest technology supplementing graphic printing and emotional branding, implemented in their plethora of offerings. Lastly, their cross-sight enabled them to identify complementarity singularly through several acquisitions, complementing their ranges and model. Some of them include converse for their casual footwear line, Hurley for watersport apparel and casual beachwear, etc.

Principally, the business model of Nike is grounded on production and sales of athletic and sports products, including the footwear, clothing, equipment plus some other services. All the things under one of the most known brand globally (Chen, 2020). John Joseph Donahoe who is the CEO and president of the company joined the position in January 2020. He is an American businessperson who earlier own worked for Brain & Company and was a board member at Nike since 2014.

As per the business model the organizations key activities include, research &development, manufacturing and distribution of footwear, apparel, sporting goods, equipment, etc. They deliver their products through third party distributors, licensees, online platforms and company owned retail stores. Their key partnerships comprise of their manufacturing contractors, who are spread over 3 countries, with the likes of Pou Shen Corporation of Taiwan, supplying their athletic and casual footwear. Whilst, PT pan brothers located in Indonesia and Eagle Nice International holdings of Hong Kong, manufacture Nike’s apparel. However, their most lucrative partnerships reside with widely populous athletes like Michael Jordan, Christiano Ronaldo, Lebron James, etc., and they are also immensely dependent on Apple Inc. for the manufacturing and production of their tracking chips, implanted in their footwear.


Financial Issues and Risk Factors

As already established from the current Form 10-K released in May 31, 2021, regarding securities registered as stipulated in Section 12 (G) of the Act; the company has stipulated some of the risks connected to their securities, investments and liquidity. In this case, they have suggested that their financial outcomes may be under siege supposing that some critical investments in businesses and operations will fail to yield the anticipated returns (Chen, 2020). This is to say, that from time to time, the company perhaps could invest in technology, the infrastructure of the business, new capabilities and businesses, product offering and manufacturing innovations, plus the widening of the current businesses, like the NIKE Direct operations, with a requirement of some substantial cash investments and management attention. With the objective of undertaking cost-effective investments, some of these investments have been highlighted to be subject of typical risks and uncertainties, which are intrinsically present in the development of the new business or in the widening of the already existing ones. Therefore, the failure of any of these critical investments to offer the anticipated outcome and profitability could have a ripple impact, which is adverse in nature, on the company’s financial results and this can potential shift management attention from more profitable business operations.

According to one of the article published by the businessinsider.com, the company is facing three risks that could place huge hurdles to its global domination and these risks are: athletic wear goes out of fashion, Under Armour is progressively growing; and China is disappointing (Almani & Nobanee, 2020). For instance, when we focus on the second hurdle, Under Armour has recently grown into a giant sportswear company in the United States- in fact, the second-largest just behind Nike. The company is today boasting of more than 3 billion dollars in revenue just of last year. This brand is however still having only a fraction of Nike’s 28 billion dollar in annual revenue.

However, the company’s sneakers with Spokesman Stephen Curry, is formidable product in the market, proving the fact that it has real potential as a sneaker brand. The company is increasingly making some of the critical savvy moves like the Curry partnership, and this is promising somewhat a progressive growth that would perhaps put some big dent in Nike’s business (Almani & Nobanee, 2020).


Financial Position and Performance

From the analysis of the financial position and performance of Nike in the past three years shows that the brand does not only invest heavily but also make immense profits. In 2016 and 2017, for example, Nike had total assets of assets for the quarter ending November 30, 2021 were $38.917 billion, a 11.71% increase year-over-year. The total assets for 2021 were $37.74 billion, a 20.41% increase from $31.342 billion in 2020 and increase from $23.717 billion in 2019 which we increase 5.24% from 2018.

The corporation managed revenues of around $36,397, 000. Two trends are evident across these years. First, Nike has been increasing its spending on its businesses. In 2017, for instance, it expanded its assets by $1,505,000. The other trend is that its revenues have also been on the rise growing from $32, 376, 000 to $34, 350 000 from 2016 t0 2017 and $34, 350 000 to $36,397, 000 from 2017 to 2018.


Financial Ratios analysis

Current and conventional current ratio for the company from perhaps 2010 to 2021. Current ratio is known to be a liquidity ratio that is quantifying the company’s ability to pay for its short term obligations. The liquidity ratios are part of the financial analysis which assist in analyzing information about the ability of a firm to pay its debts which are short term without involvement of external capital. If the ratio is close to one, it is considered good as the company can pay the debt obligations using its own capital. There are three major liquidity ratios Current ratio, Quick Ratio and Cash Ratio, the following table shows the formulas of the ratios.

Metrics

2018

2019

2020

Current asset

15134

16525

20556

Current Liabilities

6040

7866

8284

Inventory

5261

5622

7367

Cash

2754

2108

3765

Cash equivalents

4249

4466

8348

cash sum

7003

6574

12113

current asset – inv

9873

10903

13189

Liquidity Ratios

2018

2019

2020

Current Ratio

2.51

2.1

2.48

Quick Ratio

1.63

1.39

1.59

Cash Ratio

1.16

0.84

1.46

The above graph depicts the liquidity ratios of Nike. It is quite evident from the trend lines of ratios that there was a drop in the overall liquidity capability of Nike in 2019 but in 2020 it was again to the normal range; however, the current ratio was good in 2019.

Management efficiency Ratios:

There are some ratios which are associated with efficiency in managing assets of the firm. Like the asset turnover ratio, this ratio indicates how affectively the assets were utilized in generating sales from them. The other one is inventory turnover ratio, it depicts the days needed to convert inventory into sales. There are also working capital ratios which shows which portray firm’s efficiency in regard of doing sales and inventory

Metrics

2018

2019

2020

Assets

22536

23717

31342

Revenue

36397

39117

37403

Cost of goods sold

31952

34345

34693

Inventory

5261

5622

7367

Ac Payable

2279

2612

2248

Ac Receivable

3498

4272

2749

Management efficiency Ratios

Asset turnover ratio

1.615

1.649

1.193

Inventory turnover ratio

6.1

6.1

4.7

DIO (Days inventory outstanding)

60

60

78

DPO (Days payable outstanding)

26

28

24

DSO (Days sales outstanding)

35

40

27

From the above analysis it is clear that the ratios declined in these three year gradually. its is good for inventory turnover as the firm is getting efficient in terms of inventory management but for asset turnover it is slightly concerning because the organization is not utilizing its assets to make sales as it was doing in precious years.

Metrics

2018

2019

2020

Assets

22536

23717

31342

Debt

3468

3464

9406

Liability

12724

14677

23287

Equity

9812

9040

8055

debt+equity

13280

12504

17461

Solvency Ratios

Debt to asset

15%

15%

30%

Debt to equity

35%

38%

117%

Debt to capital

26%

28%

54%

As it can be seen that the ratios increased in these years gradually. Generally, it can be inferred from this information that there is much debt involved in the company or external credit revolving as compared to previous years.

Metrics

2018

2019

2020

Net Income

3966

4029

2539

Total Equity

9812

9040

8055

Total assets

22536

23717

31342

Sales

36397

39117

37403

Return ratios

ROE

40%

45%

32%

ROA

18%

17%

8%

The return ratios of Nike has much better status. The Return on equity however rose a little to 45 percent from 40 percent in 2019 but overall the trend shows decline in the return ratios


Discussion & Recommendations:

The liquidity ratios of Adidas and Nike for the years 2018, 2019 and 2020. The liquidity standing of both organizations fall in the good sector as the values are closer and above to 1.0, the overall situation of Nike is better than Adidas as it’s values are almost double than Adidas.in 2019 the cash was a little less than the current liabilities that is why the cash ratio in that year was less than 1.0.

Analyzing asset turnover ratio for both firms it is quite clear that these both organizations did well in using their assets in generating sales. both have asset turnover ratio more than except for Adidas in 2020 where it lagged at 0.93 which was still not bad but comparing it to the trend it was some short. The inventory turnover ratio is also good for these firms but Adidas is in better position as its days are less than Nike. For DIO Nike has advantage having less days than Adidas in containing inventory before making sales from it. The DPO has depicted that Nike has advantage in this ratio too as it has been able to pay the payable outstanding in lesser days than Adidas. The DSO is also showing good for Nike because the data shows that Nike has lesser days in collecting account receivables.

The solvency ratios showed that both organizations have circulated the external debt in the organization for operations and investments. With time the debt was increased and it can be inferred that it must be due to the purpose of growth in the industry.

The return ratios of both organizations are good, but the Nike has much better status than Adidas. The return on equity of Nike is almost double than that of Adidas. If we analyze the ROA Nike has much better returns in this case too.

By the DuPont analysis we can see that for Adidas the lowest ROE was in 2020 which was 7 percent, seeing the values of variables it is evident that the efficiency and profitability were lowest in that years that is why the ROE wepercent.28 percent to 7 percent. In case of Nike the lowest ROE was also in the year 2020, it was 32 percent. By analyzing the three variables the lowest value came out to be of profitability 7 percent and efficiency 1.19 as compared to previous years.

The stock price of Adidas is better than Nike, seeing dividend yield it is clear that Adidas is paying more dividend of its earning as compared to Nike. The market cap is in millions; the value of Nike is more than Adidas as current market worth.


Conclusion:

To conclude the document, we can say that the financial analysis has allowed us to look deep down the number of both organizations. The overall position of Nike was slightly better than Adidas. However, the data was of US market so it cannot be generalized for the whole global markets of these two multinational giants.


References

Almani, M., & Nobanee, H. (2020). Financial Statement Analysis of NIKE. Available at SSRN 3675026.

Chen, M. (2020). Financial performance analysis: a case study of Nike (Doctoral dissertation).

Gibson, C. H. (2012). Financial reporting and analysis. Cengage Learning.

Nica, I., Chiriță, N., & Ionescu, Ș. (2021). Using of KPIs and Dashboard in the analysis of Nike company’s performance management. Theoretical & Applied Economics28(1).

Ranjan, W. (2016). The Financial Performance Analysis of Nike Inc: with Special Reference Year 2015 Annual Report.

Wild, J. (2019). Financial Accounting: Information for Decisions, 9e.

Feldman, D. S. (1995). Asset management: Here to stay. Cornell Hotel and Restaurant Administration Quarterly, 36(5), 36-51.

Sridharan, U. V., Caines, W. R., & Patterson, C. C. (2005). Implementation of supply chain management and its impact on the value of firms. Supply Chain Management: An International Journal.

Piller, F. T., Lindgens, E., & Steiner, F. (2012). Mass customization at Adidas: Three strategic capabilities to implement mass customization. Available at SSRN 1994981.

Zhou, X. (2014). Financial Analysis of Nike, Inc. Company.



https://www.macrotrends.net/stocks/charts/NKE/nike/shares-outstanding


https://finance.yahoo.com/quote/ADDYY/history?

period1=1514764800&period2=1623801600&interval=1mo&filter=history&frequency=1mo&in

cludeAdjustedClose=true


https://www.investing.com/equities/adidas-salomon-financial-summary

https://www.investing.com/equities/nike-income-statement

https://report.adidas-group.com/2020/en/servicepages/downloads.html

Financial markets homework help

RESM 5510 Revenue Generation and Financial Management in Recreation, Event, and Sport Organizations

Financial Performance Analysis Report Guideline (100 Points)

For the financial performance analysis report, every student must choose either a publicly traded company or a nonprofit organization to complete a semester-long project. The objectives of the report are as follows:

· Investigate target organization’s core business model, organizational structure, units, and practices (e.g., mission, visions, subsidiaries, revenue streams, and key projects) and issues (e.g., merger and acquisition, personnel, and risks)

· Analyze financial data and cases from a number of financial viewpoints

· Evaluate the organization’s financial position based upon what students have learned from this class.

The paper should include some information about the company/nonprofit organization in general: Who is this organization (e.g., leadership, management, founder, the board of directors, etc.)? Where is it located? How many locations? How long has it been in business? How many employees? What does it primarily do? What market sector is it in? Who are its competitors? What position does it have in the market (e.g., market share, contributions, grants, donations, and functional expenses)?

Second, you should provide your justification of why you selected the organization. Then, consider the following questions: what the company’s business operations are or what the nonprofit organization’s missions are; how they have performed in the last 12 months; why you feel they would make a good addition to an investment portfolio; how you think they will perform in the future; and other important financial data and information (these are just examples…the expectation is that you provide me with a complete snapshot or profile of the company or nonprofit organization you select). Use all of the information and financial terminologies contained in the readings and course materials for assistance with this report. 

The final report will review how your organization performed over a given period (usually one year), based on the economic, financial, market, global, and other “environmental” factors. Next, try to use what you will learn to look at the organization through your newly acquired financial eyes. If you choose to target a publicly traded company, you must provide 3 screenshots that show the stock price of your company on 3 different dates throughout the semester. Get these from any website that can search stock prices by a symbol. What was the average stock price throughout the semester? How did the stock price change throughout the semester? Is there a justifiable reason for the changes that are company-specific, not based upon the overall market? What is the financial status of the company? For nonprofit organizations, you should obtain Form 990s and attached it to the final report. You can use several websites to obtain the documents. Then, you should analyze the financial performance of the chosen nonprofit organizations using some financial metrics.

The final paper should be at least 7 but no more than 10 pages in length (except for the title page, double spaced, and Times New Roman 12-point font) for this assignment. Please adhere strictly to the APA 7th edition reference text for the appropriate way to format and write this assignment.  

Point Breakdown

For For-Profit Organizations (Publicly Traded Companies)

1. Title Page and Table of Contents – 5 pts

· Create a title page following the APA style and format.

· Include section title and subtitle of your text and page numbers.

2. Introduction (Provide information about the company in general) – 10 points

· Who is this company? (e.g., Founder, CEO, original name); where are they located?; how many locations?; how long have they been in business (or what year it was established)?; how many employees?; and where are their headquarters?; just to name a few.

· Provide a brief snapshot of the company’s profile.

3. Business Model – 15 points

· Identify and describe their primary/core business (i.e., the parent company) and its revenue streams

· Identify and describe their subsidiaries (i.e., business units, segments/sectors, and/or brands) and their revenue streams

4. Financial Issues & Risk Factors – 15 points

· Identify financial issues (e.g., financial achievement or problem, merger and acquisition, personnel, new business, research & development) impacting current and future developments and financial performance of the company

· Identify risk factors that could affect current and future developments and financial performance of the company

5. Financial Position and Performance (Try to use what you will learn or have learned by the time you actually do it to look at the company through your newly acquired financial eyes) – 20 points

· Financial Statement Analysis (e.g., Income Statement, Balance Sheet, and Statement of Cash Flows)

· Financial Ratio Analysis (e.g., Price/Earnings to growth ratios, Earning Per Share ratio, etc.)

· Stock Price Analysis (e.g., average stock price and its changes throughout the semester)

6. Competitor Analysis – 15 points

· Identify competitors and select ONE major competitor

· Provide brief background information of the competitor and its position in the market by conducting financial performance analyses (i.e., financial statement analysis, financial ratio analysis, and stock price analysis)

7. Overall Evaluation – 5 points

· Provide the financial summary of the company

8. Future Trend – 5 points

· Predict the trend for this company in the next 5 years based upon your research (e.g., anticipate new business or new revenue streams which they can create in the near future)

· Provide your opinions (i.e., overall evaluation of the company through the project)

9. Appendices & References – 5 pts

· Include any information you feel the reader should have but not critical to put in the body of your report (e.g., any tables or figures you may use to present information, statistics, research data, etc.).

· Include a bibliography of any sources you referenced in your text (make sure to put everything in APA format).

10. Organization & Formatting – 5 pts

· Use of the template provided

· Grammatical errors and typos

· Readability of texts

· Use of formal language

For Nonprofit Organizations (NPOs)

1. Title Page and Table of Contents – 5 pts

· Create a title page following the APA style and format.

· Include section title and subtitle of your text and page numbers.

2. Introduction (Provide information about the nonprofit organization in general) – 10 points

· Who is this NPO? (e.g., Founder, the board of directors, president, original name); where are they located?; how many locations?; how long have they been in the nonprofit or voluntary sector (or what year it was established)?; how many employees?; what is its mission and vision?; just to name a few.

· Provide a brief snapshot of the NPO’s profile.

3. Nonprofit Management and Operations – 15 points

· Identify and describe the NPO’s primary/core financial resources and its fundraising events and activities

· Identify and describe its expenses and expense categories

4. Financial Issues & Risk Factors – 15 points

· Identify financial issues (e.g., financial achievement or problem, government support, personnel, clients, donor base, etc.) impacting current and future developments and financial performance of the organization

· Identify risk factors that could affect current and future developments and financial performance of the organization

5. Financial Position and Performance (Try to use what you will learn or have learned by the time you actually do it to look at the organization through your newly acquired financial eyes) – 20 points

· Financial Document Analysis (e.g., contributions and grants, program service revenue, functional expenses, balance sheet, etc.) using Form 990

· Financial Performance Metrics (e.g., Program Efficiency Ratio, Administrative Expense Percentage, Fundraising Efficiency Ratio, Liabilities to Assets Ratio, etc.)

6. Competitor Analysis – 15 points

· Identify competitors and select ONE major competitor

· Provide brief background information of the competitor and its position in the market by conducting financial performance analyses (i.e., financial document analysis and financial performance metrics)

7. Overall Evaluation – 5 points

· Provide the financial summary of the organization

8. Future Trend – 5 points

· Predict the trend for the organization in the next 5 years based upon your research (e.g., anticipate new programs or new revenue streams which they can create in the near future)

· Provide your opinions (i.e., overall evaluation of the organization through the project)

9. Appendices & References – 5 pts

· Include any information you feel the reader should have but not critical to put in the body of your report (e.g., any tables or figures you may use to present information, statistics, research data, etc.).

· Include a bibliography of any sources you referenced in your text (make sure to put everything in APA format).

10. Organization & Formatting – 5 pts

· Use of the template provided

· Grammatical errors and typos

· Readability of texts

· Use of formal language

Financial markets homework help

References
marketwatch. (n.d.). Retrieved from www.marketwatch.com: https://www.marketwatch.com/investing/stock/amzn

References
(n.d.). Retrieved from finance.yahoo.com: https://finance.yahoo.com/quote/RS/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAALoCVw7ypvNGfdnfyTZnjnWBotDIvhznWRYuHairXQiAPyAKRoqB84p83UZhml_2aMlnvvIBqgx_tBreZc-NguX7T4jjbPJHr-djCXk2xaBHlUXSEax1Z4KkYyApbDKc8MVfaPQpCl

References
MarketWatch. (n.d.). Retrieved from www.marketwatch.com: https://www.marketwatch.com/investing/stock/tsla


Financial markets homework help

Corporate Finance

Fifth Edition

Chapter 20

Financial Options

Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved

Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved

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1

Chapter Outline

20.1 Option Basics

20.2 Option Payoffs at Expiration

20.3 Put-Call Parity

20.4 Factors Affecting Option Prices

20.5 Exercising Options Early

20.6 Options and Corporate Finance

Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved

2

Learning Objectives (1 of 3)

Define the following terms: call option, put option, exercise price, strike price, exercising the option, expiration date, American option, European option, in-the-money, and out-of-the-money.

Compute the value of a call or a put option at expiration.

List the rights and obligations of the buyer of the option and the seller of the option.

Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved

Learning Objectives (2 of 3)

Use put-call parity to solve for the call premium, the put premium, the stock price, the strike price, or the dividend.

Discuss the following factors that influence call and put option values: stock price, strike price, and volatility.

Describe arbitrage bounds for option prices.

Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved

Learning Objectives (3 of 3)

Explain why it is never optimal to exercise an American call option early on a non-dividend-paying stock, and why it is sometimes optimal to exercise an American put option early.

Explain the use of option modeling to value equity.

Describe how corporate debt can be viewed as a portfolio of riskless debt and a short position in a put option.

Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved

20.1 Option Basics (1 of 2)

Financial Option

A contract that gives its owner the right (but not the obligation) to purchase or sell an asset at a fixed price as some future date

Call Option

A financial option that gives its owner the right to buy an asset

Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved

20.1 Option Basics (2 of 2)

Put Option

A financial option that gives its owner the right to sell an asset

Option Writer

The seller of an option contract

Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved

Understanding Option Contracts (1 of 3)

Exercising an Option

When a holder of an option enforces the agreement and buys or sells a share of stock at the agreed-upon price

Strike Price (Exercise Price)

The price at which an option holder buys or sells a share of stock when the option is exercised

Expiration Date

The last date on which an option holder has the right to exercise the option

Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved

Understanding Option Contracts (2 of 3)

American Option

Options that allow their holders to exercise the option on any date up to, and including, the expiration date

European Option

Options that allow their holders to exercise the option only on the expiration date

Note: The names American and European have nothing to do with the location where the options are traded

Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved

Understanding Option Contracts (3 of 3)

The option buyer (holder)

Holds the right to exercise the option and has a long position in the contract

The option seller (writer)

Sells (or writes) the option and has a short position in the contract

Because the long side has the option to exercise, the short side has an obligation to fulfill the contract if it is exercised.

The buyer pays the writer a premium

Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved

Interpreting Stock Option Quotations (1 of 3)

Stock options are traded on organized exchanges.

By convention, all traded options expire on the Saturday following the third Friday of the month.

Open Interest

The total number of contracts of a particular option that have been written

Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved

Table 20.1 Option Quotes for eBay Stock

Source: Chicago Board Options Exchange at

www.cboe.com

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A table displays the option quotes for E Bay incorporated on September 10 2018 at 12 33 E T, 33.75, negative 0.235. Bid 33.75, Ask 33.76. Size 18 by 14. Volume. 2108011. The table for calls is as follows. The table has 10 Rows and 7 columns. The columns have the following headings from left to right. Calls, Last sale, Net, Bid, Ask, Volume, Open. The Row entries are as follows. Row 2. 20 18 September 21 32.00, E BAY 1821132, 1.86, blank 1.86, 1.96, blank 534. Row 3. 20 18 September 21 33.00, E BAY 1821133, 1.04, blank 1.03, 1.08, 15, 827. Row 4. 20 18 September 21 34.00, E BAY 1821134, 0.45, negative 0.09, 0.42, 0.43, 110, 4959. Row 5. 20 18 September 21 35.00, E BAY 1821135, 0.15, negative 0.06, 0.14, 0.15, 258, 7199. Row 6. 20 18 September 21 36.00, E BAY 1821136, 0.05, negative 0.03, 0.05, 0.06, 268, 13279. Row 7. 20 19 January 1 30.00, E BAY 1821130, 4.75, blank 4.7, 4.8, blank 737. Row 8. 20 19 January 1 33.00, E BAY 1821133, 2.7, negative 0.12, 2.62, 2.68, 2, 467. Row 9. 20 19 January 1 35.00, E BAY 1821135, 1.73, 0.1, 1.61, 1.66, 6, 2079. Row 10. 20 19 January 1 37.00, E BAY 1821137, 0.96, blank 0.91, 0.96, 1, 2324. Row 11. 20 19 January 1 40.00, E BAY 1821140, 0.39, blank 0.34, 0.38, blank 3455. The table for puts is as follows. The table has 10 Rows and 7 columns. The columns have the following headings from left to right. Puts, Last Sale, Net, Bid, Ask, Volume, Open I n t. The Row entries are as follows. Row 1. 20 18 September 21 32.00, E BAY 1821132, 0.09, negative 0.02, 0.09, 0.1, 2, 2122. Row 2. 20 18 September 21 33.00, E BAY 1821133, 0.25, negative 0.06, 0.24, 0.26, 2, 2927. Row 3. 20 18 September 21 34.00, E BAY 1821134, 0.62, 0.03, 0.63, 0.65, 35, 5631. Row 4. 20 18 September 21 35.00, E BAY 1821135, 1.13, negative 0.22, 1.34, 1.39, 1, 3594. Row 5. 20 18 September 21 36.00, E BAY 1821136, 2.28, negative 0.07, 2.15, 2.3, 2, 1481. Row 6. 20 19 January 1 30.00, E BAY 1821130, 0.74, blank 0.65, 0.68, blank 7912. Row 7. 20 19 January 1 33.00, E BAY 1821133, 1.55, negative 0.05, 1.55, 1.58, 129, 7562. Row 8. 20 19 January 1 35.00, E BAY 1821135, 2.47, blank, 2.51, 2.57, blank 15795. Row 9. 20 19 January 1 37.00, E BAY 1821137, 3.8, 0.65, 3.85, 3.9, 79, 17202. Row 10. 20 19 January 1 40.00, E BAY 1821140, 5.6, Blank 6.3, 6.4, Blank 6093.

12

Interpreting Stock Option Quotations (2 of 3)

At-the-money

Describes an option whose exercise price is equal to the current stock price

In-the-money

Describes an option whose value, if immediately exercised, would be positive

Out-of-the-money

Describes an option whose value, if immediately exercised, would be negative

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Interpreting Stock Option Quotations (3 of 3)

Deep in-the-money

Describes an option that is in-the-money and for which the strike price and the stock price are very far apart

Deep out-of-the-money

Describes an option that is out-of-the-money and for which the strike price and the stock price are very far apart

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14

Textbook Example 20.1 (1 of 2)

Purchasing Options

Problem

It is the afternoon of September 10, 2018, and you have decided to purchase 10 January call contracts on eBay stock with an exercise price of $35. Because you are buying, you must pay the ask price. How much money will this purchase cost you? Is this option in-the-money or out-of-the-money?

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Textbook Example 20.1 (2 of 2)

Solution

From Table 20.1, the ask price of this option is $1.66. You are purchasing 10 contracts and each contract is on 100

shares, so the transaction will cost

(ignoring any brokerage fees). Because this is a call option and the exercise price is above the current stock price ($33.75), the option is currently out-of-the-money.

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Alternative Example 20.1 (1 of 3)

Problem

You have decided to purchase 2/15/2019 put contracts on the D J I A with an exercise price of $246.

Source:

CBOE.com

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As on January 21, 2019 at 15:52 ET, LAST 247. 06

There are three tables shown. One table shows the Calls values and another shows the Puts value. In between both the tables a table shows the Strike values as on February 02, 2015.

The Calls table has nine columns with four rows. The information given in the Calls table is as follows:

Last: 4.1

• Net: positive 1.405

• Bid: 4.35

• Ask: 4.55

• Vol: 3

• IV: 0.1432

• Delta: 0.5427

• Gamma: 0.0406

• Int: 15

Last: 4

• Net: positive 1.73

• Bid: 3.75

• Ask: 3.95

• Vol: 401

• IV: 0.1406

• Delta: 0.5016

• Gamma: 0.0416

• Int: 17

Last: 3.2

• Net: positive 1.31

• Bid: 3.25

• Ask: 3.45

• Vol: 14

• IV: 0.1403

• Delta: 0.46

• Gamma: 0.0415

• Int: 2

Last: 2.7

• Net: positive 1.14

• Bid: 2.77

• Ask: 2.92

• Vol: 1

• IV: 0.1411

• Delta: 0.4197

• Gamma: 0.0406

• Int: 5

The second table titled February 02, 2019. The table consists of one column and four rows.

The Strike values are as follows:

• DJX 246.000

• DJX 247.000

• DJX 248.000

• DJX 249.000

The Puts table has nine columns consisting of four rows. The last column has a negative symbol over it. The information given in the Puts table is as follows:

Last: 3.75

• Net: negative 1.6

• Bid: 3.45

• Ask: 3.65

• Vol: 10

• IV: 0.1514

• Delta: negative 0.457

• Gamma: 0.0384

• Int: 50

Last: 4.32

• Net: negative 1.58

• Bid: 3.85

• Ask: 4.1

• Vol: 2

• IV: 0.1499

• Delta: minus 0.4957

• Gamma: 0.039

• Int: 0

Last: 0

• Net: 0

• Bid: 4.3

• Ask: 4.6

• Vol: 0

• IV: 0.1487

• Delta: minus 0.5351

• Gamma: 0.0392

• Int: 0

Last: 0

• Net: 0

• Bid: 4.85

• Ask: 5.1

• Vol: 0

• IV: 0.147

• Delta: minus 0.5748

• Gamma: 0.0391

• Int: 3

17

Alternative Example 20.1 (2 of 3)

Problem

How much money will this purchase cost you?

Is this option in-the-money or out-of-the-money?

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Alternative Example 20.1 (3 of 3)

Solution

The ask price is $3.65 per contract.

The total cost is

Because the strike price ($246) is less than the current price ($247.06), the put option is out-of-the-money.

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Options on Other Financial Securities (1 of 2)

Although the most commonly traded options are on stocks, options on other financial assets, like the S&P 100 index, the S&P 500 index, the Dow Jones Industrial index, and the N Y S E index, are also traded.

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Options on Other Financial Securities (2 of 2)

Hedge

To reduce risk by holding contracts or securities whose payoffs are negatively correlated with some risk exposure

Speculate

When investors use contracts or securities to place a bet on the direction in which they believe the market is likely to move

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21

20.2 Option Payoffs at Expiration (1 of 2)

Long Position in an Option Contract

The value of a call option at expiration is

Where S is the stock price at expiration, K is the exercise price, C is the value of the call option, and max is the maximum of the two quantities in the parentheses.

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Figure 20.1 Payoff of a Call Option with a Strike Price of $20 at Expiration

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The x-axis shows the stock price from 0 to 60 in increments of 10. The y-axis shows the payoff in dollars from 0 to 40 in increments of 10. The graph shows that the curve starts at (0, 0) and at the strike price (20, 0) it starts to rise and stops at (60, 40).

23

20.2 Option Payoffs at Expiration (2 of 2)

Long Position in an Option Contract

The value of a put option at expiration is

Where S is the stock price at expiration, K is the exercise price, P is the value of the put option, and max is the maximum of the two quantities in the parentheses.

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Textbook Example 20.2 (1 of 2)

Payoff of a Put Option at Maturity

Problem

You own a put option on Oracle Corporation stock with an exercise price of $20 that expires today. Plot the value of this option as a function of the stock price.

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Textbook Example 20.2 (2 of 2)

Solution

Let S be the stock price and P be the value of the put option. The value of the option is

Plotting this function gives

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The x-axis shows the stock price from 0 to 40 in increments of 10. The y-axis shows the payoff in dollars from 0 to 20 in increments of 10. The graph shows that the curve starts at (0, 20) and at the strike price (20, 0) it becomes parallel to the x-axis and stops at (40, 0).

26

Alternative Example 20.2 (1 of 2)

Problem

You own a put option on Dell stock with an exercise price of $12.50 that expires today. Plot the value of this option as a function of the stock price.

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Alternative Example 20.2 (2 of 2)

Solution

Let S be the stock price and P be the value of the put

option. The value of the option is

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The y-axis ranges from 0 through 14. The graph starts at (0, 12.5), falls diagonally through (6, 6.5) to a point at (12.5, 0) labeled, strike price, then moves horizontally through (20, 0). All values estimated.

28

Short Position in an Option Contract

An investor that sells an option has an obligation.

This investor takes the opposite side of the contract to the investor who bought the option.

Thus the seller’s cash flows are the negative of the buyer’s cash flows.

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Figure 20.2 Short Position in a Call Option at Expiration

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The x-axis shows the stock price from 0 to 60 in increments of 10. The y-axis (downward) shows payoff in dollars from 0 to minus 40 in reduction of 10. The graph shows that the curve stars at (0, 0) and is parallel to x-axis, till (20, 0) when it starts to drop and ends at (60, minus 40).

30

Textbook Example 20.3 (1 of 2)

Payoff of a Short Position in a Put Option

Problem

You are short in a put option on Oracle Corporation stock with an exercise price of $20 that expires today. What is your payoff at expiration as a function of the stock price?

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Textbook Example 20.3 (2 of 2)

Solution

If S is the stock price, your cash flows will be

If the current stock price is $30, then the put will not be exercised and you will owe nothing. If the current stock price is $15, the put will be exercised and you will lose $5. The figure plots your cash flows:

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The x-axis shows the stock price from 0 to 40 in increments of 10. The y-axis (downward) shows payoff in dollars from 0 to minus 20 in reduction of 5. The graph shows that the curve stars at (40, 0) and is parallel to x-axis, till (20, 0) when it starts to drop and ends at (0, minus 20).

32

Profits for Holding an Option to Expiration

Although payouts on a long position in an option contract are never negative, the profit from purchasing an option and holding it to expiration could be negative because the payout at expiration might be less than the initial cost of the option.

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Figure 20.3 Profit from Holding a Call Option to Expiration

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The y-axis shows profit at expiration in dollars from minus 5 to 10 in increments of 5 with x-axis originating at 0. The graph shows the following data:

• 2019 Jan 18 30.00 Call: The curve originates at (25, minus 5), runs parallel to x-axis till (30, minus 5) after which it starts to increase and ends at (45, 10).

• 2019 Jan 18 33.00 Call: The curve originates at (25, minus 2.5), runs parallel to x-axis till (33, minus 2.5) after which it starts to increase and ends at (45, 9).

• 2019 Jan 18 35.00 Call: The curve originates at (25, minus 1.5), runs parallel to x-axis till (35, minus 1.5) after which it starts to increase and ends at (45, 8).

• 2019 Jan 18 37.00 Call: The curve originates at (25, minus 1), runs parallel to x-axis till (35.5, minus 1) after which it starts to increase and ends at (45, 7).

• 2019 Jan 18 40.00 Call: The curve originates at (25, minus 0.5), runs parallel to x-axis till (40, minus 0.5) after which it starts to increase and ends at (45, 5).

34

Textbook Example 20.4 (1 of 2)

Profit on Holding a Position in a Put Option Until Expiration

Problem

Assume you decided to purchase each of the January put options quoted in Table 20.1 on September 10, 2018, and you financed each position by shorting a two-month bond with a yield of 2.5%. Plot the profit of each position as a function of the stock price on expiration.

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Textbook Example 20.4 (2 of 2)

Solution

Suppose S is the stock price on expiration, K is the strike price, and P is the price of each put option on September 10th. Then your cash flows on the expiration date will be

The plot is shown below. Note the same trade-off between the maximum loss and the potential for profit as for the call options.

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expiration in dollars from minus 10 to 10 in increments of 5 with x-axis originating at 0. The graph shows the following data:

• 2019 Jan 18 40.00 Put: The curve starts at (25, 8) and drops to (40, minus 6), after which it runs parallel to x-axis till (45, minus 6).

• 2019 Jan 18 37.00 Put: The curve starts at (25, 7.5) and drops to (36.5, minus 5), after which it runs parallel to x-axis till (36.5, minus 5).

• 2019 Jan 18 35.00 Put: The curve starts at (25, 7) and drops to (35, minus 3), after which it runs parallel to x-axis till (45, minus 3).

• 2019 Jan 18 33.00 Put: The curve starts at (25, 6.5) and drops to (32.5, minus 2), after which it runs parallel to x-axis till (45, minus 2).

• 2019 Jan 18 30.00 Put: The curve starts at (25, 4) and drops to (30, minus 0.5), after which it runs parallel to x-axis till (45, minus 0.5).

36

Returns for Holding an Option to Expiration (1 of 2)

The maximum loss on a purchased call option is 100% (when the option expires worthless).

Out-of-the money call options are more likely to expire worthless, but if the stock goes up sufficiently, it will also have a much higher return than an in-the-money call option.

Call options have more extreme returns than the stock itself.

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Returns for Holding an Option to Expiration (2 of 2)

The maximum loss on a purchased put option is 100% (when the option expires worthless).

Put options will have higher returns in states with low stock prices.

Put options are generally not held as an investment, but rather as insurance to hedge other risk in a portfolio.

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Figure 20.4 Option Returns from Purchasing an Option and Holding It to Expiration

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• 2019 Jan 18 40.00 Call: The line originates at (25, minus 100) and runs parallel to the x-axis till (40, minus 100) after which it increases to (41, 500). • 2019 Jan 18 37.00 Call: The line originates at (37, minus 100) and increases to (42, 500). • 2019 Jan 18 35.00 Call: The line originates at (35, minus 100) and increases to (45, 500). • 2019 Jan 18 33.00 Call: The line originates at (34, minus 100) and increases to (45, 350). • 2019 Jan 18 30.00 Call: The line originates at (30, minus 100) and increases to (45, 200).

• 2019 Jan 18 30.00 Put: The line originates at (45, minus 100) and runs parallel to the x-axis till (40, minus 100) after which it increases to (25, 130). • 2019 Jan 18 33.00 Put: The line originates at (40, minus 100) and runs parallel to the x-axis till (37, minus 100) after which it increases to (25, 200). • 2019 Jan 18 35.00 Put: The line originates at (37, minus 100) and runs parallel to the x-axis till (34, minus 100) after which it increases to (25, 299). • 2019 Jan 18 37.00 Put: The line originates at (34, minus 100) and runs parallel to the x-axis till (33, minus 100) after which it increases to (25, 405). • 2019 Jan 18 40.00 Put: The line originates at (33, minus 100) and runs parallel to the x-axis till (30, minus 100) after which it increases to (27, 500).

39

Combinations of Options (1 of 4)

Straddle

A portfolio that is long a call option and a put option on the same stock with the same exercise date and strike price

This strategy may be used if investors expect the stock to be very volatile and move up or down a large amount but do not necessarily have a view on which direction the stock will move.

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Figure 20.5 Payoff and Profit from a Straddle

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The x-axis shows the Stock price in dollars with strike price K marked on the x-axis. The lines for Put and call payoff originate from different ends of the graph and coincide at K on the x-axis, forming a V. The lines for Put and call payoff originate from different ends of the graph and coincide below K on the x-axis, forming a V.

41

Combinations of Options (2 of 4)

Strangle

A portfolio that is long a call option and a put option on the same stock with the same exercise date but the strike price on the call exceeds the strike price on the put

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Textbook Example 20.5 (1 of 2)

Strangle

Problem

You are long both a call option and a put option on Hewlett-Packard stock with the same expiration date. The exercise price of the call option is $40; the exercise price of the put option is $30. Plot the payoff of the combination at expiration.

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Textbook Example 20.5 (2 of 2)

Solution

The red line represents the put’s payouts and the blue line represents the call’s payouts. In this case, you do not receive money if the stock price is between the two strike prices. This option combination is known as a strangle.

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The x-axis shows the Stock price in dollars from 0 to 80 in increments of 20. The y-axis shows the payoff in dollars from 0 to 40 in increments of 10. The graph shows that the line for put originates at 30 on the y-axis and coincides with the x-axis on 30. The line for call originates at (80, 40) and coincides with the x-axis on 40.

44

Combinations of Options (3 of 4)

Butterfly Spread

A portfolio that is long two call options with differing strike prices and is short two call options with a strike price equal to the average strike price of the first two calls

Although a straddle strategy makes money when the stock and strike prices are far apart, a butterfly spread makes money when the stock and strike prices are close.

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Figure 20.6 Butterfly Spread

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The x-axis shows the stock price in dollars from 0 to 45. The y-axis shows the payoff in dollars from minus 30 to 30 in increments of 5 and the x-axis drawn at 0. The graph shows that the line for 20 call originates at 0 and runs along the x-axis till 20, after which it starts to increase and ends at (45, 20). The line for 40 call originates at 0 and runs along the x-axis till 40, after which it starts to increase and ends at (45, 5). The line for payoff originates at 0 and runs along the x-axis till 30, after which it decreases to (45, minus 30). The line for payoff of the entire combination originates at 0 and runs along the x-axis till 20, after which it increases to (30, 10) before dropping again to (40, 0).

46

Combinations of Options (4 of 4)

Protective Put

A long position in a put held on a stock you already own

Portfolio Insurance

A protective put written on a portfolio rather than a single stock

When the put does not itself trade, it is synthetically created by constructing a replicating portfolio.

Portfolio insurance can also be achieved by purchasing a bond and a call option

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Figure 20.7 Portfolio Insurance

The plots show two different ways to insure against the possibility of the price of Tripadvisor stock falling below $45. The orange line in (a) indicates the value on the expiration date of a position that is long one share of Amazon stock and one European put option with a strike of $45 (the blue dashed line is the payoff of the stock itself). The orange line in (b) shows the value on the expiration date of a position that is long a zero-coupon riskfree bond with a face value of $45 and a European call option on Tripadvisor with a strike price of $45 (the green dashed line is the bond payoff).

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A line graph a, plots pay off in dollars versus stock price in dollars. The Vertical axis shows payoff in dollars from 0 to 75 in increment of 15, and the Horizontal axis shows stock price in dollars from 0 to 75 in increment of 15. A doted curve starts from origin and ends at point (75, 75). Curve labeled as stock plus put starts from point (0, 45), becomes parallel with the horizontal axis till point (45, 45). Thereafter, it converges with the doted curve. All values are estimated.

A line graph b, plots pay off in dollars versus stock price in dollars. The Vertical axis shows payoff in dollars from 0 to 75 in increment of 15, and the Horizontal axis shows stock price in dollars from 0 to 75 in increment of 15. A doted curve labeled as riskless bond starts from the point (0, 45), becomes parallel with the horizontal axis till point (75, 45). Curve labeled as riskless bond plus call starts from point (0, 45), and converges with the horizontal axis till point (45, 45). Thereafter, the curve is upward sloping till point (75, 75). All values are estimated.

48

20.3 Put-Call Parity (1 of 4)

Consider the two different ways to construct portfolio insurance discussed previously

Purchase the stock and a put

Purchase a bond and a call.

Because both positions provide exactly the same payoff, the Law of One Price requires that they must have the same price.

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20.3 Put-Call Parity (2 of 4)

Therefore,

Where K is the strike price of the option (the price you want to ensure that the stock will not drop below), C is the call price, P is the put price, and S is the stock price.

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20.3 Put-Call Parity (3 of 4)

Rearranging the terms gives an expression for the price of a European call option for a non-dividend-paying stock:

This relationship between the value of the stock, the bond, and call and put options is known as put-call parity.

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Textbook Example 20.6 (1 of 3)

Using Put-Call Parity

Problem

You are an options dealer who deals in non-publicly traded options. One of your clients wants to purchase a one-year European call option on H A L Computer Systems

Financial markets homework help

RUNNING HEAD: HEALTHCARE FINANCE QUESTIONS 1

ha

Ronda Peacock

Dr. Harold Griffin

Health Financial Management

April 13, 2022

My healthcare organization of choice is CVS Health Corp. CVS is the parent company of the drugstore chain, CVS Health Corp. and is the biggest pharmacy benefit company within the U.S. CVS purchased Aetna in 2018 and is now a key player in the health insurance industry.

Questions:

1. What is your most successful marketing strategy that has the best ROI?

Asking this question will help narrow which marketing efforts are most effective

2. What are the greatest concerns for your company from a financial perspective?

Asking this question will give me insight on what could be troublesome in regards to the company’s finances

3. How would you describe your financial health right now?

I am asking this question to get a better look into is the current state of the company’s finances

4. Will there be any other major acquisitions or mergers?

This would be huge in the healthcare industry if this were to happen. The merger with Aetna was historic.

5. How much do you spend on technology?

The way technology is constantly evolving and changing daily. I would like to know what the company is doing to keep up.

Financial markets homework help

Rubric for HSM410 – Course Project Presentation

Summative Assessment Rubric

Program Outcomes

HSM410

Assignment

Points

%

Course Project Presentation
(Week 7)

 150

 15%

1. PO1: Analyze, design and implement practical approaches to solve and prevent business problems in healthcare settings.

CO: 5

Performance

4

Excellent

3

Good

2

Fair

1

Poor

0

Fail

35-40

25-34

15-24

1-14

0

Identify:

Identify business problems in healthcare settings.

CO: 5

Students address all 7 questions posed regarding the legislation/policy analyzed.

Students address 4-5-6 questions posed regarding the legislation/policy analyzed.

Students address 3-4 questions posed regarding the legislation/policy analyzed.

Students address 1-2 questions posed regarding the legislation/policy analyzed.

Students address no questions posed regarding the legislation/policy analyzed.

2. PO2: Sustain a working understanding of evolving issues in the healthcare industry.

CO: 1, 4

Performance

4

Excellent

3

Good

2

Fair

1

Poor

0

Fail

25-30

15-24

10-14

1-9

0

Analysis:

Research and select relevant information on issues in the healthcare industry from multiple / varying sources

CO: 1,4

Students utilize at least 6 adequate references for their project.

Students utilize 5 adequate references for their project.

Students utilize 4 adequate references for their project.

Students utilize 3 adequate reference for their project.

Students utilize less than 3 appropriate references for their project.

15-20

10-14

5-9

1-4

0

Apply:

Utilize relevant information from appropriate sources to understand evolving issues in the healthcare industry.

CO: 1,4

Student applies relevant information from appropriate sources to understand at least 7 evolving issues in health policy.

Student applies relevant information from appropriate sources to understand 5-6 evolving issues in the health policy.

Student applies relevant information from appropriate sources to understand 3-4 evolving issues in the health policy.

Student applies relevant information from appropriate sources to understand 2 evolving issues in health policy.

Student applies relevant information from appropriate sources to understand less than 2 evolving issues in health policy.

3. PO4: Apply project management and business analysis principles.

CO: 5

Performance

4

Excellent

3

Good

2

Fair

1

Poor

0

Fail

15-20

10-14

5-9

1-4

0

Analyze:

Differentiate various approaches to solve and/or prevent business problems in healthcare.

CO: 5

Students perform a detailed and comprehensive analysis of the legislation/policy selected, including non-legislative options which could have been tried.

Students perform a quality, but not comprehensive, analysis of the legislation/policy selected, including non-legislative options which could have been tried.

Students perform an adequate analysis of the legislation/policy selected, including non-legislative options which could have been tried.

Students perform a limited analysis of the legislation/policy selected, including non-legislative options which could have been tried.

Students do not perform an analysis of legislation/policy selected, including non-legislative options which could have been tried.

5. PO5: Communicate effectively in writing.

CO: 1, 2, 3, 4, 5

Performance

4

Excellent

3

Good

2

Fair

1

Poor

0

Fail

15-20

10-14

5-9

1-4

0

Identify:

Identify appropriate forms of effective communication.

CO: 1, 2, 3, 4, 5


All
of the following expectations are covered in the final paper:

· Thesis statement clearly identified legislation to be addressed

· Body of text follows an organized plan to address the main points

· Content sub-divisions follow outline

· Conclusion summarizes; complements thesis; contains no new information


Most
of the following expectations (3 out of 4) are covered in the final paper:

· Thesis statement clearly identified legislation to be addressed

· Body of text follows an organized plan to address the main points

· Content sub-divisions follow outline

· Conclusion summarizes; complements thesis; contains no new information


Some
of the following expectations (2 out of 4) are covered in the final paper:

· Thesis statement clearly identified legislation to be addressed

· Body of text follows an organized plan to address the main points

· Content sub-divisions follow outline

· Conclusion summarizes; complements thesis; contains no new information


Few

of the following expectations (1 out of 4) are covered in the final paper:

· Thesis statement clearly identified legislation to be addressed

· Body of text follows an organized plan to address the main points

· Content sub-divisions follow outline

· Conclusion summarizes; complements thesis; contains no new information

None of the following expectations are covered in the final paper

· Thesis statement clearly identified legislation to be addressed

· Body of text follows an organized plan to address the main points

· Content sub-divisions follow outline

· Conclusion summarizes; complements thesis; contains no new information

15-20

10-14

5-9

1-4

0

Apply:

Demonstrates clear communication through appropriate structure and order of presentation

CO: 1, 2, 3, 4, 5

Final draft of the paper demonstrates all of the following description expectations:

· Meets the page requirement

· Has significant scope and depth of research to support statements

· Includes relevant illustration or examples

· Employs sound use of reasoning and logic to reinforce conclusions

Final draft of the Presentation submitted by the team demonstrates most of the following description expectations:

· Meets the page requirement

· Has significant scope and depth of research to support statements

· Includes relevant illustration or examples

· Employs sound use of reasoning and logic to reinforce conclusions

Final draft of the Presentation submitted by the team demonstrates some of the following description expectations:

· Meets the page requirement

· Has significant scope and depth of research to support statements

· Includes relevant illustration or examples

· Employs sound use of reasoning and logic to reinforce conclusions

Final draft of the Presentation submitted by the team demonstrates few of the following description expectations:

· Meets the page requirement

· Has significant scope and depth of research to support statements

· Includes relevant illustration or examples

· Employs sound use of reasoning and logic to reinforce conclusions

Final draft of the Presentation submitted by the team demonstrates none of the following description expectations:

· Meets the page requirement

· Has significant scope and depth of research to support statements

· Includes relevant illustration or examples

· Employs sound use of reasoning and logic to reinforce conclusions

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511-052 Red Lobster

2

food quickly, and at low cost, so mainstream consumers could afford it. In 1963, Darden and some
partners acquired a successful high end seafood restaurant in Orlando called Gary’s Duck Inn. At that
time, mainstream Americans, especially in non-coastal regions, ate very little seafood, finding it hard
to get, difficult to cook at home, and expensive. In the late 1960s, Darden realized that his skill set put
him in a great position to deliver what was at the time a unique offering – top quality seafood that
was still affordable.

The first Red Lobster opened in January 1968 in Lakeland, Florida. It was an instant success.
Darden himself had to work kitchen shifts just to get the food out.1 A month later he was forced to
expand the restaurant because demand was so high. Over the next two years he opened four more
locations, all in central Florida. For Darden, it was important that this concept had succeeded inland,
in an underserved market, over an hour from the coastline.

The chain was sold to General Mills in 1970, but Bill Darden was kept on as president. In 1975 Joe
Lee, the General Manager of the first Red Lobster restaurant, succeeded Darden as president. The
chain grew quickly, and was the first casual dining chain to achieve national scale, and hence was the
first to advertise on network television. Red Lobster developed the first national seafood distribution
system in the 1970’s – this system became an important competitive asset (See Exhibit 2 for supply
chain and distribution details). It was also the first chain to use a computerized point of sale system.
By 1985 it had grown to 400 locations and had introduced much of America to many “new” types of
seafood such as live Maine lobster, snow crab, and jumbo shrimp. It even popularized some non-
seafood items, such as key lime pie and white zinfandel wine.

In 1982, encouraged by strong earnings from Red Lobster, General Mills Restaurants, Inc. (a
subsidiary of General Mills) used the Red Lobster operations platform to create Olive Garden, an
Italian-themed casual dining restaurant which by 1989 had 145 locations. In 1990, the company’s
attempt to create a Chinese themed casual dining restaurant, China Coast, was not as successful
closing just 5 years later. General Mills spun off its restaurant unit in 1995, creating Darden
Restaurants, Inc.2 By the end of Fiscal 2010, Darden Restaurants had 694 Red Lobsters (see Exhibit 3)
and 723 Olive Gardens including a small number in Canada.3 It also had created two specialty chains,
Bahama Breeze and Seasons 52 (with 25 and 11 locations, respectively).4 And in 2007, it acquired
RARE Hospitality, which owned the casual dining chain Longhorn Steakhouse and the higher end
Capital Grille (which had 331 and 40 locations, respectively, at the end of Fiscal 2010).5 The company
had total revenue of $7.11 Billion in Fiscal 2010.

The Restaurant Industry in America

Americans spent about 40% of their food dollars away from home in 2009.6 Forty-eight percent of
this spend was in the quick serve category7 (sometimes referred to as “fast food”) – restaurants such
as McDonalds and Subway where there was no table service.8 The next largest category, accounting
for 31% was casual dining – full service restaurants like Applebee’s and Red Lobster where checks
averaged $8 – $20. These restaurants usually had beer and wine licenses. The remaining categories
were family dining (similar to casual dining but without the beer/wine license), and fine dining,
where checks were usually well above $20 per person, and service aimed to be impeccable. More
recently, two additional segments had emerged: “fast casual” (like quick serve, but food was usually
made to order, restaurant environment was generally nicer, and prices were somewhat higher) and
“premium casual” (like casual dining, but with more culinary-forward food, a more refined
atmosphere, and moderately higher prices). D

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Red Lobster 511-052

3

Americans ate on average two meals per month at a casual dining restaurant, and they had many
options to choose from.9 The most common food concept within casual dining was contemporary
American, often called bar & grill. Hamburgers and French fries were staple items at such places. The
largest casual bar & grill chain was Applebee’s, with 1,900 locations across the country. The next
largest were Chili’s, TGI Friday’s, and Ruby Tuesday. There were three other casual dining chains
that were comparable in size to these large bar & grill concepts: Outback Steakhouse, Olive Garden,
and Red Lobster. Together these were often known as the “Big 7” casual dining chains. They
accounted for 33% of the 22,000 chain casual dining restaurants in America.10 (See Exhibit 4 for
details.)

Examples of medium sized chains (with fewer than 200 locations) included the Mexican concept,
On The Border, and the Italian concept, Maggiano’s, both of which were owned by Brinker who also
owned Chili’s. Chains were not only differentiated by their size and food concept, but also by their
price point. Examples of more premium casual chains (where the average check was close to $20)
were the bar/grill concept Cheesecake Factory and the Asian concept, P.F. Chang’s. These premium
chains were more often considered by consumers to be appropriate for “special occasions” such as
graduation dinners, or anniversaries.11 They also had a larger percentage of diners who had
household incomes of $100,000 or more. Red Lobster, despite its higher price point, was not generally
put in this premium category. Its price was higher primarily because of the higher cost of seafood.

In addition to the chains, there were perhaps another 150,000 independent casual dining
restaurants. Although the independents usually had smaller unit volume and were more
concentrated in urban and rural areas (with the chains more concentrated in the suburbs), they were
an important part of the competitive landscape.12

Among seafood specialists, the only chain that compared in size to Red Lobster (in terms of
number of locations) was Long John Silver’s but it was quick serve, rather than full service casual
dining, so the two would rarely compete for customers. Joe’s Crab Shack, with 113 locations, was
really the only national casual dining chain near Red Lobster’s price point ($19). Bonefish had 150
locations, primarily in the southeast and Midwest and had an average check of $26, and McCormick
and Schmick had 87 locations and an average check of $39. More than 80% of the roughly 8,000 casual
dining seafood restaurants in the U.S. were independently owned or were chains of fewer than 10
restaurants.13 At 43%, Red Lobster’s market share was the highest among casual dining seafood
chains.

The casual dining industry was hit hard by the recession of 2008-2009.14 Large chains were
opening new locations at a rate of 6% per year from 2001 – 2006. The growth rate slowed somewhat
in 2007, and restaurants actually began closing in 2008 – 2009. Slow growth was anticipated for 2010 –
2011.15 Sales were down on average 0.4% in 2008.16

2004: Invigorating the Brand and Business

When Lopdrup took over as President in 2004, there were signs that Red Lobster had become
mature and stagnant. Same store sales had grown slightly earlier in the decade but only because of
aggressive sales promotions. Guest experience had plateaued: the percentage of guests rating their
experience as “excellent” (the top-box rating on a 5 point scale) was stalled at 64%, while sister chain
Olive Garden was at 68%. And competition in the seafood category had intensified. The rise of
aquaculture had led to dramatic declines in the cost of some types of seafood (see Exhibit 5). Roger D
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511-052 Red Lobster

4

Bing, Darden’s VP of seafood purchasing, remarked that aquaculture had transformed salmon and
shrimp from luxury items into mainstream middle class fare. Chili’s, Applebee’s, and Outback all had
salmon and shrimp on their menus. Outback also had a popular lobster tail dish. Despite the cost
declines, seafood was still much more expensive than other proteins – hence Red Lobster’s menu was
more expensive than other value focused chains like Chili’s, Applebee’s, and Olive Garden. One
option would be for Red Lobster to broaden its menu to include more non-seafood items.

In 2004, shortly after Lopdrup took over as President, Red Lobster’s marketing team
commissioned a consumer survey to make sure that any changes were grounded in real consumer
insights. The research team surveyed 857 people who had visited a Red Lobster in the last year. They
were shown a list of 11 restaurant attributes and asked, to “rate the relative importance of each
attribute when choosing a seafood restaurant” on a 7 point scale. The attribute that came out on top
was “freshness of the seafood”. Alarmingly, Red Lobster badly trailed most sit-down seafood
competitors on this attribute according to the surveyed customers. Two other notable attributes
where Red Lobster was lagging the seafood competition were “quality of the seafood” and
“taste/preparation of the seafood”. (See Exhibit 6)

Lopdrup saw some immediate opportunities for improvement, but he also felt that a major change
in positioning was needed:

Consumers saw the seafood market as divided into two categories. There were high end
places that were offering top quality, fresh seafood prepared with culinary expertise. And
there were the low end places serving mass-produced, frozen seafood, much of it fried.
Unfortunately, many consumers saw Red Lobster as being in the latter category. This shocked
us because we were buying top quality ingredients. We knew we had to change perceptions
and reposition Red Lobster in the consumer’s mind from frozen to fresh. While we already had
live lobster and some fresh fish on our menu, we learned that the appearance of our
restaurants and a number of other cues (including the many pictures of fried food on our
menus) caused consumers to question the quality of our food.

Lopdrup launched a three phased plan. Phase one involved basic operational improvements that
would begin immediately (i.e., June 2004). Phase two was where most of the re-positioning work
would happen, and this involved major menu changes that would develop over several years, and
not be complete until 2009. Phase three involved remodeling the restaurants – this was something
that Lopdrup felt was critical to changing customer perceptions. The plan was to begin testing
remodels in 2008 and accelerate in subsequent years. If successful, all locations would be remodeled
in the following 6 years.

Phase I – Operational excellence

Lopdrup made immediate improvements by initiating what he called, a “simply great operating
discipline”:

This involved simplifying operations so less could go wrong. You end up reducing costs
and you provide a high quality product for the mass market, similar to what Honda and
Southwest Airlines do. This allows you to deliver superior value. We did things like
simplifying the menus, simplifying recipes, and simplifying promotions. We stopped deep
discounting, which the brand had been doing a lot of. We started timing promotions to counter
balance the seasonality of the business … We created “no fly zones” during busy periods in the
restaurants. We didn’t bother the operators with any new initiatives (like new menu items or D
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Red Lobster 511-052

5

promotions) during these busy periods so they could just focus on serving our guests. We
started rigorously testing new initiatives to make sure they were “restaurant ready” thus
avoiding all the churn that happens in a restaurant when initiatives roll out before they are
perfected. We started insisting on disciplined execution. We figured out the “one best way” of
doing everything and greatly standardized how we do things in restaurants.

Then we also introduced a number of initiatives designed to help us excel at the basics for a
seafood restaurant, which we shorthand as Fresh, Clean, Friendly, and Full. An example of
Fresh was recalibrating all of our cooking equipment to make sure that it was cooking at the
right temperatures. For Clean, we did deep cleans of all the restrooms and tracked down
chronic odor issues. There were some restaurants that had broken drain pipes or carpets that
needed to be replaced. Doug Green (Red Lobster’s executive vice president of Operations) and
his team corrected every last one. On Friendly, we started focusing on hiring and training to
emphasize friendliness, which we determined was the most important service attribute. On
Full we did things like adding bussers during peak periods to help reset and turn tables faster,
and a computerized meal pacing system that coordinates cook times for every item in an order
so everything can be served as soon as it is finished cooking.

Phase II – Re-positioning around “freshness”

To lead the re-positioning effort, Lopdrup hired Salli Setta (previously with Olive Garden) as EVP
of marketing. Setta in turn oversaw the hiring of a new culinary team: John Fadool, SVP of Culinary
and Beverage, who had worked at Procter & Gamble and Novartis, and executive chefs Michael
LaDuke and Darryl Mickler, both of whom had worked for Disney. Product development was led by
Setta:

The marketing people give the chefs parameters. It’s very much like product development
at a packaged goods company, but we apply it to foods. So the chefs are working within
parameters, but obviously they are responsible for the creative piece of it. We then have
operations and purchasing people who say, if we want to make that in 700 Red Lobsters, how
are we going to do that, and can we get enough fish? So the process is iterative, but it starts
with marketing, then moves to culinary and operations and purchasing and back.

The team sought to develop a new menu around freshness. Work with focus groups led the team
to believe that “fresh” did not simply mean “never frozen.” Lopdrup explained: “In the minds of the
consumers, freshness means the food still has the life force in it. They want it to be as close to its
natural state as possible. We discovered that consumers have only a vague understanding of
freshness so they draw conclusions based on subtle clues that, in some cases, have nothing to do with
the food.”

Lopdrup described the biggest step in the move toward freshness: “We changed our cooking
platform. We started de-emphasizing all the fried items. We couldn’t just discontinue them abruptly
without losing too many guests. But we de-emphasized them and introduced wood-fire grilling. We
researched 15 ways of cooking seafood and we found that for most types of seafood this was the most
consumer-preferred way of cooking it.”

New grills were installed in each restaurant at a cost of about $10,000 each. And, the position of
“grill master” was created. Each restaurant had about five dedicated grill masters who focused only
on grilling, thus improving attention to detail and quality. It was the most prestigious job in the
kitchen. D
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511-052 Red Lobster

6

Once new wood fire grilled dishes were developed, the “Today’s Fresh Fish Menu” was
introduced, featuring five to eight fresh fish entrees which changed daily, based on the day’s regional
catch. While fresh fish had always been on the Red Lobster menu, it now appeared on a separate
menu card that was handed to each customer and was used as the server’s “lead” – servers greeted
guests by describing the day’s fresh fish. (See Exhibits 7 and 8 for menu details.) The fresh fish menu
also featured the name of the chef on duty, adding to perceptions of culinary expertise and quality.

There were also some upgrades in raw ingredients. For example, live lobster was upgraded to
super A1 grade hard-shell, which was the very top grade of live lobster.

New television advertisements were developed in 2008 to showcase the new menu. These ads
explicitly mentioned “wood fire grilling” and “fresh fish” and they consisted entirely of a series of
images of the food, designed to induce craving (see Exhibit 9 for examples). The “Ignite the Craving”
campaign had actually begun in 2004 and had been very effective at driving traffic so Red Lobster
invested most of its marketing budget behind it. The new 2008 ads followed the same model but
focused on the new grilling method and on “freshness.”

Setta was careful not to overwhelm customers with freshness. While promotional discounting was
reduced, two legacy promotions were revitalized: “Lobsterfest” and “Endless Shrimp.” With
“Endless Shrimp,” the emphasis was now on “choice and variety” rather than “all you can eat.”
According to Setta, “These promotions were still needed to drive traffic. We run the Endless Shrimp
promotion for 12 weeks in the Fall and it is always one of our strongest promotions. Although we
take a small margin hit at that price point, the volume gains more than compensate.”

Early results were encouraging. Not only was there now more fresh fish on the menu (nine items,
up from four), but fresh fish entrees were now the highest on the menu in terms of customer
satisfaction. And customer perceptions that Red Lobster “has food that is fresh” had increased
significantly according to recent (2008) surveys.

Phase III – Re-modeling the restaurants

After some focus group research, the restaurant re-modeling began, led by Briggs Sellers, VP of
Development:

We decided to create a comfortable seaside atmosphere. The space had to provide clues to
all senses that the seafood is fresh and of top quality. We wanted guests to feel they are dining
at a “special” restaurant – nicer than ordinary casual dining, but still approachable. And the
atmosphere had to be appropriate for multiple occasions, including family dinners, date night,
and business lunches.

Lopdrup added: “It had to be nice enough that ordinary people could go there for an anniversary
or with business associates, but comfortable enough that those same people could bring their kids or
come in their jeans.”

The remodeling was tested at four locations in Florida in 2008, and then in 30 other locations
around the country in 2009 (See Exhibits 10 and 11 for pictures). By 2014, all restaurants would be re-
done. (See Exhibit 12 for the timeline).

The remodels cost about $350,000 per restaurant. An additional $150,000 was spent at the same
time doing general maintenance. The interior was remodeled first, always after hours, so that normal D

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Red Lobster 511-052

7

business hours were not adjusted. The hope was that the restaurant would not lose traffic due to
construction. The final step was to remodel the exterior. The Red Lobster communications team took
advantage of local remodeling efforts in cities like Chattanooga and Pittsburgh to create some good
PR (see Exhibit 13 for an example).

Preliminary Results

By 2010, things were looking much better for Red Lobster. Internal research found that guest
satisfaction was up 14 percentage points since 2004 to 78% “excellent.” The American Customer
Satisfaction Index had Red Lobster above the industry average, above Outback and only slightly
behind its sister brand Oliver Garden.17 Media attention was generally positive and, while the
average Red Lobster had significant extra capacity (Lopdrup estimated that with some operational
adjustments, most locations could accommodate a 50% increase in guest counts), the chain was
outperforming the competition as measured by Knapp-Track, a widely used industry guest tracking
report. Staff morale was up and turnover was down. Even Wall Street seemed to be buying in, with
several analysts suggesting that Darden was on the right track.

A New Opportunity?

Red Lobster’s marketing team had commissioned a study by the market research firm,
Copernicus, to uncover some psychographic segments: customers or potential customers who shared
similar preferences and behaviors. In July 2008 Copernicus conducted online interviews with 2,403
adult respondents averaging 37 minutes in length (see Exhibit 14 for details). The interview included
questions in 4 categories: 1) demographics, 2) restaurant category involvement, 3) food and beverage
attitudes, and 4) restaurant brand selection criteria.

Copernicus then used a statistical technique called cluster analysis to see what kinds of natural
groupings emerged from the answers to these questions.

Mark Gilley, Red Lobster’s VP of Consumer Insights, explained the Copernicus approach:

A common criticism of psychographic segmentation is that while you may learn something
about preference groupings, the information is often not actionable. For example, while you
might know that a certain segment loves spicy food, you won’t have any idea about how to
advertise to these people unless you also know which television shows they watch. You could
of course simply ask what kinds of television shows they watch, but getting the necessary level
of detail would require prohibitively long consumer interviews.

Copernicus gets around this by partnering with Simmons, a company that conducts very
elaborate interviews with a large number of randomly selected consumers. Copernicus
conducts interviews and asks consumers a subset of the questions asked in the Simmons
survey, usually leaving out questions like media usage.

The Copernicus analysis revealed five segments for us. The last step was to come up with
names for the segments that were appropriate to the characteristics of that segment. Naming
the segments is an art, not a science, but it was a useful tool that allowed us to develop an
image of the prototypical customer, and to communicate with each other about decisions to
make with respect to the segments (see Tables A and B). D
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511-052 Red Lobster

8

Table A Summary of Segments Identified in 2008 Market Research Study

________________________________________________________________________

Experientials
• Eating out is an important source of pleasure.
• Most frequent diners at casual and fine dining restaurants.
• Enjoy new restaurants/foods/menu items, and wine with dinner.
• Motivated by Culinary Expertise, sophisticated, upscale atmosphere.
• Seafood is a favorite food. Love fresh fish and a wide variety of shellfish.
• Will not tolerate bad service.
• Well educated; HH Income $100K avg.

Indulgents

• Love all types of food, eat what they want and don’t worry about nutrition.
• Motivated by large, generous portions.
• Seafood is a favorite type of food, particularly shellfish.
• Open to all types of entrees and promotions (especially all-you-can-eat specials).
• Enjoy new restaurants/foods/menu items, but not wine-drinkers.
• Most likely high school diploma or some college; HH Income $58K avg.

Traditionalists

• Oldest segment, eating out is more functional.
• Less frequent casual restaurant diners, and lowest average check size.
• Below average liking of both shellfish and fresh fish; they prefer “tried and true” favorites.
• Particularly want conveniently located restaurants where they can dine quickly.
• Price-sensitive.
• Average education; HH Income $70K avg.

Eclectics

• Most adventurous palates. Like fresh fish, shellfish, as well as ethnic and regional cuisines.
• Want unique dishes, and dishes you don’t make at home.
• Frequent casual dining restaurants (less likely to go to chains) and some fine dining.
• Atmosphere of the restaurant is important, prefer new or recently renovated restaurants.
• Most “health-conscious”, with highest preference for fresh/light/healthy items.
• Least price sensitive.
• Well educated; HH income $91K avg.

Frugals

• Not particularly fond of going out to dinner.
• Least frequent casual restaurant diners, and below average check size.
• Price sensitive and look for inexpensive restaurants.
• Below average liking of both shellfish and fresh fish. Prefer “traditional American favorites”.
• Younger and tend to have children
• Attended college; HH income $60K avg.

Source: Company documents.

D
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op

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This document is authorized for educator review use only by Carlos Erban, Miami Dade College until Apr 2021. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860

Red Lobster 511-052

9

Table B Purchase Behavior of Segments Indentified in 2008 Market Research Study

Experientials Indulgents Traditionalists Eclectics Frugals

% of clientele (i.e., % of
unique individuals, not %
of meals served)

23% 24% 18% 7% 28%

Annual meals per
customer

6.3 5.6 4.4 5.0 3.8

Average spend per meal $24.88 $18.78 $15.84 $22.29 $14.86

Percent alcohol 12% 4% 2% 14% 1%

Source: The first row is taken from company documents and the bottom three rows of this table were estimated by the case
authors based on the Copernicus study, Red Lobster

Financial markets homework help

• Instructions

• Answer every part of each question

• Be organized in your answers (i.e. make it easy for the reader to find the

answer to each part of the question)

• Be specific and provide as much detail as possible in your answers

• Answer not only the “what” but also the “how” and “why”

• Provide supporting evidence and/or rationale to your answers

• Apply the theories and concepts discussed in class

• Only use the materials provided in the Final Exam folder or requested in the

questions

• The answers MUST only be about the case study.

QUESTION 1

• The case study takes place in 2010. Lopdrup faces several key decisions

after 6 years since taking. Do a SWOT and Competitive Analysis with the

information provided in the case study. For the SWOT explain at least 3

Strengths & Weaknesses, 2 Opportunities & Threats. For the Competitive

Analysis, use at least 3 most important consumer attributes compared to at

least 2 major competitors. Explain who is best at what and provide supporting

evidence where possible.

QUESTION 2

• Explain in detail all the changes Lopdrup has made to the strategic

positioning, marketing mix (the 4 Ps) and operations in the past 6 six. Are

these changes working? Explain your answer in detail using research and

data provided in the case study to support your argument where possible.

What would you different? Explain.

QUESTION 3

• Conduct an Industry Analysis using Porter’s 5 Forces of the Casual Dining

Industry in 2010 using the information provided in the case study. State

clearly if the industry is attractive, and the level of each competitive force

(High, Medium, Low) and why (at least 2 determinants for each force). Do you

think Red Lobster’s strategic positioning at that time gives them a sustainable

competitive advantage?

QUESTION 4

• Given all the consumer data, blogs, newspaper article presented in the case

in 2010-11, should Lopdrup make Experientials the target segment and

modify Red Lobster’s positioning? Why?

QUESTION 5

• Evalute Red Lobster’s Supply Chain and store operations based with the

information provided in the case study. Given today’s digital transformation

(i.e. AI, IoT, Blockchain, Meta/Omniverse). Pick two of the four technologies

and explain in detail how would you apply it to at least 2 major areas of the

supply chain and 2 in the store operations. Explain in detail each aspect of the

technology, the benefits and its implementation.

QUESTION 6

• Compute restaurant profitability using Table B and Exhibit 1 under the

following scenario: The mix of patrons shifts gaining 2000 new Experiential

customer, but losing 1000 Indulgent customers and 1000 Frugal customers.

Based on this profitability analysis does it make sense to focus on Experiential

customers?

  • QUESTION 1
  • QUESTION 2
  • QUESTION 3
  • QUESTION 4
  • QUESTION 5
  • QUESTION 6

Financial markets homework help

Continuous Evaluation 2 

[1] Reading the Financial Markets: French elections (20% of  the grade)

After the first round of voting on Friday, 21 April 2017, independent candidate Emmanuel Macron (who is pro-Europe and wants France in the euro) beat populist candidate Marine Le Pen (who is anti-Europe and wants France out of the euro) by 24% to 21%. This how financial markets reacted:

 


Friday, April 21 (before the election)

. French sovereign 10-year bond yield:                  1.05%

. German sovereign 10-year bond yield:                0.24%

. Credit Default Swap on French bond:                 114 basis points

. USD/EUR:                                                       1.0728

. CAC-40 French Stock market index:                  5059.20

 


Monday, April 24 (after the election)

. French sovereign 10-year bond yield:                  0.79%

. German sovereign 10-year bond yield:                0.41%

. Credit Default Swap on French bond:                 71 basis points

. USD/EUR:                                                       1.0926

. CAC-40 French Stock market index:                  5268.85

 

Explain the reaction of investors in financial markets.

 

[2] Risk and diversification  (20% of  the grade)

The standard deviation of the average stock is greater than the standard deviation of the market portfolio made up of all stocks. What is the best explanation for this?

a) the Sharpe ratio

b) diversification

c) the dividend discount model

d) the price-to-earnings ratio

e) your stock has higher risk

 

 [3] Risk and diversification  (20% of  the grade)

 

TRUE OR FALSE? “The benefits of diversification increase with increased correlation.

[4] Financial markets in general  (10% of  the grade)

If you have €300,000, where can you invest your money? List all possible investments. 


 

[5] Define financial risk in 1 sentence  (10% of  the grade)

 

[6]  Case Study: Lufthansa Corporation and Transaction Exposure (20% of  the grade)

 

 

In January 1985, the German airline company, Lufthansa, signed a contract with the

U.S. Corporation, Boeing, to purchase 20 Boeing 737 airplanes. Boeing agreed to deliver the airplanes to Lufthansa in one year later, in January 1986. Lufthansa agreed to make a single payment, of $500 million, when the planes were delivered. The spot exchange rate at the time the contract was signed was DM3.2/$, which corresponded to a deutschmark liability of 1.6 billion.

 

 

Background

 

 

 

Since 1982, the U.S. dollar had been steadily appreciating against the German mark. In January 1982, the dollar was trading around 2.3 marks, and by January 1985, it had risen to 3.2. This represented an appreciation of the dollar of just under 40%.

 

 

Although many analysts had concluded that the U.S. dollar was overvalued during this period, it continued to show strength. Government intervention to weaken the dollar was not being discussed at this time. See chart which follows.

 

 

Issue

 

 

 

While many forecasters were predicting an eventual weakening in the U.S. dollar, for Lufthansa, the size of the contract, which was denominated in U.S. dollars, was seen as a too large of an uncovered transaction exposure.

 

 

Recommendation

 

 

 

What would you have recommended that Lufthansa do, and why?

 

 

 

 

 

Financial markets homework help

Information for work:

Conserv-Amazon

A conservation effort to save the Amazon.

Saving the Amazon, for a greener world.

We are Conserv-Amazon. Our mission is to help make a greener world on our little blue planet starting with the most important greenery of all, The Amazon.

Goals

1.Plant 100,000 trees by 2025.

2.Promote indigenous rights for those native to the rainforest.

3.Raise our voice in local, state, and national governments for awareness of our campaign.

4.Block and condemn deforestation efforts by major companies.

Other organizations you can help and what they are doing:

Other organizations you can help and what they are doing:

Amazon watch is an organization that mainly opposes oil drilling and climate change while supporting indigenous rights.

The Amazon Conservation Team partners with indidenous peoples in order to aid them in replanting and allocating resources to certain parts of the forest.

Amazon Conservation Association utilizes advanced technology such as drones and conservation hubs to help monitor deforestation and help heal the forest.

Incentives

Some incentives we will do to motivate people to support our cause will be:

· Placing brochures in local shops, grocery stores, parks, etc. to spread the word of our cause and its importance. 

· Sending tshirts to those who sign up and donate to support the cause.

Social media:

3-5 post on social medias Instagram and youtube. Instagram ads 4 around 600 each. Youtube adds 3 around 500$ each . influencer post 2 around 3-5 thousand for influencer post.

Complete:

Need to create a budget for social media marketing post and incentives

· I want you to create a budget and tell me how this budget will be allocated for this project.

· budget, so I want you to tell me how the budget works for this project.

0

Financial markets homework help

26
JOURNAL OF APPLIED CORPORATE FINANCE

VALUE AT RISK:
USES AND ABUSES

by Christopher L. Culp,
CP Risk Management LLC,
Merton H. Miller,
University of Chicago, and
Andrea M. P. Neves,
CP Risk Management LLC*

26
BANK OF AMERICA JOURNAL OF APPLIED CORPORATE FINANCE

*The authors thank Kamaryn Tanner for her previous work with us on this subject.
1. See, for example, Global Derivatives Study Group, Derivatives: Practices and Principles (Washington, D.C.: July 1993),

and Board of Governors of the Federal Reserve System, SR Letter 93-69 (1993). Most recently, the Securities and Exchange
Commission began to require risk disclosures by all public companies. One approved format for these mandatory financial
risk disclosures is VAR. For a critical assessment of the SEC’s risk disclosure rule, see Merton H. Miller and Christopher L. Culp,
“The SEC’s Costly Disclosure Rules,” Wall Street Journal (June 22, 1996).

2. This presupposes, of course, that “risk management” is consistent with value-maximizing behavior by the firm. For
the purpose of this paper, we do not consider whether firms should be managing their risks. For a discussion of that issue,
see Christopher L. Culp and Merton H. Miller, “Hedging in the Theory of Corporate Finance: A Reply to Our Critics,” Journal
of Applied Corporate Finance, Vol. 8, No. 1 (Spring 1995):121-127, and Rene M. Stulz, “Rethinking Risk Management,” Journal
of Applied Corporate Finance, Vol. 9, No. 3 (Fall 1996):8-24.

stems from its ease of interpretation as a summary measure of risk and consistent

treatment of risk across different financial instruments and business activities.

VAR is often used as an approximation of the “maximum reasonable loss” a

company can expect to realize from all its financial exposures.

VAR has received widespread accolades from industry and regulators alike.1

Numerous organizations have found that the practical uses and benefits of VAR

make it a valuable decision support tool in a comprehensive risk management

process. Despite its many uses, however, VAR—like any statistical aggregate—

is subject to the risk of misinterpretation and misapplication. Indeed, most

problems with VAR seem to arise from what a firm does with a VAR measure

rather than from the actual computation of the number.

Why a company manages risk affects how a company should manage—

and, hence, should measure—its risk.2 In that connection, we examine the four

“great derivatives disasters” of 1993-1995—Procter & Gamble, Barings, Orange

County, and Metallgesellschaft—and evaluate how ex ante VAR measurements

likely would have affected those situations. We conclude that VAR would have

been of only limited value in averting those disasters and, indeed, actually might

have been misleading in some of them.

alue at risk (“VAR”) is now viewed by many as indispensable

ammunition in any serious corporate risk manager’s arsenal. VAR

is a method of measuring the financial risk of an asset, portfolio,

or exposure over some specified period of time. Its attraction

V

VOLUME 10 NUMBER 4 WINTER 1998
27

WHAT IS VAR?

Value at risk is a summary statistic that quantifies
the exposure of an asset or portfolio to market risk,
or the risk that a position declines in value with
adverse market price changes.3 Measuring risk using
VAR allows managers to make statements like the
following: “We do not expect losses to exceed $1
million on more than 1 out of the next 20 days.”4

To arrive at a VAR measure for a given portfolio,
a firm must generate a probability distribution of
possible changes in the value of some portfolio over
a specific time or “risk horizon”—e.g., one day.5 The
value at risk of the portfolio is the dollar loss
corresponding to some pre-defined probability
level—usually 5% or less—as defined by the left-
hand tail of the distribution. Alternatively, VAR is the
dollar loss that is expected to occur no more than 5%
of the time over the defined risk horizon. Figure 1,
for example, depicts a one-day VAR of $10X at the
5% probability level.

The Development of VAR

VAR emerged first in the trading community.6

The original goal of VAR was to systematize the

measurement of an active trading firm’s risk expo-
sures across its dealing portfolios. Before VAR,
most commercial trading houses measured and
controlled risk on a desk-by-desk basis with little
attention to firm-wide exposures. VAR made it
possible for dealers to use risk measures that could
be compared and aggregated across trading areas
as a means of monitoring and limiting their consoli-
dated financial risks.

VAR received its first public endorsement in July
1993, when a group representing the swap dealer
community recommended the adoption of VAR by
all active dealers.7 In that report, the Global Deriva-
tives Study Group of The Group of Thirty urged
dealers to “use a consistent measure to calculate
daily the market risk of their derivatives positions
and compare it to market risk limits. Market risk is
best measured as ‘value at risk’ using probability
analysis based upon a common confidence interval
(e.g., two standard deviations) and time horizon
(e.g., a one-day exposure). [emphasis added]”8

The italicized phrases in The Group of Thirty
recommendation draw attention to several spe-
cific features of VAR that account for its wide-
spread popularity among trading firms. One fea-
ture of VAR is its consistent measurement of

3. More recently, VAR has been suggested as a framework for measuring credit
risk, as well. To keep our discussion focused, we examine only the applications
of VAR to market risk measurement.

4. For a general description of VAR, see Philippe Jorion, Value at Risk (Chicago:
Irwin Professional Publishing, 1997).

5. The risk horizon is chosen exogenously by the firm engaging in the VAR
calculation.

6. An early precursor of VAR was SPANTM—Standard Portfolio Analysis of
Risk—developed by the Chicago Mercantile Exchange for setting futures margins.

Now widely used by virtually all futures exchanges, SPAN is a non-parametric,
simulation-based “worst case” measure of risk. As will be seen, VAR, by contrast,
rests on well-defined probability distributions.

7. This was followed quickly by a similar endorsement from the International
Swaps and Derivatives Association. See Jorion, cited previously.

8. Global Derivatives Study Group, cited previously.

FIGURE 1

28
JOURNAL OF APPLIED CORPORATE FINANCE

financial risk. By expressing risk using a “possible
dollar loss” metric, VAR makes possible direct
comparisons of risk across different business lines
and distinct financial products such as interest rate
and currency swaps.

In addition to consistency, VAR also is prob-
ability-based. With whatever degree of confi-
dence a firm wants to specify, VAR enables the
firm to associate a specific loss with that level of
confidence. Consequently, VAR measures can be
interpreted as forward-looking approximations of
potential market risk.

A third feature of VAR is its reliance on a
common time horizon called the risk horizon. A one-
day risk horizon at, say, the 5% probability level tells
the firm, strictly speaking, that it can expect to lose
no more than, say, $10X on the next day with 95%
confidence. Firms often go on to assume that the 5%
confidence level means they stand to lose more than
$10X on no more than five days out of 100, an
inference that is true only if strong assumptions are
made about the stability of the underlying probabil-
ity distribution.9

The choice of this risk horizon is based on
various motivating factors. These may include the
timing of employee performance evaluations, key
decision-making events (e.g., asset purchases),
major reporting events (e.g., board meetings and
required disclosures), regulatory examinations,
tax assessments, external quality assessments,
and the like.

Implementing VAR

To estimate the value at risk of a portfolio,
possible future values of that portfolio must be
generated, yielding a distribution—called the “VAR
distribution”—like that we saw in Figure 1. Once the
VAR distribution is created for the chosen risk
horizon, the VAR itself is just a number on the

curve—viz., the change in the value of the portfolio
leaving the specified amount of probability in the
left-hand tail.

Creating a VAR distribution for a particular
portfolio and a given risk horizon can be viewed as
a two-step process.10 In the first step, the price or
return distributions for each individual security or
asset in the portfolio are generated. These distribu-
tions represent possible value changes in all the
component assets over the risk horizon.11 Next, the
individual distributions somehow must be aggre-
gated into a portfolio distribution using appropriate
measures of correlation.12 The resulting portfolio
distribution then serves as the basis for the VAR
summary measure.

An important assumption in almost all VAR
calculations is that the portfolio whose risk is
being evaluated does not change over the risk
horizon. This assumption of no turnover was not
a major issue when VAR first arrived on the scene
at derivatives dealers. They were focused on one-
or two-day—sometimes intra-day—risk horizons
and thus found VAR both easy to implement and
relatively realistic. But when it comes to general-
izing VAR to a longer time horizon, the assump-
tion of no portfolio changes becomes problem-
atic. What does it mean, after all, to evaluate the
one-year VAR of a portfolio using only the
portfolio’s contents today if the turnover in the
portfolio is 20-30% per day?

Methods for generating both the individual
asset risk distributions and the portfolio risk
distribution range from the simplistic to the
indecipherably complex. Because our goal in this
paper is not to evaluate all these mechanical
methods of VAR measurement, readers are re-
ferred elsewhere for explanations of the nuts and
bolts of VAR computation.13 Several common
methods of VAR calculation are summarized in the
Appendix.

9. This interpretation assumes that asset price changes are what the technicians
call “iid,” independently and identically distributed—i.e., that price changes are
drawn from essentially the same distribution every day.

10. In practice, VAR is not often implemented in a clean two-step manner, but
discussing it in this way simplifies our discussion—without any loss of generality.

11. Especially with instruments whose payoffs are non-linear, a better
approach is to generate distributions for the underlying “risk factors” that affect an
asset rather than focus on the changes in the values of the assets themselves. To
generate the value change distribution of an option on a stock, for example, one
might first generate changes in the stock price and its volatility and then compute
associated option price changes rather than generating option price changes
“directly.” For a discussion, see Michael S. Gamze and Ronald S. Rolighed, “VAR:
What’s Wrong With This Picture?” unpublished manuscript, Federal Reserve Bank
of Chicago (1997).

12. If a risk manager is interested in the risk of a particular financial instrument,
the appropriate risk measure to analyze is not the VAR of that instrument. Portfolio
effects still must be considered. The relevant measure of risk is the marginal risk
of that instrument in the portfolio being evaluated. See Mark Garman, “Improving
on VAR,” Risk Vol. 9, No. 5 (1996):61-63.

13. See, for example, Jorion, cited previously, Rod A. Beckström and Alyce R.
Campbell. “Value-at-Risk (VAR): Theoretical Foundations,” in An Introduction to
VAR, Rod Beckström and Alyce Campbell, eds. (Palo Alto, Ca.: CAATS Software,
Inc., 1995), and James V. Jordan and Robert J. Mackay, “Assessing Value at Risk for
Equity Portfolios: Implementing Alternative Techniques,” in Derivatives Hand-
book, Robert J. Schwartz and Clifford W. Smith, Jr., eds. (New York: John Wiley &
Sons, Inc., 1997).

VOLUME 10 NUMBER 4 WINTER 1998
29

Uses of VAR

The purpose of any risk measurement system
and summary risk statistic is to facilitate risk reporting
and control decisions. Accordingly, dealers quickly
began to rely on VAR measures in their broader risk
management activities. The simplicity of VAR mea-
surement greatly facilitated dealers’ reporting of risks
to senior managers and directors. The popularity of
VAR owes much to Dennis Weatherstone, former
chairman of JP Morgan & Co., Inc., who demanded
to know the total market risk exposure of JP Morgan
at 4:15pm every day. Weatherstone’s request was
met with a daily VAR report.

VAR also proved useful in dealers’ risk control
efforts.14 Commercial banks, for example, used VAR
measures to quantify current trading exposures and
compare them to established counterparty risk limits.
In addition, VAR provided traders with information
useful in formulating hedging policies and evaluating
the effects of particular transactions on net portfolio
risk. For managers, VAR became popular as a means
of analyzing the performance of traders for compen-
sation purposes and for allocating reserves or capital
across business lines on a risk-adjusted basis.

Uses of VAR by Non-Dealers. Since its original
development as a risk management tool for active
trading firms, VAR has spread outside the dealer
community. VAR now is used regularly by non-
financial corporations, pension plans and mutual
funds, clearing organizations, brokers and futures
commission merchants, and insurers. These organi-
zations find VAR just as useful as trading firms, albeit
for different reasons.

Some benefits of VAR for non-dealers relate
more to the exposure monitoring facilitated by VAR
measurement than to the risk measurement task
itself. For example, a pension plan with funds
managed by external investment advisors may use
VAR for policing its external managers. Similarly,
brokers and account merchants can use VAR to
assess collateral requirements for customers.

VAR AND CORPORATE RISK MANAGEMENT
OBJECTIVES

Firms managing risks may be either value risk
managers or cash flow risk managers.15 A value risk
manager is concerned with the firm’s total value at
a particular point in time. This concern may arise
from a desire to avoid bankruptcy, mitigate problems
associated with informational asymmetries, or re-
duce expected tax liabilities.16 A cash flow risk
manager, by contrast, uses risk management to
reduce cash flow volatility and thereby increase debt
capacity.17 Value risk managers thus typically man-
age the risks of a stock of assets, whereas cash flow
risk managers manage the risks of a flow of funds. A
risk measure that is appropriate for one type of firm
may not be appropriate for others.

Value Risk Managers and VAR-Based
Risk Controls

As the term value at risk implies, organizations
for which VAR is best suited are those for which
value risk management is the goal. VAR, after all, is
intended to summarize the risk of a stock of assets
over a particular risk horizon. Those likely to realize
the most benefits from VAR thus include clearing
houses, securities settlement agents,18 and swap
dealers. These organizations have in common a
concern with the value of their exposures over a
well-defined period of time and a wish to limit and
control those exposures. In addition, the relatively
short risk horizons of these enterprises imply that
VAR measurement can be accomplished reliably and
with minimal concern about changing portfolio
composition over the risk horizon.

Many value risk managers have risks arising
mainly from agency transactions. Organizations like
financial clearinghouses, for example, are exposed to
risk arising from intermediation services rather than the
risks of proprietary position taking. VAR can assist such
firms in monitoring their customer credit exposures, in

14. See Rod A. Beckström and Alyce R. Campbell, “The Future of Firm-Wide
Risk Management,” in An Introduction to VAR, Rod Beckström and Alyce
Campbell, eds. (Palo Alto, Ca.: CAATS Software, Inc., 1995).

15. For a general discussion of the traditional corporate motivations for risk
management, see David Fite and Paul Pfleider, “Should Firms Use Derivatives to
Manage Risk?” in Risk Management: Problems & Solutions, William H. Beaver and
George Parker, eds. (New York: McGraw-Hill, Inc., 1995).

16. See, for example, Clifford Smith and Rene Stulz, “The Determinants of
Firms’ Hedging Policies,” Journal of Financial and Quantitative Analysis, Vol. 20
(1985):391-405.

17. See, for example, Kenneth Froot, David Scharfstein, and Jeremy Stein, “Risk
Management: Coordinating Corporate Investment and Financing Policies,” Journal
of Finance Vol. 48 (1993):1629-1658.

18 .See Christopher L. Culp and Andrea M.P. Neves, “Risk Management by
Securities Settlement Agents,” Journal of Applied Corporate Finance Vol. 10, No.
3 (Fall 1997):96-103.

VAR made it possible for dealers to use risk measures that could be compared and
aggregated across trading areas as a means of monitoring and limiting their

consolidated financial risks.

30
JOURNAL OF APPLIED CORPORATE FINANCE

setting position and exposure limits, and in determin-
ing and enforcing margin and collateral requirements.

Total vs. Selective Risk Management

Most financial distress-driven explanations of
corporate risk management, whether value or cash
flow risk, center on a firm’s total risk.19 If so, such
firms should be indifferent to the composition of
their total risks. Any risk thus is a candidate for risk
reduction.

Selective risk managers, by contrast, deliber-
ately choose to manage some risks and not others.
Specifically, they seek to manage their exposures to
risks in which they have no comparative informa-
tional advantage—for the usual financial ruin rea-
sons—while actively exposing themselves, at least to
a point, to risks in which they do have perceived
superior information.20

For firms managing total risk, the principal
benefit of VAR is facilitating explicit risk control
decisions, such as setting and enforcing exposure
limits. For firms that selectively manage risk, by
contrast, VAR is useful largely for diagnostic moni-
toring or for controlling risk in areas where the firm
perceives no comparative informational advantage.
An airline, for example, might find VAR helpful in
assessing its exposure to jet fuel prices; but for the
airline to use VAR to analyze the risk that seats on its
aircraft are not all sold makes little sense.

Consider also a hedge fund manager who
invests in foreign equity because the risk/return
profile of that asset class is desirable. To avoid
exposure to the exchange rate risk, the fund could
engage an “overlay manager” to hedge the currency
risk of the position. Using VAR on the whole position
lumps together two separate and distinct sources of
risk—the currency risk and the foreign equity price
risk. And reporting that total VAR without a corre-
sponding expected return could have disastrous
consequences. Using VAR to ensure that the cur-
rency hedge is accomplishing its intended aims, by
contrast, might be perfectly legitimate.

VAR AND THE GREAT DERIVATIVES
DISASTERS

Despite its many benefits to certain firms, VAR
is not a panacea. Even when VAR is calculated
appropriately, VAR in isolation will do little to keep
a firm’s risk exposures in line with the firm’s chosen
risk tolerances. Without a well-developed risk man-
agement infrastructure—policies and procedures,
systems, and well-defined senior management re-
sponsibilities—VAR will deliver little, if any, benefits.
In addition, VAR may not always help a firm accom-
plish its particular risk management objectives, as we
shall see.

To illustrate some of the pitfalls of using VAR,
we examine the four “great derivatives disasters” of
1993-1995: Procter & Gamble, Orange County,
Barings, and Metallgesellschaft.21 Proponents of VAR
often claim that many of these disasters would have
been averted had VAR measurement systems been
in place. We think otherwise.22

Procter & Gamble

During 1993, Procter & Gamble (“P&G”) under-
took derivatives transactions with Bankers Trust that
resulted in over $150 million in losses.23 Those losses
traced essentially to P&G’s writing of a put option on
interest rates to Bankers Trust. Writers of put options
suffer losses, of course, whenever the underlying
security declines in price, which in this instance
meant whenever interest rates rose. And rise they did
in the summer and autumn of 1993.

The put option actually was only one compo-
nent of the whole deal. The deal, with a notional
principal of $200 million, was a fixed-for-floating rate
swap in which Bankers Trust offered P&G 10 years
of floating-rate financing at 75 basis points below the
commercial paper rate in exchange for the put and
fixed interest payments of 5.3% annually. That huge
financing advantage of 75 basis points apparently
was too much for P&G’s treasurer to resist, particu-
larly because the put was well out-of-the-money

19. See, for example, Smith and Stulz, cited previously, and Froot, Scharfstein,
and Stein, cited previously.

20. See Culp and Miller (Spring 1995), cited previously, and Stulz, cited
previously.

21. In truth, Procter & Gamble was the only one of these disasters actually
caused by derivatives. See Merton H. Miller, “The Great Derivatives Disasters: What
Really Went Wrong and How to Keep it from Happening to You,” speech presented
to JP Morgan & Co. (Frankfurt, June 24, 1997) and chapter two in Merton H. Miller,
Merton Miller on Derivatives (New York: John Wiley & Sons, Inc., 1997).

22. The details of all these cases are complex. We thus refer readers elsewhere
for discussions of the actual events that took place and limit our discussion here
only to basic background. See, for example, Stephen Figlewski, “How to Lose
Money in Derivatives,” Journal of Derivatives Vol. 2, No. 2 (Winter 1994):75-82.

23. See, for example, Figlweski, cited previously, and Michael S. Gamze and
Karen McCann, “A Simplified Approach to Valuing an Option on a Leveraged
Spread: The Bankers Trust, Procter & Gamble Example,” Derivatives Quarterly Vol.
1, No. 4 (Summer 1995):44-53.

VOLUME 10 NUMBER 4 WINTER 1998
31

when the deal was struck in May 1993. But the low
financing rate, of course, was just premium collected
for writing the put. When the put went in-the-money
for Bankers Trust, what once seemed like a good
deal to P&G ended up costing millions of dollars.

VAR would have helped P&G, if P&G also had
in place an adequate risk management infrastruc-
ture—which apparently it did not. Most obviously,
senior managers at P&G would have been unlikely
to have approved the original swap deal if its
exposure had been subject to a VAR calculation. But
that presupposes a lot.

Although VAR would have helped P&G’s senior
management measure its exposure to the specula-
tive punt by its treasurer, much more would have
been needed to stop the treasurer from taking the
interest rate bet. The first requirement would have
been a system for measuring the risk of the swaps on
a transactional basis. But VAR was never intended
for use on single transactions.24 On the contrary, the
whole appeal of the concept initially was its capacity
to aggregate risk across transactions and exposures.
To examine the risk of an individual transaction, the
change in portfolio VAR that would occur with the
addition of that new transaction should be analyzed.
But that still requires first calculating the total VAR.25

So, for P&G to have looked at the risk of its swaps
in a VAR context, its entire treasury area would have
needed a VAR measurement capability.

Implementing VAR for P&G’s entire treasury
function might seem to have been a good idea
anyway. Why not, after all, perform a comprehen-
sive VAR analysis on the whole treasury area and
get transactional VAR assessment capabilities as an
added bonus? For some firms, that is a good idea.
But for other firms, it is not. Many non-financial
corporations like P&G, after all, typically undertake
risk management in their corporate treasury func-
tions for cash flow management reasons.26 VAR is a
value risk measure, not a cash flow risk measure.
For P&G to examine value at risk for its whole

treasury operation, therefore, presumes that P&G
was a value risk manager, and that may not have
been the case. Even had VAR been in place at P&G,
moreover, the assumption that P&G’s senior man-
agers would have been monitoring and controlling
the VARs of individual swap transactions is not a
foregone conclusion.

Barings

Barings PLC failed in February 1995 when rogue
trader Nick Leeson’s bets on the Japanese stock
market went sour and turned into over $1 billion in
trading losses.27,28 To be sure, VAR would have led
Barings senior management to shut down Leeson’s
trading operation in time to save the firm—if they
knew about it. If P&G’s sin was a lack of internal
management and control over its treasurer, then
Barings was guilty of an even more cardinal sin. The
top officers of Barings lost control over the trading
operation not because no VAR measurement system
was in place, but because they let the same indi-
vidual making the trades also serve as the recorder
of those trades—violating one of the most elemen-
tary principles of good management.

The more interesting question emerging from
Barings is why top management seems to have
taken so long to recognize that a rogue trader was
at work. For that purpose, a fully functioning VAR
system would certainly have helped. Increasingly,
companies in the financial risk-taking business use
VAR as a monitoring tool for detecting unautho-
rized increases in positions.29 Usually, this is in-
tended for customer credit risk management by
firms like futures commission merchants. In the
case of Barings, however, such account monitoring
would have enabled management to spot Leeson’s
run-up in positions in his so-called “arbitrage” and
“error” accounts.

VAR measurements at Barings, on the other
hand, would have been impossible to implement,

24. Recently, some have advocated that derivatives dealers should evaluate
the VAR of specific transactions from the perspective of their counterparties in order
to determine counterparty suitability. Without knowing the rest of the counterparty’s
risk exposures, however, the VAR estimate would be meaningless. Even with full
knowledge of the counterparty’s total portfolio, the VAR number still might be of
no use in determining suitability for reasons to become clear later.

25. See Garman, cited previously.
26. See, for example, Judy C. Lewent and A. John Kearney, “Identifying,

Measuring, and Hedging Currency Risk at Merck,” Journal of Applied Corporate
Finance Vol. 2, No. 4 (Winter 1990):19-28, and Deana R. Nance, Clifford W. Smith,
and Charles W. Smithson, “On the Determinants of Corporate Hedging,” Journal
of Finance Vol. 48, No. 1 (1993):267-284.

27. See, for example, Hans R. Stoll, “Lost Barings: A Tale in Three Parts
Concluding with a Lesson,” Journal of Derivatives Vol. 3, No. 1 (Fall 1995):109-115.,
and Anatoli Kuprianov, “Derivatives Debacles: Case Studies of Large Losses in
Derivatives Markets,” in Derivatives Handbook: Risk Management and Control,
Robert J. Schwartz and Clifford W. Smith, Jr., eds. (New York: John Wiley & Sons,
Inc., 1997).

28. Our reference to rogue traders is not intended to suggest, of course, that
rogue traders are only found in connection with derivatives. Rogue traders have
caused the banks of this world far more damage from failed real estate (and copper)
deals than from derivatives.

29. See Christopher Culp, Kamaryn Tanner, and Ron Mensink, “Risks, Returns
and Retirement,” Risk Vol. 10, No. 10 (October 1997):63-69.

For firms that selectively manage risk, VAR is useful for controlling risk only in areas
where the firm perceives no comparative informational advantage. An airline might
find VAR helpful in assessing its exposure to jet fuel prices; but to use VAR to analyze

the risk that seats on its aircraft are not all sold makes little sense.

32
JOURNAL OF APPLIED CORPORATE FINANCE

given the deficiencies in the overall information
technology (“IT”) systems in place at the firm. At any
point in time, Barings’ top managers knew only what
Leeson was telling them. If Barings’ systems were
incapable of reconciling the position build-up in
Leeson’s accounts with the huge wire transfers being
made by London to support Leeson’s trading in
Singapore, no VAR measure would have included a
complete picture of Leeson’s positions. And without
that, no warning flag would have been raised.

Orange County

The Orange County Investment Pool (“OCIP”)
filed bankruptcy in December 1994 after reporting a
drop in its market value of $1.5 billion. For many
years, Orange County maintained the OCIP as the
equivalent of a money market fund for the benefit of
school boards, road building authorities, and other
local government bodies in its territory. These local
agencies deposited their tax and other collections
when they came in and paid for their own wage and
other bills when the need arose. The Pool paid them
interest on their deposits—handsomely, in fact.
Between 1989-1994, the OCIP paid its depositors 400
basis points more than they would have earned on
the corporate Pool maintained by the State of
California—roughly $750 million over the period.30

Most of the OCIP’s investments involved lever-
aged purchases of intermediate-term securities and
structured notes financed with “reverse repos” and
other short-term borrowings. Contrary to conven-
tional wisdom, the Pool was making its profits not
from “speculation on falling interest rates” but rather
from an investment play on the slope of the yield
curve.31 When the Federal Reserve started to raise
interest rates in 1994, the intermediate-term securi-
ties declined in value and OCIP’s short-term borrow-
ing costs rose.

Despite the widespread belief that the lever-
age policy led to the fund’s insolvency and bank-
ruptcy filing, Miller and Ross, after examining the

OCIP’s investment strategy, cash position, and net
asset value at the time of the filing, have shown that
the OCIP was not insolvent. Miller and Ross esti-
mate that the $20 billion in total assets on deposit
in the fund had a positive net worth of about $6
billion. Nor was the fund in an illiquid cash situa-
tion. OCIP had over $600 million of cash on hand
and was generating further cash at a rate of more
than $30 million a month.32 Even the reported $1.5
billion “loss” would have been completely recov-
ered within a year—a loss that was realized only
because Orange County’s bankruptcy lawyers forced
the liquidation of the securities.33

Jorion has taken issue with Miller and Ross’s
analysis of OCIP, arguing that VAR would have
called the OCIP investment program into question
long before the $1.5 billion loss was incurred.34

Using several different VAR calculation methods,
Jorion concludes that OCIP’s one-year VAR at the
end of 1994 was about $1 billion at the 5% confidence
level. Under the usual VAR interpretation, this would
have told OCIP to expect a loss in excess of $1 billion
in one out of the next 20 years.

Even assuming Jorion’s VAR number is accu-
rate, however, his interpretation of the VAR mea-
sure was unlikely to have been the OCIP’s inter-
pretation—at least not ex ante when it could have
mattered. The VAR measure in isolation, after all,
takes no account of the upside returns OCIP was
receiving as compensation for that downside risk.
Remember that OCIP was pursuing a very deliber-
ate yield cu

Financial markets homework help

BCO224 · Financial Markets · Task brief & rubrics

Task

This task is individual and consists of 2 exercises and 1 question on Debt instrument market prices and yields and the mutual fund industry (NAV and important

concepts)

Exercise 1:

Suppose there are two bonds you are considering:

Bond A Bond B

Maturity (years) 20Y 30Y

Annual Coupon rate (%) 12% 8%

Par Value 1000€ 10000€

a) If both bonds had a required rate of return of 10%, what would the bonds’ prices be?

b) Re-calculate the prices of the bonds if the required return falls to 9%. Could you explain why the price increases or decreases given this change in

required return?

Exercise 2:

Calculate the NAV of the following fund, assuming 35,000 shares are outstanding. Calculate the percentage change in the NAV of the fund on April 29th 2022.

Stock Shares owned price

PYPL 3,000 $ 117.65

TWTR 5,000 $ 50.98

PG 9,000 $ 154.62

NVDA 6,000 $ 259.31

RTX 2,000 $ 98.81

Besides the underlying securities listed above, the fund shows on the Balance Sheet

Cash ______________________________________________ $ 155,000.-

Liabilities ___________________________________________ $ 18,500.-

An investor comes the day after computing the above NAV and invests quarter million USD in the fund. Assume no fees or expenses. The money manager buys

2,000 shares of PayPal and 1,500 of Twitter.

a) Will the NAV increase or decrease? Why?

b) Calculate the return on the investor’s shares. How many did he buy with 250k$?

Question:

Compare carefully Mutual Funds, Index Funds and ETFs. Explain clearly what the benefits and reasons are for investing in a Mutual Fund, Index Fund and ETFs.

Investment companies attempt to explain to investors the nature of the risk the investor incurs when buying shares in their m utual funds and other investment

funds. Scrutinize their products and their risk evaluations. Students present their findings and their return on investment. The aim of this assessment is to

familiarize students with the structure and operation of the main funds, such as Mutual Funds, Index Funds and ETFs, and specifically with the risk-return profile

and preferences of investors.

Formalities:

• Wordcount: no requirement for the exercises other than displaying details on the computations. For the question 500 – 800 words.

• Cover, Table of Contents, References and Appendix are excluded of the total wordcount.

• Font: Arial 12,5 pts.

• Text alignment: Justified.

• The in-text References and the Bibliography have to be in Harvard’s citation style.

Submission: Week 12, Sunday May, 1st at 23.59 – Via Moodle (Turnitin).

Weight: This task is a 40% of your total grade for this subject.
It assesses the following learning outcomes:

• Outcome 1: Understand and apply the yield/price relationship and mechanism for debt instruments.

• Outcome 2: Perform computations on the NAV and understand and apply the differences between NBV, NAV and market price and their consequences

for both the incumbent and the investor.

• Outcome 3: Understand the mutual fund industry with all their benefits and challenges for ethical and compliant functioning.

Rubrics

Descriptor

9-10 The student demonstrates an excellent understanding of the
concepts.

8-8.9 The student demonstrates a good understanding of the concepts.

7-7.9 The student demonstrates a fair understanding of the concepts.
6-6.9 The student demonstrates some, but insufficient understanding of the

concepts.

3-5.9 The student demonstrates insufficient understanding of the concepts.
They may mention some relevant ideas or concepts, although the
relationship between them is not understood by the student.

1-2.9 The student demonstrates insufficient understanding of the concepts
and does not mention any relevant ideas or concepts.

0 The student leaves the question blank or che ats.

Points are stated at the end of each question.

Financial markets homework help

Home Assignment 3

Due Date: By midnight of March 8,2022

Total Points: 50

Based on the two screen shots attached, please explain any association except the ones identified in the
instruction available in the recorded video. Also, explain how you can use that association to improve
the sale and profitability of the company. [The screen shots are in the next 2 pages]

Points will be given based on following criteria:

• Explained along with the concept of Support: 10 points
• Explained along with the concept of Confidence: 10 points
• Explained along with the concept of Lift: 10 points
• Use of association analysis to improve the sale and profitability of the company: 20 points

Financial markets homework help

BCO224 FINANCIAL MARKETS Task brief & rubrics. WEEK 12, Sunday 1st May

Assignment 3

• On an individual basis

• Write a professional investment proposal to a prospective investor:

o Describe the suggested share portfolio (it can be either investing directly in the shares chosen, or through a mutual fund, an index fund, or an

ETF)

o If the chosen portfolio is not a complete index, justify why it has been chosen relative to a complete index

o Write the expected return and describe the main risks of the chosen portfolio according to your views

o Justify the recommendation of the conveying vehicle: investing in the chosen shares directly, or through an investment fund (mutual fund, index

fund, ETF). Explain the rationale of your choice.

• A pdf file containing

o Description of the chosen portfolio/index

o Past data of the chosen portfolio/index: past returns and volatility of the last three years

o Expected return of the chosen portfolio: justify your statements.

o Gross returns versus Net returns. Show the expected gross returns and net returns once commissions and/or the overall Expense Ratio have

been deducted

Formalities:

• Wordcount: it is a short report, 2000 -2500

• Cover, Table of Contents, References and Appendix are excluded of the total wordcount.

• Font: Arial 12,5 pts.

• Text alignment: Justified.

• The in-text References and the Bibliography have to be in Harvard’s citation style

Submission: Week 12 – Via Moodle (Turnitin). Sunday 1st May, 00:00.

Weight: This task is a 40% of your total grade for this subject.

Financial markets homework help

Department of Business and Management
Esben Bjørn Christensen
March 25, 2022
Asset Pricing

Assignment 1

Disclaimer The assignment must be solved in groups of 2-3 students. Be sure to include all the

group members’ names and birthdates on the front page of the assignment. If a group member

wishes an individual assessment of the assignment it must be clearly stated who is responsible

for which part. The assignment must be handed in as a single PDF-file via itslearning no later

than Friday 29th April at 10:00 (the start of the lecture).

Assignment The assignment consists of the following two exercises. Be sure to show your

calculations in a suitable level of detail.

Exercise 1 Consider the following 1-period economy with a single representative agent. The

agent is at time t = 0 endowed with e0 = 1.5 and her future endowment at time t = 1 depends

on the outcome of three possible economic scenarios as shown in Figure 1. Assume that the

financial market is complete, i.e. the agent can obtain any future consumption plan given her

budget constraint.

e1(ω1) = 3

e1(ω2) = 2

e1(ω3) = 1

Figure 1: State-contingent endowment of the agent. Each of the three states are equally likely.

The agent’s preferences are characterized by the utility function u(c) = c
1−γ

1−γ , with γ > 0

and for γ = 1 she has log utility. In addition she has time-additive expected utility with a time

preference parameter δ = 0.05.

(a) What is the agent’s optimization problem in the complete market? Write the Lagrangian in

terms of the consumption today, the state-contingent consumption and state-price deflator

ζ at time t = 1.

(b) Find the unique equilibrium state-price deflator ζ(ω) for any γ.

(c) Find the equilibrium risk-free rate Rf for different parameters γ ∈ [0.5, 2]. Present your
results in a graph.

1

Consider the zero-net supply Asset 1 with state-contingent dividends given in Figure 2.

D1(ω1) = 2

D1(ω2) = 1

D1(ω3) = 0

Figure 2: State-contingent dividends of Asset 1.

(d) What is the equilibrium price of Asset 1 for any parameter γ?

(e) Find the equilibrium expected excess return of Asset 1, E[R1]−Rf, for different parameters
γ ∈ [0.5, 2]. Present your results in a graph. Explain the economic intuition behind your
results.

Consider the zero-net supply Asset 2 with state-contingent dividends given in Figure 3.

D2(ω1) = 1

D2(ω2) = 2

D2(ω3) = 0

Figure 3: State-contingent dividends of Asset 2.

(f) Find the equilibrium expected excess return of Asset 2, E[R2]−Rf, for different parameters
γ ∈ [0.5, 2]. Compare your results to Asset 1 economically, using the assets’ correlation
with the agent’s future endowment.

2

Exercise 2 Consider the following discrete-time multiple period economy with a single repre-

sentative agent. There is no terminal period so the economy continues forever. The agent is

endowed with one unit of an asset paying dividends Dt which follows from the recursion

ln Dt+∆t = ln Dt + µ∆t + σ

∆tεt+∆t, (1)

where µ, σ are constants and the noise terms εt+∆t have a mean of zero, a variance of 1, and are

mutually independent for all t, and hence independent of Dt. All other assets are in zero-net

supply.

The agent’s preferences are characterized by the utility function u(c) = c
1−γ

1−γ , with γ > 0

and for γ = 1 she has log utility. In addition she has time-additive expected utility with a time

preference parameter δ.

(a) Argue that in equilibrium, the agent’s optimal consumption must be equal to the dividend

of the asset, i.e. Ct = Dt for all t.

(b) Show/argue that the relative state-price deflator induced by the agent’s preferences and

optimal consumption are given as

ζs
ζt

= e−δ(s−t)
(
Cs
Ct

)−γ
, (2)

over any time period [t, s].

(c) Find the equilibrium one-period risk-free rate R
f
t .

To find the equilibrium price of the risky asset, we conjecture that it is given as Pt = DtA

for some constant A > 0.

(d) Argue that the price of the risky asset must follow the recursive expectation

Pt = E

[
ζt+∆t
ζt

(Pt+∆t + Dt+∆t)

]
(3)

(e) Show that the constant A > 0 is given as

A =
1

e(δ−(1−γ)µ−
1
2
(1−γ)2σ2)∆t − 1

and therefore we must have that

δ − (1 − γ)µ −
1

2
(1 − γ)2σ2 > 0

(f) Argue that the one-period return on the risky asset is given as

Rt+∆t =
Dt+∆t
Dt

1 + A

A
(4)

3

Now consider a zero-net supply asset called the variance derivative introduced at time t,

with a payoff at time T = t + 4∆t related to the realized one-period log returns of the

risky asset over the following 4 periods, given as

VT ≡ Vt+4∆t = 10 000 ·
1

4

t+4∆t∑
s=t+∆t

(ln Rs)
2 (5)

(g) Argue that the time-t price of the variance derivative must be given as

Vt = Et

[
ζt+4∆t
ζt

VT

]
(6)

(h) Estimate the time-t price of the variance derivative by simulating the 4-quarter economy

M = 10 000 times with Dt = 100, ∆t =
1
4
, µ = 0.02, σ = 0.05, δ = 0.02 and for two different

γ = 2 and γ = 10. Explain in detail how you simulate the economy and how you find the

final random variable you are using in your Monte-Carlo estimation.

4

Financial markets homework help

Q1. Explain the classification of Future traders by trading style?

Q2. Suppose there is a commodity in which the expected future spot price is $60.To induce investors to buy futures contracts, a risk premium of $4 is required. To store the commodity for the life of the futures contract would cost $5.50.

Find the future s price?

Q3. Explain the difference between a short hedge and a long hedge.

Q4. Briefly explain Interest rate swap and currency swap.

Answers:

References

Financial markets homework help

Kingdom of Saudi Arabia

Ministry of Education

Saudi Electronic University

A picture containing text, outdoor, sign  Description automatically generated

المملكة العربية السعودية

وزارة التعليم

الجامعة السعودية الإلكترونية

College of Administrative and Financial Sciences

Assignment 1

FIN 406 (2st Term 2021-2022)

Deadline: 03/03/2022 @ 23:59

Course Name: International Finance

Student’s Name:

Course Code: FIN 406

Student’s ID Number:

Semester: II

CRN:

Academic Year: 1442/1443 H, 2st Term

For Instructor’s Use only

Instructor’s Name:

Students’ Grade: / 10

Level of Marks: High/Middle/Low

Instructions – PLEASE READ THEM CAREFULLY

· This assignment is an individual assignment.

· The Assignment must be submitted only in WORD format via allocated folder.

· Assignments submitted through email will not be accepted.

· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.

· Students must mention question number clearly in their answer.

· Late submission will NOT be accepted.

· Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.

· All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).

Submissions without this cover page will NOT be accepted.

Explain the benefits that multinational companies get from using foreign exchange markets. Even though multinational companies are believed to be beneficial for countries, why are some governments concerned with the growing importance of multinational companies?


Answer:

Financial markets homework help

Strategic Management (BA 451-01)

Assignment # 3

Prepared For:

Dr. Jimmie S. Warren

Prepared By:

Zellia Edwards

Date:

February 20, 2022

Apple Inc.

A merger occurs when a financially stronger corporation acquires the assets and liabilities of another (Frank, 2003). The business that acquires the assets and liabilities of another company preserves its identity while the acquired company ceases to exist. Mergers are a sort of purchase that may include the entire or part of a company’s assets.

Acquisitions are motivated by hoped-for financial rewards (Frank, 2003). For an acquisition to occur, both firms must be valued more than they were before the merger. Acquisitions and mergers provide economies of scale, eliminate inefficiencies, and reduce taxes. Another rationale for M&A is to assure corporate survival in a competitive market. For example, a startup may combine with a large firm in the same field to gain market share. Apple, for example, has a history of mergers and acquisitions, but Hungryroot hasn’t.

Apple inc.

Apple Inc. designs, manufactures, and sells personal computers, consumer electronics, hardware, and associated services (Paroutis, Angwin, & Heracleous, 2016). It was created in 1976 in Cupertino, California. Apple’s most popular products include Mac, iPhone, iPad, and iTunes. In addition to Europe, the corporation operates in Asia, North and South America. Microsoft, Samsung Electronics, HTC, Google, and Huawei Technologies are Apple’s main rivals. To stay competitive in the electronics and software markets, the business has acquired other firms.

Analysis of Apple Acquisition Strategy

Apple Inc. just bought Map sense, a startup firm. According to (Paroutis, Angwin, & Heracleous, 2016), Apple purchases companies to add them to its product portfolio. The corporation often acquires small businesses or technology that fit within its product range.

Faced with rising consumer electronics and software rivalry, the business has made multiple acquisitions to become a market leader in electronics and software manufacturing. For example, the corporation saw Map sense as a perfect fit to strengthen its mapping technology (Chmielewski, 2015). Apple’s purchase of a business that makes tools for studying and displaying locations was considered as the finest campaign against Google. It also bought HopStop in 2013 and Coherent Navigation in 2015.

According to Porter, a firm’s position in an industry affects whether it is above or below average (David, 2010). A company’s long-term competitive advantage is the foundation for its profitability above industry norms. Apple has a history of exceeding industry norms in terms of profitability.

Apple’s product portfolios are practically unmatched by rivals like Lenovo and HP. Apple Inc. made a great move by pursuing acquisition methods. based on (Paroutis, Angwin, & Heracleous, 2016) Apple’s strategic connections have made it a digital hub where fresh content can be created and quickly transmitted to other Apple devices. The business credits its purchases for the success of the iPhone, iTunes, and iPod. So, the corporation may penetrate the consumer electronics and entertainment market.

Moreover, the corporate acquisitions have improved its market core strengths (Paroutis, Angwin, & Heracleous, 2016). Silicon Grail, Prismo Graphics, and Nothing real are three video development and production firms that Apple bought in 2002, according to the writers. In 2008, it bought PA Semi, a microprocessor boutique. The business recently purchased Map sense, a mapping and location analysis technology developer.

Apple’s recent purchases, and those it plans to make in the future, were good moves. They have helped it to keep ahead of competitors in the consumer electronics industry. As stated before, most acquisitions are strategic moves to improve a company’s market position. For example, the German music developer purchase enabled Apple to offer distinctive items via iTunes. These purchases also helped the organization stand out in the market. The corporation chooses to acquire companies that create items linked to the company’s product. Map sense was acquired to help the corporation compete with Google in location-based technologies. This and other acquisitions have helped the corporation stay competitive and profitable.

Global Business and Corporate Strategies

Business level strategies are commitments made by a corporation to gain a competitive edge (David, 2010). Differentiation and cost leadership are key company level tactics in big marketplaces. Apple’s business approach is uniqueness. Apple goods are still rare, costly, and difficult to copy. Its ability to combine software and hardware into one component sets it apart from competitors. Its biggest rivals, like Lenovo, use OS from other manufacturers. Apple devices, however, operate on the business’s own OS, iOS, allowing buyers to purchase a product made entirely by one company. The company’s ability to integrate business and marketing strategies with product development offers it a tremendous competitive advantage.

A corporate strategy explains the steps taken by a company to get a competitive edge in the market (David, 2010). In terms of marketing, Apple’s brands are nearly same in the US and other regions. Also, most Apple goods are made in China. This makes them cheaper to manufacture and consequently increases the company’s profit margins.

Improvement Suggestions

Reduce prices to gain market share. Apple goods are still costly and not for everyone. Similar items from rivals are still cheaper. To get a competitive edge, the firm depends on great innovation. Providing low-cost items may help the firm expand its market share. Thus, gaining entrée into the enormous market of low-income workers.

Hungryroot

McKean and others created Hungryroot, Inc. in 2015 to deliver packaged meals to clients through online ordering (Hungryroot, 2016). Their meal is prepared with fresh veggies and protein.

Suitable Merger Partner for Hungryroot

A beneficial combination between Hungryroot with Starbucks. Dunkin’ Donuts’ merger with Hungryroot has various benefits. First, Dunkin’ Donuts and Hungry Root have a similar business model: good service and unusual cuisine. Dunkin’ Donuts began as a coffee shop and eventually added items to its menu. To supplement the current food options, Dunkin’ Donuts may unite with Hungryroot.

Due to rising competition from Starbucks, Dunkin’ Donuts has had to expand its product line (Schmidt & Oldfield, 2007). Due of Starbucks’ success, Dunkin’ Donuts decided to develop new products to differentiate itself. The fact that Hungryroot solely sells veggies gives them a competitive edge in the market. Success in the beverage sector relies heavily on market differentiation.

Dunkin’ Donuts would also gain entrance into a new market sector by merging. Starbucks specializes on providing customers with coffee. Dunkin’ Donuts will have access to a new market formed by Hungryroot via a merger with Hungryroot. Dunkin’ Donuts’ massive financial capabilities and current infrastructure would provide a significant help to Hungryroot, a young business attempting to acquire market share.

Hungryroot’s Business and Corporate Strategies

Hungryroot’s corporate level strategy should be operational and corporate connected. Hungryroot must use economies of scale to achieve cost leadership via competitive pricing. The firm currently has a distinct product selection, but customers will be more interested if the costs are reasonable. It is advised that the corporation initially focus on the US market, which may be done by merging with Dunkin’ Donuts-like enterprises. After covering the US market, the corporation may expand to other nations like Canada, which has Dunkin’ Donuts.

Hungryroot caters to a niche market of vegetarians. Its core business strategies are distinctiveness and cost leadership.

However, the company’s distinctive cuisine sets it apart from competitors. So, the proposed company level approach is cost leadership. Hungryroot must focus on offering excellent vegetables at low cost. The combination of low cost and health advantages of vegetable rich diets will give them a competitive edge.

References

Chmielewski, D. (2015). Apple acquires Map sense, a mapping visualization startup.

Retrieved 2016, from http://www.recode.net/2015/9/16/11618606/apple-acquires- map sense-a-mapping-visualization-startup

David, F. R. (2010). Strategic management: Concepts and cases (MyManagementLab series) (13th ed.). Boston: Prentice Hall.

Frank, S. A. (2003). Mergers and acquisitions. Nature, 421(6923), 579–580.

Hungryroot. (2016). Hungryroot. Retrieved 2016, from https://www.hungryroot.com/about

Paroutis, S., Angwin, D., & Heracleous, L. (2016). Practicing strategy: Text and cases. London, United Kingdom: SAGE Publications.

Schmidt, R. A., & Oldfield, B. M. (2007). Dunkin’ Donuts – the birth of a new distribution and franchising concept. Journal of Consumer Marketing, 16(4), 376– 385.

Financial markets homework help

Final Brand Choice

Group9

We choose Tesla as our research brand, and if we need to go deeper into the product line, we will choose model 3 for research.

The reason we choose Tesla is Tesla’s market positioning, a new type of electric vehicle with the most innovative technology and new energy technology, is in line with the major theme of energy conservation and environmental protection in today’s society. The target groups are middle-class wealthy families, those who have a certain pursuit of quality of life, and those who are enthusiastic about new technologies.

Financial markets homework help

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Overall “media weight” is not really very useful.
GRPs do not measure actual reach.

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Awareness plateau – an ad no longer gains additional awareness with additional
media exposure
ROI
A commercial is considered to be experiencing wear-out when it ceases to produce
significant attitudinal or behavioral impact with additional media exposure.

https://www.aaaa.org/wp-content/uploads/2017/08/Communicus-Wearout.pdf

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S-shaped response curve

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CPM = $70

SB 2016
Ad cost: $5 million (record breaking)

Estimated 114.4 million viewers. CPM: 43.71
Actual viewers declined to 111.3. CPM: 44.92

Super Bowl LVI (2022) averages audience of 112.3 million viewers, is most-watched
show in five years

CPM 62.5

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Continuity!

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From interview of Thales Teixeira, Harvard Professor, by McKinsey partner Dave
Edelman

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Push marketing is geared to helping the retailer to sell (via merchandising,
promotions, display, equipment, pricing)

Pull marketing is geared toward driving the consumer.

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Company has a desire to achieve certain sales goals within a specific time frame.

Company’s collaborators (e.g., distribution channel) has power and wants.

Typically companies use customer incentives to achieve three primary goals: manage
the timing of customers’ purchases, selectively reach specific segments; and respond
to competitive promotions.

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Sahni, Chintagunta and Zou 2017
We find that the offers cause the average expenditure to increase significantly, by
$3.03 (a 37.2% increase) during the promotion window. However, the redemption
rate of these offers is low. Importantly, ninety percent of these gains are not
through redemption of the offers. The individuals who spent more on the platform
in the past are more responsive to the offers; and the effect of the offers is
significantly higher among individuals who did not transact on the platform in the
year before the offer was given. Interestingly, the promotion causes carryover to the
week after the promotion expires; we find that spending increases by $1.55 in the
week after the offer expires. Additionally, we find evidence for cross category
spillovers to non-promoted products – offers not applicable to a ticket genre cause
an increase in spending in that genre. We conclude that emailed offers can serve as a
form of “advertising” for the firm’s products rather than tools of price discrimination.

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Want to gain distribution, encourage stock at certain levels (for example, prior to
running a consumer promotion), encouraging the channel to promote.

Push Marketing

Shelf Space Higher levels of inventory to limit stockouts Effort
Coop advertising offset the impact of competitive promos

53

General Motors ran a price promotion “You pay what we (employees) pay” in the
summer of 2005 that was imitated after five weeks by it two major U.S. competitors.
Increased sales, but at a loss of $5000 per vehicle. Overall negative impact.
Cadillac sponsored a Super Bowl post-game show to promote the ability of its V-
Series cars to hit 60 mph in less than five seconds. Created a special Web site
promoting a “Five Second Film Competition”- shoot and upload a five-second film on
any topic. More than 2.5 million consumers visited the site, 2600 submited films, in
the four months following the promotion, Cadillac V-series sales jumped by 25%.

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One interesting idea is to spend more time attempting to design promotions that are
easy for consumers to adopt and difficult for competitors to imitate.

Home Depot – employing Olympic athletes. Flexible work week and benefits. Created
stronger links to the Olympics than many other Olympic sponsors. Plus lots of
publicity.

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Financial markets homework help

v 12/30/21 1

MGT 247
Advertising and Promotion Management

Winter 2021-22
Dr. Campbell

Final Project Description

The final project is a group project that you will complete with a four-person team.

Overall, your goal is to develop a well-conceptualized, research-based IMC plan for a brand of
your own choosing. Specifically, your team will work to develop an integrated marketing
communications plan for a brand; this can be a product, service, not-for-profit, charity or an idea
that interests you and your team members.

Your team will identify appropriate goals and communication objectives for the
organization. Your team will need to understand the competitive framework; evaluate current
communications and conduct secondary research to identify your target and your target’s
communication needs (that is, what you recommend that the organization say to whom). On the
basis of your background analysis you will develop communications objectives and a plan to
achieve them. Your integrated plan should be sure to include a variety (minimum of three) of
recommended marcom tools (e.g., static advertising; sales promotion; social media) with support
for why you recommend those specific tools). Your plan write-up should be 16 double-spaced
pages or less with 12-point font – not including figures and appendices. Please provide an
Executive Summary upfront – this can be more than one page, but should be a short, concise
summary of the major reasoning and recommendations (often all that the executives will read –
at least to begin with). The written plan is due by 11:00 am Tuesday, March 15.

We will also have presentations in class Tuesday March 15 11:30 am – 2:30 pm in
OLMH 1208 so other students can see what your plans are and learn from your group. Each
presentation will be 8 minutes long, plus another 3 minutes for Q&A. Feel free to be creative,
such as a demonstration or skit, etc. Presentations will be graded based on whether you
communicate your ideas clearly, concisely and persuasively and whether you get the audience
engaged and interested.

This is a lot of work, but it is good work because it will be so useful in terms of
consolidating your knowledge of all the different pieces that are essential to good marketing
communications strategy.

There are several tasks you will need to accomplish on the road to developing a plan.

Key Tasks:

1. Your first task is to put together a team (Due Monday 1/17/22 by 8 pm).
2. Second, pick an organization/brand on which you wish to work. You may develop a

plan for a product, service, specific brand, brand line, company brand, retailer,
organization, or idea/message. See Appendix A for more information on clients. (Due
8 pm Saturday 1/22/22)

3. Analyze the organization’s current marketing situation. Conduct secondary research
on the industry, competitors, the organization, and customers in order to gain a good

v 12/30/21 2

understanding and definition of the issues and opportunities facing your client. (The
library has lots of great resources and helpful reference librarians).

4. Identify how your organization is currently communicating and presenting the brand.
Identify any distinct brand assets; these can include logos, brand colors, slogans,
mascots, fonts, audiomarks, etc. Analyze some of the organization’s current marcom
to understand and identify what they are currently trying to associate with the brand.

5. Decide on the segment(s) you intend to target with communications. Provide a
research-based (either secondary or primary) rationale for the specific target
audience(s) for your IMC program, how you define the target(s), and why you believe
this is best for the organization at this time.

6. Develop a recommended positioning statement. Use either secondary or primary
research to identify your client’s overall communication needs.

7. Develop specific communication objectives to guide development of your IMC plan.
8. Using your insights about the market and target(s), create a comprehensive IMC plan

for your organization. Evidence-based rationale is critical for a successful plan.
a. Describe and justify all components of your campaign. Be sure to explain how

each will achieve the specified communication objectives to meet the
recommended positioning.

b. The plan should incorporate all media deemed relevant and efficient in
reaching the target(s). You should provide careful rationale for why each type
of media is, or is not, included in the plan. Discuss how the different pieces fit
together (how this is an integrated plan).

c. Develop communication/creative briefs for at least two of the types of media
and provide a sample of at least one of the types of media included in the plan.

d. Be creative and thorough!
9. Detail a media plan and schedule. This should include the basic timing for each type

of media and discussion of the weight of the proposed plan over different time
periods. Provide rationale. This should also include examples for each type of media,
but does not need to specify every individual vehicle. (For example, a
recommendation could specify print media, provide guidelines for the type of media
and then provide one example of a vehicle that meets the specifications). Be sure to
provide estimates of the reach and frequency of your plan.

10. Recommended budget. This should include the overall amount recommended for the
plan, and how you arrive at this amount. The budget should also provide percentage
allocations of the total budget for each type of recommended media. Do enough
research to complete and justify the recommended allocations (e.g., you will need to
know average costs for each type of media), but you do not need to specify every
specific vehicle and its costs. Justify the recommended budget and breakdowns, being
sure to draw upon consumer insights and the expected reach of the overall plan.

11. Provide insight into how you will assess the effects of your plan (how will you
measure whether you are achieving your objectives?)

12. Develop a strong executive summary that powerfully presents the major points of
your plan. Be sure that an executive who only reads that gets a good sense of the what
and why. (The executive summary is developed at the end but will be positioned at
the beginning of your plan.)

v 12/30/21 3

Note that this project will require a considerable amount of outside work. All groups are
expected to gather information about the industry, company, competitors, and customers in order
to complete a situation analysis and identify relevant communication objectives. As part of this,
you will need to analyze some of the organization’s and primary competitors’ current
communications.

v 12/30/21 4

Appendix A – Choosing an Organization for the Final Project

As noted, there are many different types of “organizations” that you may select for the final IMC
project. You may choose an organization that is a for-profit or not-for-profit. Your final project
can address a product class (e.g., Colorado Lamb or Beer), a specific product (e.g., Trible M Bar
Ranch or Blue Moon), a service (e.g., H&R Block or Blue Apron), a specific branded good (e.g.,
Noosa Yogurt), a brand line that covers many products (e.g., Quaker), a company brand (e.g.,
Chevron), a retailer (e.g., Target), an organization (e.g., Doctors without Borders), or a message
(e.g., “Get your kids to get more exercise”). The brand can be national or international with a
large marcom budget, or something with a smaller budget, such as a start-up or small, local
company. You have a lot of latitude in your choice. If you have a specific interest (e.g., working
for a B2B company or working in a particular industry), this is a good opportunity to pick a
project that enables you to learn more about your interest; do be sure that this matches interests
of all team members.
One thing to note is that information accessibility will be important to managing the time put into
this project. Thus, be sure to choose an organization, product or service with this in mind. If you
are choosing a project with which you have no connection, select a company that is publicly
traded rather than privately held; it is much more difficult to get information about privately-held
companies and their products. You are welcome to pick an “in-person” organization (an
organization you work with directly) and work on a project for them. If you do this, you will
probably get a project with a smaller scope and budget (e.g., you will probably work on a local,
not a national, communications plan). However, you also are likely to get a challenging, creative,
hands-on experience. The same is true of choosing a non-for-profit about which you feel
passionate. These sorts of projects can be great learning experiences. Think about what type of
marketing communications challenge you would most like to learn about and pick your client
accordingly.

A typed description and basic analysis of your final client and how you plan to get
information is due no later than 8 pm Saturday 1/22/22. Be sure to include the first and last
names of all team members on this.

Financial markets homework help

Pillsbury – Accelerating Sales
& IMC

Dr. Campbell

Class 6: February 8, 2022

1

Meg Campbell () – Need promotion spending amount for 2013 or 2014.

Introductions

Chia-Ju Lee

Taehoon Kim

Kenady Jackson

Yue He

Fatima Hamidin

Brenden Gallardo

Sam Espinoza

Mohit Dhinakaran

2

Last Week

What is pattern advertising?

What is the consumer decision journey?

Is “increase sales” a communication objective?

What is a communication objective?

What do you need to include in a “smart” communication objective?

Why is it important to develop a communication brief?

Regarding Communication Briefs…

“Like building a house,

if the foundation is shaky, good luck.”

Lesya Lysyi

4

Steps in Communications Strategy

S, T, P

Identify most important targets for communications

Identify what target customers need to know to be more favorably disposed toward our brand

Set objectives

Develop communication brief(s) for each different marketing campaign

5

Learning Agenda

Pillsbury – Figuring out how to use communications effectively

Understanding Integrated Marketing Communications

Pillsbury

Pillsbury Chub

Scoop out with a spoon

Drop spoonful on baking sheet

Bake 12 – 15 minutes

“Kisses” Research (“creative testing”)

Brand Recognition

Relevance

Likely-to-buy

9

Usage and Attitude Study

Objectives:

Understand the differences between the Canadian and U.S. markets

ID differences that could be leveraged to increase growth in Canada

Qualitative

Objectives:

Explore, understand, uncover

Understand feelings toward different types of cookie baking

Similarities and differences between scratch and refrigerated

Gain insight into what is really driving moms’ cookie baking

Findings

Size of scratch baking is much larger in Canada than US (scratch dominant)

Kids are important

Pre-oven experience is different, and less positive

Post-oven experience is the same

Warm, fragrant cookies for close family moments where mom made a difference

Key benefits of refrigerated dough, relative to scratch, are about convenience, ease, ability to make anytime

Nonusers rate RCD lower on convenience than users and lapsed users do

12

Guillen wondered…

How could we leverage the insights to increase the purchase frequency and/or market penetration?

Which consumers should the team target?

What should the brand messaging be?

Pillsbury Assignment

What is
“Integrated Marketing Communications”?

American Association of Advertising Agencies

An approach that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines and combines them to provide clarity, consistency, and maximum

communications impact.

Based on the idea that the integration and coordination of multiple elements of the marketing communication mix results in greater success.

More focused

More consistent

More effective

More efficient

IMC to Build the Brand

Understand consumer markets

STP

Analyze to uncover needed message, i.e., specific points to be communicated

Consider stage in purchase process

Hierarchy of effects

Consider alternative tools

Strengths and weaknesses

Costs

Develop coordinated communications mix

As covered in the Integrated marketing Communications Harvard reading.

Talks about the different types of communication tools. Discusses the need to understand the customer buying process and what stage particular targets are in. We ill go over in more detail when discuss consumer processing.

Media choices. Budgeting. Measurement.

Purposes of Marcom

Inform prospective customers about products, services, terms of sale, distribution channels, etc.

Persuade as to the benefits provided

Induce action

Create the positioning that is the basis of brand equity

Brand

Equity

Communications Process

Problem Awareness

Search

Evaluation/Preference

Decision & Purchase

Post Decision

Help consumers move through

the decision stages hierarchy

This is a process.

Somewhere during the process, people gain/create an overall sense of the product — an image. The idea of comprehension can include understanding of specific attributes, but also “softer” types of understanding, e.g., personality, user imagery, etc.

Marcom is supposed to help consumers through this process.

Communication is Challenging!

High clutter and noise characterize today’s consumer environment

Consumers may lack motivation, ability or opportunity to process

Getting attention for any one message is very difficult

Gaining enough processing attention to create memory is especially difficult

The current best solution is “Integrated Marketing Communications”

4000 – 10,000 ads a day?!

Steps to Integration

Analyze

Market &

Consumers

Define

Marketing

Objectives

Develop

Comm

Objectives

Start with the customer! This is what should drive the choices.

Communication objectives drive a plan that is based on CHOICES among the specific promotion tools that you have available to develop a plan that utilizes multiple tools to communicate a consistent brand concept to the targets.

Steps to Integration

Analyze

Market &

Consumers

Define

Marketing

Objectives

Develop

Comm

Objectives

Develop

Integrated

Marketing

Communications

Program

Advertising

Interactive

PR

Promotions

Batra and Keller 2016

Marketers thus must be concerned not just with what each message can accomplish in isolation (its “main effect”) but also with what it needs to accomplish in the context of this entire sequence or stream of messages (its ”interactive effects”)

Batra and Keller

What does this mean?

Marketers thus must be concerned not just with

what each message can accomplish in isolation (its “main effect”)

but also with what it needs to accomplish in the context of this

entire sequence or stream of messages (its “interactive effects”).

23

Consistency in Integrated Communications

Key Messages

The idea that communication tools should be coordinated with each other and with the company’s marketing mix to provide maximum impact and clarity of message.

All communications do not say the SAME thing, but instead, work together to create convergence.

This sounds good, is generally what we have been discussing all term.

24

Old Way

PR

Product

Merchandising

Trade

Shows

Promotions

Direct

Marketing

Packaging

Advertising

Selling/

Proposals

Implications of the Brand Equity Approach

The manner in which a brand association is formed doesn’t matter

What matters is:

Favorability

Strength

Uniqueness

Think back to the concepts behind customer-based brand equity.

Awareness and associations. Want strong associations, and whereas there are better and worse ways of building strong associations, once an association is effectively created, it doesn’t really matter how it was formed.

Implications of the Brand Equity Approach, continued

Thus, evaluate the wide variety of marketing communication options available to create these knowledge structures in terms of:

Match with objectives

Cost

Effectiveness

Integrate all communication tools to converge on a core concept

Think back to the beginning of the class when we discussed marketing communications as “brand-customer interactions” – really, just about all marketing efforts can – and should – be considered in this light. If everything we do communicates something to the consumer, building associations in the customer’s networks, then the proper integration of all this communications is essential.

Regardless of chosen options, the entire program should be coordinated to create a consistent and cohesive brand image

Brand associations should share content and meaning

What is the CORE IDEA? Two approaches.

Two Approaches to IMC

Communications Idea

“Look and Feel”

Customer-based Brand Concept

“Meaning”

Communications: Physical Continuity

Increases motivation, opportunity, and ability to process

Builds stronger linkages in memory

“Brand element” focus

Physical Continuity…

Stronger associations may be created by explicitly linking marketing communications to the brand

Easier to recognize and link to brand

Cues to earlier communications

All forms of variation increase likelihood that consumers form and retrieve links between brand and communications

Cues can be identifiable scenes, characters, symbols, verbal phrases or slogans

Can place in or on:

Product packages, place of business, coupons or other promotions, yellow pages ads, print ads, TV ads, etc…

Increases motivation, opportunity, and ability to process

Builds stronger linkages in memory

Conceptual Continuity

Increases motivation, opportunity, and ability to process

Builds stronger linkages in memory

Develops brand meaning

Builds relationship

Strengthens response tendencies

“Customer-based brand concept” focus

Different audiences – but maintain some sense of the core brand meaning even across audiences.

31

IMC – Consistency

PR

Customer-

Based Brand

Concept

Merchandising

Trade

Shows

Promotions

Direct

Marketing

Packaging

Advertising

Selling/

Proposals

Social

Media

Examples of Concepts that Drive the Brand

Nike – “Authentic athletic performance”

BMW – “The Ultimate Driving Machine”

Johnnie Walker – “We Inspire Men to Progress”

Virgin – “Genuine, fun, contemporary and innovative at a reasonable price”

Pace – “Genuine. Vibrant. Bold.”

Johnson & Johnson – “Trust and quality in OTC medicines”

Salesforce – “A Customer Company”

33

IMC – Complementarity

Strengths?

Weaknesses?

Choose the best option to address each different communication objective

PR

Customer-

Based Brand

Concept

Merchandising

Trade

Shows

Promotions

Direct

Marketing

Packaging

Advertising

Selling/

Proposals

Social

Media

IMC – Cross-effects

PR

Customer-

Based Brand

Concept

Merchandising

Trade

Shows

Promotions

Direct

Marketing

Packaging

Advertising

Selling/

Proposals

Social

Media

Steps for Achieving
Integrated Marketing Communications

1. From a thorough marketing analysis of the company, the marketing situation, and the customers’ wants and needs, create a competitive advantage.

2. This should drive the definition of the role and objectives of marketing communications within the overall marketing mix.

3. The specific marketing communications tools and messages are derived from the overall marketing communications strategy.

Old Spice

Started in 1934

Women’s fragrance

Men’s shaving soap and aftershave

An Old Spice Man always gets a warm welcome, wherever he lands.

1990 P&G purchased from Shulton Co.

Expanded the product line

Old Spice

1990 P&G purchased from Shulton Co.

Expanded the product line

2008 Old Spice Classic shower gel was sold using the slogan “The original. If your grandfather hadn’t worn it, you wouldn’t exist.”

Who is the target?

Old Spice

2009 doing quite poorly

Analyzed for a new communication strategy

Big Consumer Insight: women were buying a significant percentage of men’s body wash

Target women

Core concept: you want your man to smell like a man (fits within the “manliness” brand idea)

39

Old Spice

SuperBowl Ad

Coupons

PR (targeted earned media)

Youtube videos

Media buy

Brand microsite

Social media (e.g., FB)

Second Ad

Interactive responses

Coupons

Isaiah Mustafa

40

Interactive Responses (screenshot)

Personalized real time responses to comments from normal people and celebrities FB, Youtube, Instagram, twitter)

Day 1 5.9 million youtube views

Day 2 8 out 11 most popular videos on the web

Day 3 more than 20 million views

Week more than 40 million views

Twitter following increased (2700%), FB fan interaction (800$), traffic to OS webpage increase (300%)

Became all time most viewed branded channel on youtube

Sales doubled

41

Old Spice

Coupons (incentive)

PR (targeted earned media)

Youtube videos (owned media & earned)

Media buy (owned)

Brand microsite (owned  earned)

Social media (e.g., FB) (owned –> earned)

Second Ad (owned)

Interactive response campaign (owned, targeted earned)

Coupons (incentive)

42

Effective – YES!

29 million viral video views between the Super Bowl and July 2010 (4 ads)

Old Spice was the #1 all-time most viewed sponsored Youtube channel

Interactive videos reached > 34 million views in a week

FB fan interaction jumped 800% after videos

Traffic to OldSpice.com increased 300%

July 2010 sales 8% higher YOY, up 4.8 share points

43

Integrating Communications

Traditional, mass media communications

Broader reach and greater control

Public relations

Even broader reach, greater credibility & “news”

Experiential communications

Greater engagement and brand interaction

Social media

Greater timeliness and “real” connection

44

Consistency

Complementarity

Cross-effects

Strong IMC Components

Balance between creative & message

Must attract attention and engage consumers

Must persuade consumers of the merits of the brand

Points-of-parity

Points-of-difference

Need to be well-branded

Allow, facilitate, and encourage positive interactions online and offline

Give people something positive to talk about! Product or brand news; social events; marketing activities

46

Next Week

Due: Reflections Saturday, 8:00 pm

Due: Pillsbury Action Plan and Communication Brief, Sunday, 8:00 pm

Readings

Very short video on Thinking Fast and Slow

47

Financial markets homework help

Topic: “Explain the objective of multinational financial management? What are various aspects of world economy that have given rise to international financial management?”. Discuss

· You can add to your discussion from online resources, BUT YOU HAVE TO CITE YOUR WORK.

Financial markets homework help

JWI 530

The Mary Story

BACK ON TRACK

BACK ON TRACK

We caught a glimpse of Mary’s analytical skills at work. She was
honored to learn of her Division’s record breaking sales in the most
recent quarter – but she knew enough to look past the hype, and to
get down to the “real” numbers.

It truly had been a great quarter – but a lot of the revenue increase
could be attributed to pricing changes and other factors that might not
be achievable quarter over quarter. Mary realized that in her role as a
business leader, she had to study the numbers and the data with cool
precision – candidly making judgments as to what aspects of that
data represented sustainable progress vs. fleeting “feel good”
moments.

In the wake of her most recent meeting with Andrea and some other
staff members, Mary found herself sitting alone in her office. It was
getting late in the day, and Mary’s head was beginning to swim. She
had been agonizing over the launch of a new perfume, but the project
financials were projecting a negative net present value (NPV). Mary
knew this meant that the project was not showing a positive financial
return.

The NPV at a 10% discount was showing a negative $23,000. She
knew that Net Present Value is the net amount, in today’s dollars, of
the cost and benefits of a project’s cash flows. Since it was currently
less than zero, the company would be $23,000 in the red versus not
doing the project. Further, since the NPV was less than zero when
using a discount factor of 10%, she knew that the Internal Rate of
Return must be less than 10%. Given the poor project financials,
Mary knew there was no way that Jack, the CEO, would support this
new project.

She decided to send a few IM’s to Andrea about this analysis. Andrea
was leaving soon for some off-site appointments, but Mary was

determined to try to catch her before she left. Andrea was impressed
with Mary’s understanding of NPV and IRR. But Andrea’s experience
with project economics lead her to encourage Mary to alter her
approach to the reports.

Mary assumed that the negative NPV would most likely doom the
otherwise exciting project. However, Andrea encouraged her to look
at it a different way. She impressed upon Mary the need to think
positive, and use the NPV calculation not as a reason to give up, but
rather as a catalyst to rally the team and get to work revising the
negotiable elements of the project to make it work! In the long run,
this could lead to a better NPV – and ultimately, a stronger
product.
 
  She and Mary agreed that project economics are built on
assumptions and choices. Each group presents data and choices
based on their relative roles in the project.

For example, R&D had created the formula that they believed would
best appeal to consumers. Purchasing had made choices regarding
which suppliers needed to be contacted, and what needed to be
purchased from those suppliers. Operations made choices based on
product design from R&D. Marketing and finance made choices
related to pricing and brand support.
 

Each of these choices had an impact on the financials of the project.
However, each of these choices had alternatives. Both women knew
that for any hope of management support, they needed a financially
attractive proposition. They had to take a look at the assumptions
and do some sensitivity analysis to determine which choices would
have the most significant impact on the project NPV.

As they IM’d back and forth, Mary decided to make a list of things to
consider changing. One item they discussed was the formulation of
the perfume, which was a big overall cost driver. She wanted to ask
R&D if it was possible to reformulate to a slightly less expensive
design. She also planned to ask the operation manager if the product

 

launch proposal really needed that much inventory. She wanted to
know what would happen to consumer demand if she increased the
selling price by 5%. Finally, she wanted to know if that expensive,
fluorescent purple bottle that purchasing had selected really was the
best choice – especially in light of the fact that there were so many
other viable, cost-effective alternatives available.

Yes, the NPV is based on a set of choices and assumptions. And
Mary was even more aware of that after her IM volley with Andrea.
Modifying the original plan anywhere along the way will lead to a
different NPV. As they wrapped up their chat session, Mary spun
around in her chair and grabbed the phone. She called her assistant
and asked that a meeting be scheduled with the Perfume Division
managers tomorrow at 11AM.

Inspired by her exchange with Andrea and some further review of the
reports, Mary was as determined as ever to find a way to get the new
perfume product back on track and out to market!

Financial markets homework help

________________________________________________________________________________________________________________

HBS Professor Emeritus John A. Quelch and Ohio University Professor Katherine B. Hartman prepared this case solely as a basis for class discussion
and not as an endorsement, a source of primary data, or an illustration of effective or ineffective management. Although based on real events and
despite occasional reference to actual companies, this case is fictitious and any resemblance to actual persons or entities is coincidental.

Copyright © 2020 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu. This publication may not be digitized, photocopied, or
otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.

9 – 9 2 0 – 5 6 3
A P R I L 3 0 , 2 0 2 0

J O H N A . Q U E L C H

K A T H E R I N E B . H A R T M A N

Promoting Land and Nature Jerky

“I really do not like Mondays,” Kathy Ayers, Vice President of Marketing and Communications for
Land and Nature (L&N) Jerky Company, thought as she reflected on her afternoon meeting with L&N’s
CEO, Tim Ryan. During the meeting, Ayers and Ryan had reviewed L&N’s actual, expected, and
forecasted income statements from 2018 through 2020 (Exhibit 1). Ryan explained, “For 2020, we hope
to run at 80% capacity. That will lead to 4% growth in revenue, assuming the same variable cost
percentages that we have now, and a 3% increase in fixed costs. Our forecast operating profit for 2020
is currently 5.2% of sales, well short of the 7% target headquarters has for the company.”

Startled, Ayers looked at Ryan, who stated, “I want your team to help me achieve this goal. By next
week’s leadership meeting, I need you to analyze the effectiveness of our consumer and trade
promotions and make recommendations for the 2020 budget to ensure we use our resources wisely.”

Although relieved her budget was not being cut again, Ayers needed to ensure Ryan understood
the importance of promotions. She said, “We cannot increase sales, stimulate demand, and encourage
trial without consumer promotions. Trade promotions are less essential, but they have helped us secure
new accounts, encouraged our partners to stock more inventory, and generated point-of-purchase
discounts passed along from our partners to consumers.”

Ryan paused briefly before responding. “I think you’re right, but we must have some numbers to
support that hypothesis,” he said. “Corporate wants us to justify our position that promotions expense
translates to revenue because if it does not, why should we spend it?”

After meeting Ryan, Ayers called Steve Ham, L&N’s Chief Financial Officer. “Steve, can you get
some numbers together for me?” she asked. “I need to first calculate return-on-marketing-investment
(ROMI) for both consumer and trade promotions and then consider how to adjust the budget to
maximize ROMI.”

To Ayers’s surprise, Ham replied, “I have been working on that for the past week. Give me an hour
to finish it.” Now, Ayers was on her way to Ham’s office with her notes and planned budget.

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Meat Jerky Industry in the United States

The meat jerky industry included companies that dehydrate (or cure), season, and package meat
into meat jerky products. In 2018, estimated sales were $1.3 billion ($67.3 million in profit) with
projected annual growth of 2.7%.1 On average, operating profit margins were approximately 5%.2

Products

Meat jerky was a nutrient-dense, shelf-stable meat that was made lightweight by drying; a pound
of meat or poultry weighed about four ounces after being made into jerky. 3 It was made from lean cuts
of whole muscle. Meat was sliced into thin strips or restructured muscle by grinding and processing
whole muscle to form a more uniform shape. Most jerky was sold in plastic, multi-serve bags.

In 2018, beef had 79% of total U.S. jerky sales. Less than 20% of jerky sales came from other meats
such as turkey, chicken, pork, and game such as deer, elk, salmon, and buffalo.4 Analysts predicted
beef jerky revenue would decline and sales of innovative flavors and healthier meats would increase.5

Meat snacks were made from processed meats, including both muscle and fat, typically formed into
sticks that were encased like sausage, and often sold in single-serving packages. The nutritional
contents of jerky and meat snacks differed considerably. For example, in 2019, a one-ounce serving of
Oberto’s All-Natural Original Beef Jerky was 70 calories with 0.5g of fat and 10g of protein, while a
one-ounce serving of Slim Jim’s Original Beef Stick was 140 calories with 11g of fat and 6g of protein.

Competitive Landscape

In 2018, the top three competitors accounted for 60% of total sales in the U.S. market. 6 The largest
was Link Snacks, Inc. (26%), which produced beef jerky, turkey jerky, beef sticks, and meat and cheese
packs under the brand name Jack Link’s. The Oberto Sausage Company was the second-largest
competitor (19%). It produced and sold beef jerky, salami, pepperoni, and other snack sausages under
the brand name Oh Boy! Oberto. Slim Jim, produced by a division of Conagra Brands Inc., was the
third-largest competitor (15%). It offered a wide variety of meat sticks, meat snacks, and dried sausages.

The remaining industry revenue included numerous smaller companies and hundreds of single-
person operations. Many of them offered premium-quality products. For example, Chef’s Cut Real
Jerky offered protein-rich jerky targeted to golfers, and Country Archer Jerky Co. produced gourmet
jerky, sticks, and bars made with “premium and clean” ingredients. 7

Rapid revenue growth had also spurred industry consolidation, with global food companies
acquiring small jerky producers. As examples, Hershey’s purchased KRAVE in 2015, General Mills
acquired EPIC Provisions in 2016, and Premium Brands Holding Corporation purchased Oberto in
2018. These companies used their power to secure limited shelf space.

The bases of competition were product price-quality, channel relationships, and innovation-
differentiation. 8 Most consumers were price sensitive, yet those concerned with quality were loyal to
competitively priced brands. Producers needed relationships with meat producers to ensure steady
access to inputs as well as distributors to secure shelf space in stores. Innovation and differentiation
helped earn consumer interest, command higher prices, and secure product placement. These efforts
included new flavor profiles, all-natural or organic variations, and artisanal (small batch) handcrafted
product lines that were targeted at athletes, hikers, and campers.

L&N considered KRAVE, EPIC, Chef’s Cut, and Country Archer as its direct competitors. L&N had
products that were similarly priced (per ounce) to their competitors’, but the other companies had more

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HARVARD BUSINESS SCHOOL | BRIEFCASES 3

product items than L&N. EPIC sold 4 flavors of traditional jerky, 6 flavors of meat steaks, and 12 flavors
of meat bars using 9 different meats. Chef’s Cut sold eight flavors of traditional jerky and six flavors of
meat sticks. Country Archer sold 11 flavors of traditional jerky and 7 flavors of meat sticks.

Markets and Distribution

Most sales of meat jerky were derived from grocery wholesalers (78%). The remainder were sold
directly to supermarkets and convenience stores (12.5%) or exported to other countries (9.5%).9 Grocery
wholesalers supplied supermarkets, convenience stores, and others with a range of packaged snack
foods, including meat jerky. However, the grocery wholesaler market share had been decreasing as
online ordering systems enabled automatic repurchasing directly from producers.

In 2018, U.S. retail sales of meat snacks were $3.6 billion. 10 Using inflation-adjusted prices, retail
sales had increased 29% between 2013 and 2018 and were forecasted to continue to grow an additional
19% by 2023.11 Convenience stores generated 72% of retail revenue, and supermarkets accounted for
approximately 20%. 12

According to a survey of U.S. consumers, 13 42% of households had purchased meat snacks at least
once during the previous three months. Among consumers aged 18–34, 54% of men and 33% of women
reported purchasing meat snacks themselves. Exhibit 2 provides excerpts from the survey.

L&N’s competitors relied increasingly on promotions to retain existing customers and attract new
ones. The typical revenue-to-cost ratio for consumer promotions in the jerky industry was 5:1, where
every dollar spent should produce an additional five dollars in revenues. The typical revenue-to-cost
ratio for trade promotions in the meat snack industry was 4:1.

Land and Nature (L&N) Jerky Company
Located in Nebraska, L&N was an independent subsidiary owned by KB Holdings, a global food

company. Until 2014, L&N had slowly expanded its product lines to include a variety of premium-
quality, all-natural jerky that was available in stores throughout the Great Plains. In 2014, KB Holdings
purchased L&N to build its portfolio of all-natural, eco-friendly products by expanding L&N’s
distribution nationwide. Surveys suggested that jerky consumers considered L&N one of the top five
brands among all-natural artisan jerky and meat snacks.

Philosophy & Production

Ayers had joined L&N because she believed in its focus on sustainability; L&N sourced its products
from sustainable farms and produced products using eco-friendly practices. It processed only
traditional meats (beef, turkey, and pork) to scale production responsibly and efficiently. The company
also supported conservation efforts and nonprofit organizations.

Unlike competitors that used co-packers, L&N processed purchased meat in its own production

facility. It employed 20 workers and used USDA Food Safety and Inspection Service (FSIS) guidelines
for jerky processing: strip preparation, marination, antimicrobial interventions, surface preparation
and lethality (i.e., the process for destroying pathogenic microorganisms), drying, and post-drying
heating. 14 Managing its own facilities improved quality control and lowered production costs.

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4 BRIEFCASES | HARVARD BUSINESS SCHOOL

Product and Pricing

In 2019, L&N’s product mix included two lines: traditional beef jerky and meat strips. L&N’s jerky
was made from whole muscle beef and came in four flavors: regular, teriyaki, barbeque, and habanero.
Strips were introduced as an extension to L&N’s product mix in 2013. They were made from beef,
turkey, and pork using restructured muscle. Strips were offered in three unique flavor combinations:
chipotle-lime turkey, apple-walnut pork, and dark chocolate, and blackberry beef. In 2016, L&N’s
chipotle-lime turkey strip won a national award from the American Cured Meat Championships. In
2018, jerky accounted for 42% of L&N’s revenue, strips for 58%.

Since 2015, L&N wholesale prices for jerky and strips were $3 and $1, respectively. In 2017, L&N
reduced its jerky package size from 2.2 to 2.0 ounces and its strip package size from 0.8 to 0.7 ounces
to address rising material costs while maintaining prices. In 2019, jerky was sold in resealable pouches
for $5.49 MSRP. Retailers frequently discounted jerky; the average retail price in 2019 was $4.99. Strips
were sold in individual, vacuum-sealed packages for $1.99 MSRP. They offered fewer price discounts
on strips; the average retail price in 2019 was $1.89. Although products were competitively priced
against premium national brands, L&N had one of the highest price-per-ounce MSRP.

Positioning and Customers

In 2016, Ayers had convinced Ryan to reposition L&N’s products. L&N situated itself as an artisanal
heritage brand that made hand-crafted, better-for-you products, and it began promoting its products
as high-quality, protein-rich, and all-natural. Its packaging emphasized grams of protein per serving,
all-natural ingredients, and minimal processing. L&N’s products were labeled as certified paleo,
gluten-free, and grain-free. Its practices for meat sourcing practices allowed L&N to be the only
national meat jerky producer permitted to label its products using three AGW (A Greener World)
certifications: Certified Grassfed, Certified Non–GMO, and Animal Welfare Approved.

Rather than using a Wild West theme to differentiate its products, L&N used bold graphics and
vibrant colors. The primary colors of its meat steak strip packaging varied by flavor: apple red (apple-
walnut pork); lime green (chipotle-lime turkey); and blackberry purple (dark chocolate and blackberry
beef). In addition, L&N differentiated itself from other artisanal jerky brands—which usually used
sophisticated, artistically rendered images—by using cartoon-rendered food icons. Branding choices
positioned L&N products as offbeat and quirky.

The market study that Ayers had commissioned showed that L&N had strong brand awareness
among meat snack consumers (75% aided recall), which was comparable to competitors such as
KRAVE, EPIC, Country Archer, and Chef’s Cut. According to the study, 12% of consumers surveyed
had purchased an L&N product at least once in the previous three months; 40% of those surveyed had
purchased any meat snack during that period. Consumers who had purchased L&N’s products tended
to be college-educated, working adults with household incomes of $75,000–$99,999.

Compared to the average meat snack consumer, L&N customers were more likely to look at
ingredients before buying snack foods (42% vs. 28%) and less likely to identify low price as important
to their purchase decision (16% vs. 39%). The study also suggested that L&N’s customers were far more
likely to look for labels like L&N’s AGW certifications than the average jerky buyer was (39% vs. 27%).
Exhibit 3 compares L&N customers to all customers who purchased meat snacks.

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HARVARD BUSINESS SCHOOL | BRIEFCASES 5

Distribution

As a subsidiary of KB Holdings, L&N enjoyed strong distribution. In the United States, 70% of
supermarket chains, 44% of convenience stores, and 36% of independent grocers stocked at least one
L&N product. KB Holdings managed reordering, restocking, and delivery for all retail accounts in
exchange for 10% of L&N‘s revenue; typical grocery wholesaler distribution fees ran from 15% to 30%.
L&N also considered its relationship with KB Holdings to be a major competitive advantage. Unlike
independent, wholesale distributors that often represented several jerky brands, KB Holdings had a
vested interest in L&N’s long-term revenue and profit growth.

L&N’s jerky pouches were offered near other jerky products on hanger shelves. Strips were sold
from L&N display boxes located near nutrition bars. Independent of KB Holdings, L&N managed its
own advertising, consumer promotions, and trade promotions through a three-person sales and
marketing team, which had developed successful point-of-purchase displays in convenience stores that
increased impulse purchases. L&N’s annual survey of distributors indicated strong satisfaction with
product quality (95%), inventory turn (91%), relationship (88%), and trade promotions (81%).

L&N’s Integrated Marketing Communications
Ayers arrived at Ham’s office and sat down. She gave him a copy of her notes and budget and began

to explain. “As you know, we conceptualize L&N’s marketing communications strategy using three
components: (1) strategic intent, including the communication goals and target audience; (2) strategic
execution, including message/story and media; and (3) strategic impact, including budget and
effectiveness metrics. In 2019, our goal was to build a preference for our products and increase the
likelihood of purchase. We targeted mainly existing customers, but we also targeted consumers who
expressed interest in jerky or meat snacks online. We shared our message primarily through paid and
owned online media. We also used consumer and trade promotions to build demand.”

L&N’s paid media included social media ads, search ads, and image-rich display ads. Its owned
media included a mobile-friendly website and company-sponsored social media content that used a
combination of humor and emotional (feel-good) appeals. For example, the L&N website shared
information about sustainability practices as well as funny animal pictures and videos.

L&N had recently finished negotiations with a company to outsource a portion of paid and owned
media. The company specialized in targeting and delivering marketing content using marketing
automation, artificial intelligence, and machine learning. By outsourcing, L&N estimated it would
reduce its 2020 paid and owned media budget from $700,000 to $500,000.

L&N invested heavily in consumer promotions, which were pull marketing communications
intended to induce end users to purchase L&N’s products at the point of sale. Consumer promotions
also encouraged trial among new customers; L&N commonly used digital coupons (e.g., buy-one-get-
one and cents-off) and instant savings stickers on packages. L&N also invested in social media contests
in which participants earned money to be donated to a sustainable nonprofit organization. For
example, L&N invited participants to share pictures of nature via social media. It then selected five
entries as finalists and asked followers to vote for their favorite. L&N donated $50,000 to the preferred
nonprofit of the winning photographer and $10,000 to the nonprofit of the runner-up. L&N alternated
promotions monthly so that it offered consumer promotions during even months (February, April,
June, August, October, and December).

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Ayers explained, “Consumer promotions will drive most of our revenue generation. We get a lot of
positive feedback on social media when we offer promotions that consumers like. Our customers
especially love to re-share contests and promotions that benefit social and environmental causes they
support. Our loyal customers are one of our greatest assets.”

L&N also invested in trade promotions, which were push marketing communications designed to
motivate retailers to sell products to consumers and to maintain distributor relationships and loyalty.
L&N’s trade promotions included discounts off invoice prices, free cases with minimum orders, shelf
talkers (i.e., signs attached to a shelf that were designed to attract a customer’s attention, and
performance discount incentives for verifiable merchandising/advertising support). L&N regarded
this effort as key for getting retailers to carry L&N products; it estimated that half its accounts would
discontinue carrying L&N’s products without them. L&N alternated promotions monthly; it offered
trade promotions during odd months (January, March, May, July, September, and November).

Ayers explained: “I am not sure about the effectiveness of our trade promotions. Our trade partners
tell us that our timing, duration, and frequency of trade promotions are very effective and that our
shelf talkers and vibrant packaging are distinct visuals. In addition, thanks to KB holdings, we have
fewer out-of-stock issues and higher inventory turn-over rates than our competitors do. However,
although our goal is for retailers to pass along discounts to stimulate demand rather than build their
own inventory, we cannot control how our partners manage their inventory or stock our products.”

Ham told Ayers. “I just finished these estimates. Using historical sales records, expected organic
growth, and the 2018 and 2019 monthly marketing expenses (Exhibit 4), I estimated incremental
revenue for trade and consumer promotions (Exhibit 5). I think this information will help you estimate
ROMI for promotions for the 2020 budget, which includes $700,000 for owned and paid media, $400,000
for consumer promotions, and $300,000 for trade promotions. Unfortunately, I do not have the data to
calculate incremental revenue for media spending.” Ayers thanked Ham for the information.

Decision

As Ayers walked back to her office, she reflected on Ryan’s request during their earlier meeting:

I want you to estimate L&N forecasted 2020 operating profit (Exhibit 1) using three
options: reduce L&N’s total promotion budget by 30%, increase L&N’s consumer
promotions by $200,000, or increase L&N’s trade promotions by $200,000. Because we can
reduce our paid and owned media budget by 30%, the first option explores whether we
can achieve our profit goal by reducing promotion spending. Options two and three,
increasing consumer promotions and increasing trade promotions, respectively, would
reallocate the savings from the paid and owned media budget to promotions. I want to
invest all the savings into one category, to maintain existing programs while increasing
investments in new programs. I do not want to invest more money into both consumer
and trade promotions because it will split the focus of your team.

Ayers replied, “Beyond these calculations, we must consider both strategic and financial issues.
L&N must differentiate our products from those of our competitors. Our positioning and emphasis on
better-for-you ingredients have been effective, but the competitive landscape is changing.”

Ryan said, “I might agree, but remember that you have under a week to do your analyses and make
your recommendation. I look forward to hearing what your data suggest.”

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HARVARD BUSINESS SCHOOL | BRIEFCASES 7

Exhibit 1: L&N Consolidated Income Statement

2018 ($) 2019 (expected) ($) 2020 (forecasted) ($)
Revenue $9,585,000 $10,064,000 $10,480,000
Variable Costs
Raw materials $4,715,820 $5,253,538 $5,470,560
Production $747,630 $785,012 $817,440
Distribution $958,500 $1,006,425 $1,048,000
Gross profit $3,163,050 $3,019,025 $3,144,000
Fixed Costs
Wages $843,480 $896,000 $920,000
Marketing $1,293,975 $1,358,000 $1,400,000
G&A $277,965 $272,000 $280,000
Operating profit $747,630 $493,025 $544,000

Exhibit 2: Select Results from a 2017 National Consumer Survey*

Jerky or Meat Snack Purchases (over the previous three months)
• Meat source: beef (80%), chicken (49%), turkey (45%), bison (34%), game – elk or venison

(24%), and salmon (26%)

• Reasons for consumption: satisfy a craving (43%), to relieve stress (43%), to satisfy hunger
(35%), eat on the go (24%), for energy (26%), and as something healthy (8%)

• Flavors: regular (55%), teriyaki (29%), peppered (18%), spicy (16%), smoked / mesquite
(14%), hickory (11%), and barbeque (11%)

Purchase Interest by Product Characteristics
• Product forms: prime cuts (41%), variety packs (38%), and snack bars (27%)

• Preferred attributes: tasty (44%), unique (38%), natural (37%), premium (33%), a
trustworthy brand (33%), and healthy (31%)

• Feel-good attributes: grass-fed (28%), preservative-free (26%), and humanely raised (24%)

* Sample: an online survey of 2,000 adults living in the United States

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Exhibit 3: Select Results from 2019 L&N Consumer Survey*
L&N

Buyers
Any Meat

Snack

Demographics
Male, 25–34 52% 54%
Female, 25–34 41% 33%
Income $75,000–$99,999 43% 36%
Degree earned (Bachelors or higher) 42% 30%

Purchase Behaviors
Made from prime cuts 50% 41%
Better-for-you (e.g., low salt, high fiber, added
nutrients)

37% 26%

Feel-good (e.g., grass-fed, free-range, organic) 39% 27%
Artisanal (hand-crafted in small batches) 24% 18%
Low carbohydrate (e.g., paleo, keto) 17% 10%
Look at ingredients 42% 28%
Price-sensitive 16% 39%
AGW certifications 39% 27%

* Sample: an online survey of 2,000 adults living in the United States

Exhibit 4: L&N’s Marketing Costs (US$)

Costs
2018 (Actual)
Owned and paid media $646,336
Trade $280,487
Consumer $367,152

2019 (Expected)
Owned and paid media $678,300
Trade $294,300
Consumer $385,400

Exhibit 5: L&N’s Incremental Revenue (US$)

Revenue
2018 (Actual)
Owned and paid media (unknown)
Trade $1,304,265
Consumer $1,340,104

2019 (Expected)
Owned and paid media (unknown)
Trade $1,368,495
Consumer $1,406,710

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2021 to Apr 2022.

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HARVARD BUSINESS SCHOOL | BRIEFCASES 9

Endnotes

1 IBISWorld Industry Report OD4826 Meat Jerky Production in the US, December 2018, via IBISWorld database, accessed July
2019.

2 IBISWorld Industry Report.

3 USDA, Jerky and Food Safety 2011, https://www.fsis.usda.gov/wps/portal/fsis/topics/food-safety-education/get-
answers/food-safety-fact-sheets/meat-preparation/jerky-and-food-safety/ct_index,, accessed July 2019.

4 IBISWorld Industry Report.

5 IBISWorld Industry Report.

6 IBISWorld Industry Report.

7 ”America’s Top Entrepreneurs,” Inc. Magazine, August 2018, https://www.inc.com/inc5000/index.html, accessed July 2019.

8 IBISWorld Industry Report.

9 IBISWorld Industry Report.

10 Beth Bloom, “Salty Snacks–US” (March 2019), via Mintel Academic database.

11 Bloom.

12 IBISWorld Industry Report.

13 Caleb Bryant, “Salty Snacks–US” (April 2017), via Mintel Academic database.

14 USDA, FSIS Compliance Guideline for Meat and Poultry Jerky Produced by Small and Very Small Establishments 2014
Compliance Guideline, https://meathaccp.wisc.edu/doc_support/asset/Compliance-Guideline-Jerky-2014.pdf, accessed July
2019.

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2021 to Apr 2022.

  • Meat Jerky Industry in the United States
    • Products
    • Competitive Landscape
    • Markets and Distribution
  • Land and Nature (L&N) Jerky Company
    • Philosophy & Production
    • Product and Pricing
    • Positioning and Customers
    • Distribution
  • L&N’s Integrated Marketing Communications
  • Decision
  • Exhibit 1: L&N Consolidated Income Statement
  • Exhibit 2: Select Results from a 2017 National Consumer Survey*
  • Exhibit 3: Select Results from 2019 L&N Consumer Survey*
  • Exhibit 4: L&N’s Marketing Costs (US$)
  • Exhibit 5: L&N’s Incremental Revenue (US$)
  • Endnotes

BriefCases_Masthead_via HBS cases_3

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9-920-563

APRIL 30, 2020

John A. Quelch

Katherine B. Hartman

Promoting Land and Nature Jerky

“I really do not like Mondays,” Kathy Ayers, Vice President of Marketing and Communications for Land and Nature (L&N) Jerky Company, thought as she reflected on her afternoon meeting with L&N’s CEO, Tim Ryan. During the meeting, Ayers and Ryan had reviewed L&N’s actual, expected, and forecasted income statements from 2018 through 2020 (Exhibit 1). Ryan explained, “For 2020, we hope to run at 80% capacity. That will lead to 4% growth in revenue, assuming the same variable cost percentages that we have now, and a 3% increase in fixed costs. Our forecast operating profit for 2020 is currently 5.2% of sales, well short of the 7% target headquarters has for the company.”

Startled, Ayers looked at Ryan, who stated, “I want your team to help me achieve this goal. By next week’s leadership meeting, I need you to analyze the effectiveness of our consumer and trade promotions and make recommendations for the 2020 budget to ensure we use our resources wisely.”

Although relieved her budget was not being cut again, Ayers needed to ensure Ryan understood the importance of promotions. She said, “We cannot increase sales, stimulate demand, and encourage trial without consumer promotions. Trade promotions are less essential, but they have helped us secure new accounts, encouraged our partners to stock more inventory, and generated point-of-purchase discounts passed along from our partners to consumers.”

Ryan paused briefly before responding. “I think you’re right, but we must have some numbers to support that hypothesis,” he said. “Corporate wants us to justify our position that promotions expense translates to revenue because if it does not, why should we spend it?”

After meeting Ryan, Ayers called Steve Ham, L&N’s Chief Financial Officer. “Steve, can you get some numbers together for

Financial markets homework help

INSTRUCTION:

1. The APA format
MUST
be maintained, and a declaration of authorship must be made.

Financial Market Analysis


“Sustainable Investing as a Crucial Path to Covid-19 Recovery”.
This is the theme for the upcoming Caribbean Financial Exposition.

You have been invited to provide a delegation to speak on matters relating to the stock market and its operations.


The presentation should include, but not limited to
:

· Introduction

· Types of stock market – a focus on primary and secondary/organized and OTC markets

· Role of the stock market in aiding Covid-19 recovery

· Benefits of cross listing

· Circuit breakers as it relates to the stock exchange

· Conclusion

2021/2022- Semester 2

Financial Market Analysis

Financial markets homework help

Creative Considerations
&

Advertising

Dr. Campbell
Class 7: February 15, 2022

Introductions

• Seth Davis
• Ashley Dang
• Andrea Cuevas
• Charlene Chung
• Chun-Li Chu
• Zhifan Chen
• Po-Chun Chen
• Justin Cervantes

Last Week

• What is IMC?
• What are the two types of, or approaches to, IMC?

Two Approaches to IMC

• Communications Idea
– “Look and Feel”

• Customer-based Brand Concept
– “Meaning”

Last Week

• What should be at the core of an IMC campaign and drive
each touchpoint?

• What do you need for IMC to be effective?

IMC

• Pick each tool to best achieve an objective
• Coordinate for consistency, clarity, & complementarity
• Converge on shared meaning

Strong IMC Components

• Balance between message & creative
• Must attract attention and engage customers
• Must persuade customers of the merits of the brand
– Points-of-parity
– Points-of-difference

• Need to be well-branded

Which Tools are Best for Which Tasks?

• Strengths and Weaknesses (IMC table)

How Can We Make Our Tools Most Effective?

Learning Agenda

• A Framework for Effective Execution (Creative
Considerations)

• Understanding Signature Stories

Good Communications…

• Focus on achieving one or more specific objectives

Good Communications…

• Focus on achieving one or more specific objectives
• Are processed by the target

Processed Communications

• Catch the attention of the target

• Maintain the interest of the target

• Develop memory of the brand & specific associations

Processing Involvement

• System I
– Fast and automatic

• System II
– Slow, effortful and deliberate

Processing Involvement (Petty & Cacioppo)

• There are two levels of processing
involvement

Processing Involvement (Petty & Cacioppo)

• There are two levels of processing
involvement

• There are two routes to persuasion
– The Peripheral Route
– The Central Route

Processing Involvement (Petty & Cacioppo)

• Attitude change (persuasion) is influenced
by the amount and nature of elaboration

• Elaboration likelihood is impacted by
characteristics of the
– Target

• Motivation
• Ability
• Opportunity

– Message
• Discrepancy
• Relevance

Three Options

• Accept and communicate for low involvement
• Work to increase involvement and communicate for higher
levels of involvement

• Do both!

Two Common Approaches

• Lecture format
– Rationality
– Comparison

• Dramatic format
– Verisimilitude
– Story Grammar

Effective Communications…

• Catch the attention of the target
– Stopping power
– Target self-identification

• Maintain the interest of the target
– Relevance
– Benefit communication
– Support

• Develop memory of the brand & specific associations

Motivational Creative Tactics

• Information
– Rationality
– Comparison

• Metaphor
• Mystery

• Emotion
– Love
– Fear

• Borrowed Interest
– Sex
– Animals
– Babies/kids

• Humor
• Music

• Source
– Expert
– Celebrity

• What is critical is to motivate appropriate consumer
processing

• Motivate processing such that “learn” something relevant
about the brand

Potential Pitfalls of Motivational Tactics?

Potential Pitfalls of Motivational Tactics?

• Can be distracting; consumers may remember the wrong
thing (and/or not the brand).

• Has to say something – the right thing – about the brand!
– Relevance to the target is an important driver of processing
involvement

Tide Cold

Again…

• What is critical is to motivate appropriate processing of the
ad

Many Types of Communications

• Advertising is a business practice where a company pays to
place its messaging or branding in a particular location.

“Static” ads

Parts of a (Static) Print or Digital Ad

1. Headline
– The words that will be read first and/or are

positioned to draw the most attention
– Subhead

• A secondary head, usually smaller than the headline,
but larger than the body copy

– (Much evidence indicates that short headlines are
more effective for low involvement products
while longer headlines are more effectives for
high involvement products)

Parts of a Print/Digital Ad, continued

2 Illustration/visual element
– The visual(s) that is(are) included in the

advertisement
– Plays an important role in the effectiveness of the

ad

Parts of a Print/Digital Ad, continued

2 Illustration/visual element
– The visual(s) that is(are) included in the

advertisement
– Plays an important role in the effectiveness of the

ad
3 Body Copy
– The main text of the ad
– Must match the type of appeal (e.g., rational

appeal needs relevant support; emotional appeal
may use narration, a story, etc.)

– Make a point

Parts of a Print/Digital Ad, continued

4 Logo
– The brand name and/or logo or other brand

elements
5 Layout

– How the other elements (headline, visuals, copy)
are blended together into a cohesive whole. The
physical arrangement of the elements of the ad

8 Steps in Static (Print/Digital) Evaluation

1. Does the visual and/or headline catch the attention of
the target?

2. What does the initially-processed material (i.e.,
visual + headline combo) convey?

3. Is the meaning of the visual + headline combo
relevant to the target?

8 Steps in Print/Digital Evaluation

4. Is an important benefit communicated?
• Is it important to the target?
• Does it meet the objective?

5. Is the benefit supported and convincing?
• Body copy
• Visuals

6. Is the brand clearly identified? Where does the logo
appear?

7. Is the piece memorable and persuasive?
8. Does this piece fit with brand history & equity?

Critical Balance Between
Message Strategy & Creative

• Need to be based on clear communication objectives
• Need to attract attention and engage target consumers
• Need to be linked to the brand
• Need to persuade consumers of the merit of the brand
– POP
– POD

• Need consistency

Once Upon a Time…

Signature Story

An intriguing, authentic, involving
narrative with a strategic message

that clarifies or enhances the
brand, the customer relationship,

the organization, and/or the
business strategy.

Aaker & Aaker

Tactical Story

A story that is used to
achieve a short-term

communication objective

The Power of Stories

The Power of Stories

• Write down:
– How did 1984 motivate processing (how did it create processing
involvement)?

– What did it communicate?

Discuss: What are the Hero Types?

• How can you use these? Do you think of any good examples
(not from the reading)?

• Mayhem?

For More on Signature Stories…

Next

Reflections – Saturday, Feb 19, 8 pm

Class 8
Media Strategy
Sales Promotions

Work with your team on your final project
(Meet with me to discuss?)

Announcements

Th 2/17 Office Hours
1:30 – 3:25 pm

Land & Nature Jerky
Individual Assignment

Due MONDAY,
February 28

Final Presentations –
probably Tuesday,
March 15 11 – 2

Financial markets homework help

IT for Management: On-Demand Strategies for Performance, Growth, and Sustainability

Eleventh Edition

Turban, Pollard, Wood

Chapter 6

Search, Semantic, and Recommendation Technology

Learning Objectives (1 of 5)

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Copyright ©2018 John Wiley & Sons, Inc.

Using Search Technology for Business Success

How Search Engines Work

Search Engine: an application for locating webpages or other content on a computer network using spiders.

Spiders: web bots (or bots); small computer programs designed to perform automated, repetitive tasks over the Internet.

Bots scan webpages and return information to be stored in a page repository.

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Using Search Technology for Business Success: Web Directories

Typically organized by categories.

Webpage content is usually reviewed by directory editors prior to listing.

Page Repository: data structure that stores and manages information from a large number of webpages, providing a fast and efficient means for accessing and analyzing the information at a later time.

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Figure 6.1: Components of crawler search engines (Grehan, 2002).

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Figure 6.2: Search engines use invested indexes to efficiently locate Web content based on search query terms

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Enterprise Search

Why Search is Important for Business

Enterprise search tools allow organizations to share information internally

Structured data: information with a high degree of organization, such that inclusion in a relational database is seamless and readily searchable by simple, straightforward search engine algorithms or other search operations.

Unstructured data: “messy data” not organized in a systematic or predefined way.

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Enterprise Search Security

Security Issues

Limited access to certain data via job function or clearance.

Request log audits should be conducted regularly for patterns or inconsistencies.

Enterprise Vendors

Used to treat data in large companies like Internet data but include information management tools.

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Enterprise Search Marketing

Recommendation Engines

Attempt to anticipate information users might be interested in to recommend new products, articles, videos, etc.

Search Engine Marketing (SEM)

A collection of online marketing strategies and tactics that promote brands by increasing their visibility in search engine results pages (SERPs) through optimization and advertising.

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Search Engine Marketing Techniques

Basic search types:

Informational search

Navigational search

Transactional search

Strategies and tactics produce:

Organic search listings

Paid search listings

Pay-per-click(PPC)

(produce click-through rates)

Social media optimization

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Mobile and Social Search

Mobile Search

Technically configured mobile sites

Content designed for mobile devices

Social Search

Facebook new AI-based search features, including image search based on content and not tags

Intelligent Personal Assistant (IPA) and Voice Search

Alexa

Siri

Business looking into uses

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Web Search for Business

Business search with Google and Bing

Focused search in different formats

Filetype:[file extension]

Advanced search: narrowing down parameters

Search tools button: locations or time frames

Search history: queries and pages visited

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Business Trends

Real-time Search

Google Trends

Google Alerts

Twitter Search

Social Bookmarking Search

Page links tagged with keywords

Specialty Search: Vertical Search

Programmed to focus on webpages related to a particular topic and to drill down by crawling pages that other search engines are likely to ignore.

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Using Search Technology for Business Success

What is the primary difference between a web directory and a crawler based search engine?

What is the purpose of an index in a search engine?

Why are companies increasingly interested in enterprise search tools capable of handling unstructured data?

What is the difference between search engine optimization and PPC advertising?

Describe three different real-time search tools.

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Suggested Answers:

1. Crawler search engines rely on sophisticated computer programs called “spiders,” “crawlers,” or “bots” that surf the Internet, locating webpages, links, and other content that are then stored in the SE’s page repository.

 

Web directories are categorized listings of webpages created and maintained by humans. Because websites are only included after being reviewed by a person, it is less likely that search results will contain irrelevant websites.

 

2. An index helps search engines efficiently locate relevant pages containing keywords used in a search.

 

3. . Unstructured data, sometimes called messy data, refers to information that is not organized in a systematic or predefined way. Unstructured data accounts for about a majority of all the data present on computers today, which explains why companies are interested in tools that claim to handle it. Originally, enterprise search tools worked only with structured data. Many newer systems claim to work with unstructured information as well, although there is great variability in terms of how well they actually do this.

 

4. Businesses utilize search engine optimization (SEO) to improve their website’s organic listings on SERPs. No payments are made to the search engine service for organic search listings.

 

Pay-per-click (PPC) advertising refers to paid search listings where advertisers pay search engines based on how many people click on the ads.

5. Google Trends—Trends (google.com/trends) will help you identify current and historical interest in the topic by reporting the volume of search activity over time. Google Trends allows you to view the information for different time periods and geographic regions.

Google Alerts—Alerts (google.com/alerts) is an automated search tool for monitoring new Web content, news stories, videos, and blog posts about some topic. Users set up alerts by specifying a search term (e.g., a company name, product, or topic), how often they want to receive notices, and an e-mail address where the alerts are to be sent. When Google finds content that match the parameters of the search, users are notified via e-mail. Bing has a similar feature called News Alerts.

 

Twitter Search—You can leverage the crowd of over 650 million Twitter users to find information as well as gauge sentiment on a wide range of topics and issues in real time. Twitter’s search tool (twitter.com/search-home) looks similar to other search engines, and includes an advanced search mode.

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Learning Objectives (2 of 5)

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Search Engine Optimization: Google’s Search Factors (1 of 2)

On-Page (directly controlled by webpage creator)

Content

Quality, relevance, up-to-date

Functionality and Programming

Responsiveness, load time, secure connection, metadata, click-through-rate (CTR), keyword connection

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Search Engine Optimization: Google’s Search Factors (2 of 2)

Off-Page (influenced but not directly controlled by SEO professionals)

Relevance and Credibility

Backlinks to target site

Click-through-rate (CTR)

Dwell time (how longer user stays on page)

Personalized Search

Location-based

Past history

Social experience

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Content and Inbound Marketing

Inbound marketing

An approach to marketing that emphasizes SEO, content Marketing, and social media strategies.

Outbound marketing

Traditional approach using mass media advertising.

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Organic Search and Search Engine Optimization

Black Hat SEO

Gaming the system or tricking search engines into ranking a site higher than its content deserves.

Link spamming: generating backlinks toward SEO, not adding user value.

Keyword tricks: embedded high-value keywords to drive up traffic statistics.

Ghost text: text hidden in the background that will affect page ranking

Shadow (ghost or cloaked) pages: created pages optimized to attract lots of people through redirect

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Organic Search and Search Engine Optimization Review

Search engines use many different “clues” about the quality of a website’s content to determine how a page should be ranked in search results. Explain how a search engine uses specific factors to determine the quality of a website’s content.

Backlinks are an important ranking factor in SEO. Explain what a backlink is and why search engines use it to determine how websites are listed in SERPs.

Explain why so-called black hat SEO tactics are ultimately short-sighted and can lead to significant consequences for businesses that use them.

What is the fundamental difference between on-page and off-page SEO factors?

Explain why providing high quality, regularly updated content is the most important aspect of any SEO strategy.

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Suggested Answers:

1. One way of assessing the quality of a website is to use measures of popularity. This is based on the assumption that websites with good content will be more popular than sites with poor quality content. On the assumption that people are more likely to link to high-quality websites than poor-quality sites, one measure of popularity is the number of backlinks—external links that point back to a site.

 

Search engines attempt to determine if the content on a webpage is relevant to what the searcher is looking for. As with quality, the search engine cannot determine relevance directly, so algorithms have been developed to look for clues that suggest a site might be relevant. Factors which affect relevancy:

Keywords related to the search topic suggest relevant content.

Page titles: Words in the page title that are related to the topic suggest relevant content.

Relevant phrases in text: In addition to keywords, search engines look at the words and phrases on the page to determine relevance.

Amount of text on page that appears relevant: The proportion of relevant text to non-relevant text can influence relevance.

Backlinks from relevant sites and Web directories: Webpages that are listed in relevant categories of Web directories are more likely to be relevant because they were reviewed by human editors.

SERP click through rate (CTR): Searchers are more likely to click on listings that contain relevant content.

Onpage factor: Metadata (such as page titles, page descriptions) and descriptive URLs should reflect the page content. People use the information in search listings to determine if a link contains relevant information. This affects CTR.

Dwell time and bounce rate are impacted by how relevant a website’s content is. Long dwell times and short bounce rates suggest relevant content related to the search.

Search engines want their customers to be satisfied. As a result, SERP ranking is influenced by factors that impact user satisfaction. Factors that are likely to influence a search engine’s user satisfaction rating are:

Dwell time: Users that stay on a site longer are probably more satisfied.

Site speed: Slow page loading time on websites reduces satisfaction.

Reading level: Reading levels that are too high or too low frustrate users.

Hacked sites, malware, spam reduce user satisfaction significantly.

Website satisfaction surveys: Google created user satisfaction surveys that webmasters can embed in their websites. Positive responses to these surveys can improve ranking.

Barriers to content: Making people register, provide names, or fill out forms to get to content has a negative impact on user satisfaction.

Other factors: Too many ads, page-not-found errors, duplicate content/pages, content copied from other websites, and spam in comment sections all detract from user satisfaction.

 

2. A backlink is an external link that points back to a site. The use of backlinks is based on the assumption that people are more likely to link to high-quality websites than poor-quality sites. Since the number of backlinks is believed to be a heavily weighted factor, SEO professionals have developed several creative strategies for increasing legitimate backlinks to their websites while avoiding certain tactics that Google disapproves of. Google downgrades websites that use methods that artificially inflate their backlink count.

 

3. Black hat tactics try to trick the search engine into thinking a website has high-quality content, when in fact it does not. The search engines have stronger detection systems in place and when they are discovered, Google and other SEs will usually punish the business by dramatically lowering the website’s rank so that it does not show up on SERPs at all.

 

4. On-page SEO factors are elements that can be controlled by the web designer. Off-page factors can be influenced but not directly controlled by SEO professionals.

5. Perhaps the most important action an organization can take to improve its website’s ranking and satisfy website visitors is provide helpful content that is current and updated regularly. When SEO practices are combined with valuable content, websites become easier to find in search engines but, more importantly, contribute to building brand awareness, positive attitudes toward the brand, and brand loyalty.

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Learning Objectives (3 of 5)

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Copyright ©2018 John Wiley & Sons, Inc.

Pay-Per-Click Strategies

PPC advertising campaigns:

Set an overall budget

Create ads

Select associated keywords

Set up billing account information

Modify key words and ad copy based on results

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Quality Score Factors

Determined by factors related to the user’s experience.

Expected keyword click-through-rate (CTR)

The past CTR of your URL (web address)

Past effectiveness

Landing page quality

Relevance of keywords to ads

Relevance of keywords to customer search

Geographic performance in targeted regions

Ad performance on difference devices

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Pay-Per-Click Advertising Metrics

Click through rates (CTR): used to evaluate keyword selection and ad copy campaign decisions.

Keyword conversion: should lead to sales, not just visits.

Cost of customer acquisition (CoCA): amount of money spent to attract a paying customer.

Return on advertising spend (ROAS): overall financial effectiveness.

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Copyright ©2018 John Wiley & Sons, Inc.

Pay-Per-Click and Paid Search Strategies Review

What would most people say is the fundamental difference between organic listings and PPC listings on a search engine?

What are the five primary steps to creating a PPC advertising campaign on search engines?

In addition to the “bid price” for a particular keyword, what other factor(s) influence the likelihood that an advertisement will appear on a search results page? Why don’t search engines just rely on the advertisers bid when deciding what ads will appear on the search results page?

How do on-page factors influence the effectiveness of PPC advertisements?

What factors determine an ad’s quality score?

Describe four metrics that can be used to evaluate the effectiveness of a PPC advertising campaign.

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Suggested Answers:

1. Paid advertisements receive preferential page placement, but most major search engines differentiate organic search results from paid ad listings on SERPs with labels, shading, and placing the ads in a different place on the page.

 

2. There are five steps to creating a PPC advertising campaign on search engines:

1. Set an overall budget for the campaign.

2. Create ads—most search engine ads are text only.

3. Select keywords associated with the campaign.

4. Set up billing account information.

5. Modify key words and copy based on results.

 

3. In addition to selecting keywords and setting bid prices, advertisers also set parameters for the geographic location they want their ad to appear in and time of day. These factors allow for additional customer targeting designed to help advertisers reach the consumers most likely to purchase their products.

 

A quality score is determined by factors related to the user’s experience. Ads that are considered to be more relevant (and therefore more likely to be clicked on) will cost less and more likely run in a top position.

 

Relevant ads are good for all parties—the search engine makes more money from clicked ads, the advertiser experiences more customers visiting its site, and the customer is more likely to find what he or she is looking for.

 

4. The effectiveness of PPC ads is heavily influenced by factors on the webpages that ads are linked to. For instance, sometimes companies create product-oriented ads, but then link to the main page of their website instead of a page with information about the product in the ad. Other factors include landing page design, effectiveness of the call to action, and the quality of the shopping cart application. A PPC campaign will not be very effective if the website is not attractive to consumers once they reach it.

 

5. Quality scores are determined by factors related to ad relevance and user experience factors. According to Google, quality scores are determined by several factors:

 Expected keyword CTR

 The past CTR of your URL

 Past effectiveness (overall CTR of ads and keywords in the account)

 Landing page quality (relevance, transparency, ease of navigation, etc.)

 Relevance of keywords to ads

 Relevance of keywords to customer search query

 Geographic performanceaccount success in geographic regions being targeted.

 How well ads perform on different devices (quality scores are calculated for mobile, desktop/laptop, and tablets).

6. Click through rates (CTRs)—By themselves, CTRs do not measure the financial performance of an ad campaign. But they are useful for evaluating many of the decisions that go into a campaign, such as keyword selection and ad copy.

 

Keyword conversion—High CTRs are not always good if they do not lead to sales. Since the cost of the campaign is based on how many people click an ad, you want to select keywords that lead to sales (conversions), not just site visits. PPC advertisers monitor which keywords lead to sales and focus on those in future campaigns.

 

Cost of customer acquisition (CoCA)—This metric represents the amount of money spent to attract a paying customer. To calculate CoCA for a PPC campaign, you divide the total budget of the campaign by the number of customers who purchased something from your site. For instance, if you spent $1,000 on a campaign that yielded 40 customers, your CoCA would be $1,000/40 5 $25 per customer.

 

Return on advertising spend (ROAS)—The campaign’s overall financial effectiveness is evaluated with ROAS (revenue /cost). For example, if $1,000 was spent on a campaign that led to $6,000 in sales, ROAS would be $6,000/$1,000 5 $6. In other words, for every dollar spent on PPC ads, $6 was earned.

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Learning Objectives (4 of 5)

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A Search for Meaning—Semantic Technology

Semantic Web

Meaningful computing using metadata: application of natural language processing (NLP) to support information retrieval, analytics, and data-integration that compass both numerical and “unstructured” information

Semantic Search

Process of typing something into a search engine and getting more results than just those that feature the exact keyword typed into the search box

Metadata

Data that describes and provides information about other data.

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Evolution of the Web

Table 6.2 Evolution of the Web
Web 1.0 (The Initial Web)
A Web of Pages
Pages or documents are “hyperlinked,” making it easier than ever before to access connected information.
Web 2.0 (The Social Web)
A Web of Applications
New applications and technologies allow people to easily create, share, and organize information.
Web 3.0 (The Semantic Web)
A Web of Data
Using metadata tags, artificial intelligence, natural language processing, and other semantic tools, computers can be used to access specific information across platforms and applications, regardless of the original structure of the file, page or document. It turns the Web into a giant readable database.

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The Languages of Web 3.0

Resource description framework (RDF)

Used to represent information about resources

Web ontology language (OWL)

Language used to categorize and accurately identify the nature of Internet things

SPARCQL protocol

Used to write programs that can retrieve and manipulate data scored in RDF

RDF query language (SPARCQL)

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Semantic Web and Semantic Search

In addition to metadata tags, semantic search engines use a variety of strategies to find meaning:

natural language processing

contextual cues

synonyms

word variations

concept matching

specialized queries

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Semantic Search Features and Benefits (1 of 2)

Semantic Search Features

Related searches/queries: alternatives provided

Reference results: reference material provided

Semantically annotated results: search terms and related terms are highlighted

Full-text similarity search: a full block of text can be searched

Search on semantic/syntactic annotations:

<organization> center </organization>

Johnson Research Center

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Semantic Search Features and Benefits (2 of 2)

Semantic Search Features

Concept search: returns results related to concept

Ontology-based search: uses relationships between data “What vegetables are green?”

Semantic Web search: uses tagged data

Faceted search: filtering based on predefined facets

Clustered search: similar to facet search but without predefined facets

Natural language search: extracts keywords from full question

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Semantic Web For Business

Semantic Web offers opportunities and challenges for businesses

Must optimize websites for semantic search

Metadata optimization produces richer and more attractive SERP listings (rich snippets)

Detailed organic search listings produce greater CTRs

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A Search for Meaning—Semantic Technology

List five different practical ways that semantic technology is enhancing the search experience of users.

How do metadata tags facilitate more accurate search results?

Briefly describe the three evolutionary stages of the Internet?

Define the words “context,” “personalization,” and “vertical search” and explain how they make for more powerful and accurate search results.

What are the three languages developed by the W3C and associated with the semantic Web?

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Suggested Answers:

1. Grimes (2010) provides a list of practical benefits that could result from semantic search technology:

Related searches/queries. The engine suggests alternative search queries that may produce information related to the original query. Search engines may also ask you, “Did you mean: [search term]?” if it detects a misspelling. (This already happens with some.)

Reference results. The search engine suggests reference material related to the query, such as a dictionary definition, Wikipedia pages, maps, reviews, or stock quotes.

Semantically annotated results. Returned pages contain highlighting of search terms, but also related words or phrases that may not have appeared in the original query. These can be used in future searches simply by clicking on them.

Full-text similarity search. Users can submit a block of text or even a full document to find similar content.

Search on semantic/syntactic annotations. This approach would allow a user to indicate the “syntactic role the term plays—for instance, the part-of-speech (noun, verb, etc.)—or its semantic meaning—whether it’s a company name, location, or event.” For instance, a keyword search on the word “center” would produce too many results. Instead, a search query could be written using a syntax such as the following:

<organization> center </organization>

This would only return documents where the word “center” was part of an organization’s name. Google currently allows you to do something similar to specify the kind of files you are looking for (e.g., filetype:pdf)

Concept search. Search engines could return results with related concepts. For instance, if the original query was “Tarantino films,” documents would be returned that contain the word “movies” even if not the word “films.”

Ontology-based search. Ontologies define the relationships between data. An ontology is based on the concept of “triples”: subject, predicate, and object. This would allow the search engine to answer questions such as “What vegetables are green?” The search engine would return results about “broccoli,” “spinach,” “peas,” “asparagus,” “Brussels sprouts,” and so on.

Semantic Web search. This approach would take advantage of content tagged with metadata as previously described in this section. Search results are likely to be more accurate than keyword matching.

Faceted search. Faceted search provides a means of refining results based on predefined categories called facets. For instance, a search on “colleges” might result in options to “refine this search by. . .” location, size, degrees offered, private or public, and so on. Faceted search tools available today tend to focus on a specific domain, such as Wikipedia or Semidico, a search tool for biomedical literature.

Clustered search. This is similar to a faceted search, but without the predefined categories. Visit Carrot2.org to better understand this concept. After conducting a search, click on the “foamtree” option to see how you can refine your search. The refining options are extracted from the content in pages of the initial search.

Natural language search. Natural language search tools attempt to extract words from questions such as “How many countries are there in Europe?” and create a semantic representation of the query. Initially, this is what people hoped search engines would evolve toward, but Grimes wonders if we have become so accustomed to typing just one or two words into our queries that writing out a whole question may seem like too much work.

 

2. Much of the world’s digital information is stored in files structured so that they can only be read by the programs that created them. With metadata, the content of these files can be labeled with tags describing the nature of the information, where it came from, or how it is arranged, essentially making the Web one large database that can be read and used by a wide variety of applications.

 

The semantic Web will make it possible to access information about real things (people, places, contracts, books, chemicals, etc.) without worrying about the details associated with the nature or structure of the data files, pages, and databases where these things are described or contained (Hendler and Berners-Lee, 2010).

 

3. The first stage was Web 1.0 (The Initial Web) – A Web of Pages. Pages or documents are “hyperlinked,” making it easier than ever before to access connected information.

The first stage was Web 2.0 (The Social Web) – A Web of Applications. Applications are created that allow people to easily create, share, and organize information.

 

The third stage is Web 3.0 (The Semantic Web) – A Web of Data. Information within documents or pages is tagged with metadata, allowing users to access specific information across platforms, regardless of the original structure of the fi le, page, or document that contains it. It turns the Web into one giant database.

 

4. Context defines the intent of the user; for example, trying to purchase music, to find a job, to share memories with friends and family

 

Personalization refers to the user’s personal characteristics that impact how relevant the content, commerce, and community are to an individual.

 

Vertical search, as you have read, focuses on finding information in a particular content area, such as travel, finance, legal, and medical.

Financial markets homework help

MGT 247

Setting Objectives
&
The Communication Brief

Dr. Campbell

Week 5: Feb 1, 2022

1

Break 12:15

Meg Campbell () – Need promotion spending amount for 2013 or 2014.

Introductions

Yung-Hsin Lin

Yao Lin

Cindy Lin

Xiang Li

Tz-Yu Li

Qin Li

Hongyu Li

Ao Li

2

Last Class

What are some common types of positioning?

What is the consumer decision process?

Why do we need to understand this?

How can we determine where a consumer is in terms of decision-making stage?

How can the decision-making process/stages approach help determine:

The tool to use?

What we need to communicate?

3

Campaign Message (Positioning)

Must be fully consistent with overall brand positioning

Addresses how we are, specifically, approaching the communication of the brand positioning

Identifies the information to be communicated to the target

4

Learning Agenda

Using the consumer decision-making approach to understand what tools to use and what to communicate

Customer-based Communications Objectives

The Communication Brief

The Consumer Decision Journey

On Which Decision Stage does this Focus?

Post-Purchase Stages

Repurchase/Loyalty

Engage

Advocate

7

Awareness

Knowledge

Liking

Purchase

Re-purchase

Case 1

30%

28%

25%

23%

20%

Case 2

80%

35%

25%

23%

20%

Case 3

80%

70%

45%

23%

20%

Case 5

80%

70%

45%

38%

30%

Case 4

80%

65%

45%

35%

8%

Decision-Making Stages Approach

Percentages of target

8

Awareness

Knowledge

Liking

Purchase

Re-purchase

Case 1

30%

28%

25%

23%

20%

Case 2

80%

35%

25%

23%

20%

Case 3

80%

70%

45%

23%

20%

Case 5

80%

70%

45%

38%

30%

Case 4

80%

65%

45%

35%

8%

ADVERTISING

MEDIA

ADVERTISING

MESSAGE

DISTRIBUTION/

PRICE

NICHE/TARGET

PRODUCT/

TARGET/

PROMOTION

Decision-Making Stages Approach

Each level is based on the total of the target you are interested in. E.G., for Case 1, out of 100 people, 30 are aware, 28 know what the product is about, 25 like it.

Change the strategies – what are the possible strategies?

9

WOW’s Primary Approach (time of the case)

Watch advertisement

Who do you think is the target of this?

What does this communicate?

What stage of the decision process is this communication focusing on?

William Shatner. I am a shaman.

You can be anyone you want.

Role playing – give sense of what this is like. Free trial.

11

WOW’s Primary Approach (time of the case)

Watch advertisement

Who do you think is the target of this?

What does this communicate?

What stage of the decision process is this communication focusing on?

Pattern Advertising

An approach to international advertising in which use the same basic position and communication objective across countries or regions but modify the specifics of each communication to better speak to the local audiences.

WOW’s Secondary Approach (time of the case)

Look at FB page

What does this communicate?

Who do you think is the target of this?

What stage of the decision process is this communication focusing on?

What does this show? Different target

Changes to the product and “direct” communication with users (as opposed to the wider, non-user target trying to reach with the TV ads).

15

What did you learn (generalizable)?

Focus reflections on generalizable learnings from working through this case.

16

Communication Targets

Need to specify who we want to speak to with any given campaign or communication

Our goal is to identify a segment of consumers who will respond positively to the same messaging and more positively than to other messaging.

We need to figure out what to say to these people to get them to respond more favorably.

Saw this is the video on S, T, P.

How will you do this? One way you talked about targeting in general in the core is based on usage with the larger idea being to target based on profitability.

For your marketing communications, you need to figure out who to communicate with what message.

Our topic for the rest of today’s session is, based on what we have covered so far, how to use our analyses to set objectives for our actual communications. We will discuss objectives, different types, reasons for them and criteria for strong communications objectives.

17

Communication Targets

Need to specify who we want to speak to with any given campaign or communication

Our goal is to identify a segment of consumers who will respond positively to the same messaging.

We need to figure out what to say to these people to get them to respond more favorably.

Need to develop a communication objective based on the what to say to the specific target.

18

Communication Objectives

Goals for marketing communications

campaigns or programs that are

based on communication tasks
(rather than just on sales).

19

Developing Communication Objectives

Consumer behavior and choice is influenced by consumer goals

Need to understand consumer decision making to be able to influence your target

Look for a consumer insight that can provide some differentiation and move the market

20

The objective for a campaign is based on your target’s decision-making stage, what they think about you and what they need to think about you.

21

Setting Objectives

Types of Objectives

Sales goals (Marketing Plan)

Communication objectives (IMC Plan)

22

Goals  Big Picture

Objectives  Plan of Attack

What is the purpose of communication objectives?

Provide direction. What do we need to change inside consumers’ heads to achieve our sales goals?

23

Need for Communication Objectives

Consumers usually do not

buy immediately.

Consumers must gain relevant

information and develop positive

associations with a brand

before a purchase

will be made.

24

Need for Communication Objectives

“At some point,

sales-oriented objectives

must be translated into what

a company hopes to

communicate and

to whom it hopes

to communicate it.”

25

Communication Objective

Starts with understanding of the target consumer and specifies the communication task that needs to be achieved to move the consumer as desired

At this time, what does the consumer need to understand, know, feel, or believe?

Effective Communication Objectives…

Specify the target

Set a communication task

Identify a benchmark (current levels)

Indicate the desired outcome

Set time period for achievement

(Indicate appropriate measurement)

27

What Do We Mean by a “Communication Task?”

Create awareness; build knowledge of a brand benefit; develop understanding of the brand image/personality; clarify where to find the product (where distribution is); let me know that the product exists; communicate that there is a three-day sale; get people to click through to our website.

28

Communication task: increase knowledge of the role-playing aspect of WOW

Effective Communication Objectives…

Specify the target

Set a communication task

Identify a benchmark (current levels)

Indicate the desired outcome

Set time period for achievement

(Indicate appropriate measurement)

Specify the communications task.

Specify the success criteria

30

Is this an Effective Communication Objective?

Increase percentage of consumers who believe that our product is easy and convenient.

What is missing?

31

Communication Objective

Increase percentage of target consumers who believe that our product is easy and convenient from current 15% to 30% in next 6 months.

Effective Communication Objective?

Increase HH penetration by 10% during the next year.

What is wrong with this? What is the communication task?

33

This is a Sales Objective

Increase HH penetration by 10% during the next year.

No communication task

34

Effective Communication Objective?

Expose 90% of our target to 3 or more communications during the next three months.

Media objective

35

This is a Media Objective

Expose 90% of our target to 3 or more communications during the next three months.

Media objective, no communication task

36

Characteristics of Effective Objectives

Specific

Include communication task and target

Measurable

Identifies a starting point

Identifies the desired outcome

Method for assessment

Agreed upon

Realistic

Time-focused

37

Increase knowledge of the role-playing aspect of WOW (from basically 0) to 50% of non-gamers by January 2008

Reach 25% agreement by the non-gamer target with “The immersive role-playing offered by WOW looks fun” by January 2008

The Communication Objective is the Foundation

Once you have developed a SMART communication objective, develop a Communication Brief

Communication Brief

Problem to Solve

Target Audience

Positioning/Message

Specific Communication Objective(s)

Key Benefit (for target)

Reasons Why (target should believe)

Intended Reaction/Single Thought

“Mandatories”

Signatures

40

Lactaid

Write down what comes to mind

Wanted to increase sales and believed that there were many people who would benefit from consuming less lactose.

Why aren’t they purchasing and/or consuming?

41

Lactaid

Many associate primarily with dietary supplement – “medicine”

42

Lactaid

While Lactaid has lactose-free dairy products (to replace products with lactose), many consumers associate them with their dietary supplement products (to combat uncomfortable consequences of consuming lactose)

Products include Lactaid milk, ice cream, and more

43

Lactaid

Problem to solve: Many people do not purchase and or consume Lactaid dairy products because they think of Lactaid as “fake” or chemical-based. They associate Lactaid more with the dietary supplement than with dairy. Perceive of Lactaid dairy products as not really dairy.

Lactaid

Write a SMART communication objective to address the problem that they identified in their research

45

Lactaid Commercial:
Communication Objective?

46

Communication Brief for Lactaid

Problem to Solve

Many people do not purchase and or consume Lactaid dairy products because they think of Lactaid as “fake” or chemical-based. They associate Lactaid more with the dietary supplement than with dairy. Think of Lactaid dairy products as not real dairy.

Target

Consumers who think Lactaid is fake, not real milk

Positioning

Position by product attributes: real dairy, wholesome, tasty

Communication Brief

Specific Communication Objective

Increase awareness of Lactaid as lactose-free milk

Develop target perceptions of Lactaid as real dairy/milk

Build target perception of Lactaid as real dairy that is delicious

Communication Brief, continued

What is wrong with these communication objectives??

They are not really concrete and specific — want these to be quantified so we really know what we are trying to achieve with this communication effort.

Could have another specific objective — for example, may have a communication objective of convincing some customers to test drive — promo.

Specific Communication Objective

Increase awareness of Lactaid as lactose-free milk from current 20% to 40% in next 6 months

Develop target perceptions of Lactaid as real dairy/milk to 40% of target in next 6 months

Build target perception of Lactaid as real dairy that is delicious to 30% in next 6 months

Communication Brief, continued

Key Benefit

I can enjoy the delicious taste of milk without upsetting my stomach

Reasons Why (support for the key benefit)

Lactaid is real milk with the lactose removed

Communication Brief

Intended Reaction/Single Thought

Wow! I didn’t know that I could get delicious, healthy real milk without lactose

Mandatories

Lactaid brand logo

A carton of Lactaid milk

Signatures

Communication Brief

Lactaid Commercial:
Communication Objective?

53

Who Should Develop the Brief?

The BRAND! (“Client”)

But in collaboration

Pilot/Co-Pilot Collaboration

The brand owner needs to be the pilot.

Collaborative

It is critical that communications are consistent with the firm’s strategy. That is, need to be sure that all of the promotions that are developed communicate some aspect of the brand’s positioning.

On strategy.

58

The Communication Brief

“The brief is, by far, the most important part of your creative development journey as a client. The brief is not glamorous, it’s not sexy, and there will be no one standing on a table singing a song when you are pulling this together (that comes later). But you, the client, stand very little chance of getting something good at the other end if you don’t spend the time to develop a tight brief.”

In analyzing thousands of ad campaigns and

execution test processes, the single biggest factor is

simple to diagnose, but hard to fix – great ads come from a

really strong, tight creative brief. Brilliant ideas, duds, or

boringly average campaigns – there is a high correlation between

these outcomes and how strong the brief was.

Poor creative is too often the function of a vague

or broad brief that leaves the agency up to its

own imagination about what the customer is

thinking and where the brand fits into

consumers’ lives.

Need for a Brief

Ralph Blessing

From “Three Keys to Unlock a Powerful Creative Brief: Great Ads Come from a Strong, Tight Creative Brief.

Advertising Age

60

Major Selling Idea/Unique Selling Proposition

“The major selling idea should emerge as the strongest singular thing you can say about your product or service. This should be the claim with the broadest and most meaningful appeal to your target…be certain you can live with it; be sure it stands strong enough to remain the central issue in every ad and commercial in the campaign”

61

Consumer Decision Journey

All the ways in which a consumer interacts with the organization from initially learning about the organization to deciding whether to purchase, and re-purchase.

62

What is “ZMOT”?

The very short reading covers this idea – really just adding the notion that there is a lot of stuff consumers consider prior to really engaging with the decision.

Pre-consideration web-based information gathering.

Really do this “before purchasing anything”?

63

Consumer Journey

The goal of conceptualizing the consumer decision journey is to consider all the points of interaction and to understand which are most important in influencing the consumer.

Be sure that all important touchpoints create a consistent brand concept

Target stages in the decision journey

64

Example

65

The CDJ and Branding in the Digital Age

Understand your consumers’ decision journey

Determine which touchpoints are priorities

Figure out how to leverage those

Target priority touchpoints in priority stages

Allocate resources accordingly

“Orchestrate”

66

Overall Considerations for CDJ

For each touchpoint, consider consistency with the brand promise.

Consider how to provide strategic differentiation with your touchpoints.

Identifying & Understanding Segments:
Ask Consumers

Milk Bone Chews: Size of Dog as basis for Segmentation?

Ad Theme: Love of Master v. Best Buddy

68

Breakout Activity

Developed two approaches

Communicate: You and your dog love each other; Milk-Bones show your dog how much

Communicate: Your dog is your always fun buddy; Milk-bones bring fun to your dog

Dog owners watched and rated the ads (1 – 10)

Average = 7.25

What do you need to do to understand if size of dog provides useful segmentation?

69

Breakout Activity

Owners of Love between Owner & Dog Your Fun Buddy Row Average
Small Dogs 8 5
Large Dogs 7 9
Column Average

70

Activity

Owners of Love between Owner & Dog Your Fun Buddy Row Average
Small Dogs 8 5 6.5
Large Dogs 6 9 7.5
Column Average 7 7

What is your conclusion? Should we use the same or different communications?

71

Communication Response by Size of Dog

Small Dog Owner Love between Owner & Dog My Fun Buddy 8 5 Large Dog Owner Love between Owner & Dog My Fun Buddy 7 9

Next Week:

Week 5 Reflection due Saturday Feb. 5 by 8:00 pm

Prepare Case: Pillsbury

Read:

Empathy Mapping

Planning for Integrated Marketing Communications

Integrating Marketing Communications…

NEXT week Pillsbury Individual Assignment

Be sure to work on your Final Project with your group

73

Thank you & Have a Good Week

Lavf54.6.100

Lavf56.40.101

Lavf57.83.100

Financial markets homework help

Information Technology
for Management

On-Demand Strategies for Performance,
Growth and Sustainability

Eleventh Edition

Eleventh Edition

Information Technology
for Management

On-Demand Strategies for Performance,
Growth and Sustainability

E F R A I M T U R B A N

C A R O L P O L L A R D
Appalachian State University

G R E G O R Y W O O D
Canisius College

VP AND EDITORIAL DIRECTOR Mike McDonald
EXECUTIVE EDITOR Lise Johnson
EDITORIAL ASSISTANT Ethan Lipson
EDITORIAL MANAGER Judy Howarth
CONTENT MANAGEMENT DIRECTOR Lisa Wojcik
CONTENT MANAGER Nichole Urban
SENIOR CONTENT SPECIALIST Nicole Repasky
PRODUCTION EDITOR Loganathan Kandan
PHOTO RESEARCHER Billy Ray
COVER PHOTO CREDIT © Ditty_about_summer/Shutterstock

This book was set in 9.5/12.5 pt Source Sans Pro by SPi Global and printed and bound by Strategic
Content Imaging.

Founded in 1807, John Wiley & Sons, Inc. has been a valued source of knowledge and understanding
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ISBN: 978-1-118-89079-0 (PBK)
ISBN: 978-1-119-39783-0 (EVALC)

Library of Congress Cataloging in Publication Data:

Names: Turban, Efraim, author. | Pollard, Carol (Carol E.), author. | Wood,
Gregory R., author.
Title: Information technology for management : on-demand strategies for
performance, growth and sustainability / Efraim Turban, Carol Pollard,
Gregory R. Wood.
Description: 11th edition. | Hoboken, NJ : John Wiley & Sons, 2018. |
Includes bibliographical references and index. |
Identifiers: LCCN 2017037711 (print) | LCCN 2017046158 (ebook) | ISBN
9781118890868 (epub) | ISBN 9781119172390 (pdf) | ISBN 9781118890790 (pbk.)
Subjects: LCSH: Management information systems.
Classification: LCC T58.6 (ebook) | LCC T58.6 .T765 2017 (print) | DDC
658.4/038011—dc23
LC record available at https://lccn.loc.gov/2017037711

The inside back cover will contain printing identification and country of origin if omitted from this
page. In addition, if the ISBN on the back cover differs from the ISBN on this page, the one on the
back cover is correct.

v

Brief Contents

PREFACE xiii
ACKNOWLEDGMENTS xviii

PART 1 Reshaping Enterprises and Consumers
in the On-Demand Economy

1 Disruptive IT Impacts Companies,
Competition, and Careers 1

2 Information Systems, IT Architecture, Data
Governance, and Cloud Computing 25

3 Data Management, Data Analytics,
and Business Intelligence 65

4 Networks, Collaborative Technology,
and the Internet of Things 101

5 Cybersecurity and Risk Management
Technology 127

PART 2 Winning, Engaging, and Retaining
Consumers for Growth

6 Search, Semantic, and Recommendation
Technology 165

7 Web 2.0 and Social Technology 199

8 Retail, E-commerce, and Mobile Commerce
Technology 240

PART 3 Optimizing Performance, Processes,
and Productivity

9 Functional Business Systems 269

10 Enterprise Systems 300

11 Data Visualization and Geographic
Information Systems 331

PART 4 Managing Business Relationships,
Projects, and Ethical Responsibilities

12 IT Strategy, Sourcing, and Strategic
Technology Trends 354

13 Systems Development and Project
Management 385

14 IT Ethics, Privacy, and Sustainability 417

GLOSSARY 443
ORGANIZATION INDEX 448
NAME INDEX 450
SUBJECT INDEX 451

vi

PREFACE xiii
ACKNOWLEDGMENTS xviii

PART 1 Reshaping Enterprises
and Consumers in the On-Demand
Economy

1 Disruptive IT Impacts Companies,
Competition, and Careers 1

Case 1.1 Opening Case: Uber and Airbnb Revolutionize
Business Models in the On-Demand Economy 3

1.1 Doing Business in the On-Demand Economy 4
Growth of the On-Demand Economy 5
Digital Business Models 6
IT’s Role in the On-Demand Economy 7
IT Business Objectives 8

1.2 Business Process Improvement and Competitive
Advantage 8
What Is a Business Process? 9
Improving Business Processes 9
Don’t Automate, Obliterate! 10
Gaining a Competitive Advantage 11
Software Support for BPM 13

1.3 IT Innovation and Disruption 13
Social–Mobile–Analytics–Cloud (SMAC) Model 13
Technology Mega Trends 14
Lessons Learned from Companies Using Disruptive
Technologies 16

1.4 IT and You 17
On-Demand Workers 17
IT Adds Value to Your Performance and Career 19
Becoming an Informed IT User 21

Case 1.2 Business Case: The Internet of Things Comes
to the NFL 23

Case 1.3 Video Case: Knowing More and Doing More 24

2 Information Systems,
IT Architecture, Data Governance,
and Cloud Computing 25

Case 2.1 Opening Case: Detoxing Location-Based
Advertising Data at MEDIATA 27

2.1 IS Concepts and Classification 28

Components of an IS 29
Data, Information, Knowledge, and Wisdom 30
Types of ISs 31
Transaction Processing System (TPS) 32
Management Information System (MIS) 33
Decision Support System (DSS) 34
Executive Information System (EIS) 35
ISS Exist within Corporate Culture 36

2.2 IT Infrastructure, IT Architecture, and Enterprise
Architecture 37
EA Helps to Maintain Sustainability 38
Developing an Enterprise Architecture (EA) 41

2.3 Information Management and Data
Governance 42
Information Management Harnesses
Scattered Data 43
Reasons for Information Deficiencies 43
Factors Driving the Shift from Silos to Sharing
and Collaboration 45
Business Benefits of Information Management 45
Data Governance: Maintaining Data Quality
and Cost Control 46

2.4 Data Centers and Cloud Computing 48
Data Centers 48
Integrating Data to Combat Data Chaos 50
Cloud Computing 52
Selecting a Cloud Vendor 52
Cloud Infrastructure 54
Issues in Moving Workloads from the Enterprise
to the Cloud 54

2.5 Cloud Services and Virtualization 55
Anything as a Service (XAAS) Models 55
Going Cloud 58
Virtualization and Virtual Machines 58

Case 2.2 Business Case: Data Chaos Creates Risk 62
Case 2.3 Video Case: Cloud Computing at Coca-Cola Is

Changing Everything 63

3 Data Management, Data Analytics,
and Business Intelligence 65

Case 3.1 Opening Case: Coca-Cola Strategically Manages
Data to Retain Customers and Reduce Costs 66

3.1 Data Management and Database Technologies 69
Database Management Systems and SQL 69
DBMS and Data Warehousing Vendors
Respond to Latest Data Demands 72

Contents

C O N T E N T S v i i

3.2 Centralized and Distributed Database
Architectures 73
Garbage In, Garbage Out 75
Data Ownership and Organizational Politics 76
Data Life Cycle and Data Principles 77
Master Data and Master Data Management 78

3.3 Data Warehouses 79
Procedures to Prepare EDW Data for Analytics 80
Building a Data Warehouse 80
Real-Time Support from an Active Data
Warehouse 81

3.4 Big Data Analytics and Data Discovery 83
Human Expertise and Judgment are Needed 85
Data and Text Mining 88
Creating Business Value 88
Text Analytics Procedure 90
Analytics Vendor Rankings 90

3.5 Business Intelligence and
Electronic Records Management 91
Business Benefits of BI 92
Common Challenges: Data Selection
and Quality 92
Aligning BI Strategy with Business Strategy 92
BI Architecture and Analytics 93
Electronic Records Management 94
Legal Duty to Retain Business Records 94
ERM Best Practices 94
ERM Benefits 95
ERM for Disaster Recovery,
Business Continuity, and Compliance 95

Case 3.2 Business Case: Big Data Analytics is the “Secret
Sauce” for Revitalizing McDonald’s 98

Case 3.3 Video Case: Verizon Improves Its
Customer Experience with Data Driven
Decision-Making 99

4 Networks, Collaborative
Technology, and the Internet
of Things 101

Case 4.1 Opening Case: Sony Builds an IPv6 Network
to Fortify Competitive Edge 102

4.1 Network Fundamentals 104
Network Types 104
Intranets, Extranets, and Virtual Private
Networks 105
Network Terminology 105
Functions Supported by Business Networks 106
Quality of Service 107

4.2 Internet Protocols (IP), APIs, and Network
Capabilities 109

Comparing 3G, 4G, 4G LTE, and 5G Network
Standards 110
Circuit versus Packet Switching 111
Application Program Interfaces and Operating
Systems 111

4.3 Mobile Networks and Near-Field
Communication 113
Increase in Mobile Network Traffic and Users 114
Higher Demand for High-Capacity Mobile
Networks 115
Mobile Infrastructure 115
Two Components of Wireless Infrastructure 116
Business Use of Near-Field Communication 117
Choosing Mobile Network Solutions 118

4.4 Collaborative Technologies and the Internet
of Things 119
Virtual Collaboration 120
Group Work and Decision Processes 120
The Internet of Things (IoT) 121
IoT Sensors, Smart Meters, and the Smart Grid 121

Case 4.2 Business Case: Google Maps API for
Business 125

Case 4.3 Video Case: Small Island Telecom Company
Goes Global 126

5 Cybersecurity and Risk
Management Technology 127

Case 5.1 Opening Case: Yahoo Wins the Gold and Silver
Medal for the Worst Hacks in History! 129

5.1 The Face and Future of Cyberthreats 130
Intentional Threats 132
Unintentional Threats 132
Hacking 133
Cyber Social Engineering and Other Related
Web-Based Threats 134
Denial-of-Service 137
Insider and Privilege Misuse 137
Physical Theft or Loss 138
Miscellaneous Errors 138
New Attack Vectors 138

5.2 Cyberattack Targets and Consequences 139
“High-Profile” and “Under-the-Radar” Attacks 139
Critical Infrastructure Attacks 140
Theft of Intellectual Property 141
Identity Theft 142
Bring Your Own Device 142
Social Media Attacks 144

5.3 Cyber Risk Management 146
IT Defenses 146
Business Continuity Planning 149
Government Regulations 149

v i i i C O N T E N T S

5.4 Defending Against Fraud 150
Occupational Fraud Prevention
and Detection 151
General Controls 152
Internal Controls 153
Cyber Defense Strategies 153
Auditing Information Systems 155

5.5 Frameworks, Standards, and Models 155
Risk Management and IT Governance
Frameworks 155
Industry Standards 157
IT Security Defense-In-Depth Model 157

Case 5.2 Business Case: Lax Security at LinkedIn
Exposed 161

Case 5.3 Video Case: Botnets, Malware Security, and
Capturing Cybercriminals 163

PART 2 Winning, Engaging, and
Retaining Consumers for Growth

6 Search, Semantic, and
Recommendation Technology 165

Case 6.1 Opening Case: Mint.com Uses Search
Technology to Rank Above Established
Competitors 166

6.1 Using Search Technology for Business
Success 168
How Search Engines Work 168
Web Directories 168
How Crawler Search Engines Work 169
Why Search Is Important for Business 172

6.2 Organic Search and Search Engine
Optimization 178
Strategies for Search Engine Optimization 178
Content and Inbound Marketing 180
Black Hat versus White Hat SEO: Ethical Issues
in Search Engine Optimization 181

6.3 Pay-Per-Click and Paid Search Strategies 182
Creating a PPC Advertising Campaign 182
Metrics for Paid Search Advertising 184

6.4 A Search for Meaning—Semantic Technology 184
What Is the Semantic Web? 185
The Language(s) of Web 3.0 185
Semantic Web and Semantic Search 186
Semantic Web for Business 187

6.5 Recommendation Engines 188
Recommendation Filters 189

Case 6.2 Business Case: Deciding What to Watch—Video
Recommendations at Netflix 195

Case 6.3 Video Case: Power Searching with
Google 196

7 Web 2.0 and Social
Technology 199

Case 7.1 Opening Case: Social Customer Service Takes
Off at KLM 200

7.1 Web 2.0—The Social Web 201
The Constantly Changing Web 201
Invention of the World Wide Web 202
A Platform for Services and Social Interaction 202
Emergence of Social Applications, Networks,
and Services 203
Why Managers Should Understand Web
Technology 205
Communicating on the Web 206
Social Media Applications and Services 207
Social Media Is More than Facebook, YouTube, and
Twitter 207
With Web 2.0, Markets are Conversations 209

7.2 Social Networking Services and Communities 210
The Power of the Crowd 212
Crowdfunding 212
Social Networking Services 213
Facebook Dominates Social Networking 214
Google Takes on Facebook with G+ 216
Be in the Now with Snapchat 217
And Now for Something Different: Second Life 218
Private Social Networks 219
Future of Social Networking Systems 220

7.3 Engaging Consumers with Blogs and
Microblogs 220
What Is the Purpose of a Blog? 220
Blogging and Public Relations 222
Reading and Subscribing to Blogs 222
Blogging Platforms 222
Microblogs 223
Twitter 223
Tumblr Blogs 225

7.4 Mashups, Social Metrics, and
Monitoring Tools 226
What Makes a Mashup Social 226
RSS Technology 227
Social Monitoring Services 227

7.5 Enterprise 2.0: Workplace Collaboration and
Knowledge Sharing 229
Tools for Meetings and Discussions 230
Social Tools for Information Retrieval and
Knowledge Sharing 230
Social Bookmarking Tools 231
Content Creation and Sharing 232

Case 7.2 Business Case: Facebook Helps Songkick Rock
the Ticket Sales Industry 236

Case 7.3 Business Case: AT&T’s “It Can Wait” Campaign
against Distracted Driving 237

C O N T E N T S i x

8 Retail, E-commerce, and Mobile
Commerce Technology 240

Case 8.1 Opening Case: Macy’s Races Ahead with Mobile
Retail Strategies 241

8.1 Retailing Technology 243
Keeping Up with Consumer Demands and
Behavior 243
The Omni-Channel Retailing Concept 244

8.2 Business-to-Consumer (B2C) E-commerce 246
Online Banking 246
International and Multiple-Currency
Banking 246
Online Recruiting 246
Issues in Online Retailing 250
Online Business and Marketing Planning 250

8.3 Business-to-Business (B2B) E-commerce and
E-procurement 251
Sell-Side Marketplaces 251
E-Sourcing 252
E-Procurement 252
Electronic Data Interchange (EDI) Systems 253
Public and Private Exchanges 253

8.4 Mobile Commerce 253
Information: Competitive Advantage in Mobile
Commerce 255
Mobile Entertainment 258
Hotel Services and Travel Go Wireless 259
Mobile Social Networking 259

8.5 Mobile Transactions and Financial Services 260
Mobile Payment Systems 260
Mobile Banking and Financial Services 262
Short Codes 263
Security Issues 263

Case 8.2 Business Case: Chegg’s Mobile Strategy 266
Case 8.3 Video Case: Searching with Pictures

Using MVS 267

PART 3 Optimizing Performance,
Processes, and Productivity

9 Functional Business Systems 269
Case 9.1 Opening Case: Ducati Redesigns Its

Operations 271
9.1 Business Management Systems and Functional

Business Systems 272
Business Management Systems (BMSs) 273
Management Levels 273
Business Functions vs. Cross-Functional Business
Processes 274
Transaction Processing Systems 275

9.2 Production and Operations Management
Systems 277
Transportation Management Systems 278
Logistics Management 278
Inventory Control Systems 279
Computer-Integrated Manufacturing and
Manufacturing Execution Systems 281

9.3 Sales and Marketing Systems 282
Data-Driven Marketing 284
Sales and Distribution Channels 284
Social Media Customer Service 284
Marketing Management 285

9.4 Accounting, Finance, and Regulatory Systems 286
Financial Disclosure: Reporting and
Compliance 286
Fraud Prevention and Detection 289
Auditing Information Systems 291
Financial Planning and Budgeting 291

9.5 Human Resource Systems, Compliance, and
Ethics 293
HR Information Systems 293
Management and Employee Development 295
HR Planning, Control, and Management 295

Case 9.2 Business Case: HSBC Combats Fraud in Split-
second Decisions 297

Case 9.3 Video Case: United Rentals Optimizes Its
Workforce with Human Capital Management 298

10 Enterprise Systems 300
Case 10.1 Opening Case: 3D Printing Drives the “Always-

On” Supply Chain 301
10.1 Enterprise Systems 303

Implementation Challenges of Enterprise
Systems 305
Investing in Enterprise Systems 305
Implementation of Best Practices 306
Enterprise Systems Insights 307

10.2 Enterprise Resource Planning (ERP) 307
Brief History of ERP 308
Technology Perspective 308
Achieving ERP Success 311

10.3 Supply Chain Management Systems 313
Managing the Flow of Materials, Data,
and Money 315
Order Fulfillment and Logistics 315
Steps in the Order Fulfillment Process 315
Innovations Driving Supply Chain Strategic
Priorities 316

10.4 Customer Relationship Management Systems 319
How are CRM Apps Different from ERP? Why are they
Different? 319
CRM Technology Perspective 320

x C O N T E N T S

Customer Acquisition and Retention 320
CRM for a Competitive Edge 320
Common CRM Mistakes: How to Avoid
Them 321
Justifying CRM 322

10.5 Enterprise Social Platforms 323
Growth of Enterprise Social Investments
and Markets 323
Sharepoint 324
Oracle’s Social Network 326
Jive 326
Chatter 326

Case 10.2 Business Case: Lowe’s Fresh Approach to
Supply Chain Management 328

Case 10.3 Video Case: Procter & Gamble: Creating
Conversations in the Cloud with 4.8 Billion
Consumers 329

11 Data Visualization and Geographic
Information Systems 331

Case 11.1 Opening Case: Safeway and PepsiCo
Collaborate to Reduce Stock Outages using Data
Visualization 332

11.1 Data Visualization and Learning 334
Learning, Exploration, and Discovery with
Visualization 336
Data Discovery Market Separates from the
BI Market 336
How Is Data Visualization Used in Business? 340
Data Visualization Tools 341

11.2 Enterprise Data Mashups 342
Mashup Architecture 343
Why Do Business Users Need Data Mashup
Technology? 344
Enterprise Mashup Technology 344

11.3 Digital Dashboards 345
Dashboards are Real Time 347
How Operational and Strategic
Dashboards Work 348
Benefits of Digital Dashboards 348

11.4 Geographic Information Systems and
Geospatial Data 349
Geocoding 350
GIS Is Not Your Grandfather’s Map 350
Infrastructure and Location-Aware Collection
of Geospatial Data 350
Applying GIS in Business 351

Case 11.2 Visualization Case: Are You Ready for
Football? 353

Case 11.3 Video Case: The Beauty of Data
Visualization—Data Detective 353

PART 4 Managing Business
Relationships, Projects, and Ethical
Responsibilities

12 IT Strategy, Sourcing, and Strategic
Technology Trends 354

Case 12.1 Opening Case: Intel Reaps Rewards from
Sustainable IT Strategy 355

12.1 IT Strategic Planning 357
Value Drivers 358
IT Strategic Plan Objectives 358
IT and Business Disconnects 359
Corporate and IT Governance 359
Reactive Approach to IT Investments Will Fail 359
IT Strategic Planning Process 359

12.2 Aligning IT with Business Objectives 362
Achieving and Sustaining a Competitive
Advantage 364

12.3 IT Sourcing Strategies 367
Sourcing and Cloud Services 368
Factors Driving Outsourcing 369
Outsourcing Risks and Hidden Costs 370
Offshoring 370
Outsourcing Life Cycle 371
Managing IT Vendor Relationships 373
Contracts: Get Everything in Writing 373

12.4 Balanced Scorecard 374
The Balanced Scorecard 374
Using the Balance Scorecard 375
Applying the BSC 377

12.5 Strategic Technology Trends 378
Strategic Technology Scanning 380
Finding Strategic Technologies 380

Case 12.2 Business Case: Cisco IT Improves Strategic
Vendor Management 382

Case 12.3 Data Analysis: Third-Party versus Company-
Owned Offshoring 383

13 Systems Development and Project
Management 385

Case 13.1 Opening Case: Denver International Airport
Learns from Mistakes Made in Failed Baggage-
Handling System Project 386

13.1 System Development Life Cycle 388
Stages of the SDLC 388

13.2 Systems Development Methodologies 391
Waterfall Model 391
Object-Oriented Analysis and Design 392
Agile Methodology 392

C O N T E N T S x i

The DevOps Approach to Systems
Development 394

13.3 Project Management Fundamentals 395
What Is a Project? 396
Choosing Projects 396
The Triple Constraint 397
The Project Management Framework 397

13.4 Initiating, Planning, and Executing Projects 399
Project Initiation 400
Project Planning 400
Project Execution 403

13.5 Monitoring/Controlling and Closing
Projects 404
Project Monitoring and Controlling 404
Project Closing or Post Mortem 407
Why Projects Fail 408
IT Project Management Mistakes 410

Case 13.2 Business Case: Steve Jobs’ Shared Vision
Project Management Style 412

Case 13.3 Demo Case: Mavenlink Project Management
and Planning Software 413

14 IT Ethics, Privacy, and
Sustainability 417

Case 14.1 Opening Case: Lessons Learned: How Google
Glass Raised Risk and Privacy Challenges 418

14.1 IT Ethics 420
Ethical versus Unethical Behavior 420
Competing Responsibilities 423

14.2 Privacy and Civil Rights 424
Privacy and the New Privacy
Paradox 424
Social Media Recruiting 425
Legal Note: Civil Rights 426
Competing Legal Concerns 427
Financial Organizations Must Comply with Social
Media Guidelines 428

14.3 Technology Addictions and Focus
Management 430
Digital Distractions and Loss of Focus 430
Focus Management 430

14.4 ICT and Sustainable Development 432
Global Temperature Rising Too Much
Too Fast 432
IT and Global Warming 433
Technology to Transform Business and
Society 436
Next Wave of Disruption Will Be More
Disruptive 438

Case 14.2 Business Case: Android Auto and
CarPlay Keep Drivers Safe, Legal, and
Productive 439

Case 14.3 Video Case: IT Ethics in the
Workplace 440

GLOSSARY 443
ORGANIZATION INDEX 448
NAME INDEX 450
SUBJECT INDEX 451

xiii

Information Technology for Management discusses a variety of
business strategies and explains how they rely on data, digital
technology, and mobile devices to support them in the on-
demand economy. Our goal is to provide students from any
business discipline with a strong foundation for understand-
ing the critical role that digital technology plays in enhancing
business sustainability, profitability, and growth and excel in
their careers. Enabling technologies discussed in this textbook
include the following:

• Performance Combining the latest capabilities in big data
analytics, reporting, collaboration, search, and digital com-
munication helps enterprises be more agile and cuts costs to
optimize business performance and profitability.

• Growth Strategic technologies enable business to create
new core competencies, expand their markets, and move
into new markets to experience exponential growth in the
on-demand economy.

• Sustainability Cloud services are fundamental to sus-
taining business profitability and growth in today’s on-
demand economy. They play a critical role in managing
projects and sourcing agreements, respecting personal pri-
vacy, encouraging social responsibility, and attracting and
engaging customers across multimedia channels to promote
sustainable business performance and growth.

In this 11th edition, students learn, explore, and understand
the importance of IT’s role in supporting the three essential
components of business performance improvement: technology,
business processes, and people.

What’s New in the
11th Edition?
In the 11th edition of IT for Management, we present and dis-
cuss concepts in a comprehensive yet easy-to-understand for-
mat by actively engaging students through a wide selection of
case studies, interactive figures, video animations, tech notes,
concept check questions, online and interactive exercises, and
critical thinking questions. We have enhanced the 11th edition
in the following ways:

New Author Dr. Carol Pollard, Professor of Computer Infor-
mation Systems at the Walker College of Business and former
Executive Director of the Center for Applied Research in Emerg-
ing Technologies (CARET) at Appalachian State University in
North Carolina, has taken the helm for the 11th edition. Carol

has applied her innovative teaching and learning techniques to
create a stronger pedagogical focus and more engaging format
for the text.
Diverse Audience IT for Management is directed toward
undergraduate, introductory MBA courses, and Executive Educa-
tion courses in Management Information Systems and General
Business programs. Concepts are explained in a straightforward
way, and interactive elements, tools, and techniques provide
tangible resources that appeal to all levels of students.
Strong Pedagogical Approach To encourage improved learn-
ing outcomes, we employed a blended learning approach, in
which different types of delivery and learning methods, enabled
and supported by technology, are blended with traditional
learning methods. For example, case study and theoretical
content are presented visually, textually, and/or interactively
to enable different groups of students to use different learning
strategies in different combinations to fit their individual learn-
ing style and enhance their learning. Throughout the book,
content has been reorganized to improve development of the
topics and improve understanding and readability. A large
number of images that did not enhance understanding have
been removed and replaced with informative and interactive
figures and tables that better convey critical concepts.
Leading-Edge Content Prior to and during the writing pro-
cess, we consulted with a number of vendors, IT professionals,
and managers who are hands-on users of leading technologies,
to learn about their IT/business successes, challenges, experi-
ences, and recommendations. To integrate the feedback of
these business and IT professionals, new or updated chapter
opening and closing cases have been added to many of the
chapters along with the addition of relevant, leading-edge
content in the body of the chapters.
New Technologies and Expanded Topics New to this edition
are the IT framework, business process reengineering, geoco-
ding, systems developments methodologies, including Water-
fall, object-oriented analysis, Agile and DevOps, advances
in Search Technology, the growth of Mobile Commerce and
Mobile Payment Systems, the Always-On Supply Chain, and
the Project Management framework. In addition, with more
purchases and transactions starting online and attention being
a scarce resource, students learn how search, semantic, and
recommendation technologies function to improve revenue.
Table P-1 provides a detailed list of new and expanded topics.
Useful Tools and Techniques New to this edition is a feature
we call the “IT Toolbox.” This involves the provision of a set of
useful tools or techniques relevant to chapter content. Collec-
tively, these tools and techniques equip readers with a suite of
IT tools that will be useful in their university classes, workplace,
and personal life.

Preface

xiv P R E F A C E

Chapter New and Expanded IT and Business Topics Innovative Enterprises
1. Disruptive IT Impacts

Companies, Competition,
and Careers

• IT’s role in the on-demand economy
• Business process improvement
• Business process re-engineering
• SMAC model
• Nature of on-demand work
• Becoming an informed IT user
• Technology mega trends

• Uber
• Airbnb
• FitBit
• NFL
• Teradata

2. Information Systems, IT Archi-
tecture, Data Governance, and
Cloud Computing

• IS concepts and framework
• Information, knowledge, wisdom model
• Software-defined data center

• Mediata
• National Climatic Data center
• U.S. National Security Agency
• Apple
• Uber
• WhatsApp
• Slack
• Vanderbilt University Medical Center
• Coca-Cola

TA B L E P – 1 Overview of New and Expanded Topics and Innovative Enterprises Discussed in the Chapters

Engaging Students
to Assure Learning
The 11th edition of Information Technology for Management
engages students with up-to-date coverage of the most impor-
tant IT trends today. Over the years, this IT textbook has dis-
tinguished itself with an emphasis on illustrating the use of
cutting-edge business technologies for supporting and achiev-
ing managerial goals and objectives. The 11th edition contin-
ues this tradition with more interactive activities and analyses.

Real-World Case Studies Each chapter contains numerous
real-world examples illustrating how businesses use IT to increase
productivity, improve efficiency, enhance communication and
collaboration, and gain a competitive edge. Faculty will appreciate
a variety of options for reinforcing student learning that include
three different types of Case Studies (opening case, video case,
and business case), along with interactive figures and whiteboard
animations that provide a multimedia overview of each chapter.
Interactive Figures and Whiteboard Animations The unique
presentation of interactive figures and whiteboard anima-
tions facilitates reflection on the textual content of the book
and provides a clear path to understanding key concepts. The
whiteboard animations fit particularly well with the “flipping
the classroom” model and complement additional functional-
ity and assets offered throughout the 11th edition. The interac-
tive figures actively engage the students in their own learning
to effectively reinforce concepts.
Learning Aids Each chapter contains various learning aids,
which include the following:

• Learning Objectives are listed at the beginning of each
chapter to help students focus their efforts and alert
them to the important concepts that will be discussed.

• IT at Work boxes spotligh

Financial markets homework help

Communication Strategy:
Segmenting, Targeting
&
Positioning

Dr. Campbell

Week 3: January 18, 2022

1

Introductions

Gregory Romero

Andrew Rodriguez

Shikhar Rakesh

Yisen Qiao

Natalie Qaqish

Ethan Puente

Dominick Pickett

Hayden Petrovick

2

Reebok Case: What did we learn?

29

Difference between brand awareness and brand associations (meaning)

4

Additional Takeaways

There are many methods and tools for marketing communications

Each is a critical moment for interaction and should be carefully used and evaluated as a chance to build shared meaning that is the basis of the brand

Strong brands use a variety of tools to build and maintain brand strength

Strong brands integrate to communicate a CONSISTENT idea of the brand

Need to define, develop and understand “essence”

CBBE is important to marketplace success

5

1/8/22

Learning Agenda

Setting marketing communication strategy

Segmenting and Targeting

Positioning

6

Differences Between Strategic and Tactical STP

7

Targeting gets progressively “smaller”

1. Who are the targets for our company?

2. Who are the targets for our product (brand)?

3. Who are the targets for our marcom campaign?

8

Communications Targets (Tactical)

We need to understand segments with potential

We need to determine what to say to those segments

9

Indentifying Users

We want to identify segments with potential

Examples of questions we should ask:

How well is our brand performing within a specific customer segment?

How well does the product category do within a specific group of customers (segment)?

10

Brand Development Index

This index quantifies how well a brand is doing within a specific group (segment) of consumers, compared to how the brand does on average among all consumers.

Brand Development Index

BDI =

Brand sales to Segment/Size of Segment

Total Brand Sales/Total population

12

Brand Development Index

BDI =

Brand sales to Segment/Size of Segment

Total Brand Sales/Total population

X 100

13

Solo Wants to Compare Geographic Segments

BDI =

Brand sales to Segment/Size of Segment

Total Brand Sales/Total population

X 100

14

Solo Wants to Compare Geographic Segments

West: 26% of Solo’s Sales

South: 30% of Solo’s Sales

Is one segment stronger than the other?

15

Solo Wants to Compare Geographic Segments

West: 26% of Solo’s Sales

South: 30% of Solo’s Sales

Is one segment stronger than the other?

What else do you need to know?

16

Solo Wants to Compare Geographic Segments

West: 26% of Solo’s sales; 23.7% of U.S. population

South: 30% of Solo’s sales; 38.1% of U.S. population

BDI =

Brand sales to Segment/Size of Segment

Total Brand Sales/Total population

X 100

West BDI = 26%/23.7% = 1.097 (or 109.7)

South BDI = 30%/38.1% = .787 (or 78.7)

17

Category Development Index

This index quantifies how well a category is doing within a specific group (segment) of consumers, compared to how the category does on average among all consumers. Comparing the category performance within a segment to the average performance

CDI =

Category sales to Segment/Size of Segment

Total Category Sales/Size of Total pop.

18

CDI: Solo Wants to Compare Geographic Segments

West: 24.5% of category sales; 23.7% of U.S. population

South: 40% of category sales; 38.1% of U.S. population

CDI =

Category sales to Segment/Size of Segment

Total Category Sales/Total population

X 100

West CDI = 24.5%/23.7% = 1.034 (or 103.4)

South CDI = 40%/38.1% = 1.05 (or 105)

19

Comparing the BDI and CDI

What can you tell Solo?

Indentifying Users: Indices

In general, an index number indicates current usage of a segment of the market

Question: compared to what?

21

How Can We Use These?

Help identify strong and weak segments (usually demographic or geographic)

Compare the two for additional insight

Use to identify segments that need attention

Figure out if there are different communication messages that could be more/less effective with the different segments

22

Other Dimensions for Segmentation?

23

Le Petit Prince

24

Why Do Consumers Buy?

.

25

Why Do Consumers Buy?

Values

Attitudes

Lifestyles

Beliefs

Goals

26

Why Do Consumers Buy?

Values

Attitudes

Lifestyles

Beliefs

Goals

Life stage

{

27

Communication Targets

Need to specify who we want to speak to with any given campaign or communication

We need to identify a segment of consumers who will respond positively to the same messaging.

We need to figure out what to say to these people to get them to respond more favorably.

28

Communication Targets

Look for a consumer insight that can provide some differentiation and move the market

Consumer behavior and choice is influenced by consumer goals

29

Early Pregnancy Test Example

An early pregnancy test is a home pregnancy test. Many HPT are sensitive such that they may be able to detect pregnancy before the first missed period. For example, these tests can identify low levels of hCG as early as four – six days before a missed period, or seven days after conception.

Women are able to get an accurate idea of whether or not they are pregnant prior to going to see a medical professional.

Who are target consumers for this product? People who want to know if they are pregnant before going to the doctor.

Is this just one big segment of women or are there different types of consumers such that this market can be segmented?

Think of all the ways to segment the market for early pregnancy test devices. And think of different implications for the marketing.

WHY would a woman want to take a home test?

30

Two very different groups

Worried

Hopeful

31

Positioning: Definition

is the process of defining a distinct image of the company’s offering to create in a customer’s mind.

Positioning

Three Questions You Must Ask About Your Brand

What do we learn from this article?

Breakouts

Have we established a frame?

Are we leveraging our points of parity?

Are the points of difference compelling?

33

Positioning: Three Steps

Define Frame of Reference

Identify relevant competition

Target market

Assess Brand Perceptions

Own brand

Competing brands

Determine Desired Brand Position

Points-of-Parity associations

Points-of-Difference associations

Positioning Statement

For ,

target

is a great .

brand offering

category frame of reference

Compared to

primary competitors

we offer & .

primary benefit POD

primary POP

Positioning Statement

Among ,

target

is the brand of

Brand offering

category frame of reference

that because .

primary benefit POD

reason to believe

This PS includes a reason to believe and this can be quite useful for communications positioning because the reason to believe is often specific to the specific target. What you need to communicate to convince a business woman that the iPhone is the easiest to use and most powerful smartphone is likely to be different from the reason a tween will believe this.

May want to develop a specific PS for a communications campaign. But, of course, every communication must be consistent with the overall brand positioning.

This is the one from the reading from the core. In the core we talked about my preference for the first one because I think that the reason to believe is more changeable – and short term – than the other elements. I think that the reason to believe is more of a communication component that can differ depending upon the subtarget, or even how you want to support your point at a given time. To me, this one makes more sense as a positioning statement for the kind of “little targeting” that we are often doing with marketing communications than the overall positioning for the product. Some people add brand personality or character as well.

Sara Lee commercial

STP is the Basis of
Communication Strategy

Segmenting, targeting, and positioning allows us to effectively address a target

Segments differ in what they know about a brand

Segments differ in what they need to know about a brand

Different targets will need different messages to reach a “better” understanding of the brand

STP allows more effective communication with specific targets

Tiffany

38

2015

Will you promise to never stop completing my sentences or singing off key, which I’m afraid you do often? And will you let today be the first sentence of one long story that never, ever ends?

Will you?

39

Tiffany

40

Communication targets may need different

Communication positions

Styles of communication

Messages

41

What do they think about us and what do they need to think about us?

42

Next

Reflection 3 by 8 pm Saturday 1/22/22

Due: Final Project Choice by 8 pm Saturday 1/22/22

Video on Consumer Decision Making

Readings

World of Warcraft case discussion next class

Disability accommodation?

Religious accommodation?

43

Financial markets homework help

MGT 247
Advertising & Promotion

Dr. Campbell

Week 1: January 4, 2022

© Margaret C. Campbell

1

What We Cover In Week 1

Introductions (video, class, turn in by Th)

What is marketing? (video)

What is the “promotion p”?

What are marketing communications?

What are steps and goals for marcom?

The what and why of brand

Course details (video, class Q&A)

© Margaret C. Campbell

2

Today

8 Intros – Who are you and why an MBA?

Questions on “What is Marketing” Video

Class content:

What is Promotion?

Goals for Marcom

What is a Brand? What is Brand Equity?

Using Marcom to Build your Brand

Questions about Course Details

Next Week

© Margaret C. Campbell

3

Questions on “What is Marketing”?

© Margaret C. Campbell

4

What is “Promotion”?

All elements in an organization’s marketing mix that facilitate exchanges by establishing shared meaning with the organization’s customers.

© Margaret C. Campbell

1/3/22

5

Promotion?

© Margaret C. Campbell

6

Earned

Media

Owned

Media

Paid

Media

Three Delivery Routes for Marketing Communications

© Margaret C. Campbell

Owned media – any property (web or “real”) that you control and is unique to your brand.

Owned. Website, company magazine or newsletter, blogs, white papers

Earned includes PR outcomes, likes, recommendations, reviews, strong organic ratings (from search engine optimization)

Companies rely on these different forms of marcom to help them market their products & services. Consumers rely on these for information they can use in making purchase decisions. Can drive traffic.

Overlapping components capture that one can be a driver of the other. For example, you engage in owned and paid media to drive earned media. You will put out a press release or a blog or a cool video that gains earned media.

7

Earned

Media

Owned

Media

Paid

Media

Marcom Delivery Routes and Control

More Control

Less Control

© Margaret C. Campbell

So, there are a lot of different communication tools. Let’s take a minute to think about what they have in common. What is offered by each type of marcom?

http://blogs.forrester.com/interactive_marketing/2009/12/defining-earned-owned-and-paid-media.html

8

Earned

Media

Owned

Media

Paid

Media

Marcom Delivery Routes and Trust

More Skepticism

More Trust

© Margaret C. Campbell

9

Steps in Marcom

Identifying the Target

Setting Goals/Objectives

Developing the Message

Selecting the

Media

Implementing the Campaign

Evaluating Results

Developing the Creative Solution

© Margaret C. Campbell

10

Steps in Marcom w 6 Ms Model

Identifying the Target

Setting Goals/Objectives

Developing the Message

Selecting the

Media

Implementing the Campaign

Evaluating Results

Developing the Creative Solution

Market

Mission

Message

Media

Money

Measurement

]

© Margaret C. Campbell

11

Big Picture Goals for Marcom

© Margaret C. Campbell

12

Big Picture Goal for Marcom

Gain & Retain Customers

© Margaret C. Campbell

13

Big Picture Goals for Marcom

Gain & Retain Customers

Convey Information & Value

© Margaret C. Campbell

14

Big Picture Goals for Marcom

Gain & Retain Customers

Convey Information & Value

“Here’s what we‘ve got. Here’s what it will do for you. Here’s how to get it.”

Leo Burnett

© Margaret C. Campbell

15

Big Picture Goals for Marcom

Gain & Retain Customers

Convey Information & Value

Build and/or Maintain the Brand

© Margaret C. Campbell

16

What is a Brand?

“… A name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.” (AMA)

… A promise and commitment that a firm makes to its customers.

… What consumers believe it to be.

© Margaret C. Campbell

17

Why are Brands Important?

What differential effects of brand equity provide value to a firm?

In what ways can brand equity allow differential effects that provide value to customers?

© Margaret C. Campbell

18

Activity

In breakout groups

https://docs.google.com/spreadsheets/d/1S6BvLfKKqmdXHmA3kAnk8tZb8_bkZMCXr4gpZdfxhyg/edit#gid=0

How does investing in a brand benefit an organization?

Brainstorm at least three ways and discuss why/how

How does a brand benefit a customer?

Brainstorm at least three ways and discuss why/how

© Margaret C. Campbell

19

Benefits of Strong Brand Equity

Greater brand loyalty

Higher willingness to pay (larger margins)

Less elastic responses to price increases

More elastic responses to price decreases

Communication efficiency/effectiveness

Resistance to competitive marketing actions

More “lenient” perceptions

Receptivity to extensions (licensing opportunities)

Greater trade cooperation and support

© Margaret C. Campbell

20

Customer Benefits of Brands

Reduce search costs

Mitigate perceived risk

Allow self expression

Provide use satisfaction

Maintain post-purchase satisfaction

Simplify

Decision

Making

© Margaret C. Campbell

21

Customer-Based Brand Equity Model

Brand

© Margaret C. Campbell

22

Definition:
Customer-Based Brand Equity

The differential effect that

brand knowledge has on

consumer response to the

marketing of that brand.

Kevin Lane Keller

© Margaret C. Campbell

23

CBBE

Brand Knowledge is the key to creating brand equity

© Margaret C. Campbell

What do we mean by knowledge?

© Margaret C. Campbell

Associative Network Memory Model

Network of nodes and connecting links

Informational nodes linked to a brand node in memory

Many different types of information (nodes)

Different levels of strength between nodes (links)

© Margaret C. Campbell

Links represent the strength

Draw brand node and links to association nodes on board.

Think about a brand – if you know the brand, you have a node for it that is linked to various kinds or associations.

26

© Margaret C. Campbell

27

Knowledge

is

what is stored

in

MEMORY

© Margaret C. Campbell

28

Godiva?

© Margaret C. Campbell

Who knows the brand Godiva? Count – awareness.

What do you know about Godiva? Write down the first five things that come to mind – Brand associations

Know, what does the awareness and the meaning DO? I ran a study in which one group of consumers learned about that there would be a new chocolate introduced, another learned about Sees and one learned about Godiva.

Then I asked them questions like where would you expect to find this? How much would it cost?

Very different responses based on the brand – because of each consumer’s prior knowledge.

29

Brand Awareness and Meaning Drive CBBE

BE:

Differential

Response

Awareness

Brand Image:

Attributes/

Benefits

© Margaret C. Campbell

30

Customer-Based Brand Equity

BE:

Differential

Response

Awareness

Brand Image:

Attributes/

Benefits

Strong

Favorable

Unique

Associations

that are:

{

© Margaret C. Campbell

31

Develop a great product with desired, differentiated positioning

What is your core brand meaning?

Create awareness of the brand/product

Develop accessible, favorable, unique brand associations

Creating Strong Brand Equity

© Margaret C. Campbell

Understand, at a deep level, what they mean to consumers.

Understand the totality of their brand image.

Profile associations in terms of strength, favorability,and uniqueness.

Articulate the core brand associations and the key brand values.

Nike: “authentic athletic performance”

Visa (versus American Express in the 1980’s). Created points-of difference on “convenience” and “accessibility” and estalished pop on the basis of status and prestige. Negated American Express’s pod with parity on prestige and created pods.

Positioning is the basis of differentiation

Last class we talked about the fact that there are many different tools for communication.

At this point, in order to do this well, IMC is the current best solution.

So, what is IMC? Today’s reading discussed and gave a couple of different definitions.

Develop a great product with desired, differentiated positioning

What is your core brand meaning?

Create awareness of the brand/product

Develop accessible, favorable, unique brand associations by communicating consistent brand position/image in all communications

Creating Strong Brand Equity

© Margaret C. Campbell

Understand, at a deep level, what they mean to consumers.

Understand the totality of their brand image.

Profile associations in terms of strength, favorability,and uniqueness.

Articulate the core brand associations and the key brand values.

Nike: “authentic athletic performance”

Visa (versus American Express in the 1980’s). Created points-of difference on “convenience” and “accessibility” and estalished pop on the basis of status and prestige. Negated American Express’s pod with parity on prestige and created pods.

Positioning is the basis of differentiation

Last class we talked about the fact that there are many different tools for communication.

At this point, in order to do this well, IMC is the current best solution.

So, what is IMC? Today’s reading discussed and gave a couple of different definitions.

Brand Positioning

The heart of marketing strategy

“the act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customer’s minds.” (Kotler & Keller)

© Margaret C. Campbell

A Story of Pizza

© Margaret C. Campbell

35

A Story of Pizza

In 1995 Kraft introduced a “rising crust” pizza. This was the first pizza with an uncooked, fresh-frozen crust. When cooked in the consumer’s oven, the pizza came out with a fresh baked, delicious crust.

© Margaret C. Campbell

36

DiGiorno

What position does DiGiorno communicate?

© Margaret C. Campbell

Story?

37

© Margaret C. Campbell

38

© Margaret C. Campbell

What type of media is this?

39

© Margaret C. Campbell

Website: Owned Media

40

DiGiorno

Defined a differentiated positioning frame of reference

Used all communications to develop associations

Linked to brand name

© Margaret C. Campbell

41

DiGiorno

Defined a differentiated positioning frame of reference

Used all communications to develop associations

Linked to brand name

Consistent

“It’s not delivery, it’s DiGiorno”

© Margaret C. Campbell

42

The Goal of Promotions/Marcom Management

Manage all brand contacts

to build a

strong brand

in relevant

constituencies’ minds

© Margaret C. Campbell

43

Our stated plan…

8 Intros

Questions on “What is Marketing” Video

Class Content:

What is Promotion?

Goals for Marcom

What is a Brand? What is Brand Equity?

Using Marcom to Build your Brand

Questions about Course Details

Next Week

© Margaret C. Campbell

44

Professor Meg Campbell

Anderson Hall 202

margaret.campbell@ucr.edu

(Zoom – same link as class) Office Hours: Thursdays 2 – 4

and by appointment

How to Find Me

© Margaret C. Campbell

45

1/3/22

Course Details

Class Participation (15%)

NAME CARDS!

Reflections (15%)

Exercises (30%)

Final Project & Presentation (40%)

© Margaret C. Campbell

46

Reflections

No later than 8:00 pm Saturday following each class, pleases upload:

Two points you found important in the class material

If we discussed a case, two points about what you learned from the case, going beyond the specific case. What is important generalized learning?

© Margaret C. Campbell

47

1/3/22

Questions About Course Details?

© Margaret C. Campbell

48

Next Class

Read:

“Marketing Communications: Background Note”

“Core brand message: How to build a unique brand”

Read Final Project Description

Prepare for Reebok class discussion

Hand in:

Reflection 1/8/22

Hand in Reebok Break-even exercise 1/10/22

Introduction (Class Participation) – 1/15/22

© Margaret C. Campbell

49

See you next week

© Margaret C. Campbell

50

Financial markets homework help

Question and writing rules


Module 06: Critical Thinking


Leveraging Search Technologies (105 points)

Google is the world’s premier search engine with more than 60,000 searches made every second, which equates to between five and six billion searches on any given day. As a result, the company is highly profitable earning around $100 billion in advertising revenue each year.

Research an organization located in the Kingdom Saudi Arabia and discuss the following:

1. Introduction

2. What type of search engine technology is the company using?

3. Discuss the benefits the company is gaining from using that technology.

4. What sort of metrics does the company use to measure the success of the utilized search engine technology?

5. What other metrics might the company consider using to measure the success of the utilized search engine technology?

6. Why other metrics might, the company consider using to measure the success of the utilized search engine technology?

7. conclusion

Essay should meet the following requirements:

· Be 5 pages in length, which does not include the title page, abstract, or required reference page, which is never a part of the content minimum requirements.

· Use APA (7th ed) style guidelines.

· Support your submission with course material concepts, principles, and theories from the textbook and at least nine scholarly, peer-reviewed journal articles

· Please include in the answer Appendix ( Graph or table …)


Writing rules

· Use a standard essay format for responses to all questions (i.e., an introduction, middle paragraphs, headline (and conclusion).

· Make sure to include all the key points within conclusion section, which is discussed in the assignment. Your way of conclusion should be logical, flows from the body of the paper, and reviews the major points.

· I would like to see more depth for the question

· Responses must be submitted as a MS Word Document only, typed double-spaced, using a standard font (i.e. Times New Roman) and 12 point type size.

· Plagiarism All work must be free of any form of plagiarism.

· Written answers into your own words. Do not simply cut and paste your answers from the Internet and do not copy your answers from the textbook

Required:

Chapter 6 in Information Technology for Management: On-Demand Strategies for Performance, Growth, and Sustainability

Wei, L., & Na, C. (2020). Personalized recommendation algorithm based on improved trustworthiness. 2020 International Conference on Robots & Intelligent System (ICRIS), 526–528.

Drivas, I. C., Sakas, D. P., Giannakopoulos, G. A., & Kyriaki-Manessi, D. (2020). Big Data Analytics for Search Engine Optimization. Big Data and Cognitive Computing, 4(5), 5.

Financial markets homework help

Land & Nature Jerky Analysis
Individual Assignment

MGT 247 – Dr. Campbell

Due: Monday, February 28, 2022 by 8 pm

Individual Assignment. Please complete this work individually without referencing any
additional information (e.g., on the web). If you have questions, please ask me rather than
anyone else (Margaret.campbell@ucr.edu).

Please be sure to show your work (points will depend upon my being able to tell what you did).

1) (6 points) We went over incremental revenue to cost in class. Please compute the ratios for
2018 for a) trade promotions and b) consumer promotions. Please compare each to the industry
average.

2) (5 points) We went over the Return-on-Marketing-Investment (ROMI) in class.
Please provide the ROMI for 2018 and 2019 for BOTH trade promotions and consumer
promotions.

3) (4 points) Kathy Ayers has asked you to provide two things that you think might explain the
trade promotion results and two things that you think might explain the consumer promotion
results. Be sure to carefully explain.

Financial markets homework help

MGT 247
Advertising & Promotion

Dr. Campbell

Week 2: January 11, 2022

© Margaret C. Campbell

1

Topics for the Week

Reminder – need teams for FP by Monday

Continue intros

How does marcom impact brand equity? Reebok

What are the critical elements necessary to use marcom to build and maintain strong brands?

Positioning/Core Brand Message

What is memory? (video)

© Margaret C. Campbell

2

Introductions

Carolyn Wu

Pardeep Uppal

Shiyue Tang

Imagen Soto

Andrea Sobredo

Quanzhe Shi

Victor Sarmiento

Nadia Said

© Margaret C. Campbell

3

Logos

© Margaret C. Campbell

4

© Margaret C. Campbell

26

Why did you have a hard time with Reebok and an easy time with Nike? I hope by the end of today’s case discussion you will have an idea of this and much more.

© Margaret C. Campbell

6

U.B.U.

1989 – Physics Behind the Physiques

1989 – Christmas: Pump Line

1990 – Agency Review, Hill, Holiday

It’s Time to Play

1991 – Agency Review, Chiat/Day/Mojo

Life is Short. Play Hard. Reebok.

1992

Planet Reebok

Reebok: Campaigns

© Margaret C. Campbell

Inconsistency!

Saying different things about the brand, confusing consumers about the meaning of the brand.

Why couldn’t you draw the logo? Because have changed so many times (4 times during this same period).

Reebok: Campaigns

1996

This is My Planet

1997 – Leo Burnett

Athletes’ Stories

1997 – The Heat, Heater Advertising, Boston

© Margaret C. Campbell

Reebok: Campaigns

1998 – Berlin, Cameron & Partners, agency of record for the running shoe business

DMX performance technology

2000 – various agencies

Continued focus on DMX technology

“Defy”

© Margaret C. Campbell

© Margaret C. Campbell

10

Market Share

© Margaret C. Campbell

Reebok…

2006 — Adidas purchases Reebok!

$3.8 billion in cash

© Margaret C. Campbell

2009 Reebok Introduces Easytone

© Margaret C. Campbell

13

What Does Reebok Mean?

© Margaret C. Campbell

Very unclear. Too much going on. Their communications are not integrated.

14

How does the Core Brand Message reading help you to think about using marcom to build brand equity?

About Reebok?

© Margaret C. Campbell

15

Core Brand Message

Need to link your brand to specific associations

Clear

Differentiating

Relevant

Consistent

Need to be the one linked to those associations

create and connect to that meaning

© Margaret C. Campbell

16

Using the Core Brand Message ideas, what did Reebok do wrong?

(And what did Nike do right?)

© Margaret C. Campbell

Need to understand your real “essence” – talks about “why you exist.” What are you about and in what way are you bringing value to your customers?

Perception versus reality – really need to understand the consumer’s perceptions (market research)

Across time – he talks about the big idea and the need for it to be valid for multiple years – across time.

Simple and clear enough

Differentiating

Relevant

Consistent

Can you be the first to say it? Nice, but really want to be the one that clearly says it and is associated with it. Can you “own it”?

Lightening rod target

17

© Margaret C. Campbell

18

What’s Next?

© Margaret C. Campbell

19

Watch the video on memory

© Margaret C. Campbell

20

Watch the video on Memory

Preparation for Week 3

Three Questions You Need to Ask About Your Brand

In a Digital World Are Generations Dead?

Nielsen insights

Watch STP video (not posted yet)

Be prepared for BO groups on Three Questions reading

© Margaret C. Campbell

21

Deliverables

Submit Introduction by Jan. 13

Submit Reflection 2 by Saturday, Jan 15 by 8:00 pm

If haven’t already, hand in list of team members for Final Project

Monday 1/17/202 by 8 pm

© Margaret C. Campbell

22

Stay Healthy!

See you next week.

© Margaret C. Campbell

23

Chart1

1987 1987 1987 1987
1988 1988 1988 1988
1989 1989 1989 1989
1991 1991 1991 1991
1993 1993 1993 1993
1995 1995 1995 1995
1997 1997 1997 1997
1999 1999 1999 1999
2001 2001 2001 2001
2003 2003 2003 2003
2005 2005 2005 2005
Reebok
Nike
LA Gear
Adidas
0.322
0.18
0.02
0.27
0.23
0.05
0.22
0.26
0.13
0.22
0.28
0.08
0.21
0.32
0.05
0.2
0.36
0.03
0.052
0.15
0.47
0.06
0.11
0.5
0.17
0.12
0.43
0.14
0.133
0.44
0.11
0.122
0.364
0.09

Sheet1

Reebok Nike LA Gear Adidas Column1
1987 32.20% 18% 2%
1988 27% 23% 5%
1989 22% 26% 13%
1991 22% 28% 8%
1993 21% 32% 5%
1995 20% 36% 3% 5.20%
1997 15% 47% 6%
1999 11% 50% 17%
2001 12% 43% 14%
2003 13.30% 44% 11%
2005 12.20% 36.40% 9%
To resize chart data range, drag lower right corner of range.

Financial markets homework help

Kingdom of Saudi Arabia

Ministry of Education

Saudi Electronic University

A picture containing text, outdoor, sign  Description automatically generated

المملكة العربية السعودية

وزارة التعليم

الجامعة السعودية الإلكترونية

College of Administrative and Financial Sciences

Assignment 1

Portfolio Management (FIN424)

Due Date: 12/03/2022 @ 23:59

Course Name: Portfolio Management

Student’s Name:

Course Code: FIN424

Student’s ID Number:

Semester: Second

CRN:

Academic Year:2021-22-2nd

For Instructor’s Use only

Instructor’s Name:

Students’ Grade:

Marks Obtained/Out of 10

Level of Marks: High/Middle/Low

General Instructions – PLEASE READ THEM CAREFULLY

· The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.

· Assignments submitted through email will not be accepted.

· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.

· Students must mention question number clearly in their answer.

· Late submission will NOT be accepted.

· Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.

· All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).

· Submissions without this cover page will NOT be accepted.


Learning Outcomes:

CLO 4- Analyse and choose appropriate Alternative Investments Portfolio Management.

CLO 5- Evaluate portfolio performance and risk.

(Critical Thinking) Assignment Question(s) :

Q.1.Suppose you are creating the questionnaire to assess investor consistency, write at least five questions by which you can assess the personality of investors’ behavior and decision-making style. (3 Marks)

Q.2.What are the different Personality Types of Investors. As a Portfolio Manager, what type of investment strategy would you formulate for “Cautious Type” of Investors? (3 Marks)

Q.3.Why Ethical Conduct is a key requirement for managing Investment Portfolios? Support your answer with an appropriate example. (2 Marks)

Q.4.Write a situation, when there is a need to rebalance the portfolio. (2 Marks)


Answers

1. Answer-

2. Answer-

3. Answer-

4. Answer-

Financial markets homework help

Margaret C. Campbell
2021-22

Integrated Marketing Communications Plan
Components

The written plan is due by 11:00 am Tuesday, March 15
(Be sure to refer for more detail to Final Project Description W 21-22)

The main body of the plan (not including the cover page, executive summary, figures and
appendices) should be no more than 16 double-spaced pages with 12-ppoint font.

Cover Page
Executive Summary
Situation Analysis
Marketing Goals
Segmenting and Targeting for Communications
Positioning Statement
Communication Objectives
Plan (be sure to provide your rationale for each part of your plan)
• Recommended communication tools (e.g., Advertising (could include TV, print, digital,
etc.); Direct Marketing (email, mail, etc.); Social Media; Search, etc.)
• Communications briefs for at least two of your recommended tools
• Creative example for at least one of your recommended tools
• Media Plan and Schedule (give at least one exemplar for each tool)
• Recommended Budget
• Brief discussion of assessment (how will you determine where you are at the end of the
planning period?)
Conclusion
References

Remember to provide the evidence and rationale for your recommendations. Your goal is for the
decision maker(s) to be persuaded that your plan makes sense and is a good path forward.

Financial markets homework help

M. Campbell

1

MGT247
Advertising & Promotion Strategy

Winter 2021-22

Presentation Guidelines: Integrated Marketing Communications Plan
Presentations of Final Plan
Tuesday, March 15, 2022

This final session will be devoted to your presentations, beginning at 11:30am.
Attendance is mandatory.

Please have a professional presentation ready to go. Be sure you know how you will
access your slides.

Each group has 8 minutes to present. We will then have 3 minutes for Q&A. We will take
a couple of short breaks during the session.

Everyone on the team needs to be involved in the presentation (that is, everyone needs to
make some portion of the presentation). Be sure to wear appropriate dress and to present
professionally. Handle this presentation as if you were presenting to high-level decision
makers (e.g., the CMO).

The goal for the presentation is to persuade everyone in the room that:

• your recommendation is based on a sound analysis and understanding of
customers and the organization’s situation

• your IMC plan is highly likely to help the organization achieve important goals
& objectives (as specified in the plan).

The 8 minutes is very short. Be sure to:
• provide enough of your situation analysis so that the recommended plan makes sense;
• state recommended target and communications objectives (with support);
• present how your plan will meet those objectives;
• include some discussion of implementation of your recommendations.

Creativity should be expressed by developing an analysis-based solution to the client’s
marketing communications problems that is likely to be persuasive to the specified
target(s).

The presentation will be graded in terms of:
• Strong Analysis
• Clear identification of appropriate target(s) and position
• Communication objectives that are based on the analysis of the problem(s) that the
organization needs to address with one or more specific targets
• Recommendations that flow from and fit with the objectives
• Supporting evidence, including support for recommended budget
• Thoroughness of plan

M. Campbell

2

• Effectiveness of presentation

As the audience, listen (and respond) as if you are high-level decision makers.

(Reminder: the final project is a total of 40% of your grade: 33% for the written plan and
7% for the presentation).

Groups will present in the group number order (Group 1, then Group 2 and so on…).

Financial markets homework help

MGT 247
The Consumer Decision Process
&
Identifying the Problem
&
Appropriate Solutions

Dr. Campbell

Week 4: January 25, 2022

1

Meg Campbell () – Need promotion spending amount for 2013 or 2014.

Introductions

Viresha Perera

Shih-Wei Pan

Simone Palmer

Mei Shan Lui

XiaoXiao Lu

Emily Lor

Xingyi Liu

Guanyu Liu

2

Last Class

What is the difference between strategic and tactical targeting?

What are the three steps in positioning?

Why do you need to be consistent across marketing communications?

Does every different target need a different positioning?

3

Learning Agenda

Positioning Types

Consumer Decision-Making Process

Basis for Communication Objectives

Identifying targets’ stage in the decision-making process

Developing solutions that address targets

Introduce communication objectives

4

Common Positioning Types

Product Attributes or Benefits

Price/Quality/Service

Value-for-money

Cultural symbols/Brand characters

Identity

Underdog

Authenticity

Cool

Users/Lifestyle

Use

Product class

Competition

Underdog

Social Mission

Incentives

Distribution

5

7

8

Positioning Types

Product Attributes or Benefits

Price/Quality/Service

Value-for-money

Cultural symbols/Brand characters

Identity

Underdog

Authenticity

Cool

Users/Lifestyle

Use

Product class

Competition

Underdog

Social Mission

Incentives

Distribution

9

Any questions about these common approaches to positioning?

Communication Targets

Need to specify who you want to speak to with any given campaign or communication

11

Understanding Your Target

What do they think about us and what do they need to think about us?

Let’s briefly review consumer decision-making and the hierarchy of effects from the video.

12

The Consumer Decision-Making Process

Motivation

Information Search/

Knowledge of Alternatives

Problem Awareness/

Need Recognition

Perception

Information Search/

Knowledge of Alternatives

Attitude formation

Integration

Learning/attitude

Evaluation/

Preference

Decision/

Purchase

Post

10

13

What do they think about us and what do they need to think about us?

What they think about us and what they need to think about us is, in part, dependent upon where they are in terms of these stages of decision making.

Develop marketing communications with this in mind.

14

What is “the Purchase Funnel”?

15

The Consumer Purchase Funnel

Knowledge

Problem Awareness

Liking /

Preference

Purchase

Decision

Post

10

16

What is the Purchase Funnel?

The purchase funnel is a simple way to visualize the complex process of garnering leads and converting them into paying customers.

The purchase funnel is a consumer-focused marketing model that illustrates the theoretical customer journey toward the purchase of a good or service.

17

The most appropriate tool will be influenced by what your target thinks about you and their decision- making stage

The objective for a campaign is based on your target’s decision-making stage, what they think about you and what they need to think about you.

18

How do we increase total customers?

19

Identifying Solutions

What tool is best to achieve our sales objectives? (4 P’s)

Can communications help with the particular problem the firm wants to solve?

More advertising?

Different messaging?

Change or add media?

Incentives? (e.g., sales promotion)

20

21

22

Need to Assess Situation and ID Solutions

Identify a which think we can influence

Determine which tools of the 4 P’s are most useful for the current situation

Which are most impactful for your target?

Consider what objective could communications achieve that would be useful?

23

BCG Growth Share Matrix

? – Analyze

Dog – Divest

Star – Invest

Cash Cow – Milk…or Analyze

24

Awareness

Knowledge

Liking

Purchase

Re-purchase

Case 1

30%

28%

25%

23%

20%

Case 2

80%

35%

25%

23%

20%

Case 3

80%

70%

45%

23%

20%

Case 5

80%

70%

45%

38%

30%

Case 4

80%

65%

45%

35%

8%

Decision-Making Stages Approach

Percentages of target

25

Awareness

Knowledge

Liking

Purchase

Re-purchase

Case 1

30%

28%

25%

23%

20%

Case 2

80%

35%

25%

23%

20%

Case 3

80%

70%

45%

23%

20%

Case 5

80%

70%

45%

38%

30%

Case 4

80%

65%

45%

35%

8%

ADVERTISING

MEDIA

ADVERTISING

MESSAGE

DISTRIBUTION/

PRICE

NICHE/TARGET

PRODUCT/

TARGET/

PROMOTION

Decision-Making Stages Approach

26

World of Warcraft Individual Assignment

WOW has asked you to:

identify the best target and explain your rationale

discuss what that target does and does not know about WOW

identify what the target needs to know (where is the target in terms of the consumer decision making process and what will move the target toward WOW?)

identify the best positioning for WOW to take

develop a positioning statement including POP and POD

Due: Sunday, January 30, 2022 by 8 pm

Food for Thought

How will you know where customers are in terms of the hierarchy of effects?

28

How Do We Know Where the Target is?

Ask (aka Market Research)

29

Tokyo Joe’s

.

30

How Do We Know?
Tokyo Joe’s

How often do you go out for lunch?

When was the last time you went out for lunch?

When you are going out to lunch, what places do you consider?

What are your top 3 places to go to lunch?

How familiar are you with Tokyo Joe’s

Have you been to TJ’s for lunch? (Never to frequently)

31

How Do We Know?
Tokyo Joe’s

Overall, what is your perception of TJ’s?

What do you think of TJ’s on each of the following compared to your top lunch places? (food, price, ambience…)

How do consumers make the decision? (individually, group)

Lunch different from dinner?

32

Next Class

Reflections (Saturday Jan 29 by 8)

World of Warcraft Individual Assignment (Sunday Jan 30 by 8)

Readings

Video on the Consumer Journey

33

See you next week.

Stay Healthy!

34

Financial markets homework help

BCO224 Financial Markets Assignment 1

Task

· individual

· answer the questions below

· submission format: pdf or ms word

Formalities:

· Wordcount: no more than 1000-1800 words

· Cover, Table of Contents, References and Appendix are excluded of the total wordcount.

· Font: Arial 12,5 pts.

· Text alignment: Justified.

· The in-text References and the Bibliography have to be in Harvard’s citation style.

Submission: Week 3. Via Moodle (Turnitin). Sunday, 13th of February. Time: 23:59.

Weight: This task is a 40% of your total grade for this subject.

It assesses the following learning outcomes:

· Outcome 1: To be able to price bonds

· Outcome 2: Have general understanding of what happens in the markets recently

· Outcome 3: To be able to identify and exploit arbitrage opportunities in bonds markets

Question 1: Bond pricing [50 points]

Question 2: Market outlook [20 points]

(no more than 800 words)

What are the main risks on financial markets in 2022? How would you manage these risks? What are the promising asset classes and/or sectors of economy you would invest in 2022?

(hint: you can use market outlook reports of leading investment firms/banks)

Question 3: Arbitrage strategy [30 points]

Rubrics

Rubrics

Descriptor

9-10

The student demonstrates an excellent understanding of the concepts.

8-8.9

The student demonstrates a good understanding of the concepts.

7-7.9

The student demonstrates a fair understanding of the concepts.

6-6.9

The student demonstrates some, but insufficient understanding of the concepts.

3-5.9

The student demonstrates insufficient understanding of the concepts. They may mention some relevant ideas or concepts, although it is clear that the relationship between them is not understood by the student.

1-2.9

The student demonstrates insufficient understanding of the concepts and does not mention any relevant ideas or concepts.

0

The student leaves the question blank or cheats.

Points are stated at the end of each question.

Financial markets homework help

UNIVERSITY OF TEXAS, DALLAS

OBHR 3330 SPRING 2022

Introduction to Human Resources

Opinion Paper – Guidelines and Questions

Paper Format:

1. Cover page – name, course & section, date and title

2. Table of contents

3. Executive summary

4. Question answers (approximately 1 page per answer)

5. References (Links are acceptable)

Notes: Please submit your paper using Turn-it-in on Blackboard by the due date

Write the executive summary last (hint)

Paper should be SINGLE-SPACED, DOUBLE-SPACED IS UNACCEPTABLE and the paper will not be graded

Use 10pt – 12pt type

Support all your thoughts and conclusions with references/links

Questions:

1. As discussed in class this semester, employment laws are relaxing, and more employers are open to hiring people with a felony criminal past. Do you believe hiring ex-felons is a good strategy? Yes or No and Why?

2. What criteria do you feel would be appropriate to for the candidate with a federal or state prison record to meet? What criteria would automatically disqualify a candidate from being hired for specific positions? Explain why you selected the criteria and provide an example of an ex-felon you would hire and an ex-felon you would not hire and why.

3. Do you feel hiring an applicant with a criminal past is a significant risk to an organization and the employees of the organization? Yes or No and Why? What are a couple of three potential risks and how would you mitigate these risks?

4. When you hire an ex-felon, do you feel the employee would be more dedicated and loyal to the company because you provided him/her an opportunity for employment? Yes or No and Why?

Paper is due March 11, only electronic copies submitted through Turn-it-in on Blackboard please.

Financial markets homework help

COURSE CODE : BCO 224 COURSE NAME: FINANCIAL MARKETS Task brief & rubrics

Task

This is Assignment 2

· Individual task

· You should prepare an executive memo and submit a document in Word format. Wordcount between 1500-2000.

· You should submit an Excel file used to perform your calculations.

Formalities:

· Cover, Table of Contents, References and Appendix are excluded of the total wordcount.

· Font: Arial 12,5 pts.

· Text alignment: Justified.

Submission: Week (7) – Via Moodle (Turnitin). Sunday 13th March.

Weight: This task is a 20% of your total grade for this subject.

It assesses the following learning outcomes:

· Demonstrate a deep understanding of the role of financial markets and financial institutions

· Understand the primary classes of mutual funds available to investors and the benefits of different investment funds

· Understanding NAV calculations

· Understanding the relation between risk and return

Assignment:

1. Assume you are an investment advisor. Your client is unsure what are the main benefits and reasons for investing in a Mutual Fund or in an index fund with an ETFs.

a. Explain the main differences and similarities between each other

b. Explain what are the main advantage and disadvantage of investing in mutual funds or ETFs versus investing in Equity Stocks.

c. Explain the difference between investing in fixed income and an ETF that follows the S&P 500.

d. Explain the main difference between active and passive management

e. Explain what is the difference between investing in value companies or in growth companies.

2. Go to https://

www.morningstar.com

a. What information does provide the Morningstar Style Box®?

b. Morningstar assigns a Rating to each Mutual Fund. What are the criteria they use to assign this rating?

c. Use the information provided above (style box and ratings) to choose 2 different mutual funds/ETFs (4 funds/ETFs per each portfolio) to prepare 2 portfolios for 2 different types of investors:

i. Aggressive

ii. Conservative

iii. The total amount to invest in each portfolio is 1.000.000€.

d. In half a page for each portfolio, explain:

i. The rationale behind choosing the given funds/ETFs per each portfolio

ii. The criteria chosen to build each portfolio

e. Follow up the prices for all 2 portfolios for a week. Calculate the return for each portfolio at the end of the week. Explain your results and show them graphically. Compare in the same graph the development of the two portfolios you have chosen and the development in the same period of the S&P500 index. Explain you conclusions.

Rubrics

Exceptional

90-100

Good

80-89

Fair

70-79

Fail

<70

Understanding (40%)

Student selects all key concepts, demonstrating an excellent understanding of the reading material and task.

Student selects some key concepts, demonstrating a good understanding of the reading material and task.

Student selects a few key concepts, demonstrating a fair understanding of the reading material and task although some concepts might be missing.

Student fails to select key concepts, demonstrating insufficient understanding of the reading material or task.

Calculation (25%)

Student demonstrates excellent ability to calculate and understand all key formulas & exercises.

Student demonstrates good ability to calculate and understand all key formulas & exercises.

Student demonstrates fair ability to calculate and understand all key formulas & exercises.

Student demonstrates insufficient ability to calculate and understand all key formulas & exercises.

Analysis (25%)

Student demonstrates an excellent ability to interpret statistics and the calculation results, as well as a highly critic approach

Student demonstrates an good ability to interpret statistics and the calculation results, as well as a good critic approach

Student demonstrates an fair ability to interpret statistics and the calculation results, as well as a fair critic approach

Student demonstrates an insufficient ability to interpret statistics and the calculation results, as well as a insufficient critic approach

Communication (10%)

Student communicates their ideas extremely clearly and concisely, in writing and orally.

Student communicates their ideas clearly and concisely, in writing and in public.

Student communicates their ideas with some clarity and concision, in writing and to some extent, in public.

Student fails to communicate their ideas clearly and concisely, in writing and/ or in public.

Financial markets homework help

9.4.2 Example 2—An Income Statement Analysis

We now consider a slightly more complex model for scenario analysis. In this example, we focus on a standard income statement and a related set of scenarios that are provided by a decision maker. The decision maker would like to determine the bottom-line (net profit) that results from various combinations of input values. In Fig. 
9.17
 we can see that we have 7 input variables, and each variable has two possible values. This is not a particularly complex problem, but with a greater number of possible input values, this problem could easily become quite cumbersome. The 7 input values represent standard inputs that are often estimated in proforma Income Statement analysis:

· Sales Revenue = (Volume)*(Price)

· COGS = (percentage
4
)*(Sales Revenue)

· Variable Operating Expense = (percentage)*(Sales Revenue)

· Fixed Operating Expenses

· Depreciation Expense

· Interest Expense


Fig. 9.17

Fig. 9.17

Income statement analysis example

Obviously, we cannot use a two variable Data Table for this type of analysis; there are too many variables to consider simultaneously. This example is an excellent use of the Scenarios tools. Figure 
9.18
 shows the results of the 4 scenarios. They range from a loss of $300,000 to a gain of $2,417,800.


Open image in new window
Fig. 9.18

Fig. 9.18

Income statement scenarios

Financial markets homework help

Ethical Theories to Apply: Golden Rule and Virtue Ethics

1. Task

You work in the Ethics Department for ABC Company (ABC). Your department is dedicated

to advising its employees about their ethical obligations in the corporate setting. You are an

internal consultant who provides advice and most importantly, recommendations for action to

employees of the firm. All communications you receive in this capacity are confidential.

Luke, an employee of ABC, comes to you with the following scenario and asks for your advice.

He wants to fully consider the situation. Your task is to advise and recommend a course of

action based on the specified ethical lenses and facts as given. Below are the facts that

Luke provides to you.

*****

Luke has been asked to work on a project that involves developing land recently purchased by

ABC to build an adult entertainment retail store. According to the plan, the land is located on

the corner of the neighborhood where Owen, Luke’s brother, lives.

Luke knows that as soon as the plans for the store are made public, property values for the

surrounding neighborhood will decrease significantly. ABC plans to publicly announce the

project one month from today.

Luke is concerned about his obligations of confidentiality to his company. However, Luke is

also very close to Owen, who recently told Luke that he received an offer to sell his house at an

“okay” price given the current real estate market. Owen is considering selling but hasn’t made

any final decision yet. He wonders if he might get a better offer a few years from now when

the real estate market improves.

What is the ethical issue, why is this an issue, and what should Luke do about it?

For assignment *, prepare a memo, setting out your analysis and recommendations, that considers ONLY the following two theories: Golden Rule and Virtue Ethics.

1. Format

a. Use 12-point font, single spacing

b. Where using headers in this Assignments , you will get better results if you include these:

1. Facts: a brief restatement of the important facts, in your own words;

2. Issue: what must the protagonist decide? What action should he take?

3. Lens: describe the ethical theories being applied including the pros and cons of each;

4. Analysis: apply each ethical theory to the facts and discuss the logical conclusion of that process for each;

5. Recommendation / Conclusion: choose the ethical theory that is superior to the other and explain your rationale, briefly. You must choose one theory on which to base your recommendation – no waffling between theories will be allowed. Answer the question posed in your framing of the issue.

Financial markets homework help

Kingdom of Saudi Arabia

Ministry of Education

Saudi Electronic University

A picture containing text, outdoor, sign  Description automatically generated

المملكة العربية السعودية

وزارة التعليم

الجامعة السعودية الإلكترونية

College of Administrative and Financial Sciences

Assignment 2

Portfolio Management (FIN424)

Due Date: 26/03/2022 @ 23:59

Course Name: Portfolio Management

Student’s Name:

Course Code: FIN424

Student’s ID Number:

Semester: Second

CRN:

Academic Year:2021-22-2nd

For Instructor’s Use only

Instructor’s Name:

Students’ Grade:

Marks Obtained/Out of 10

Level of Marks: High/Middle/Low

General Instructions – PLEASE READ THEM CAREFULLY

· The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.

· Assignments submitted through email will not be accepted.

· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.

· Students must mention question number clearly in their answer.

· Late submission will NOT be accepted.

· Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.

· All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).

· Submissions without this cover page will NOT be accepted.


Learning Outcomes:

CLO 1-Recognize the characteristics and risks of stocks, bonds, money market, and property investments.

CLO 4- Analyse and choose appropriate Alternative Investments Portfolio Management.

CLO 5- Evaluate portfolio performance and risk.

(Problem Solving & Critical Thinking Assignment Question(s) :

Q.1 (a).What is the relationship between Yield Curve and Fiscal and Monetary Policies ? (1.5 Marks)

Q.1 (b). Describe the relationship between Inflation and Business Cycle. (1.5 Marks)

Q.2.Explain about the different sources of excess return in international bond portfolios (3 Marks)

Q.3.Given the following information, calculate the short-term interest rate target. (2Marks)

Neutral rate 4%

Inflation target 3%

Expected inflation 7%

GDP long-term trend 2%

Expected GDP growth 0%

Q.4.Given the following information, calculate the Sharpe Ratio. (2 Marks)

Return of Portfolio 30

Risk-free Return 10

Standard –deviation of portfolio’s excess return 15


Answers

Financial markets homework help

Problem 1

SOLVE THE FOLLOWING NON-LINEAR PROBLEM USING SOLVER
YOU HAVE TO INSERT THE FORMULAS IN GREEN CELLS
MARKETING COSTS ARE HIGHLIGHTED IN RED IN CELLS C20 AND D20
INSERT THE FORMULA FOR MARKETING COST IN CELL C19 AND D19
Problem With Nonlinear Marketing Costs
Doors (D) Windows (W) Range Name Cells
Unit Profit (Gross) $4 $6 DoorsProduced C12
Hours Hours GrossProfitFromSales H12
Hours Used Per Unit Produced Used Available HoursAvailable G7:G9
Plant 1 1 3 <= 8 HoursUsed E7:E9
Plant 2 5 2 <= 14 HoursUsedPerUnitProduced C7:D9
MarketingCost C14:D14
TotalMarketingCost H14
Doors Windows TotalProfit H16
Units Produced 0.000 0.000 Gross Profit from Sales UnitProfit C4:D4
UnitsProduced C12:D12
Marketing Cost Total Marketing Cost WindowsProduced D12
D^3 2*W^2
Total Profit

Problem 2

Daily price of Disney stock and NYSE are given below
PLOT THE DATA POINTS ON A GRAPH, INSERT A TREND LINE AND FIND OUT THE EQUATION
y x
Dependent Independent
Quarter Year DIS (NYSE)
Q4 2016 13.10% 3.13%
Q3 2016 -4.38% 2.21%
Q2 2016 -1.50% 2.77%
Q1 2016 -5.49% 0.63%
Q4 2015 3.47% 3.51%
Q3 2015 -9.94% -9.31%
Q2 2015 8.82% -0.86%
Q1 2015 11.37% 0.55%
Q4 2014 7.14% 1.27%
Q3 2014 3.83% -2.52%
Q2 2014 7.08% 4.29%
Q1 2014 4.81% 1.23%
Q4 2013 19.93% 8.10%
Q3 2013 2.12% 5.58%
Q2 2013 11.18% 0.06%
Q1 2013 14.07% 7.86%
Q4 2012 -3.29% 2.33%
Q3 2012 7.78% 5.76%
Q2 2012 10.80% -4.94%
Q1 2012 16.74% 9.76%
Q4 2011 26.43% 10.09%
Q3 2011 -22.76% -18.36%
Q2 2011 -9.39% -1.02%
Q1 2011 14.87% 5.54%

Problem 3

FIND OUT THE 5 DAY MOVING AVERAGE AND COMPLETE THE SPREADSHEET
Plug in the formulas in green cells
N=5
Moving Average Forecasting
Independent Forecast Error
Quarter Year (NYSE)
Q4 2016 3.13% MAD =
Q3 2016 2.21%
Q2 2016 2.77%
Q1 2016 0.63%
Q4 2015 3.51%
Q3 2015 -9.31%
Q2 2015 -0.86%
Q1 2015 0.55%
Q4 2014 1.27%
Q3 2014 -2.52%
Q2 2014 4.29%
Q1 2014 1.23%
Q4 2013 8.10%
Q3 2013 5.58%
Q2 2013 0.06%
Q1 2013 7.86%
Q4 2012 2.33%
Q3 2012 5.76%
Q2 2012 -4.94%
Q1 2012 9.76%
Q4 2011 10.09%
Q3 2011 -18.36%
Q2 2011 -1.02%
Q1 2011 5.54%

Problem 4

Complete the Exponential Forecast using the formula
Forecast = 𝛂*(last value) + (1 – 𝛂)*Last Forecast
Plug in the formulas in green cells
Alpha (𝛂) = 0.25
Quarter Year (NYSE) Forecast Forecast Error MAD =
Q4 2016 3.13% 3.00%
Q3 2016 2.21%
Q2 2016 2.77%
Q1 2016 0.63%
Q4 2015 3.51%
Q3 2015 -9.31%
Q2 2015 -0.86%
Q1 2015 0.55%
Q4 2014 1.27%
Q3 2014 -2.52%
Q2 2014 4.29%
Q1 2014 1.23%
Q4 2013 8.10%
Q3 2013 5.58%
Q2 2013 0.06%
Q1 2013 7.86%
Q4 2012 2.33%
Q3 2012 5.76%
Q2 2012 -4.94%
Q1 2012 9.76%
Q4 2011 10.09%
Q3 2011 -18.36%
Q2 2011 -1.02%
Q1 2011 5.54%

Problem 5

Daily price of SP and NASDAQ for 2014 are given below
RUN A REGRESSION ANALYSIS, PLOT THE DATA ON A SCATTER GRAPH
FIND INTERCEPT AND SLOPE TO FORECAST
Plug in the formulas in green cells
y Independent y = 𝛂 + β*x
Dependent Variable variable (x) Forecast Forecast error
Quarter Year DIS (NYSE) Intercept = 0.0319078217 𝛂
Q4 2016 13.10% 3.13% 7.36% -5.74% Slope = 1.3335857597 β
Q3 2016 -4.38% 2.21% 6.14% 10.52%
Q2 2016 -1.50% 2.77% 6.88% 8.38%
Q1 2016 -5.49% 0.63% 4.03% 9.52%
Q4 2015 3.47% 3.51% 7.87% 4.40%
Q3 2015 -9.94% -9.31% -9.22% 0.72% MAD =
Q2 2015 8.82% -0.86% 2.04% -6.77%
Q1 2015 11.37% 0.55% 3.93% -7.44%
Q4 2014 7.14% 1.27% 4.89% -2.25%
Q3 2014 3.83% -2.52% -0.17% -4.00%
Q2 2014 7.08% 4.29% 8.91% 1.83%
Q1 2014 4.81% 1.23% 4.83% 0.02%
Q4 2013 19.93% 8.10% 13.99% -5.94%
Q3 2013 2.12% 5.58% 10.63% 8.51%
Q2 2013 11.18% 0.06% 3.27% -7.91%
Q1 2013 14.07% 7.86% 13.67% -0.40%
Q4 2012 -3.29% 2.33% 6.30% 9.60%
Q3 2012 7.78% 5.76% 10.87% 3.08%
Q2 2012 10.80% -4.94% -3.39% -14.19%
Q1 2012 16.74% 9.76% 16.21% -0.53%
Q4 2011 26.43% 10.09% 16.65% -9.78%
Q3 2011 -22.76% -18.36% -21.29% 1.46%
Q2 2011 -9.39% -1.02% 1.83% 11.22%
Q1 2011 14.87% 5.54% 10.57% -4.30%

Financial markets homework help

Exercise #5

For this week’s exercise, we need to try a few logit regression (or logistic regression) models (see this link for more information on these regression models: 
https://stats.idre.ucla.edu/r/dae/logit-regression/
). You should also review the email attachment I sent to you called “Interpreting Odds Ratios”.

Data: We shall use the same data we have used for all our previous exercises – HMGT400Hosp.CSV 


Using Excel

To analyze the data using the logit regression model (Logistic Regression analysis) in Excel, we cannot use regular Analysis ToolPak. But we can use either the XLMiner Analysis ToolPak add-in or the RegressItLogistic add-in. Of course, XLMiner Analysis ToolPak is an add-in for Google Sheets or Excel Online. 

The “RegressItLogistic” add-in was developed by Professor Robert Nau, at the Duke University Business School in North Carolina. Instructions for downloading and using the add-in are at  
https://regressit.com/regressitlogistic.html
 . Note that we need the add-in that runs regressions including logistic regressions called “RegressItLogistic”. You can use it to run both linear regression and logistic regression models. There is a version for running just linear regression models called “RegressItPC”.

“RegressItLogistic” – Excel Add-In Software

To install “RegressItLogistic”, create a new “c:\RegressIt” file folder in which to store your RegressIt files. Then use one of these two links to download the program file:

1. If your computer will not allow the direct download of an executable file, then use this link to get the program file 
RegressItLogistic.xlam
   (version 2020.03.04)  Right-click this link and choose the “save link as” option to save it to your new RegressIt file folder.

2. Otherwise use this link to get the program file in zip form: 


RegressItLogistic.zip

Right-click the link and choose the “save link as” option to save it to your RegressIt file folder. Then right-click on the saved file and choose “unzip to here”. The program file will be extracted from the zip file.

Then follow these instructions to run the add-in for the first time:

1. To “Unblock” the program file go to the File Explorer, right-click on the file and choose Properties.

· At the bottom of the dialog box check the Unblock box.

· Then click Apply further below the unblock box.

· Then click OK

· This only needs to be done once. You should close the file explorer when running analyses because it may cause errors when producing non-editable graphs.

2. To run the program, start Excel, open the RegressItLogistic.xlam file, and click either “Trust all from the publisher” or “Enable macros” at the security prompt. You should see a RegressIt tab appear at the top of the Excel window. When you click on it you should see the RegressIt ribbon interface. You may click the “Instructions” button at the far right for details on how to load data and begin your analyses.

After you have tested the add-in as specified in the Instructions, please run the three models (using the HMGT400Hospital.CSV dataset we have used for all exercises) and complete the template tables below.


Data Setup for all Analyses (“RegressItLogistic”, “XLMiner Analysis ToolPak” or R
:

Create an extract of the HMGT400Hospital.CSV dataset by selecting the columns having the dependent variable “system_member”, and the independent variables Total Hospital Costs, Total Hospital Revenue, Medicare Discharges, Medicaid Discharges, and Total Hospital Discharges. Create the Medicare Discharge ratio and the Medicaid Discharge ratio. Then as you would for all regressions, clean the data by deleting all rows (hospitals) that have missing values or #DIV/0! values. Be sure to state and describe in your report how you cleaned the data, indicating the number of hospitals you deleted and which variables had missing values or #DIV/0! Values. Re-save the data file as a file with a ___.CSV extension.

Using RegressItLogistic

Logit Model 1: Run a logit model to explain the “being a member of a network” variable (system_member). The independent variable is Total Hospital Costs. And choose 0.95 Confidence level. In options select the Logit and Exponentiated Coefficient Table (not just Logit) and request for P-values.The exponentiated coefficients (exp(coeff) ETC.) are the odds ratios. You may also request for the logistic curve or other plots or graphs you want, and request for the high-resolution graph format.

Table 1 – Logit Model 1

 

Coefficient.

ST. ERR

P-Value

 

Exp (coeff.)

Exp (z SE)

Exp (Std. Coeff.)

Intercept

 

Total Hospital Costs

 

 

 

 

 

 

 

R-Squared

 

 

 

 

 

 

 

What is the impact of hospital costs on “being a member of a network”?

 

Logit Model 2: Run a logit model to explain the “being a member of a network” variable (system_member). The independent variables area Total Hospital Costs and Total Hospital Revenues. And choose 0.95 Confidence level. In options select the Logit and Exponentiated Coefficient Table (not just Logit) and request for P-values. You may also request for the logistic curve and high-resolution graph format.

Table 2 – Logit Model 2

 

Coefficient.

ST. ERR

P-Value

 

Exp (coeff.)

Exp (z SE)

Exp (Std. Coeff.)

Intercept

 

 

 

 

 

 

 

Total Hospital Costs

 

 

 

 

 

 

 

Total Hospital Revenue

 

 

 

 

 

 

 

R-Squared

 

 

 

 

 

 

 

What is the impact of hospital costs and hospital revenue on “being a member of a network”?

 

Logit Model 3: For model 3, add the Medicare-discharge-ratio and the Medicaid-discharge-ratio variables to your Model 2, as independent variables.

Table 3 – Logit Model 3

 

Coefficient.

ST. ERR

P-Value

 

Exp (coeff.)

Exp (z SE)

Exp (Std. Coeff.)

Intercept

 

 

 

 

 

 

 

Total Hospital Costs

 

 

 

 

 

 

 

Total Hospital Revenue

 

 

 

 

 

 

 

Medicare discharge ratio

 

 

 

 

 

 

 

Medicaid discharge ratio

 

 

 

 

 

 

 

R-Squared

 

 

 

 

 

 

 

What is the impact of hospital costs and hospital revenue, and each of the two ratios you added in Model 3 on “being a member of a network”?

Based on your findings from the three models, would you recommend that hospitals keep their system memberships? Why or why not? Discuss 3 policies you would advocate for based on your findings.

Please attach any plotted or graphed information you may want to use to make your case.

NOTE: After completing Exercise 5 students may start on the Final Exam (see content in week 8). The final Exam format follows Exercises 1 to 5 with regard to the data analysis. So go back and review the exercises and my feedback to your submissions.

======================================


Using R (Through RStudio)

If you chose to use RStudio you should do the following:

Get the R script from here:  
E5-codes


Logit Model 1

: Run a logit model using being a member of a hospital system (system_member) as the dependent variable. The independent variables are Hospital beds, For-Profit Dummy, Public Ownership Dummy, Other Owner Type Dummy.

Note: AIC is the Akaike Information Criterion. The AIC is calculated from: the number of independent variables used to build the model. the “maximum likelihood estimate” of the model (how well the model reproduces the data). AIC is used to compare different possible models and determine which one is the best fit for the data.

Table 1 – Logit Model 1

Coefficient -Estimate

Std. Err

z value

Pr(>|z|)

Exp(coeff.)

Hospital beds

 

 

 

 

For-Profit Dummy

 

 

 

 

Public Ownership Dummy

 

 

 

 

Other Owner Type Dummy

 

 

 

 

AIC =

 

 

 

 

What is the impact of hospital beds and the three ownership dummy variables on “being a member of a network”?


Logit Model 2

: Now, add hospital revenue as an additional independent variable

Table 2 – Logit Model 2

Coefficient.

Std. Err

z value

Pr(>|z|)

Exp(coeff.)

Hospital beds

 

 

 

 

For-Profit Dummy

 

 

 

 

Public Ownership Dummy

 

 

 

 

Other Owner Type Dummy

 

 

 

 

Hospital Revenue

 

 

 

 

AIC =

 

 

 

 


Logit Model 3

: For model 3, add the Medicare-discharge-ratio and the Medicaid-discharge-ratio variables to your Model 2, as additional independent variables.

Coefficient.

Std. Err

z value

Pr(>|z|)

Exp(coeff.)

Hospital beds

 

 

 

 

For-Profit Dummy

 

 

 

 

Public Ownership Dummy

 

 

 

 

Other Owner Type Dummy

 

 

 

 

Hospital Revenue

 

 

 

 

Medicare discharge ratio

 

 

 

 

Medicaid discharge ratio

 

 

 

 

AIC =

 

 

 

 

What is the impact of hospital beds, hospital revenue, the three ownership dummy variables, each of the two ratios you added in Model 3 on ” being a member of a hospital system “?

Based on your findings from the three models, would you recommend that hospitals keep their system memberships? Why or why not? Discuss 3 policies you would advocate for based on your findings.

Please attach any plotted or graphed information you may want to use to make your case.

Financial markets homework help

NB- Post your response to one other student’s post which has not received a response by Mar 12 EOD. Include:

· discussion of your agreement or disagreement with the selected initial discussion author’s key discussion points

· information and evidence with citation and reference supporting your agreement/disagreement

· identification of any key points that have not been addressed by the initial discussion author

· APA format references and citations

“Myra Student post”

Marketing is a rapidly growing and multifaceted industry that requires individuals to be aware of several specific terms. In MKTG Principles of Marketing, the authors provide an in-depth look at the fundamental marketing concepts and theories. While the book provides users with a comprehensive overview of many ideas, three very relevant aspects of marketing stand out as vital to the industry in terms of strategic planning. These are the marketing plan, the mission statement, and a situational or SWOT analysis. Strategic planning is a crucial stage in marketing, as poor preparation can affect the organization negatively. By having a solid strategic plan, one can protect and develop the organization’s resources, and define its objectives easily (Lamb et al., 2020). These three steps and their respective relevance in a typical marketing environment are discussed below:

The Marketing Plan

A marketing plan’s primary goal is to provide the marketing manager and their clients with direction regarding the project. It enables details to be concretized and helps them record their communication (Lamb et al., 2020). Marketing planning is a relatively complex process because it is used to segment markets and identify market positions (Westwood, 2022). This marketing process is vital in real-life contexts because it helps potential clients or customers to understand the business’s positioning. It shows them how the marketing strategy will be implemented through these critical components: The business mission, a situation analysis, outlining the organization’s objectives, and establishing the target market (Lamb et al., 2020). Within this framework, they could also develop budgets, timetables, and establish what other types of marketing initiatives are necessary (Lamb et al., 2020). Writing the marketing plan should also be completed carefully, as it is a key contributor to meeting the organization’s objectives or goals (Lamb et al., 2020). Because the marketing plan highlights the organization’s marketing objectives, it is also linked strongly to the mission statement.

The Mission Statement

The mission statement is used to explain the reason for the organization’s existence; it helps customers to identify its role and purpose. As David et al. explain, mission statements should be informative, concise and beneficial to the customers in order to form an emotional bond with the firm. For example, Amazon’s mission statement is, “We aim to be Earth’s most customer centric company” (Amazon, 2018). They explain that they will focus on the customer experience using technology and the internet. Additionally, the mission statement also provides guidance and, in a way, develops a blueprint off of which the marketing manager and client can work from, concerning decisions and strategies (Lamb et al., 2020). The next appropriate step would be to conduct a situational analysis to gain greater insight into what internal and external elements affect a business.

A Situational or SWOT Analysis

A situational analysis is mainly performed to assess the internal strengths and weaknesses of an organization. The key characteristics of a situational analysis are represented by the acronym SWOT, which stands for strengths, weaknesses, opportunities, and threats. By examining these aspects, the marketing manager can understand where the business can improve, and where they are excelling. Additionally, they can gain information about external forces, events, and relationships, which may affect the organization in the future – This is called environmental scanning (Lamb et al., 2020). A situational analysis is also helpful to identify the target audience.

Conclusion

The marketing plan, mission statement, and situational analysis are crucial components to succeed as a marketing practitioner. All three are exceedingly helpful in establishing and guiding the organization’s objectives, and as such, should be understood as far as possible.

References:

Amazon. (2018). Our mission. https://www.aboutamazon.eu/news/how-amazon-works/our-mission (Links to an external site.).

David, M. E., David, F. R. & David, F. R. (2014). Mission statement theory and practice: a content analysis and new direction. International Journal of Business, Marketing, and Decision Sciences, 7(1) 95-109.

Lamb, C. W., Hair, J. F. & McDaniel, C. (2020). MKTG principles of marketing (13th ed.). Boston: Cengage Learning.

Westwood, J. (2022). How to write a marketing plan: define your strategy, plan effectively and reach your marketing goals. London: Kogan Page.

Financial markets homework help

stata_name stcd year total_hosp_cost total_hosp_revenue hospital_beds bedsize_cat teaching_hospital system_member level_trauma white rural_area herf_cat herf_index non_white log_hosp_cost log_hosp_revenue total_hospital_beds total_hospital_medicare_days total_hospital_medicaid_days interns_and_residents total_hospital_employees_on_payr total_hospital_non_paid_workers total_hospital_medicare_discharg total_hospital_medicaid_discharg total_hospital_discharges own
Arizona 86 2012 1.89E+07 1.73E+07 19 1 0 0 0 58.7 0 1 0 41.3 16.75435 16.66785 168.92 11551.5 8206.92 855.048 2695.488 2867 8879 0
Arizona 86 2012 8.01E+07 7.94E+07 88 3 0 0 0 58.5 0 1 2 41.5 18.19875 18.19 138.02 14629.86 2423.52 1209.024 4117.736 697 6998 1
Arizona 86 2012 1.47E+08 1.33E+08 134 4 0 0 0 82 0 1 2 18 18.80468 18.70265 74.16 3784.2 4354.38 490.464 1305.488 1253 4320 0
Arizona 86 2012 7.74E+07 8.81E+07 72 3 0 0 0 82 0 1 2 18 18.16424 18.29439 25.75 306 225.42 132.84 74.504 66 257 0
Arizona 86 2012 1.53E+08 1.41E+08 187 4 0 0 0 58.7 0 1 2 41.3 18.84588 18.76257 19.57 1545.3 98.94 139.608 259.096 18 429 2
Arizona 86 2012 1.60E+07 1.70E+07 21 1 0 0 0 20.4 1 0 2 79.6 16.58738 16.65044 20.6 1042.44 235.62 185.148 160.128 77 366 2
Arizona 86 2012 7.02E+08 7.55E+08 460 7 0 0 1 55.3 0 1 2 44.7 20.36947 20.4425 493.37 28329.48 46840.44 356.34 4570.98 5216.392 9139 26341 2
Arizona 86 2012 2.07E+07 2.29E+07 14 1 0 0 3 58.5 0 1 2 41.5 16.84361 16.94799 237.93 5724.24 11063.94 95.39 1073.82 1195.4 1481 6836 0
Arizona 86 2012 1.67E+08 1.72E+08 163 4 0 0 3 55.3 0 1 2 44.7 18.93446 18.96016 14.42 961.86 255 154.62 151.232 98 356 1
Arizona 86 2012 2.32E+07 2.06E+07 56 3 0 1 0 16 0 1 2 84 16.95965 16.84255 61.8 3816.84 1180.14 307.2 1159.816 312 2738 0
Arizona 86 2012 9.60E+07 1.20E+08 3550 4 0 1 0 58.7 0 1 0 41.3 18.37936 18.59896 37.08 1138.32 2433.72 315.804 433.68 660 2426 0
Arizona 86 2012 1.31E+08 1.49E+08 110 4 0 1 0 82 0 1 2 18 18.68941 18.82107 101.97 8494.56 3713.82 8 882.924 2048.304 934 4332 1
Arizona 86 2012 1.81E+08 1.99E+08 460 5 0 1 0 58.7 0 1 0 41.3 19.01667 19.10902 360.5 12812.22 9098.4 1110 3155.856 2109 10925 1
Arizona 86 2012 5.37E+07 3.92E+07 3550 2 0 1 0 58.7 0 1 2 41.3 17.79862 17.48499 210.12 10312.2 9235.08 1303.464 2696.6 2715 12235 0
Arizona 86 2012 2.28E+08 2.45E+08 3550 6 0 1 0 58.7 0 1 0 41.3 19.24457 19.31838 354.32 27260.52 9731.82 1711.284 7236.896 2559 18413 1
Arizona 86 2012 3.15E+08 3.79E+08 267 5 0 1 1 55.2 0 2 2 44.8 19.56899 19.7525 252.35 16108.86 15733.5 1894.188 3968.728 3487 12895 2
Arizona 86 2012 2.64E+08 2.81E+08 460 5 0 1 1 58.7 0 1 0 41.3 19.39099 19.45325 273.98 17960.16 16340.4 1704.816 4232.272 3447 16298 2
Arizona 86 2012 4.70E+08 5.17E+08 3550 8 0 1 1 58.7 0 1 0 41.3 19.96899 20.06368 273.98 17960.16 16340.4 1704.816 4232.272 3447 16298 1
Arizona 86 2012 3.94E+08 4.35E+08 3550 7 0 1 1 58.7 0 1 0 41.3 19.79191 19.89182 273.98 17960.16 16340.4 1704.816 4232.272 3447 16298 1
Arizona 86 2012 3.48E+07 3.67E+07 25 2 0 1 3 65.9 0 1 2 34.1 17.36395 17.41857 0
Arizona 86 2012 5.24E+07 5.62E+07 49 2 1 0 0 52.3 0 2 2 47.7 17.77366 17.8452 507.79 29487.18 40869.36 44.66 3096.06 7225.776 8762 29644 1
Arizona 86 2012 4.28E+08 4.54E+08 553 8 1 0 0 55.3 0 1 2 44.7 19.8756 19.9329 50.47 2233.8 2249.1 500.772 563.784 654 2095 0
Arizona 86 2012 1.22E+08 1.23E+08 89 3 1 0 3 43.9 1 1 2 56.1 18.61977 18.62993 91.67 4144.26 5121.42 788.256 1223.2 1544 3712 0
Arizona 86 2012 2.23E+08 2.16E+08 3550 4 1 1 0 58.7 0 1 0 41.3 19.22436 19.19189 244.11 29369.88 2147.1 89.71 5149.536 6878.832 264 12315 2
Arizona 86 2012 2.27E+08 2.68E+08 3550 6 1 1 0 58.7 0 1 0 41.3 19.24058 19.40528 397.58 38496.84 4977.6 1.88 2182.056 9723.328 1340 22069 1
Arizona 86 2012 9.23E+08 9.84E+08 244 5 1 1 0 58.7 0 1 0 41.3 20.64341 20.70665 327.54 32268.72 11889.12 1869.108 8493.456 2780 20464 2
Arizona 86 2012 2.72E+08 2.95E+08 3550 7 1 1 0 58.7 0 1 0 41.3 19.42014 19.50291 169.95 8433.36 12750 1059.324 2466.416 4690 13654 0
Arizona 86 2012 6.06E+08 6.80E+08 3550 8 1 1 1 58.7 0 1 0 41.3 20.22179 20.33736 585.04 37101.48 53716.26 129.3 4415.16 7460.408 10624 36275 0
Arizona 86 2012 1.98E+08 2.41E+08 3550 5 1 1 2 58.7 0 1 0 41.3 19.1031 19.30064 220.42 12159.42 24371.88 1554.48 3299.304 5620 18796 2
Arkansas 71 2012 8125045 7994666 49 2 0 0 0 84 0 1 2 16 15.91046 15.89429 111.24 8150.82 1690.14 717.768 2257.36 803 4634 2
Arkansas 71 2012 7.38E+07 7.72E+07 125 4 0 0 0 95.2 0 2 2 4.800003 18.11635 18.16157 120.51 11514.78 1907.4 704.808 2766.656 561 4925 1
Arkansas 71 2012 7.12E+07 7.71E+07 124 4 0 0 0 89 0 1 2 11 18.08072 18.16073 13.39 1.02 1 1 2
Arkansas 71 2012 2.28E+07 2.36E+07 33 2 0 0 0 68.2 1 0 2 31.8 16.9437 16.97513 25.75 1785 57.12 103.896 394.76 26 502 1
Arkansas 71 2012 1.05E+07 1.03E+07 85 3 0 0 0 71 1 0 2 29 16.16907 16.143 25.75 1164.84 44.88 178.392 306.912 22 395 1
Arkansas 71 2012 1.62E+07 1.88E+07 25 2 0 0 0 40.3 1 0 2 59.7 16.60155 16.75008 25.75 1051.62 194.82 117.936 259.096 62 414 2
Arkansas 71 2012 9525674 8233617 25 2 0 0 0 92.2 1 0 2 7.800003 16.0695 15.92374 25.75 2970.24 762.96 180.468 760.608 429 1243 2
Arkansas 71 2012 2.08E+07 2.22E+07 72 3 0 0 0 84.1 1 0 2 15.9 16.85083 16.91463 25.75 3277.26 839.46 177.708 684.992 144 1136 2
Arkansas 71 2012 1.90E+07 1.95E+07 35 2 0 0 0 58 1 0 2 42 16.75869 16.7843 25.75 1048.56 140.76 108.792 253.536 47 380 1
Arkansas 71 2012 7280002 6124331 26 2 0 0 0 95 1 0 2 5 15.80064 15.62778 25.75 2063.46 1147.5 203.184 529.312 427 1213 2
Arkansas 71 2012 8981868 8779914 25 2 0 0 0 46.8 1 0 2 53.2 16.01072 15.98798 25.75 2063.46 1147.5 203.184 529.312 427 1213 2
Arkansas 71 2012 1.80E+08 1.80E+08 333 6 0 0 2 41.4 0 2 2 58.6 19.00796 19.00953 226.6 21352.68 3790.32 16.25 1445.7 5354.28 1043 11444 1
Arkansas 71 2012 1.61E+08 1.64E+08 266 5 0 0 3 96 0 1 2 4 18.89993 18.91253 284.28 39680.04 10245.9 16.76 1947.264 8560.176 2906 17086 0
Arkansas 71 2012 5.86E+07 5.84E+07 125 4 0 0 3 95.4 0 1 2 4.599998 17.88697 17.88236 117.42 10665.12 2298.06 700.38 2274.04 863 4928 2
Arkansas 71 2012 1.34E+08 1.34E+08 146 4 0 0 3 82.4 0 1 2 17.6 18.71023 18.71331 172.01 20803.92 2783.58 1168.872 5972.552 939 9666 2
Arkansas 71 2012 2.37E+08 2.55E+08 375 6 0 0 3 79.6 0 2 2 20.4 19.28277 19.35728 172.01 20803.92 2783.58 1168.872 5972.552 939 9666 2
Arkansas 71 2012 3.19E+07 3.25E+07 80 3 0 0 3 83.5 1 0 2 16.5 17.2775 17.29597 59.74 3112.02 1345.38 344.82 821.768 550 2632 2
Arkansas 71 2012 2.39E+07 3.39E+07 143 4 0 0 3 94.1 1 0 2 5.900002 16.99044 17.34006 30.9 1881.9 263.16 171.948 603.816 73 815 1
Arkansas 71 2012 1.65E+07 1.69E+07 46 2 0 0 3 95.9 1 0 2 4.099998 16.62067 16.64345 25.75 2254.2 130.56 210.636 449.248 35 600 0
Arkansas 71 2012 1.85E+07 1.91E+07 41 2 0 0 4 76.7 0 1 2 23.3 16.73334 16.76492 2
Arkansas 71 2012 1.34E+07 1.19E+07 25 2 0 0 4 46.8 1 0 2 53.2 16.41199 16.29221 25.75 1712.58 548.76 140.916 385.864 227 834 1
Arkansas 71 2012 9563577 8258766 25 2 0 1 0 93.8 0 1 2 6.199997 16.07347 15.92679 220.42 29111.82 4643.04 1369.116 6231.648 1279 10879 0
Arkansas 71 2012 1.78E+08 1.75E+08 282 5 0 1 0 84 0 1 2 16 18.9969 18.9805 164.8 10821.18 2282.76 973.464 3209.232 913 8682 1
Arkansas 71 2012 1.58E+08 1.78E+08 141 4 0 1 0 76.6 0 1 2 23.4 18.88097 18.99704 25.75 1110.78 80.58 70.944 224.624 18 307 1
Arkansas 71 2012 1.02E+07 7574942 24 1 0 1 0 85.3 1 0 2 14.7 16.13752 15.84036 24.72 1094.46 60.18 53.4 264.656 17 377 1
Arkansas 71 2012 1.51E+08 1.56E+08 171 4 0 1 2 89.8 0 1 2 10.2 18.83054 18.86587 442.9 47683.98 10017.42 5 1928.376 9634.368 2162 20543 2
Arkansas 71 2012 3.57E+08 3.23E+08 409 7 0 1 2 55.3 0 1 1 44.7 19.69448 19.59453 142.14 21330.24 3384.36 1202.796 4393.512 1182 8000 1
Arkansas 71 2012 4.74E+08 4.73E+08 703 8 0 1 2 55.3 0 1 1 44.7 19.97661 19.97376 691.13 70966.5 12676.56 5.5 3352.536 13084.904 3029 32377 2
Arkansas 71 2012 2.22E+08 1.99E+08 374 6 0 1 3 72.8 0 1 2 27.2 19.21836 19.11002 302.82 26373.12 4982.7 1558.8 5163.016 1518 12147 0
Arkansas 71 2012 1.25E+07 1.36E+07 20 1 0 1 3 67.4 0 0 2 32.6 16.34282 16.42407 25.75 2405.16 158.1 142.2 444.8 49 668 2
Arkansas 71 2012 1.63E+07 1.99E+07 25 2 0 1 3 84 1 0 2 16 16.60686 16.80791 25.75 1399.44 181.56 169.704 384.752 62 727 2
Arkansas 71 2012 7635363 6872063 16 1 0 1 4 92.2 1 0 2 7.800003 15.8483 15.74298 16.48 861.9 17.34 51.816 140.112 7 174 2
Arkansas 71 2012 6.05E+07 5.55E+07 142 4 1 0 0 45.2 0 1 2 54.8 17.9181 17.83119 126.69 8201.82 2879.46 9 572.868 1688.016 1039 3657 2
California 93 2012 8.37E+07 8.64E+07 106 4 0 0 0 38 0 2 2 62 18.24239 18.27405 215.27 19378.98 8950.5 1236.408 3642.912 1993 10069 2
California 93 2012 2.31E+07 2.02E+07 45 2 0 0 0 75.2 0 2 2 24.8 16.95381 16.82317 354.32 41602.74 2518.38 3142.8 9791.16 522 17775 0
California 93 2012 2.42E+08 2.25E+08 354 6 0 0 0 46.7 0 1 2 53.3 19.30451 19.23256 161.71 14347.32 3139.56 1226.292 2643.224 466 7148 0
California 93 2012 9.66E+07 1.11E+08 54 3 0 0 0 41.9 0 1 2 58.1 18.38582 18.52615 342.99 17475.66 33372.36 1618.824 3384.928 8768 16195 1
California 93 2012 2.58E+08 2.94E+08 279 5 0 0 0 33.3 0 1 1 66.7 19.36954 19.49981 109.18 7997.82 10123.5 798.78 1407.792 3150 4919 1
California 93 2012 2.63E+08 3.03E+08 345 6 0 0 0 48.7 0 1 2 51.3 19.38597 19.52821 55.62 4399.26 989.4 345.492 840.672 174 1917 0
California 93 2012 3.85E+08 4.66E+08 235 5 0 0 0 32.9 0 2 2 67.1 19.76832 19.96018 249.26 15628.44 7954.98 1 1809.6 3620.672 1685 12906 0
California 93 2012 4.86E+08 5.21E+08 377 6 0 0 0 27.8 0 1 0 72.2 20.00236 20.07216 321.36 26351.7 7998.84 2909.496 5955.872 2082 23435 2
California 93 2012 5.25E+08 4.99E+08 540 8 0 0 0 39.7 0 1 2 60.3 20.07814 20.02845 287.37 16533.18 4152.42 1958.664 3880.88 864 15273 1
California 93 2012 3.09E+08 3.20E+08 843 6 0 0 2 27.8 0 1 0 72.2 19.54885 19.58282 322.39 23063.22 24211.74 8.1 1622.808 4431.32 4284 13660 1
California 93 2012 2.88E+08 3.17E+08 212 5 0 0 3 58.8 0 2 2 41.2 19.47863 19.57406 309 27895.98 16155.78 1423.416 6154.92 3730 13004 0
California 93 2012 3.22E+08 3.34E+08 157 4 0 0 3 40.8 0 2 2 59.2 19.58895 19.62522 185.4 13104.96 2485.74 1695.288 3135.84 551 8198 0
California 93 2012 5.57E+07 5.67E+07 25 2 0 0 4 79.5 1 1 2 20.5 17.83623 17.85366 25.75 2215.44 1472.88 434.592 718.352 384 1537 0
California 93 2012 3.74E+07 4.62E+07 25 2 0 1 0 77.2 0 2 2 22.8 17.43634 17.64939 250.29 24774.78 15975.24 1715.748 4708.208 2910 14821 1
California 93 2012 5.94E+07 7.33E+07 78 3 0 1 0 47.9 0 2 2 52.1 17.89945 18.10939 107.12 9324.84 2806.02 710.172 2688.816 686 5062 0
California 93 2012 3.08E+08 3.25E+08 255 5 0 1 0 38.6 0 1 2 61.4 19.5469 19.60048 71.07 6690.18 1771.74 453.816 2030.512 475 4037 0
California 93 2012 2.43E+08 2.08E+08 271 5 0 1 0 27.8 0 1 0 72.2 19.30917 19.1532 60.77 2642.82 418.2 375.6 785.072 71 2661 1
California 93 2012 1.87E+08 2.07E+08 152 4 0 1 0 81.9 0 2 2 18.1 19.04803 19.14685 54.59 5389.68 57.12 406.8 7.84 1584.6 16 2727 0
California 93 2012 1.03E+08 1.09E+08 1242 3 0 1 0 76.1 0 1 2 23.9 18.45084 18.50496 269.86 17737.8 1768.68 1986.924 4334.576 353 11887 2
California 93 2012 2.24E+08 2.48E+08 1783 4 0 1 0 42.3 0 1 2 57.7 19.22678 19.32805 105.06 6401.52 1148.52 535.548 1491.192 296 5027 0
California 93 2012 4.00E+07 4.76E+07 25 2 0 1 0 68.6 0 2 2 31.4 17.5039 17.67836 58.71 2053.26 30.6 257.484 651.632 13 1288 0
California

Financial markets homework help

U N I T 2 – T H E J A M A I C A S T O C K
E X C H A N G E

Financial Market Analysis
ACCT3602

1

The Stock Market

 The stock market is one of the most vital areas of a market economy

 it provides companies with access to capital for business expansion

 provide investors with a slice of ownership in a company and the potential of
gains based on the company’s future performance.

 Making sure we are financially secure is a vital part of how our
economy grows.

 Investing in securities is often a significant component of an
investor’s portfolio.

The Stock Market
3

 The Jamaica Stock Market is a vital link between companies needing
capital and Jamaicans with money to invest.

 When a company needs to raise money to expand, it sells stocks or
bonds to the public through the financial markets. Individuals become
investors in this company by purchasing those securities.

 As investors and part-owners in companies of their choice, they are able
to participate in the companies’ growth and development. In turn,
companies which raise capital from the sale of shares are able to
expand.

The Stock Market
4

 The number of Jamaicans who own stocks through individual investments
or through unit trusts is growing and many more participate in the stock
market through investments in retirement funds, insurance companies
and banks.

 Owning stock allows investors, large and small, to share in the world’s
economic growth and, vitality. Central to this activity is the Jamaica Stock
Exchange (JSE), where billions of dollars worth of stocks change hands
annually.

 The JSE plays a unique role in providing companies who list their
securities on the Exchange with a liquid market for the trading of those
securities; benefiting all investors.

Evolution of the Jamaican Stock Exchange (JSE)
5

 Prior to Jamaica Stock Exchange (JSE)
 Jamaicans would buy and sell shares of corporations and companies through banks, lawyers

and other individuals.
 The Kingston Stock Market

 was established in 1961 under the guidance of the Bank of Jamaica, to co-ordinate the activities of
traders, or persons who bought and sold shares on behalf of individuals.

 The Jamaica Stock Exchange
 Incorporated as private limited company in August 1968 but began operations in February

1969 at the Bank of Jamaica Building.
 The first official trade on the Jamaica Stock Exchange took place on Monday, February 3,

1969.
 It relocated to its current location at 40 Harbour street, Kingston since 1998.

 The four founding members were:
 Mr. Willard Samms – Annett & Company Limited
 Mr. Raglan I. Golding – Capital Market Services (Ja) Ltd.
 Mr. Edward E. Gayle – Edward Gayle & Company Ltd.
 Mr. Anthony Lloyd – Pitfield Mckay Ross & Co Ltd.

Evolution of the Jamaican Stock Exchange (JSE)
6

 One of the roles of the JSE was to promote the development of a vibrant

capital market and to ensure orderly trading in listed securities
 That is stocks, shares or bonds that are traded on a stock exchange.

 JSE Governance Structure
 The Exchange is governed by a Council (Board of Directors) which has the following

composition:

 The Governor of the Central Bank (Bank of Jamaica) or his nominee.

 A representative of the Ministry of Finance.

 Three persons other than seat-holders.

 Upwards of ten seat-holders representing members.

 The Chairman and Deputy Chairman are elected by the Council annually.

 The General Manager /Secretary is in charge of the day-to-day operations of the Jamaica
Stock Exchange.

Evolution of the Jamaican Stock Exchange (JSE)
7

 Role of the Council (Board of Directors)
 is a self-regulatory body that monitors the activities of the stock market.

 The Council’s functions include:
 Setting guidelines and rules of operations at the Exchange to ensure that the stock

market and its broker-members operate at the highest possible standards.

 To determine the shares to be listed on the exchange.

 In this regard, the Council has the power to suspend companies which violate the rules
of the Exchange from trading, or to de–list companies which fail to meet the
requirements of the Jamaica Stock Exchange.

 The decisions of the Council are arrived at on the basis of a majority
vote.

Evolution of the Jamaican Stock Exchange (JSE)
8

 Principal Objectives of JSE are:-
 To promote the orderly development of the stock market and the Stock Exchange in

Jamaica;

 To ensure that the stock market and its Broker-members operate at the highest
standards practicable;

 To develop, apply and enforce rules designed to ensure public confidence in the
stock market and its Broker-members;

 To provide facilities for the transaction of stock market business;

 To conduct research, disseminate relevant information and maintain local and
international relationships calculated to enhance the development of the Jamaica
Stock Market.

 To educate investors/companies on all aspects of the equities market in an effort to
facilitate the entry of new investors to the stock market.

Functions of the Jamaica Stock Exchange (JSE)

 To provide an additional channel for encouraging and mobilizing
domestic savings.

 To foster the growth of the domestic financial services sector.

 To provide savers with greater opportunities to protect themselves
against inflation.

 To increase the overall efficiency of investment.

 To facilitate privatization.

 To improve the gearing of the domestic corporate sector and help reduce
corporate dependence on borrowing.

9

Evolution of the Jamaican Stock Exchange (JSE)
10

 Securities traded on the JSE include:
 Ordinary/Common shares

 Preference Shares

 Corporate Bonds

 Government Bonds are not listed on the Jamaica Stock Exchange.
 These are traded by the Bank of Jamaica in an over the counter market.

 For the first time in Jamaica’s history a US dollar share was listed on
the Jamaica Stock Exchange on Thursday, July 18, 1996.
 This was the Citizens Bank US Dollar Convertible Cumulative Redeemable Preference

Share.

Listings on the JSE
11

 The listing of securities on the Exchange
 is in the absolute discretion of the Council/Board of the Exchange which may

delegate such powers to a duly appointed committee.

 The markets in the JSE are:
 Main Market

 Junior Market

 Combined Market

 USD Market

 Bond Market

 Junior USD Market

 Private Market

JSE Main Market Listing
12

 The JSE Main Market lists ordinary and preference shares, which
represent various business sectors:
 banking and finance; manufacturing; retail; communications; insurance; leisure;

conglomerate; services and real estate.

 The criteria for listing on the JSE Main Market are as follows:

 Must be incorporated or registered and operating in a business located in a
CARICOM country.

 The total issued share and loan capital of the company must be J$200,000 or
more; the share capital portion being not less than $100,000.

 All of the issue of the security which is the subject of the request for listing is to
be issued and fully paid.

JSE Main Market Listing
13

 Ordinary Shares/Stock -The issued nominal value must be
$250,000 or more; and a minimum of 100 shares/stockholders holding
not less than 20% of the issued ordinary capital

 Irredeemable Preference Shares and/or Preference Shares
convertible into Ordinary Shares/Stock: Issued nominal value
must be $500,000 or more

 Redeemable Preference Shares: Issued nominal value of
$100,000 or more.

JSE Main Market Listing
14

 Companies incorporated or Registered in Jamaica may be listed by
one of the following methods:
 Prospectus Issue:

 an offer to the public by or on behalf of a company at a fixed price;

 Offer for Sale:
 an offer to the public, by or on behalf of a third party at a fixed price.

 Offer by Tender:
 an offer to the public by or on behalf of a company or a third party by tender;

 Placing:
 an offer through broker-members of the Exchange to sell the securities of a company to

the public;

 Introduction:
 where none of the company’s securities is being offered to the public or trading.

JSE Junior Market
15

 The JSE launched the Junior Market on April 1, 2009
 Which was designed to encourage and promote investment in Jamaica’s

entrepreneurship, employment and economic development.

 It was a collaborative efforts of the Government, the Board of the JSE, the
Financial Services Commission and Steering Committee composed of key
stakeholders.

 The Junior Market allow investors to put capital into legitimate small
and medium sized companies (SMEs)
 Their shares are traded on a special JSE platform.

 Listed on the JSE Junior Market are ordinary and preference shares
 representing various business sectors: banking and finance; manufacturing; retail;

insurance; leisure; services and real estate.

JSE Junior Market
16

Each company that wants to join the Junior Market

 Must be incorporated as a public limited company
 in Jamaica or elsewhere in the CARICOM region.

 Have no association with other listed companies, or prior
history of listing
 must demonstrate to the JSE that (a) it has not been previously listed on the Main

Board of the JSE, or on the main trading plat form of any other stock exchange,
and (b) it is not an “associate “ (including a subsidiary) of any such listed company.

 Initial Public Offering
 Each company that wants to join the Junior Market must raise a minimum of

J$50m in new funds in an initial public offering that is made, subject to a
prospectus. The initial public offering must relate to equity shares, or convertible
or other shares that have the characteristics of equity (rather than debt) securities.

JSE Junior Market
17

 Minimum and Maximum Capital, and Number of Shareholders

 Each company that is admitted to the Junior Market must have stated capital of not less than
J$50m and not more than J$500m following its initial public offer, and during its life on the
Junior Market.

 In addition, each such company must have at least 25 shareholders holding at least 20% of
the issued equity share capital in its first 5 years on the Junior Market, and at least 50
shareholders holding that proportion in its second 5 years on the Junior Market.

 Appointment of a Mentor

 Each company that wants to join the Junior Market must, unless the JSE agrees otherwise,
appoint a mentor who will act as a compliance adviser to the Board of Directors.

 The mentor must be a suitably experienced person, and he must enter into the standard form
Mentor Agreement and be approved by the JSE for the purposes of the Company’s admission
to the Junior Market.

JSE Junior Market
18

 Appointment of a Board of Directors
 Each company that wants to join the Junior Market must appoint a Board of Directors

that is suitably experienced as a collective body, to govern and represent the company.

 The JSE tracks the performance of the market by maintaining indices.
 Uses the weighted average market capitalization method to calculate its indices.

 The JSE Junior Market Index measures the performance of all the ordinary shares
listed on the Junior Market.

 Settlement is done at T+2 and daily information is disseminated on the activities of
this market through the usual channels inclusive of the JSE’s website

Combined Market
19

 The performance of all the companies with ordinary shares listed on
the JSE Main and Junior Markets is tracked by the JSE Combined
Index.
 Tracking the performance of both markets by one index will allow investors,

analysts and researchers to see the performance of the overall market at a glance

without having to look at the markets separately.

 The JSE Combined Index provides a daily indicator of the overall
performance of the market and its movement.

 The JSE Combined Index commenced on April 1, 2011.

USD Market
20

 On July 5, 2011, the Jamaica Stock Exchange, as the first in the English
Caribbean, launched the US Dollar Equities Market.
 It allows companies to list their shares in US dollars and also allow for trading and

settlement to take place in US dollar.

 This market further expands the product offerings of the JSE
 It provides additional investment options for persons interested in diversifying their

portfolios via the Exchange.

 This market is governed by the rules of the Main Market and trading
operates according to the trading rules for all the securities listed on the
JSE.

 Similar to the other markets, settlement is done at T+2 and daily
information is disseminated on the activities of this market through the
usual channels inclusive of the JSE’s website.

Bonds Market
21

 The Jamaica Stock Exchange launched the Bond Market in June 2013 as a
means of:

 Increasing the number of options available for corporations to efficiently raise capital

 Widening choices that individuals and corporate investors have to invest

 Assisting the efficiency of monetary management

 The JSE bond market is a facility where investors buy and sell debt securities,
either directly from the borrower at issue or afterwards from other investors.

 This market will facilitate the trading of bonds with the aim to increase efficiency,
transparency and liquidity of the bond market.

 Any company that is incorporated in a CARICOM country may list its fixed income securities
on the JSE Bond Market.

 Similar to the equities market, companies interested in listing their bonds will be required to
follow the requirements as outlined in the JSE Rule Book (Main Market).

Private Market
22

 The JSE Private Market (PM) platform facilitates the listing and
managing of private debt and equity issues. This facility is a first of its
kind in Jamaica.

 The benefit to companies and investors include:
 Private companies can now raise equity and/or debt capital on a regulated platform

 Seamless transfers of securities among private investors

 Efficiency in tracing changed shareholder positions

 A full suite of registrar, trustee and transfer services

 Market information on private equity and debt transactions

 Sellers will have easy access to their transaction activity and executed electronic
agreements

 Real-time reporting on sell orders which can be generated directly from the platform

JSE Platform
23

 Since January 2000, the Jamaica Stock Exchange has had an automated
trading platform, called Horizon.
 The back office operations which involves clearance and settlement was automated with the

establishment of the Jamaica Central Securities Depository in June 1998.

 Some of the benefits of automated trading are: Greater efficiencies through increased accuracy
and increased processing speed and lower operating costs. Reduced risk associated with
clearing and settling securities transactions, also shorter settlement cycles.

 Delivery versus payment – the exchange of securities and the cash to
settle.
 There has been increased global attractiveness of the Jamaican stock market through the

adoption of generally accepted international standards. The JSE has demutualized since 2009
and is listed on the Exchange.

 Its regulatory functions are now overseen by the Regulatory Market & Oversight Division
(RMOD) that is governed by Regulatory Market & Oversight Committee which comprises of
the Independent Members of the Board and they are autonomous.

Reporting Requirements of JSE listed Companies
24

 Listed companies are required to conform to provisions of the
Companies Act of Jamaica and to provide the Exchange with annual
audited financial statements with certain minimum information and
within specific time periods.
 In addition listed companies are required to submit quarterly unaudited financial

reports.

 In case of Take-Overs & Mergers, the Exchange imposes specific
obligations on the listed offeror or Offeree Company.
 The Jamaica Stock Exchange defines “Take-Over” to mean “an offer made to

shareholders, to purchase such number of equity shares of a company that,
together with the offeror’s presently-owned shares will in the aggregate exceed
50% of the outstanding shares with voting rights of the company.”

Reporting Requirements of JSE listed Companies
25

 The general principles applicable to Take-Overs and
Mergers include:
 Strict compliance with the detailed regulations.

 That stockholder is given sufficient evidence, facts and opinions upon which an
adequate judgement and decision can be reached

 No action taken by the Board of the offeree company, without the approval of
stockholders in general meeting, to frustrate a bona fide offer.

 The prevention of the creation of a false market in the shares of the offeror or
offeree company.

 Rights of control to be exercised in good faith.
 The oppression of minority shareholders is wholly unacceptable.

 All stockholders of the same class of offeree company are to be treated similarly
by offeror company.

Compensation Fund
26

 A Compensation Fund has been established in 1970 to indemnify
losses to Broker-members’ clients in certain situations.
 Member-Dealers who have lost money as a result of a defalcation or fraudulent

misuse of securities or document of title to securities or of other property, by a
member-dealer or any of his directors or employees.

 investments in Stocks and Shares of companies listed on the Jamaica Stock
Exchange and

 as of July 1, 1999, any claim in denominated money market instruments.

 The Fund does not protect against losses resulting from the rise and
fall in the market value of investments.

 Contributions are made by Broker-members based on the
consideration for equity and preferred transactions.

Compensation Fund
27

 In order to provide further protection to the investing public, the
Exchange can intervene and run and/or wind-up the affairs of a Broker-
member in certain situations where clients’ interest are in jeopardy.
 The Council of the Jamaica Stock Exchange monitors the financial situation of all

brokers.

 When the Exchange sees fit, it can act on an a priori basis to prevent a broker from
continuing to trade before a situation becomes critical.

More about JSE
28

 For more information on the Jamaica Stock Exchange, visit:

https://www.jamstockex.com/about/frequently-asked-questions-jse/

UP NEXT…………..
29

The Role
of a

Stock
Market

Financial markets homework help

Module: Marketing Research (MKTG 320)

PROJECT

Assessment Grade Weight: 30% of overall Grade

For this assignment, it needs to write a research project related to the field of Marketing Research. As part of the group research project, you are expected to take the following steps:

1. Identify a business problem that you will conduct market research to solve. The clarity of your problem statement will be key to successfully executing the following steps

2. Determine the type of data needed to solve the problem you identified in step 1 and the research tool to collect the necessary data

3. Design your selected tool(s)

4. Analyze the data you collected

5. Present your findings and actionable insights in the classroom

The report should be a maximum of 2.500 words, (12 pt. font; double-spaced), plus charts, tables and appendices.

The answers should include mainly the basic points:

Each group should submit a written research project. The paper should state the research background and research objectives, explain why the current research needs to be carried out, and describe the data collection and analysis methods they expect to use, data description, data analysis, and managerial implications

Assessment rubric for the ‘Essay’

Grade range

A

B

C

F

Organization

Easy to read, topic introduced, organization clearly evident with proper introduction, body, conclusion

Paper has intro, body, and conclusion but may take a re-reading to understand

Disorganized, leaves reader wondering what is being said; abrupt ending

Fails to meet this criteria by obvious disregard for the expectations stated in the criteria; Disorganized and the reader can not follow the paper at any length

Relevance to material (is the topic addressed?)

The student’s reflection about the topic is explained in clear language; immediately interesting and supported with detail

The entire paper’s content relates to the prompt or topic; the student explains his/her reflections about the topic but may take a rereading to understand

Student does not clearly identify his/her reflections about the topic; may veer from topic

The topic of the paper is not addressed at all; Fails to stick to the topic therefore fails to meet this criteria

Writing style/Clarity

Consistently precise and unambiguous wording, clear and lucid sentence structure. All quotations are well chosen, effectively framed in the text and explicated where necessary.

Mostly precise and unambiguous wording, mostly clear sentence structure. Mostly effective choice of quotation. Mostly effective framing and explication of quotation where necessary.

Imprecise or ambiguous wording. Confusing sentence structure. Poorly chosen quotations, or ineffective framing and explication of quotations.

Consistently imprecise or ambiguous wording, confusing sentence structure. Quotations contradict or confuse student’s text. Serious errors; difficult to comprehend

Presentation/Referencing

Paper is clean, correctly formatted (12-point font, Times New Roman, normal margins), written in full sentences. Quotations are all properly attributed and cited in a consistent style. Virtually no spelling or grammatical errors. APA referencing system is followed flawlessly

Paper is clean, correctly formatted (12-point font, Times New Roman, normal margins), written in full sentences. A few minor spelling or grammatical errors. Proper references are cited and listed in the bibliography and in text citations are included but there are a few errors and omissions.

Paper is clean, correctly formatted (12-point font, Times New Roman, normal margins), written in full sentences. A number of spelling or grammatical errors. References are cited and listed in the bibliography but not in the correct format; in text citations are missing

Paper is sloppy or incorrectly formatted, not written in full sentences. No references included even though the student uses secondary sources.

1

Financial markets homework help

Saylor URL: http://www.saylor.org/books Saylor.org
1

This text was adapted by The Saylor Foundation under a Creative
Commons Attribution-NonCommercial-ShareAlike 3.0 License without

attribution as requested by the work’s original creator or licensee.

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2

Welcome to The Power of Selling
You’re about to go on a journey that will take you to places you can’t even imagine. Think about being able

to get what you want in life. While that may sound far-fetched, it’s not. You really can get what you want,

if you learn to use the right skills. That’s what this book is about.

Selling is a skill that everyone uses every day, no matter what they do for a living. Want to be successful?

Learn how to sell. “You can have everything in life you want, if you will just help enough other people get

what they want,” according to famous sales expert, Zig Ziglar. That means listening and connecting with

people, understanding their needs, what they want, what motivates them, and then capturing their

imagination with a reason to buy…from you (Ziglar).

This book is different from other textbooks about selling. While it uses the traditional selling tenets as its

foundation, it adapts the concepts to the rapidly changing world of business in today’s environment,

including the use of Twitter, LinkedIn, Facebook, blogs, wikis, and other interactive ways of connecting

with customers. In addition, this book is filled with many unique approaches to traditional topics. For

example, Chapter 10 “The Presentation: The Power of Solving Problems” covers how to create an elevator

pitch for your product as well as for your personal brand; Chapter 13 “Follow-Up: The Power of Providing

Service That Sells” explains Net Promoter Score, a nontraditional method of measuring of customer

satisfaction; and Chapter 15 “Entrepreneurial Selling: The Power of Running Your Own

Business” addresses how selling can help you realize your dream of being an entrepreneur and starting

your own company.

There are four special features that make this book interesting and interactive:

1. Links to videos, Web sites, articles, and podcasts. The focus on real-world experience and

sales professionals is carried throughout the book. Not only will you learn from real examples, but

you’ll also learn from current events.

2. Video ride-alongs. The best way to learn selling is to experience it. And just about every

salesperson starts out in sales by going on ride-alongs with an experienced salesperson or manager to

learn how selling is done firsthand. In order to provide the experience of a ride-along, each chapter

starts with a short video featuring a sales professional who shares personal insights and practical tips

about how he uses the key concepts that are covered in the chapter. These videos, which were made

exclusively for The Power of Selling, highlight sales professionals who are personally interested in

Saylor URL: http://www.saylor.org/books Saylor.org
3

helping you learn and succeed. In fact, you can contact any of these selling professionals directly using

the contact information at the end of this preface.

3. The Power of Selling LinkedIn group. Selling professionals from across the country are part of a

LinkedIn group created expressly for the students and faculty who use The Power of Selling. Simply

go to LinkedIn and joinThe Power of Selling group to network, connect, join or start discussions, or

ask questions to the group. The people in the group are looking forward to connecting with you. The

sales professionals featured in the video ride-alongs are also members of this group. Feel free to

contact them individually or add them to your network. Visit http://www.linkedin.comand create a

profile (see Chapter 3 “The Power of Building Relationships: Putting Adaptive Selling to Work” for

details), then search “Groups” for “The Power of Selling” and join the group. If you already have a

LinkedIn profile, click on the following link and join The Power of Selling group.

http://www.linkedin.com/groups?gid=2566050&trk=anetsrch_name&goback=%2Egdr_1263094780871

_1

4. Selling U. The last section of each chapter is called Selling U, which applies the key concepts to selling

yourself as a brand to get the job you want. Selling U teaches you how to think about yourself as a

brand through every step of your career search. These sections throughout the book include details on

key career searching tips such as how to create a cover letter and résumé that sells, how to target

prospective employers, how to craft your personal elevator pitch, how to ace interviews, how to follow

up, how to negotiate and accept the right job offer, and what to do to prepare for your first day of your

new job. Links to videos, Web sites, articles, and other interactive resources make Selling U an

excellent complement to the selling material and the ultimate resource for how to build your personal

brand in this very competitive twenty-first century.

There are four features that are used throughout the book that reinforce key concepts:

1. Power Selling: Lessons in Selling from Successful Brands. These short vignettes highlight

examples of how successful companies implemented one of the concepts covered in the chapter.

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4

2. Power Player: Lessons in Selling from Successful Salespeople. Real-life advice from sales

professionals about how to be successful in sales is showcased in these short accounts.

3. Power Point: Lessons in Selling from the Customer’s Point of View. Feedback from

customers about sales techniques and what they look for in a salesperson and a brand are brought to

life in these short features.

4. You’ve Got the Power: Tips for Your Job Search. Helpful tips highlighted in the Selling

U section of each chapter are emphasized in these sidebars.

It’s a powerful lineup designed to give you insight and experience into the profession of selling and teach

you how to get what you want in life. Over the course of this semester, you’ll learn how to sell products,

services, concepts, and ideas. More important, you’ll learn how to sell the most important

product…yourself.

Selling is a journey. Your journey starts here.

Meet the Sales Professionals Featured

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5

Sales professionals (left to right): Lisa Peskin, Paul Blake, Tonya Murphy, Andrew Sykes, Rachel

Gordon, Priya Masih, David Fox.

Lisa Peskin, Sales Trainer at Business Development University

Lisa thought she wanted to be a doctor and declared her major as premed at Pennsylvania State

University. It was only after she completed all the prerequisite courses, except one, that she decided she

didn’t like science. She graduated with a Bachelor of Arts in Psychology. After she completed her Master

of Business Administration at Temple University, her plan was to pursue a career in marketing and

decided to take a job in sales to learn the business. Once she started selling, she never looked back. Lisa

now has over twenty years of sales and sales training experience in payroll and human resources services,

financial services, and other business-to-business (B2B) industries. She started her selling career in 1989

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6

at Automated Data Processing (ADP) and rose to become the vice president of sales where she was

responsible for four district managers and forty salespeople. Then she decided to put her successful selling

skills to work as a sales trainer at Bayview Financial and Interbay Funding. Today she is a principal, sales

trainer, and coach at Business Development University, a company that conducts sales training with a

focus in B2B selling.

Connect with Lisa Peskin on LinkedIn or by e-mail:

http://www.linkedin.com/in/lisapeskin

lisapeskin@verizon.net

Paul Blake, Vice President of Sales at Greater Media Philadelphia

Paul was born to sell. He started his career in sales in 1989 when he graduated from Bloomsburg

University of Pennsylvania. He quickly rose to a leadership role as the director of sales at Global

Television Sports, then sales manager at Clear Channel Radio, WJJZ-FM, and WMMR-FM. In 2006, Paul

was promoted to vice president of sales at Greater Media Philadelphia, responsible for the advertising

sales for five radio stations in Philadelphia and managing over forty salespeople.

Connect with Paul Blake on LinkedIn or by e-mail:

http://www.linkedin.com/in/pauljblake

pblake@greatermediaphiladelphia.com

Tonya Murphy, General Sales Manager at WBEN-FM

Tonya thought she wanted to be the next Barbara Walters, but soon learned that the newsroom was not

the place for her. Thanks to internships at two television stations and a sales-savvy mentor, she found that

her that her passion was sales. Tonya graduated from Cabrini College in 1989 with a Bachelor of Arts in

English/Communications. She has been in sales for seventeen years and has held sales roles in media

including at Greater Media Philadelphia. Last year, Tonya was promoted to general sales manager at

WBEN-FM, one of the radio stations owned by Greater Media Philadelphia.

Connect with Tonya Murphy on LinkedIn or by e-mail:

http://www.linkedin.com/pub/tonya-murphy/10/812/334

tmurphy@957benfm.com

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7

Andrew Sykes, Pharmaceutical Sales Specialist at AstraZeneca

Andrew has always had a focus on selling and the pharmaceutical industry. He graduated from Saint

Joseph’s University with a Bachelor of Science in Pharmaceutical Marketing in 2005. After graduation

Andrew landed his dream job at AstraZeneca, a major pharmaceutical company, and today he is a

pharmaceutical sales specialist on the cardiovascular account team. Andrew’s customers are doctors who

prescribe the drugs he represents.

Connect with Andrew Sykes on LinkedIn or by e-mail:

http://www.linkedin.com/pub/andrew-sykes/7/52b/97

andrew.h.sykes@gmail.com

Rachel Gordon, Account Manager at WMGK-FM

When she graduated from Cornell University in 2003 with a Bachelor of Science in Fashion, Business

Management, and Human Development, Rachel was certain she wanted to pursue a career in fashion

merchandising. But she found she didn’t enjoy it as much as she thought she would. She made a switch to

the media industry with a job as the national director of marketing at Westwood One. It was there that she

discovered her passion for sales. She is currently an account manager at WMGK, the classic rock station in

Philadelphia, and happy that she made the decision to change the direction of her career.

Connect with Rachel Gordon on LinkedIn or by e-mail:

http://www.linkedin.com/pub/rachel-gordon/0/992/35b

rgordon@WMGK.com

Priya Masih, Sales Representative at Lupin Pharmaceuticals

Since graduating from Saint Joseph’s University in 2004 with a Master of Science in International

Marketing and a Bachelor of Science in Business Administration, Priya has proven herself to be an

outstanding sales achiever at The Hartford Customer Services Group, Creative Channel Services, and

GlaxoSmithKline with recognition such as The Winner’s Circle and the Top Sales Rep Award. She is

currently a sales representative at Lupin Pharmaceuticals.

Connect with Priya Masih on LinkedIn or by e-mail:

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8

http://www.linkedin.com/in/priyamasih

priyasju719@gmail.com

David Fox, Founder and CEO at Brave Spirits

David gave up the corporate life to start Brave Spirits. His background in marketing, new product

development, and sales includes work on major brands from Procter & Gamble, General Mills, and Mars;

spirits brands from Diageo; and wine brands from Brown-Foreman. In 2005 he and his business partner

conceived the concept for Brave Spirits and launched the company in 2007. Brave Spirits distributes

premium vodka, gin, rum, and whiskey and donates $2.00 of every bottle sold to charities that support

the men and women of America’s military, police, fire, and emergency medical services (EMS). It is

David’s way of creating a toast to the brave.

Learn more about Brave Spirits or connect with David Fox by e-mail:

http://www.bravespirits.com

dfox@bravespirits.com

References
Zig Ziglar, “Zig Ziglar’s Little PDF of Big Quotes,”

Ziglar.com,http://www.ziglar.com/_cms/assets/Downloads/TheLittle BookofBigQuotes.pdf (accessed

January 9, 2010).

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Chapter 1
The Power to Get What You Want in Life

Welcome to The Power of Selling
Do you want to be successful in sales and in life? You’ll have a chance to meet the pros, the people who

have achieved success in their careers in sales. At the beginning of each chapter you’ll have the

opportunity to go on a video ride-along, a chance to hear from sales professionals and learn firsthand

what it’s like to be in sales. You’ll go on video ride-alongs with some of the best in the business and hear

about their personal selling experiences and tips of the trade.

1.1 Get What You Want Every Day
L E A R N I N G O B J E C T I V E

1. Understand the role of selling in everyday life.

What does success look like to you?

For most people, to achieve personal success entails more than just making a lot of money. Many

would claim that to be successful in a career means to have fulfilled an ongoing goal—one that has

been carefully planned according to their interests and passions. Is it your vision to run your own

business? Or would you rather pursue a profession in a service organization? Do you want to excel in

the technology field or, perhaps, work in the arts? Can you see yourself as a senior executive?

Imagine yourself in the role that defines success for you. Undoubtedly, to assume this role requires

more than just an initial desire; those who are most successful take many necessary steps over time

to become sufficiently qualified for the job presented to them. Think about your goal: what it will

take to get there?

With a good plan and the right information, you can achieve whatever you set out to do. It may seem

like a distant dream at the moment, but it can be a reality sooner than you think. Think about

successful people who do what you want to do. What do they all have in common? Of course, they

have all worked hard to get to their current position, and they all have a passion for their job. There

is, additionally, a subtler key ingredient for success that they all share; all successful people

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10

effectively engage in personal selling, the process of interacting one-on-one with someone to provide

information that will influence a purchase or action. [1]

Congratulations, You’re in Sales!

If you think personal selling is only for salespeople, think again. Everyone in every walk of life uses

personal selling (some more effectively than others!). Selling is what makes people successful. We all have

to sell our ideas, our points of view, and ourselves every day to all sorts of people—and not just those

related to our jobs. For example, when you work on a team project, you have to sell your ideas about how

your team should approach the project (or, sometimes more delicately, you will have to persuade others as

to what you should do about a lazy team member). When you are with your friends, you have to sell your

point of view about which movie you want to see or where you want to go to eat. When you pitch in for a

friend’s gift, you have to sell your ideas about what gift to give. You are selling every day whether you

realize it or not.

Think about the products and services that you buy (and concepts and causes that you believe in) and how

selling plays a role in your purchase decision. If you rented an apartment or bought a car, someone sold

you on the one you chose. If you read a product review for a new computer online then went into the store

to buy it, someone reinforced your decision and sold you the brand and model you bought. If you ran in a

5K race to raise money for a charity, someone sold you on why you should invest your time and your

money in that particular cause. A professor, an advisor, or another student may have even sold you on

taking this course!

“I Sell Stories”

Selling is vital in all aspects of business, just as it is in daily life. Consider Ike Richman, the vice president

of public relations for Comcast-Spectacor, who is responsible for the public relations for all NBA and NHL

games and hundreds of concerts and events held at the company’s Wachovia Center in Philadelphia.

When you ask Ike to describe his job, he replies, “I sell stories.” What he means is that he has to “pitch”—

or advertise—his stories (about the games or concerts) to convince the press to cover the events that he is

promoting. So, even though he is not in the sales department, his job involves selling. Gary Kopervas,

similarly, is the chief creative strategist at Backe Digital Brand Communications. He works in the creative

department in an advertising agency, yet he describes his job as “selling ideas,” not creating ads. Connie

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11

Pearson-Bernard, the president and founder of Seamless Events, Inc., an event planning company, says

she sells experiences. For many of her clients, she also sells time because she and her team execute all the

required details to create the perfect event. As you notice, all these people are engaged in selling, even

though “sales” may not be included in their respective job descriptions. Clearly, whether you pursue a

career in sales or in another discipline, selling is an important component of every job…and everyday life.

Power Player: Lessons in Selling from Successful Salespeople
Who Wants to Be a Millionaire?

Imagine being a nineteen-year-old college dropout with a child on the way.

That described Tom Hopkins in 1976. He worked in construction to pay the bills. He realized there had to

be a better way to make a living, so he took a job in real estate sales, but had no success. In fact, after his

first six months, he had only sold one house and made an average of just $42 a month to support his

family.

One day, he met someone who suggested that he go to a sales training seminar. Tom was inspired by the

concepts in the seminar and put them to work. Before he was thirty, Tom was a millionaire selling real

estate. Tom is now a legend in the selling arena with his “Training for Champions” and “Sales Boot Camp”

programs. He is a successful author, speaker, columnist, and sales coach at Tom Hopkins International,

which provides sales training for companies such as Best Buy, State Farm Insurance, Aflac, U.S. Army

Recruiters, and more. [2]

The New World of Selling

There are some people who might think of selling as a high-pressure encounter between a salesperson and

a customer. Years ago, that may have been the case in some situations. But in today’s world, successful

selling is not something you do “to” a customer, it is something you do “with” a customer. The customer

has a voice and is involved in most selling situations. In fact, Internet-based tools such as forums, social

networks like Facebook, MySpace, and Twitter, along with Web sites, live chat, and other interactive

features allow customers to participate in the process no matter what they are buying.

Brand + Selling = Success

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12

What do Ikea, Red Bull, Mini Cooper, and Apple have in common? All four are strong and highly

identifiable brands. You might wonder what role a brand name plays in selling strategy. Perhaps it is not

always noticeable, but when you buy a Red Bull at the corner store for some extra energy, at that very

moment, a specific, chosen brand has become an extremely powerful selling tool, and it has significantly

influenced your inclination to purchase that particular drink. Selling can only be successful when that

thing that you sell has perceived value applied to it by the consumer—why Red Bull rather than another

caffeine drink? Red Bull must be more effective if a person chooses it rather than the other brand nearby.

A brand is a tool to establish value in the eyes of the customer because it indicates something unique. On

the surface, a brand is identified by a name, logo, or symbol so that it is consistently recognized. [3] But a

brand is more than that.

A great brand has four key characteristics:

1. It is unique. (Ikea furniture has exclusive, on-trend styling at unbelievable prices.)

2. It is consistent. (Red Bull looks and tastes the same no matter where you buy it.)

3. It is relevant. (Mini Cooper looks cool and doesn’t use much gas, and you can design your own

online.)

4. It has an emotional connection with its customers. (An iPod, with hundreds of personalized qualities,

becomes a loved companion.)

A brand is important in selling because it inherently offers something special that the customer values. In

addition, people trust brands because they know what they can expect; brands, over time, establish a

reputation for their specific and consistent product. If this changes, there could be negative

repercussions—for example, what would happen if thousands of Mini Coopers started to break down?

Customers expect a reliable car and would not purchase a Mini if they could not expect performance.

Brand names emerge in all different sects of the consumer market—they can represent products, like

PowerBar, or services, like FedEx. Brands can also be places, like Macy’s, Amazon.com, or even Las Vegas

(everyone knows that what happens in Vegas stays in Vegas! [4]). Brands can be concepts or causes like

MTV’s Rock the Vote or the Susan G. Komen Race for the Cure. Brands can also be people, like Lady Gaga,

Jay-Z, Martha Stewart, or Barack Obama.

When products, services, concepts, ideas, and people demonstrate the characteristics of a brand, they are

much easier to sell. For example, if you go to McDonald’s for lunch, you know you can always get a Big

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13

Mac and fries, and you always know it will taste the same whether you go to the McDonald’s near campus

or one closer to your home. Or if you go to Abercrombie & Fitch, you can expect the store to look and feel

the same and carry the same kind of merchandise whether you go to a store in Baltimore, Maryland, or

Seattle, Washington.

The same concept applies to people. Think about your classmates: is there one that is always prepared?

He or she is the one who always does well on the tests, participates in class, is a good team player, and

gets good grades on assignments. This person has created a brand. Everyone knows that they can count

on this person; everyone knows what to expect. Conversely, the same is true for a person who is often

times late and sometimes arrives unprepared. You probably wouldn’t want to work with that person

because you’re not sure if that person will hold up his or her end of the project. Which one would you

choose as a teammate? Which one would you trust to work with on a class project? Which person is your

brand of choice?

The Power of an Emotional Connection

Uniqueness (no other fries taste like McDonald’s), consistency (a Coke tastes like Coke no matter where

you buy it), and relevance (your college bookstore is only relevant on a college campus, not in your local

mall) are clear as characteristics of a brand, but the most important characteristic is also the most

<

Financial markets homework help

LETTER OF TRANSMITTAL

We are submitting the attached research problem entitled “The impact of covid-19 on consumer’s behavior towards online shopping”.
This research problem tries to determine the relationship between the impact of the corona pandemic and the behavior of online shopping. The pandemic and social distancing as well as lockdown to prevent the spread of the infection, these factors have had an impact on consumers’ shopping habit. Also, with the increasing technology developments and e-commerce market, we can notice changes in the preference of shopping style. Our research purpose is to discuss this disruption on the shopping method and shopping preferences. How the corona pandemic has had effects on business, which must adapt quickly to digital sales and the changes in shopping style will be discussed.
We hope you find this research report satisfactory.
Sincerely yours,
Georgakou G., and Okolakpa D.

Table of Contents
Letter of transmittal 1
Brief Description 1
Introduction 1
Research Questions 2
Analysis 2
Results and Data Analysis 7
Reliability Test 8
Conclusion 9
Discussion 9
Appendix 9

Introduction


COVID-19, which is commonly known as coronavirus since December 2019, has affected the daily lives of the population in many aspects. As of February 7, 2021, nearly 2,323,815 people had been killed worldwide, affecting hundreds of millions of people. In fear of the malicious illness this virus can bring and to slow down the spread of this virus many countries around the world, is taking cautious steps, including closing boarders of the country, Universal travel limit, closing public places and educational institute, the public is urged to stay in their houses, maintain the social distance and work from home, keep social distances, limiting interaction between households and so on. Under the national lockdown, people are requested to stay at home and should only go out for essential reasons. Similar, across the United Kingdom regions measures are in place to control the pandemic. Whenever new cases emerge authorities tend to implement strict curbs (The Economic Times News, 2021). As a result, many shops are close and prevent people for making physical purchases. In effect, majority of businesses have little options but to make considerable changes. One of those changes is making transactions by adopting electronic commerce, which can simply be put as shopping for products on-line. It includes the online method of marketing, selling, delivering, exchanging merchandise, good and services. However, E-Commerce may be a trendy business method that has been there for several decades, at the present time it is emerging even more during this time of the pandemic. The whole e-commerce world is affected by the coronavirus, the nature of business has changed. The pandemic might have been the accelerated transformation of the market structure.


Research Questions

1. How often were people shopping online before and after the covid-19?

2. How corona virus affects our shopping online behavior?

3. Assuming the pandemic is over, would people go back to offline shopping?

4. COVID-19 the main impact of the immerse e-commerce trend? Or just a contributing factor?

5. E-commerce through COVID-19 has changes in revenues?

6. Is the e-commerce process easy for consumers?


Analysis


E-Commerce which refers to electronic commerce is one of the emerging means of conducting business with internet usage since before the coronavirus pandemic. In October 1997, IBM was one of the first to introduce such term, when they launched a campaign built around e-business. For several decades, researchers and practitioners have been creative in developing and solving problems for quite some time. With the creation of the internet and networking technologies, business to business electronic commerce has been in a gradual expansion. In this fashion, information is exchanged among organizations with comfort and suitability. Online shopping for decades and recent developments has become an inherent part of our society, only in 2010 sales exceeded $200 billion. The internet economy in e-commerce revenue has been noticeable at a rate of 20% and 25% growth each year, indicating gradual shift in customer spending habit of human beings (Shahriari, S., et al., 2015). Moreover, the web of business to consumers retail market has advanced greatly with new technologies in a way that it supports interactions for everyday business. Recently, due to the corona virus pandemic there has been great increase in e-commerce and consumer behavior regarding shopping style.

When the Covid-19 pandemic struck, the change from brick-and-mortar to online shopping had already begun. E-commerce sales have increased from an estimated $1.4 trillion in 2017 to $2.4 trillion in 2018, accounting for around 2.7 percent of global production. According to recent figures, 3.5 billion people (roughly 47 percent of the world’s population) use e-commerce platforms today. The biggest market is China, which is followed by the US, Japan, the UK, and Germany. This transition has been exacerbated by the pandemic. The imposition of mobility restrictions to combat the virus’s spread resulted in an increase in online demand for a range of products and services. In 2020, the online share of retail sales in China, Germany, the United Kingdom, and the United States increased by 4–7 percentage points as people remained at home. The share has recently dropped in China and the United States, but it remains well above pre-pandemic levels. Consumers on the Mercado Libre platform in Latin America, one of the regions with the lowest e-commerce penetration, made the equivalent of a year’s worth of transactions in just two months. For both regular and infrequent users, the number of days between online transactions has decreased. E-commerce has been on the rise for some time, and it has intensified during the pandemic. (Alfonso et al., 2021)

The pandemic unfolded in three simple stages in terms of e-commerce: (i) precautionary stage; (ii) a stockpiling stage; and (iii) a shelter at home stage. Mercado Libre’s proprietary data showed which goods were in the highest demand at each level. As the Covid-19 virus spread throughout Asia, Europe, and the Americas, consumers purchased medical supplies as a precaution. For example, hand sanitizer, disinfectant and facemasks. Consumers stockpiled household essentials such as personal care items and non-perishable foodstuffs in the second stage after a pandemic was announced. This is in line with the fact that the duration of government containment policies is unknown. Finally, technical products, fitness equipment, and entertainment and education facilities were in high demand during the third level. This is due to the fact that more tasks were performed at home, and teleworking and home schooling became more common. In the Americas, this stage was especially important. Although lockdowns were mostly only in effect for a few weeks in Asia and Europe, non-essential stores in the United States and Latin America were closed for months. Many countries tightened containment measures again in late 2020, in response to a second wave of infections. Various sectors of the economy were impacted in different ways. The number of online orders in the retail industry increased across the world, and the mix of products demanded closely matched the stage of the pandemic. According to Content square, traffic to supermarket web pages increased by 270 percent during the lockdown. The number of visitors to online stores selling electronics and sports equipment has increased dramatically. Visits to tourism websites, on the other hand, declined by 80%.

Another factor is that online prices have risen in tandem with increased demand. During the pandemic, the cost of many online items increased. Owing to high demand, some goods were temporarily out of stock. Furthermore, the cancellation of passenger flights decreased cross-border postal shipments and other small deliveries by a considerable amount. As a result, many consumers experienced order delays or cancellations. A sudden rise in online (including shipping) prices was triggered by supply chain causes, shortages, and spikes in demand. The online selling of computers, home appliances, and medical devices has seen a turnaround in the deflationary market pattern. Grocery prices have risen slightly in recent months, especially since April. Although the macroeconomic effects were minor, the shift in online product prices illustrates e-commerce retailers’ well-documented ability to rapidly adjust their prices in response to online competition. Remote payments are becoming more common as a result of e-commerce. During the pandemic, global card purchases declined as economic activity decreased. Some industries were hit harder than others, as predicted, due to the economy-wide reallocation. CNP transactions, in particular, have grown in popularity among card payments. Listed sectors have seen a greater increase in CNP transaction share once again. There are indicators that the customer behavior shock could become systemic. Although the share of CNP transactions has decreased since the pandemic, it is still higher than pre-pandemic levels in a number of economies, especially emerging market economies (EMEs). While some sector-specific shocks are likely to be transient, others will signal a longer-term reorganization of economic activity.

In addition, the pandemic has caused changes in card payment habits. The pandemic has accelerated the process of countries catching up in terms of e-commerce development. Prior to the pandemic, there was a clear connection between e-commerce sales and GDP, as calculated by the WIPO Global Innovation Index, and an economy’s ability to innovate. As calculated by the Oxford Covid-19 Government Response Tracker stringency index, e-commerce growth was faster during the pandemic where containment measures were tighter. Surprisingly, where e-commerce was less established, growth was higher. The lower a country’s e-commerce level is in 2019, the faster it will rise during the Covid-19 pandemic. This means that countries with low levels of e-commerce have been catching up. This is backed up by regression analysis, which takes into account the possibility of outliers. Changes in consumer behavior may have a long-term effect. The closing of physical stores has prompted many people to reconsider long-held shopping habits. Since the pandemic, a growing number of adults in 18 countries plan to shop online more regularly. Since April, this share has risen, especially in EMEs. Consumers anticipate an increase in both home delivery and “order online, pick up in store.”

In practice, the majority of companies have little choices but to make significant improvements. Although some businesses were forced to reduce production, lay off workers, or even shut down operations as a result of covid-19’s negative effect on supply chains, others quickly adapted smart technology to keep their operations or supply chains running (Bragazzi, N. L., 2020).

Digital and virtual operations are quickly becoming the trend in workplaces and how businesses conduct business. Consumers dislike brick and mortar shopping and crowded areas in 52 percent of cases, according to data (Anam Bhatti et al.,2018). As a result, both large and small businesses have had to digitalize their business networks in order to satisfy the rising demands of electronic consumers. Although e-Commerce might not be the answer to recouping economic activity losses, it can definitely help keep the economy afloat. COVID-19 has had a major effect on e-commerce retail revenue, with sales projected to hit $6.5 trillion by 2023, according to a research quantitative paper (Jones, 2020). Customers are required to use the internet to make it a habit of their everyday life due to the coronavirus (Abiad, Arao, & Dagli, 2020). According to research, the number of active and new users who use trade apps and e-commerce mobile apps online is increasing. Since March, there has been a rise in the number of people using the internet (Jebril, N., 2020). After the worldwide pandemic, it has been observed that the number of active and new users of shopping websites and smartphone applications for shopping has increased. In the meantime, India’s E-Commerce sector has expanded significantly. For small to large businesses, e-commerce has become a necessary component of their operations.

Finally, COVID-19 is regarded as an independent variable since it seems to have had a substantial impact on global economic activity. Consumers and companies, among other items, rely on the e-commerce site to fulfill their demands and meet their basic needs in order to survive.


Results and Data Analysis

Online respondents are 102 in total, the sample size that the researcher will be used for determining the analysis are collected from different countries and cultural background. This part intends to represent the respondents’ demographic and change in shopping behavior through online during the corona pandemic.

Table 1: Demographics of the respondents

Variable

Frequency Response

Percentage

Mean

Gender

Female

80

78.4%

3.1875

Male

19

18.6%

3.1579

Others

3

2.9%

3.000

Age Group

18-29

63

61.8%

3.0317

30-39

34

33%

3.4412

40-49

4

3.9%

3.000

50 and over

1

1%

4.000

Occupation

Student

48

47.1%

2.9167

Part-time employed

7

6.9%

2.4286

Full-time employed

39

38.2%

3.5897

Unemployed

4

3.9%

3.000

others

4

3.9%

3.750

Table 1 illustrate the demography of the 102 respondents where the main responses are female, with age group of 18 to 19, making a total of 78% of the sample population. The data analysis of the participants show that they are above 18 years old, 47% student, 45% employed (38% full-time and 7% part-time), a small group of 4 % are unemployed and the other 4% are respondents who get their income from other kind of source. From these facts, the researcher can deduce that all of the above make some independent expenditures for their basic needs.

Table 2: Online shopping behavior

Particulars

Frequency

Percentage

Mean

Shopping rarely online before the pandemic

YES

NO

TOTAL

58

44

102

57%

43%

100%

2.401

Shopping online increased during the pandemic

YES

NO

TOTAL

72

30

102

70.6%

29.4%

100%

3.176

From Table 2 we can identify that the most people (57%) do normally shop online before the pandemic. However, out of the same sample there is increase in the number of people who started shopping online due to the pandemic by 14%. Evidentially, this finding shows that there has been an emerging shift of shopping behavior due to the corona pandemic.


Reliability Test

Table 3: Cronbach Alpha

Variables

Scores

Variance Items

2

Sum of item Variance

2,837

Variance Total Score

4,401

Item Variiance Before Corona

1,299

Variance During corona

1,537

Cronbach’s α

0,711

In table 2 the reliability test was calculated to allow the researcher to determine whether the internal consistency of the variables is reliable. One of the most common method used to measure the internal construct of a test is the Cronbach’s Alpha method of reliability (Cronbach, L. J. ,1951). As a rule of thumb, the calculated value of reliability is that alpha of 0.6 and higher are acceptable level of reliability. The estimate for reliability has been determined using the Cronbach’s alpha and the value is 0.711, which shows a moderate reliability construct of scale.


Conclusion

As the world is reeling from the impact of the Coronavirus pandemic, consumer behavior is being forced to change, and more people are shopping online. Ecommerce sites are in a position to benefit from this, but only if they can be identified by consumers in the first place. While strategies may need to be adjusted to the modern climate, companies should consider sustaining investment in analytics, web marketing, and online content in order to stay competitive and meet the needs of consumers. In these uncertain times, there are still opportunities and people and businesses have to adjust because that changes in online activities are likely to outlast the COVID-19 pandemic. The e-commerce is classified as a dependent variable that is influenced by the pandemic, its’ social distancing and lockdown regulations and on the customer behavior towards online purchases. As the increase or decrease in market demand usage of internet for shopping is due to the restriction of physically shopping in majority of business. As a result, customers have shifted from a gradually developing awareness to an immense pace and sharp rise of e-commerce. these factors are dependable variable that influence online business.


Discussion

The study has some limitations in gathering primary data from e-business owner. Therefore, secondary data was used to analyze the trending and sharp pace of e-commerce. On the other hand, survey was conducted to collect primary data from consumers to verify some changes regarding shopping online.

Reference

1. Abiad, A., Arao, R. M., & Dagli, S. (2020). The economic impact of the COVID-19 outbreak on developing Asia

2. Alfonso, V., Boar, C., Frost, J., Gambacorta, L. and Liu, J., 2021. [online] Bis.org. Available at: <https://www.bis.org/publ/bisbull36.pdf>

3. Anam Bhatti, A., Akram, H., Basit,H.,M., Khan,A.,U., Raza Naqvi,S.,M., and Bilal,M., (2020) E-commerce trends during COVID-19, Vol. 13, No. 2, pp.1449-1452.

4. BBC News (2021) ‘Covid-19: Lockdown needs to be stricter, scientists warn’, BBC NEWS, [Online]. Available at https://www.bbc.com/news/uk-55602828

5. Bragazzi, N. L. (2020). Digital technologies-enabled smart manufacturing and industry 4.0 in the post-COVID-19 era: lessons learnt from a pandemic, Int. J. Environ. Res. Public Health 2020, Vol. 17, No. 13, pp. 4785


6. Jebril, N., (2020) World Health Organization Declared a Pandemic Public Health Menace: A Systematic Review of the Coronavirus Disease 2019 “COVID-19” [Online], University of Plymouth; University of Babylon. Available at SSRN: https://ssrn.com/abstract=3566298

7. Jones, K. (2020). COVID-19The Pandemic Economy: What are Shoppers Buying Online During COVID-19? Available at https://www.visualcapitalist.com/shoppers-buying-online-ecommerce-covid19/

8. The Economic Times News (2021) ‘Chinese city of Langfang goes into lockdown amid new COVID-19 threat’[Online]. Available at https://economictimes.indiatimes.com/news/international/world-news/chinese-city-of-langfang-goes-into-lockdown-amid-new-covid-19-threat/articleshow/80236408.cms

9. Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. psychometrika, Vol.16, no.3, pp.297-334.

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Financial markets homework help

SUSTAINABLE INVESTING AS A CRUCIAL PATH TO COVID-19 RECOVERY

INTRODUCTION

Financial market refers to any place where the sellers and buyers can trade the financial instruments. The financial instruments include the equities , derivatives , bonds and the international currencies.

The financial market provides potential interaction between the people who have the capital to invest and those who are in need of the capital.

Stock market is a market where shares of the publicly quoted companies are exchanged and also it facilitates busing and selling of shares.

Types of stock market

Primary market

The primary market provides a platform for the creation of the securities. New bonds and stock can be sold for the first time in the primary market to the public. IPO (Initial Public Offering) is an example of the primary market. The IPO occurs when the stock from the private company is issued to the public for the first time. It also allows underwriting of shares.

2. Secondary market

It is also called the stock market. It is categorized into Auction market and dealer market. The auction market involves the congregation of the institutions and the individuals in one place where they can sell and buy shares at the prices quoted by each seller or buyer. The dealer market involves connection of the participants via the electronic networks. The dealer in the market can buy or sell shares by holding an inventory of security. The dealers gain profit via the different prices at which the participants will buy or sell shares.

3. OTC market

It is a market where transactions occur over the counter system. It is an unorganized system where there was no physical occurrence of the trading.

Please add example.

Role of stock market

Firstly, raising of capital. The stock market provides a venue where various enterprises meet to trade, buy o sell shares with the aim of raising the capital.

Secondly is the servicing investors. A stock market can also act as an intermediary between small and large investors which enables them to get money outside field of banking institutions. The main objective of the stock exchange is to maximize the return on savings.

The stock market are indicators of health. Stock market can indicate the ups, down trends and the shifts of the domestic economy.

Stock market provides a place for selling and buying of securities. This enables liquidity. Liquidity refers to securities which can be easily converted to cash.

Stock market provides speculation of securities so as to enhance liquidity and the supply of securities.

Stock market provides security of transactions. The stock market allow only the listed securities to be traded together with the names of the of the companies in the trade list. Therefore the companies will trade under strict rules and regulations

Cross listing

Cross listing is where the common shares of the company is listed on different exchange as compared to the original stock exchange and primary. For a company to be cross listed, the company must meet the requirements of the exchange listing.

What are the requirement?

Benefits of the cross listing.

Firstly is the access to capital. Cross listing allows the trading of shares in multiple time zones which enhances liquidity. The increased liquidity by the firm tend to increase the chances of raising the capital by the firm.

Secondly cross listing helps in building the reputation of the firm. Since the cross listing allows multiple exchanges, an emergence of any positive news will always be aired out to international media outlets thus boosting the sales of the company.

Thirdly, cross listing enables companies that are found overseas to build a good reputation with the local residents.

How Circuit Breakers Work

In trading the circuit breaker occurs when there is a decrease in the market prices of stocks. A decrease in the market prices will result to a closure of the trading activities temporarily or for the rest of the day.

Add an example about when and where a circuit breaker occurred in the USA.

Conclusion

The financial market are very vital in this covid 19 period. The stock market enables the firms to revive their production activities since the will be able to access capital either via the primary market or secondary market or over the counter. The market will enable the firm to sell or buy shares in the market. The stock market enables the continuity of the business for a longer period of time.

Financial markets homework help

Writing The Research Report




General guidelines

The results of marketing research must be effectively communicated to management. Presenting the results of a marketing research study to management generally involves a formal written report as well as an oral presentation. The report and presentation are extremely important. First, because the results of marketing research are often intangible (after the study has been completed and a decision is made there is very little physical evidence of the resources, such as time and effort, that went into the project), the written report is usually the only documentation of the project. Second, the written report and the oral presentation are typically the only aspect of the study that marketing executives are exposed to, and consequently the overall evaluation of the research project rests on how well this information is communicated. Third, since the written research report and oral presentation are typically the responsibility of the marketing research supplier, the communication effectiveness and usefulness of the information provided plays a crucial role in determining whether that particular supplier will be used in the future.

Every person has a different style of writing. There is not really one right style for a report, but there are some basic principles for writing a research report clearly.

Preparing a research report involves other activities besides writing; in fact, writing is actually the last step in the preparation process. Before writing can take place, the results of the research project must be fully understood and thought must be given to what the report will say. Thus, preparing a research report involves three steps: understanding, organising and writing. The general guidelines that should be followed for any report or research paper are as follows:

Consider the audience: The information resulting from the study is ultimately of importance to marketing managers, who will use the results to make decisions. Thus, the report has to be understood by them; the report should not be too technical and not too much jargon should be used. This is a particular difficulty when reporting the results of statistical analysis where there is a high probability that few, if any, of the target audience have a grasp of statistical concepts. Hence, for example, there is a need to translate such terms as standard deviation, significance level, confidence interval etc. into everyday language. This is sometimes not an easy task but it may be the case that researchers who find it impossible do not themselves have a sufficiently good grasp of the statistical methods they have been using.

Qualitative research also presents difficulties. The behavioural sciences have their own vocabulary, much of which is not encountered in everyday speech. Examples include: cognitive dissonance, evoked set, perception, needs versus wants, self-actualisation. It should be noted that these are extreme examples; many words, phrases and concepts used a very precise way by behavioural scientists are also present in everyday speech but often in a less precise or different way. This also presents opportunities for misunderstandings.

Be concise, but precise: On the one hand, a written report should be complete in the sense that it stands by itself and that no additional clarification is needed. On the other hand, the report must be concise and must focus on the critical elements of the project and must exclude unimportant issues. There is a great temptation, on the part of inexperienced researchers, to seek to convey all that they did in order to obtain information and to complete the research. This is done almost as if the researcher is afraid that the audience will not other wise appreciate the time, effort and intellectual difficulties involved. What the researcher has to come to realise is that he/she will be judged by the contribution towards solving the marketing problem and not by the elegance or effort involved in the research methodology.

Understand the results and drawing conclusions: The managers who read the report are expecting to see interpretive conclusions in the report. The researcher must therefore understand the results and be able to interpret these. Simply reiterating facts will not do, and the researcher must ask him/herself all the time “So what?”; what are the implications. If the researcher is comparing the client’s product with that of a competitor, for example, and reports that 60 percent of respondents preferred brand A to brand B, then this is a description of the results and not an interpretation of them. Such a statement does not answer the ‘So what?’ question.

The following outline is the suggested format for writing the research report:

 Title page
 Summary of findings
 Table of contents
 List of tables
 List of figures

Introduction

 Background to the research problem
 Objectives
 Hypotheses

Methodology-Data collection

 Sample and sampling method
 Statistical or qualitative methods used for data analysis
 Sample description

Findings

 Results, interpretation and conclusions.

The summary of findings is perhaps the most important component of the written report, since many of the management team who are to receive a copy of the report will only read this section. The summary of findings is usually put right after the title page, or is bound separately and presented together with the report.

The introduction should describe the background of the study and the details of the research problem. Following that, automatically the broad aim of the research can be specified, which is then translated into a number of specific objectives. Furthermore, the hypotheses that are to be tested in the research are stated in this section.

In the methodology chapter the sampling methods and procedures are described, as well as the different statistical methods that are used for data analysis. Finally, the sample is described, giving the overall statistics, usually consisting of frequency counts for the various sample characteristics..

Once the sample has been described, the main findings are to be presented in such a way that all objectives of the study are achieved and the hypotheses are tested. As mentioned before, it is essential that the main findings are well interpreted and conclusions are drawn wherever possible.



Data presentation

Easy-to-understand tables and graphics will greatly enhance the readability of the written research report. As a general rule, all tables and figures should contain:

1. Identification number corresponding to the list of tables and the list of figures

2. A title that conveys the content of the table or figure, also corresponding to the list of tables and the list of figures, and

3. Appropriate column labels and row labels for tables, and figure legends defining specific elements in the figure.

There are a number of ways to produce tables and figures. When typing a report word-processor, it is sometimes easiest to type a table out by hand. However, when complicated tables have to be produced, it is advisable to use spreadsheet software .

Writing The Research Report

General guidelines

The results of marketing research must be effectively communicated to management.

Presenting the results of a marketing research study to management generally involves a

formal written report as well as an oral presentation. The report and presentation are

extremely important. First, because the results of marketing research are often intangible

(after the study has been completed and a decision is made there is very litt

le physical

evidence of the resources, such as time and effort, that went into the project), the written

report is usually the only documentation of the project. Second, the written report and the

oral presentation are typically the only aspect of the stud

y that marketing executives are

exposed to, and consequently the overall evaluation of the research project rests on how

well this information is communicated. Third, since the written research report and oral

presentation are typically the responsibility

of the marketing research supplier, the

communication effectiveness and usefulness of the information provided plays a crucial

role in determining whether that particular supplier will be used in the future.

Every person has a different style of writing.

There is not really one right style for a

report, but there are some basic principles for writing a research report clearly.

Preparing a research report involves other activities besides

writing; in fact, writing is

actually the last step in the preparation process. Before writing can take place, the results

of the research project must be fully understood and thought must be given to what the

report will say. Thus, preparing a research re

port involves three steps: understanding,

organising and writing. The general guidelines that should be followed for any report or

research paper are as follows:

Consider the audience:

The information resulting from the study is ultimately of

importance t

o marketing managers, who will use the results to make decisions. Thus, the

report has to be understood by them; the report should not be too technical and not too

much jargon should be used. This is a particular difficulty when reporting the results of

st

atistical analysis where there is a high probability that few, if any, of the target audience

have a grasp of statistical concepts. Hence, for example, there is a need to translate such

terms as standard deviation, significance level, confidence interval e

tc. into everyday

language. This is sometimes not an easy task but it may be the case that researchers who

find it impossible do not themselves have a sufficiently good grasp of the statistical

methods they have been using.

Qualitative research also prese

nts difficulties. The behavioural sciences have their own

vocabulary, much of which is not encountered in everyday speech. Examples include:

cognitive dissonance, evoked set, perception, needs versus wants, self

actualisation. It

should be noted that these

are extreme examples; many words, phrases and concepts used

Writing The Research Report

General guidelines

The results of marketing research must be effectively communicated to management.

Presenting the results of a marketing research study to management generally involves a

formal written report as well as an oral presentation. The report and presentation are

extremely important. First, because the results of marketing research are often intangible

(after the study has been completed and a decision is made there is very little physical

evidence of the resources, such as time and effort, that went into the project), the written

report is usually the only documentation of the project. Second, the written report and the

oral presentation are typically the only aspect of the study that marketing executives are

exposed to, and consequently the overall evaluation of the research project rests on how

well this information is communicated. Third, since the written research report and oral

presentation are typically the responsibility of the marketing research supplier, the

communication effectiveness and usefulness of the information provided plays a crucial

role in determining whether that particular supplier will be used in the future.

Every person has a different style of writing. There is not really one right style for a

report, but there are some basic principles for writing a research report clearly.

Preparing a research report involves other activities besides writing; in fact, writing is

actually the last step in the preparation process. Before writing can take place, the results

of the research project must be fully understood and thought must be given to what the

report will say. Thus, preparing a research report involves three steps: understanding,

organising and writing. The general guidelines that should be followed for any report or

research paper are as follows:

Consider the audience: The information resulting from the study is ultimately of

importance to marketing managers, who will use the results to make decisions. Thus, the

report has to be understood by them; the report should not be too technical and not too

much jargon should be used. This is a particular difficulty when reporting the results of

statistical analysis where there is a high probability that few, if any, of the target audience

have a grasp of statistical concepts. Hence, for example, there is a need to translate such

terms as standard deviation, significance level, confidence interval etc. into everyday

language. This is sometimes not an easy task but it may be the case that researchers who

find it impossible do not themselves have a sufficiently good grasp of the statistical

methods they have been using.

Qualitative research also presents difficulties. The behavioural sciences have their own

vocabulary, much of which is not encountered in everyday speech. Examples include:

cognitive dissonance, evoked set, perception, needs versus wants, self-actualisation. It

should be noted that these are extreme examples; many words, phrases and concepts used

Financial markets homework help

Kingdom of Saudi Arabia

Ministry of Education

Saudi Electronic University

A picture containing text, outdoor, sign  Description automatically generated

المملكة العربية السعودية

وزارة التعليم

الجامعة السعودية الإلكترونية

College of Administrative and Financial Sciences

Assignment 3

Portfolio Management (FIN424)

Due Date: 04/30/2022 @ 23:59

Course Name: Portfolio Management

Student’s Name:

Course Code: FIN424

Student’s ID Number:

Semester: Second

CRN:

Academic Year:2021-22-2nd

For Instructor’s Use only

Instructor’s Name:

Students’ Grade:

Marks Obtained/Out of 10

Level of Marks: High/Middle/Low

General Instructions – PLEASE READ THEM CAREFULLY

· The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.

· Assignments submitted through email will not be accepted.

· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.

· Students must mention question number clearly in their answer.

· Late submission will NOT be accepted.

· Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.

· All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).

· Submissions without this cover page will NOT be accepted.


Learning Outcomes:

CLO 1-Recognize the characteristics and risks of stocks, bonds, money market, and property investments.

CLO 3- Recognize the purpose and function of stock markets, interest rates, and international regulation.

CLO 5- Evaluate portfolio performance and risk.

Assignment Question(s) :

1. Compare the relative liquidity characteristics of direct versus indirect investment in real estate. Discuss three factors that affect the liquidity of both forms of investment. (3 Marks)

2. Adel retired from his firm. He has continued to hold his private retirement investments in a portfolio of common stocks and bonds. At the beginning of 2015, when he retired, his account was valued at SAR500,000. By the end of 2015, the value of his account was SAR530,500. Adel made no contributions to or withdrawals from the portfolio during 2015. What rate of return did Adel earn on his portfolio during 2015? (3 Marks)

3. Ahmad follows the automotive industry, including ABC Motor Company. Based on ABC’s 2020 annual report, Ahmad writes the following summary: ABC Motor Company has businesses in several countries around the world. ABC frequently has expenditures and receipts denominated in non-U.S. currencies, including purchases and sales of finished vehicles and production parts, subsidiary dividends, investments in non-U.S. operations, etc. ABC uses a variety of commodities in the production of motor vehicles, such as nonferrous metals, precious metals, ferrous alloys, energy, and plastics/resins. ABC typically purchases these commodities from outside suppliers. To finance its operations, ABC uses a variety of funding sources, such as commercial paper, term debt, and lines of credit from major commercial banks. The company invests any surplus cash in securities of various types and maturities, the value of which are subject to fluctuations in interest rates. ABC has a credit division, which provides financing to customers wanting to purchase ABC’s vehicles on credit. Overall, ABC faces several risks. To manage some of its risks, ABC invests in fixed-income instruments and derivative contracts. Some of these investments do not rely on a clearing house and instead effect settlement through the execution of bilateral agreements.

Based on the above discussion, recommend and justify the risk exposures that should be reported as part of an Enterprise Risk Management System for ABC Motor Company. (4 Marks)

Financial markets homework help

U N I T 2 – T H E S T O C K M A R K E T
A N D I T S O P E R A T I O N S

Financial Market Analysis
ACCT3602

1

Buying and Selling Shares

Specific to the Jamaican Stock Exchange (JSE)

 A potential investor must contact a broker to buy or sell shares
on their behalf.

 The buying/selling process begins when an order is placed with
the stockbroker for a specified number of shares in a company.

 The trade is complete when the price matches a trade that is
placed by a buying broker on the electronic trading platform with
the price placed by a selling broker. Settlement is done T +2 days.

 Trading on the Jamaica Stock Exchange is conducted on Monday
to Friday between 9:30 a.m. and 1:30 p.m. through an electronic
trading platform which was introduced in 2000.

The Jamaica Central Securities Depository
3

 In 1998 the Jamaica Central Securities Depository
(JCSD), a wholly owned subsidiary of the Jamaica Stock
Exchange was established.

 It is a facility for holding securities which enables share
transactions to be processed by book entry.

 A book entry system is an accounting system which
facilitates the change of ownership of securities
electronically between parties without the need for
movement of physical documents.

Buying and Selling Shares
4

 There are three types of orders that you can place:

 A Market Order – asks your broker to buy or sell stock at the market price.

 A Limit Order – sets the price at which you want stocks to be bought or sold.

 A Stop Order – gives an approximate buying or selling price of stock.

 When the approximate price is reached the stop order becomes a market order.

 You will then receive a contract note that states the company whose
stock you have bought or sold, the price paid or received, the
commission and other fees and the settlement date.

 You should pay your bill by the settlement date.

Placing an Order: Market Orders
5

 Market Order is the simplest and most common. It is an order to buy or sell a
security immediately at the best obtainable price.

 The investor has no control on the amount paid for the stock’s purchase or sale as the
price is set by the market.

 For example, if an investor places an order to purchase 100 shares, they receive 100 shares
at the stock’s asking price.

 It requires that the shares should be traded at the most favourable price available
which is the lowest obtainable price for a purchase, and the highest available price
for a sale shares.

 A market order poses a high slippage risk in a fast-moving market.

 If a stock is heavily traded, there may be trade orders being executed ahead of yours,
changing the price that you pay.

Placing an Order: Market Orders
6

Market-if Touched (MIT) Order

 an order that will be executed only if a security reaches (touches) a specific
price.
 For example, suppose Bob would like to purchase 100 shares of stock in Fortis, whose

share is currently trading for $25.50 but only after the stock price reaches $25.10 per share
(trigger price). Bob will place a MIT order with a broker for these 100 shares. Once stocks
of Fortis reaches $25.10 per share, the broker executes Bob’s order as a regular market
order.

 MIT is used when investors wish to delay buying or selling a security until
its price becomes more advantageous.
 A MIT buy order instructs a broker to execute the buy order once the security’s market

price has fallen to a desired price.

 A MIT sell order instructs a broker to execute the sell order once the market price has
risen to a desired price.

Placing an Order: Limit Orders
7

Limit Orders

 Places a limit on the price at which shares can be bought or sold.
 Thus it specifies purchase or sale of shares at maximum buying price or minimum

selling price, respectively.
 i.e. lower for a buy order and higher for a sell order.

 It prevents investors from potentially purchasing or selling stocks at a
price that they do not want.
 if the market price is not in line with the limit order price, the order will not be

executed.

 A limit order can be referred to as:
 a buy limit order

 a sell limit order

Placing an Order: Limit Orders
8

 Buy limit order

 specifies that the purchase should take place only if the price is at, or below, a specified level.

 For example, consider a stock whose price is $11. An investor sets a limit order to purchase
100 shares at $10. In this scenario, only when the stock price hits $10 or lower will the trade
be executed.

 Sell limit order

 specifies a minimum selling price such that the trade should not take place unless that price,
or more, can be obtained.

 Consider the stock above. An investor sets a limit order to sell 100 shares at $12. In this
scenario, only when the stock price hits $12 or higher will the trade be executed.

 A Limit order, therefore, ensures that if the order is filled it will not be filled

at a price less favorable than your limit price, but it does not guarantee a fill.

Placing an Order: Stop Orders
9

 Stop Order or Stop-Loss Order is designed to limit or protect profits

and limit an investor’s loss on a trade.

 It involves selling of shares after the price has fallen to a specified level, or
buying after the price has risen to a certain level.

 Therefore, it ensures that a selling price is not too low, or that a buying price is no too high.

 For example, an investor is considering selling its position in a stock if it

declines to $8 from its current price of $12. The investor could place a stop
order at $8. When the stock hits $8, the sell order would be executed.

 Note that the stock will not necessarily sell at exactly $8 – it depends on the supply and
demand of the stock. If the stock price is rapidly falling, the order may be executed at a
price significantly lower than $8.

 This type of problem can be minimized by a stop-limit order.

Placing an Order: Stop Orders
10

Stop-Limit Order

 requires placing two prices – the stop price and the limit price.
 Once the stock hits the stop price, the order becomes a limit order.

 Stop-limit orders, as opposed to a stop order, guarantee a price limit. On the other
hand, a stop order guarantees an order execution but not necessarily at the stop order
price.

 For example, an investor currently owns a stock trading at $30. The
investor would like to sell the stock if it dips below $25, but only if the
stock can be sold at $24 or more. The investor sets a stop-limit order by
setting a stop price of $25 and a limit price of $24. Once the stock drops
below $25, the order becomes a $24 limit order.

Placing an Order: Timing
11

Another dimension to an order is the length of time for which it
remains in force.

 Fill-or-Kill Order

 order is to be cancelled if it cannot be executed immediately.

 Open Order, or Good-till-Cancelled Order

 order remains in force until it is specifically cancelled by the
investor.

Stock Market and its Operations
12

 When a security is traded, a dealer, operating as a market-maker,
quotes a price at which he/she is prepared to sell – the ask price – and a
price at which he/she is willing to buy – the bid price.

 In the transaction the investor pays the ask price and the dealer pays
the bid price.
 Ask price – the price at which market maker is willing to sell a security, also called

an offer price.

 Bid price – the price at which market maker is willing to buy a security.

 The ask price is always above the bid price and the difference between
the quoted bid and the ask price is called the bid–ask spread. This is
the profit of the dealer: Spread = ask price – bid price.

Stock Market and its Operations
13

 Example: Company’s shares are quoted by a dealer as bid and
ask price for $49.2 and $50.00 respectively. The bid-ask spread
in percentage is:

Spread = ($50.00 – $49.2)/ $49.2 = $0.8 / $49.2 = 1.63%

 If investor purchases the share and then immediately sells it before the
market price of the share changes, he will incur a cost of 1.63% of his
investment for the round-trip transaction.

 The market bid-ask spread is the excess of the lowest ask price
over the highest bid price and is normally smaller than the spreads
of individual market-makers.

Stock Market and its Operations
14

 The bid-ask spread of dealers can be seen as the price to be paid by
investors for his services.

 From the perspective of the dealer the spread can be seen as a
compensation for his costs and risks.
 The dealer typically holds an inventory of securities during the day to be able to sell (and

buy) immediately.

 From his return (i.e., the bid–ask spread), the dealer has to cover the costs of holding his
inventory (e.g., interest costs of financing the securities inventory) and the risks (e.g.,
prices may move while the securities are in the inventory).

 From the perspective of investors, dealers (in their role as market-makers)
provide two important services:
 possibility to execute a trade immediately from inventory, without having to wait for a

counterparty to emerge.

 maintenance of price stability in the absence of corresponding sell or buy orders.

Stock Market and its Operations
15

 By trading from their own stockholdings, dealers reduce price
fluctuations.
 The dealer costs include the administrative costs of transferring shares.

 The dealer risks arise from price fluctuations and information-based investors.

 For shares that are infrequently traded, such as shares in smaller
companies

 the risks are greater, because positions are held for longer periods between trades.

 If shares are held for a long time, the risk of losses from price falls is
greater.
 the bid-ask spreads for such shares tend to be relatively high.

Stock Market and its Operations
16

 Dealer risk is also related to the possibility of investors possessing
information that the dealer does not.
 Such investors are able to make profit at the expense of the dealer.

 Investor can sell shares to the dealer at a high price, while he is
informed about a possible fall of share price.
 As a result the dealer may suffer the loss from a fall in the share price. The bid-offer

spread is to provide the dealer with compensation for bearing this kind of
information risk.

 Dealers have a possibility to negotiate special prices for large
transactions.
 The spread can be broader for particularly large transactions (i.e., block trades) to

cover the price risk of such block trades before the dealer can sell or buy the bought
or sold securities to or from other dealers in the market.

Stock Market and its Operations
17

 The spread is influenced by the following factors:

 order costs – costs of processing orders, including clearing costs and costs of
recording transactions;

 inventory costs – include the costs of maintaining an inventory of particular
shares;

 competition – the larger the number of market makers, the greater their
competition, and the narrower is the spread;

 volume – the larger the trading volume, the more liquid are the shares, the less
risk of share price change;

 risk – the more risky are company operations, the more volatile are its shares, the
higher spread is set.

Stock Market and its Operations
18

 Several research studies showed that bid-ask spreads on specific
large stock exchanges are wider as they should be.
 Due to specific trading practice, market makers kept their profits margins wide.

 Some analysts called this phenomenon “under-the-table-payment”
for order flow or the right to execute customers’ trades.
 Order flow – the right to execute customers’ trades.

 Therefore it abuses small investors, who do not receive the best price
for their quotes.

Margin Trading
19

 Investors can borrow cash to buy securities and use the securities
themselves as collateral.

 A transaction in which an investor borrows to buy shares using the
shares themselves as collateral is called margin trading or buying
on margin.

 Investor borrows money or shares from a broker to finance a
transaction.
 Funds provided by the broker are borrowed from a bank.

 The interest rate that bank charges broker for funds for this purpose is called the
broker call rate or call money rate. The broker charges the borrowing investor
the call money rate plus a service charge.

Margin Trading
20

 Stock exchange regulations set margin requirement
 brokers cannot lend more than a specified percentage of the market value of the

securities.

 The aims of margin requirement are:
 to discourage excessive speculation

 ensure greater stability in the markets

 Margin requirement has to ensure that investors can cover their
position in case the value of their investments into shares reduces.
 the possibility of default on broker loans should also reduce

Margin Trading
21

 In order to purchase shares on margin investors have to create a
margin account with a broker.

 They will then need to pay the initial deposit of cash (initial margin)
 The amount of cash or securities that must be deposited as guarantee on a futures

position.
 The margin is a returnable deposit.

 Stock exchange regulations set initial margin requirement
 which is the proportion of the total market value of the securities that the investor

must pay as an equity share

 the remainder is borrowed from the broker

 Maintenance Margin
 the minimum margin that an investor must keep on deposit in a margin account at

all times.

Margin Trading
22

Important note:

 For securities, the definition of margin includes 3 important concepts:
 The Margin Loan – the amount of money that an investor borrows from his broker to buy

securities.

 The Margin Deposit – the amount of equity contributed by the investor toward the purchase
of securities in a margin account.

 The Margin Requirement – the minimum amount that a customer must deposit and it is
commonly expressed as a percent of the current market value.

 The Margin Deposit can be greater than or equal to the Margin
Requirement.

 We can express these as equations:

Margin Loan + Margin Deposit = Market Value of Security

Margin Deposit >= Margin Requirement

Short Selling
23

 In a short selling, investor place an order to sell a security that is not owned by
the investor at the time of sale. Investors sell the stock short (or short the stock)
when they expect decline of the stock price.
 The investor borrows the security from the broker and sells it on the open market and plans to

buy it back later for less money.

 To cover their short position, investors must subsequently purchase the stock and
return it to the party that lent the stock.
 The owner of the stock is unaffected when his shares are borrowed and is not aware that the

shares were lent.

 If the stock price declines by the time the short-seller repurchases it in the
market,
 the short seller earns a profit from the difference between the initial selling price and the

subsequent repurchase price of the stock.

 However, his profit will be less, if he has to pay to the owner of the borrowed
stock dividends, which the investor would have received if he had not borrowed
the stock.

Short Selling
24

 The risk of a short sale is that the stock price may increase over time

forcing the short-seller to pay a higher price for the stock than the price
at which it was initially sold.

 Stock markets and financial analysts provide information on level of
short sale.

 Twice a month, brokerage firms are required to report the number of
shares that have been shorted in their client accounts.

 This information is compiled for each security and then released to the
public.

 By monitoring changes in a stock’s short-interest figures, investors are
able to gauge the public’s level of pessimism toward the stock.

Short Selling
25

Several indicators are used to measure the short position on stock:

 The degree of short positions

 It is a ratio of the number of shares that are currently sold short,
divided by the total number of shares outstanding.

 Statistics shows, that most often this measure is in the range of 0.5-
2%.

 A high measure of 3% shows a large number of short positions in
the market, which may indicate that a large number of investors
expect the stock price to decline.

Short Selling
26

 Short interest ratio for specific shares
 The short interest ratio is a mathematical indicator of the average number of days it

takes for short sellers to repurchase borrowed securities in the open market;
calculated as the number of shares which are currently sold short, divided by the
average daily trading volume over a one-month period.

 The higher the ratio, the higher the level of short sales.
 A ratio of 20 or more reflects an unusually high level of short sales, indicating that many

investors believe that the stock price is currently overvalued.

 For some stock this ratio may exceed 100 at particular points in time.

 Short interest ratio for the market
 The higher the ratio, the higher the level of short selling activity in the market

overall.

 Investors, who have established a short position, quite often request a stop-buy
order to limit their losses.

Stock Trading Regulations
27

 Stock market regulations aim at ensuring fair treatment of all investors in
the market.

 Stock trading is regulated by national securities exchange commissions and
by individual stock exchanges.
 It is widely understood, that the development of financial markets and success of new issues

of securities cannot be handled without efficient and fair secondary stock markets.

 Analysis of average real returns on stock in the well developed markets
indicate that historically it has been about 6% percent higher than return on
Treasury bills, which reached on average only 1% p.a.

 The difference between the return on stocks and the risk free- rate is a
measure of risk premium on equities.
 However, the size of this risk premium is not justified by the stock market’s risk exposure if

only investors are assumed to be unreasonably averse to risk. The research has shown that
only 0.35% of an equity premium can be justified as risk premium. Such persistent
overpricing of risk premium is called an equity premium puzzle.

Stock Trading Regulations
28

 Equity premium puzzle is the persistent overpricing of risk premium on
stocks.

 If the equity premium puzzle is the result of security mispricing, then there
is an arbitrage opportunity.
 It means that investor can gain by borrowing at the Treasury bill rate and investing in stocks.

 Borrowing limitations and transaction costs may reduce this arbitrage profit, but not
eliminate it.

 The concern about the fair and ethical stock market trading require
imposing discipline on individuals and institutional investors.
 The organized stock exchanges introduce surveillance of all transactions at the exchanges.

 Computerized systems are installed to detect unusual trading of any particular stock.

 Any abnormal price or trading volume of particular stock or unusual trading practices of
market participants is investigated.

Stock Trading Regulations
29

 Additional regulations on imposing good corporate governance practice
for listed companies are imposed through introduced corporate
governance codes.

 Regulations require disclosure of financial statements, having a
majority of independent directors (not employees of the companies) on
their boards of directors.
 Such requirements are aimed at reducing existing or potential conflicts of interest

between management and minority as well as majority shareholders, focusing
management on maximizing stock value for company shareholders.

 Specific regulation concerns are related to restrictions on trading in
case of market downturns.

Stock Trading Regulations
30

 Trading halts may be imposed on particular stocks if stock exchanges
believe that market participants need more time to receive and absorb
material information, which can affect stock price.
 Such trading halts are imposed on stocks that are associated with mergers and acquisitions,

earning reports, lawsuits and other important news.
 The purpose of them is to ensure that market has complete information before trading on the

news.

 A halt may last a few minutes, hours or several days.

 Trading is resumed after it is believed that the market has complete
information.
 This does not prevent investors from a trading loss in response to the news. However, it can

prevent from excessive optimism or pessimism about a stock, and can reduce stock market
volatility.

 Drawbacks of trading halts are related to slowing down the inevitable
adjustment of stock prices to the news.

Stock Trading Regulations
31

 Stock exchanges can impose circuit breakers, which are restrictions on
trading when stock prices or stock indexes reaches a specified threshold
level.
 Circuit breakers – automatic halts or limitations in trading that are triggered upon the

attainment of certain stipulated price moves.

 The necessity of such restriction became vivid during stock market crashes,
e.g of NYSE in October 1987 and the later ones including Flash Crash in
2010.
 When market maker swamp market with sell orders, stock prices cannot reflect the fair value

any longer and move into a freefall.

 The market experiences huge liquidity crisis, which feeds panic and exacerbates the price
decline.

 As a result of such experience, in order to provide time for market participants to regroup
and obtain backup sources of liquidity, a series of circuit breakers are put to use.

Stock Trading Regulations
32

 In February 2013, the U.S. Securities and Exchange Commission (SEC) introduced
new market-wide circuit breakers rules. The S&P 500 index was chosen as the new
benchmark, replacing the Dow Jones .
 The percentage decline of the market index is calculated based on the prior-day closing price of the

S&P 500.

 The market index percentage changes were split into three tiers.
 Level 1 tier sets up a threshold of 7% decline, level 2 circuit breaker triggers at a 13% decline, and

level 3 sets up a benchmark of a 20% slump.
 Levels 1 and 2 halt the trading for 15 minutes if a market drop occurs before 3:25 p.m. If the

decline occurs at or after 3:25 p.m., the trading continues.
 Level 3 stops the trading for the remainder of the trading day in any circumstances.

 NASDAQ and other large international exchanges impose similar circuit breakers.
 50 point collar – provision that prohibits computer assisted trading if Dow Jones Industrial

average index rises or falls by 50 points.
 250 point rule – provision that halts all trading for one hour if Dow Jones Industrial average

index falls by 250 points in a day.

Stock Trading Regulations
33

JSE Circuit Breaker Rule

 No stock should trade +/-15% from the close price or the effective close price at the
opening of the market. The effective close price is determined whenever the closing bid

is greater than the close price or whenever the closing ask is less than the close price.

 Use the closing bid as the effective close price, if the value is greater than the close price or
use the closing ask as the effective close price, if the value is less than the close price.

 However, during the day if the Circuit Breaker is triggered for a security, the security
will be halted for an hour to allow for the release, circulation and absorption of any

relevant market news and a cool down period while investors consider their options.

 After the hour has passed the security will be released for trading and the new reference price,
which is a simple average of the trigger price and the close price, will be used to determine the
trade range for the remainder of the day. The price of the trade that triggered the Circuit Breaker
should not be +/-15% outside of the original prescribed price band. The stock will not be allowed
to trade +/- 15% of the new reference price.

The Stock Market and Covid-19
34

 The market has reacted to recent unpredictability with large drops, triggering

a market wide circuit breaker four times in March 2020.

 The safeguard pauses trading for 15 minutes in hopes the market will calm.

 The U.S. Securities and Exchange Commission mandated the creation of
market-wide circuit-breakers to prevent a repeat of the Oct. 19, 1987 market

crash, in which the Dow Jones plunged 22.6%. Since then, they have only
been triggered once in 1997 before the four times March 2020.

 The S&P 500 triggered level 1 market wide circuit breakers during the

opening hour on March 9, 12 and 16 based on drops of 7% from the previous
close, and tripped later in the day on the 18th. Trading also halts on both the

Dow and the Nasdaq when a circuit-breaker is triggered on the S&P 500.

The Role of Speculation
35

 Speculation is the practice of engaging in risky financial transactions
 With an attempt to profit from fluctuations in the market value of tradable goods

such as a financial instruments

 rather than attempting to profit from the underlying financial attributes embodied in the
instrument such as capital gains, interest, or dividends.

 When investors become speculators
 they are purchasing a stock (speculative stock) with the sole purpose of selling it to

someone else at a higher price.

 At the same time, it carries an unusually high level of risk.

 The concepts of hedging and the futures market become relevant in
explaining the role of speculation in determining stock prices

Speculative Stocks
36

 There is a relationship between risk and expected return, as we have seen.
 Speculation by definition involves a short time horizon, and a speculative stock is

one with the potential to make its owners a lot of money quickly. At the same time
it carries an unusually high degree of risk.
 In other words a speculative stock has a high probability of a loss and a small probability of a

large profit.
 The potential for a large profit is the attraction.

 Some analysts consider speculative stocks to be a growth stock at the far end of the
risks spectrum.
 Most people would classify the computer company DELL (DELL, NASDAQ) as a growth stock

rather than a speculative stock.
 DELL has never paid a dividend so it clearly is not an income stock.

 A new formal computer software company also paying no dividends would
probably be considered a speculative rather than a growth stock by most investors.
 Speculative stocks tend to be relatively new companies and in recent years have been heavily

represented by electronic and technology terms.

Financial markets homework help

You are a Financial Analyst that has been appointed to lead a team in the production of a report

to some potential investors regarding participating in the financial market. In teams of FOUR

(4), you are required to provide information on the following sections:

Section A – (Total 10 marks)

· An Overview of Financial Markets

· The role of the Stock Market

· Benefits of participating in the Stock Market from an investor perspective.

Section B – Select one of the following group of companies currently listed on the Jamaica Stock

Exchange (JSE) to conduct an analysis. (Total 60 marks)

Group 1

Salada Foods Ltd and Seprod Ltd

Group 2

Mayberry Investment Ltd and Scotia Group Jamaica Ltd

The analysis will include the following:

· A brief overview of the companies selected. (5 marks)

· Daily recordings of the trade volume, opening and closing price, percentage change in

price and whether the stock advance, decline or traded firm for each company over a two-week period, beginning March 14 – 25, 2022. (20 marks)

· Use the prices recorded to form an index for each company, then construct the following:

o A price-weighted index for the two stocks and compute the percentage changes

in the index for period 1 (Week 1) and period 2 (Week 2) (10 marks)

o A value-weighted index for the two stocks and compute the percentage changes

in the index for period 1 (Week 1) and period 2 (Week 2) (10 marks)

o Explain the factors that you believe may have affected the share prices on the

market for both companies during period 1 and 2 (15 marks)

Section C – Financial Viability (Total 30 marks)

Assess the financial viability of the two companies given above by performing a company and

security analysis to determine if the stocks are over-valued or under-valued based on information

gathered from:

a) The stock’s price-earnings ratio (5 marks)

b) The Price-Earnings Growth ratio (10 marks)

c) The interest rate of the country (5 marks)

d) Market capitalization to GDP (5 marks)

e) The company’s activities, and revenues and profits generated (5 marks)

Financial markets homework help

Kingdom of Saudi Arabia

Ministry of Education

Saudi Electronic University

A picture containing text, outdoor, sign  Description automatically generated

المملكة العربية السعودية

وزارة التعليم

الجامعة السعودية الإلكترونية

College of Administrative and Financial Sciences

Assignment 2

FIN 406 (2st Term 2021-2022)

Deadline: 11/04/2022 @ 23:59

Course Name: International Finance

Student’s Name:

Course Code: FIN 406

Student’s ID Number:

Semester: II

CRN:

Academic Year: 1442/1443 H, 2st Term

For Instructor’s Use only

Instructor’s Name: Sulaiman Aldhawyan

Students’ Grade: / 10

Level of Marks: High/Middle/Low

Instructions – PLEASE READ THEM CAREFULLY

· This assignment is an individual assignment.

· The Assignment must be submitted only in WORD format via allocated folder.

· Assignments submitted through email will not be accepted.

· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.

· Students must mention question number clearly in their answer.

· Late submission will NOT be accepted.

· Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.

· All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).

Submissions without this cover page will NOT be accepted.

1. Over the last few decades, the size of the foreign exchange market has increased significantly. Explain in detail the factors that has fuelled this growth. Why is the US dollar the most widely used currency of quotation in the foreign exchange markets?

2. “Explain the principle and features of comparative advantage. How does it relate to international trade?”. Discuss (150-200 words)


Answer:

Financial markets homework help

Simplified Income Statement

Simplified Income Statement
Changing Cells Fixed Expenses
Price Volume COGS (pct) VarExp (pct) Operating Depr Interest Exp 1. Use Solver to answer the question: What volume of sales is necessary to achieve 0 net income (break -even volume) for a sales price of 2.25
2.25 4,000,000 25 35 300000 300000 250000
Record answer here:
Income Statement
Sales Revenue 9,000,000.00 2. Use Solver to answer the question: What price of sales is necessary to achieve 0 net income (break even volume) for a volume of 4,000,000
Cost of Good Sold Expense 2,250,000.00
Gross Margin 6,750,000.00 Record answer here:
Variable Operating Expenses 3,150,000.00
Contribution Margin 3,600,000.00
Fixed Expenses
Operating Expenses 300,000.00
Depreciaiton Expense 300,000.00
Operating Earnings (EBIT*) 3,000,000.00
Interest Expense 250,000.00
2,750,000.00
Income Tax Expense (use tax rate of 32 pct) 880,000.00
Net Income 1,870,000.00
* EBIT – earnings before interest and tax
This income statement assumes no taxe shields for interest or depreciaiton expenses
This income statement assumes tax rate is 32 percent

Simplified In Statment Scenario

Simplified Income Statement Observation Units Price Revenue COGS (pct of rev) Var Op Exp Fixed Op Exp Interest Exp Depr Exp EBT Taxes Net Income
1 1,910,369 2.25 4,298,330.74 1,074,582.69 1,504,415.76 300,000.00 250,000.00 $ 300,000.0 869,332.30 278,186.34 591,145.96
Uncertain Events 2 1,121,822 2.25 2,524,099.39 631,024.85 883,434.79 300,000.00 250,000.00 $ 300,000.0 159,639.76 51,084.72 108,555.04 (250,000.00) Bin Frequency
3 3,165,407 2.25 7,122,165.90 1,780,541.48 2,492,758.07 300,000.00 250,000.00 $ 300,000.0 1,998,866.36 639,637.24 1,359,229.13 0 (250,000.00) 1
Changing Cells Fixed Expenses 4 3,549,116 2.25 7,985,510.30 1,996,377.58 2,794,928.61 300,000.00 250,000.00 $ 300,000.0 2,344,204.12 750,145.32 1,594,058.80 250,000 – 0 1
Price Volume COGS (pct) VarExp (pct) Operating Depr Interest Exp 5 1,860,330 2.25 4,185,742.55 1,046,435.64 1,465,009.89 300,000.00 250,000.00 $ 300,000.0 824,297.02 263,775.05 560,521.97 500,000 250,000.00 2
2.25 4,000,000 25 35 300000 300000 250000 6 1,604,601 2.25 3,610,351.69 902,587.92 1,263,623.09 300,000.00 250,000.00 $ 300,000.0 594,140.68 190,125.02 404,015.66 750,000 500,000.00 3
7 567,692 2.25 1,277,307.12 319,326.78 447,057.49 300,000.00 250,000.00 $ 300,000.0 (339,077.15) (108,504.69) (230,572.46) 1,000,000 750,000.00 13
Sales (units) 2,500,000 mean 8 659,476 2.25 1,483,820.98 370,955.24 519,337.34 300,000.00 250,000.00 $ 300,000.0 (256,471.61) (82,070.91) (174,400.69) 1,250,000 1,000,000.00 7
1,000,000 std deviation 9 1,864,364 2.25 4,194,818.88 1,048,704.72 1,468,186.61 300,000.00 250,000.00 $ 300,000.0 827,927.55 264,936.82 562,990.74 1,500,000 1,250,000.00 11
10 4,411,007 2.25 9,924,766.59 2,481,191.65 3,473,668.31 300,000.00 250,000.00 $ 300,000.0 3,119,906.64 998,370.12 2,121,536.51 1,750,000 1,500,000.00 3
11 3,954,135 2.25 8,896,803.94 2,224,200.98 3,113,881.38 300,000.00 250,000.00 $ 300,000.0 2,708,721.58 866,790.90 1,841,930.67 2,000,000 1,750,000.00 3
12 2,691,935 2.25 6,056,854.61 1,514,213.65 2,119,899.11 300,000.00 250,000.00 $ 300,000.0 1,572,741.85 503,277.39 1,069,464.46 2,250,000 2,000,000.00 3
Tax Rate (pct) 32 13 3,019,017 2.25 6,792,789.35 1,698,197.34 2,377,476.27 300,000.00 250,000.00 $ 300,000.0 1,867,115.74 597,477.04 1,269,638.70 2,500,000 2,250,000.00 1
14 3,127,444 2.25 7,036,748.56 1,759,187.14 2,462,862.00 300,000.00 250,000.00 $ 300,000.0 1,964,699.43 628,703.82 1,335,995.61 2,750,000 2,500,000.00 1
15 2,398,679 2.25 5,397,027.05 1,349,256.76 1,888,959.47 300,000.00 250,000.00 $ 300,000.0 1,308,810.82 418,819.46 889,991.36 3,000,000 2,750,000.00 1
16 3,181,488 2.25 7,158,347.37 1,789,586.84 2,505,421.58 300,000.00 250,000.00 $ 300,000.0 2,013,338.95 644,268.46 1,369,070.49 3,000,000.00 0
17 1,979,422 2.25 4,453,699.89 1,113,424.97 1,558,794.96 300,000.00 250,000.00 $ 300,000.0 931,479.95 298,073.59 633,406.37 More 0
Income Statement 18 2,671,121 2.25 6,010,021.94 1,502,505.48 2,103,507.68 300,000.00 250,000.00 $ 300,000.0 1,554,008.77 497,282.81 1,056,725.97
Sales Revenue 9,000,000.00 19 1,737,359 2.25 3,909,056.86 977,264.21 1,368,169.90 300,000.00 250,000.00 $ 300,000.0 713,622.74 228,359.28 485,263.47
Cost of Good Sold Expense 2,250,000.00 20 2,920,834 2.25 6,571,875.98 1,642,969.00 2,300,156.59 300,000.00 250,000.00 $ 300,000.0 1,778,750.39 569,200.13 1,209,550.27
Gross Margin 6,750,000.00 21 2,219,771 2.25 4,994,484.88 1,248,621.22 1,748,069.71 300,000.00 250,000.00 $ 300,000.0 1,147,793.95 367,294.06 780,499.89
Variable Operating Expenses 3,150,000.00 22 2,469,371 2.25 5,556,084.19 1,389,021.05 1,944,629.47 300,000.00 250,000.00 $ 300,000.0 1,372,433.68 439,178.78 933,254.90
Contribution Margin 3,600,000.00 23 2,778,138 2.25 6,250,809.56 1,562,702.39 2,187,783.35 300,000.00 250,000.00 $ 300,000.0 1,650,323.82 528,103.62 1,122,220.20
Fixed Expenses 24 3,728,344 2.25 8,388,774.39 2,097,193.60 2,936,071.04 300,000.00 250,000.00 $ 300,000.0 2,505,509.76 801,763.12 1,703,746.64
Operating Expenses 300,000.00 25 2,475,416 2.25 5,569,686.99 1,392,421.75 1,949,390.45 300,000.00 250,000.00 $ 300,000.0 1,377,874.80 440,919.94 936,954.86
Depreciation Expense 300,000.00 26 1,717,867 2.25 3,865,200.73 966,300.18 1,352,820.25 300,000.00 250,000.00 $ 300,000.0 696,080.29 222,745.69 473,334.60
Operating Earnings (EBIT*) 3,000,000.00 27 4,107,712 2.25 9,242,351.79 2,310,587.95 3,234,823.13 300,000.00 250,000.00 $ 300,000.0 2,846,940.72 911,021.03 1,935,919.69
Interest Expense 250,000.00 28 2,020,958 2.25 4,547,155.15 1,136,788.79 1,591,504.30 300,000.00 250,000.00 $ 300,000.0 968,862.06 310,035.86 658,826.20
EBT 2,750,000.00 29 2,268,680 2.25 5,104,530.79 1,276,132.70 1,786,585.78 300,000.00 250,000.00 $ 300,000.0 1,191,812.32 381,379.94 810,432.38
Income Tax Expense 880,000.00 30 720,972 2.25 1,622,186.36 405,546.59 567,765.22 300,000.00 250,000.00 $ 300,000.0 (201,125.46) (64,360.15) (136,765.31)
Net Income 1,870,000.00 31 1,800,611 2.25 4,051,374.95 1,012,843.74 1,417,981.23 300,000.00 250,000.00 $ 300,000.0 770,549.98 246,575.99 523,973.99
32 1,278,086 2.25 2,875,693.38 718,923.34 1,006,492.68 300,000.00 250,000.00 $ 300,000.0 300,277.35 96,088.75 204,188.60
33 1,337,626 2.25 3,009,657.78 752,414.44 1,053,380.22 300,000.00 250,000.00 $ 300,000.0 353,863.11 113,236.20 240,626.92
34 2,011,072 2.25 4,524,912.04 1,131,228.01 1,583,719.22 300,000.00 250,000.00 $ 300,000.0 959,964.82 307,188.74 652,776.08
* EBIT – earnings before interest and tax 35 1,892,926 2.25 4,259,082.92 1,064,770.73 1,490,679.02 300,000.00 250,000.00 $ 300,000.0 853,633.17 273,162.61 580,470.55
36 2,564,195 2.25 5,769,439.31 1,442,359.83 2,019,303.76 300,000.00 250,000.00 $ 300,000.0 1,457,775.73 466,488.23 991,287.49
37 4,037,199 2.25 9,083,697.67 2,270,924.42 3,179,294.19 300,000.00 250,000.00 $ 300,000.0 2,783,479.07 890,713.30 1,892,765.77
38 426,336 2.25 959,257.00 239,814.25 335,739.95 300,000.00 250,000.00 $ 300,000.0 (466,297.20) (149,215.10) (317,082.10)
39 2,318,042 2.25 5,215,593.44 1,303,898.36 1,825,457.70 300,000.00 250,000.00 $ 300,000.0 1,236,237.38 395,595.96 840,641.42
40 4,349,238 2.25 9,785,784.41 2,446,446.10 3,425,024.54 300,000.00 250,000.00 $ 300,000.0 3,064,313.76 980,580.40 2,083,733.36
41 2,354,852 2.25 5,298,418.03 1,324,604.51 1,854,446.31 300,000.00 250,000.00 $ 300,000.0 1,269,367.21 406,197.51 863,169.70
42 2,290,113 2.25 5,152,753.76 1,288,188.44 1,803,463.82 300,000.00 250,000.00 $ 300,000.0 1,211,101.51 387,552.48 823,549.02
43 818,291 2.25 1,841,155.80 460,288.95 644,404.53 300,000.00 250,000.00 $ 300,000.0 (113,537.68) (36,332.06) (77,205.62)
44 1,762,733 2.25 3,966,149.29 991,537.32 1,388,152.25 300,000.00 250,000.00 $ 300,000.0 736,459.71 235,667.11 500,792.61
45 4,047,958 2.25 9,107,905.74 2,276,976.44 3,187,767.01 300,000.00 250,000.00 $ 300,000.0 2,793,162.30 893,811.94 1,899,350.36
46 2,176,886 2.25 4,897,993.55 1,224,498.39 1,714,297.74 300,000.00 250,000.00 $ 300,000.0 1,109,197.42 354,943.17 754,254.24
47 1,794,678 2.25 4,038,025.90 1,009,506.48 1,413,309.07 300,000.00 250,000.00 $ 300,000.0 765,210.36 244,867.32 520,343.05
48 2,950,842 2.25 6,639,395.04 1,659,848.76 2,323,788.26 300,000.00 250,000.00 $ 300,000.0 1,805,758.02 577,842.57 1,227,915.45
49 2,283,136 2.25 5,137,056.97 1,284,264.24 1,797,969.94 300,000.00 250,000.00 $ 300,000.0 1,204,822.79 385,543.29 819,279.49
50 1,839,610 2.25 4,139,123.39 1,034,780.85 1,448,693.19 300,000.00 250,000.00 $ 300,000.0 805,649.36 257,807.79 547,841.56
Max 2,121,536.51
Min (317,082.10)
Avg (mean) 856,984.28
St Deviation 610,840.14
Loss count 5
Profit count 45

Histogram

Frequency (250,000.00) – 250,000.00 500,000.00 750,000.00 1,000,000.00 1,250,000.00 1,500,000.00 1,750,000.00 2,000,000.00 2,250,000.00 2,500,000.00 2,750,000.00 3,000,000.00 More 1 1 2 3 13 7 11 3 3 3 1 1 1 0 0

Bin

Frequency

Financial markets homework help

Sheet1

BCO224 Task brief & rubrics Task brief & rubrics FINANCIAL MARKETS
Assignment 2
Individual task
Covers: Unit 1, 2 and 5
Formalities:
Format accepted: EXCEL
Font: Arial 12 pts.
The in-text References and the Bibliography have to be in Harvard’s citation style.
Submission: Week 7 – Via Moodle (Turnitin). Sunday 20th February 2022 at 23h59 CET
Weight: This task is a 20% of your total grade for this subject.
Task (100 points in total)
Ex. 1 Make a fictive investment in 1 to 10 ETF, mutual and/ or index funds for a client considering the following:
Client profile: Agressive
Residency: Europe
Investment horizon: 15 years
Should include 1 fund of each with: ESG, Gender equality and Water
Maximum PORTFOLIO ongoing fees: 1.50%
Present your results according to the following table:
ETF/ Mutual/ Index Funds selected ISIN code % of total Portfolio Fees (ongoing charges) Weighted fees % Equity % Bond % Cash Weighted Equity Weighted Bond Weighted Cash First Top region and % First Top Sectors and % Passive Mngt Active Mngt Net Asset Value N.A.V Trailing 12-mth yield (%) or YTD Morningstar risk rating
(w) (f) (w) * (f) ( e) (b) ( c) (w) * (e) (w) * (b) (w) * (c)
EXAMPLE Amundi Small Cap C ** LU1883306901 3.00% 0.76% 0.02% 98.06% 0.00% 2.70% 2.94% 0.00% 0.08% EU 57.70% Industrials 29.67% 1 1136.05 -18.61% 6
Blackrock European HY Bond * LU1191877379 2.00% 1.22% 0.02% 0.60% 89.21% 0.86% 0.01% 1.78% 0.02% UK 17.34% NA NA 1 12.07 -1.77% 5
Fund B
Fund C ..
Portfolio 100.00% 0.05% 2.95% 1.78% 0.10% Pflio average: Pflio average: 0 2 -0.593700%
EU 1.7% Industrials 29.67%
* https://www.morningstar.es/es/funds/snapshot/snapshot.aspx?id=F00000W4ZH US Tech
** https://www.morningstarfunds.ie/ie/funds/snapshot/snapshot.aspx?id=F000013SO7 UK 0.3% Cons. Cycl.
ex EU Communication
Asia Financials
etc
Search sources: https://www.mutualfunds.com/
https://www.morningstar.com/
https://etfdb.com/indexes/
Ex.2 (15 lines maximum) Explain 4 benefits and reasons for investing in a Mutual Fund
Ex.3 (15 lines maximum) What background check can investors do nowadays to understand the risk involved when buying shares in mutual funds?
Ex.4 (15 lines maximum) What are the minimum regulation requirements for mutual funds, index funds and ETFs?

https://www.mutualfunds.com/
https://www.morningstar.com/
https://etfdb.com/indexes/
https://www.morningstar.es/es/funds/snapshot/snapshot.aspx?id=F00000W4ZH

Financial markets homework help

U N I T 3 – C A P I T A L & M O N E Y
M A R K E T A N A L Y S I S

Financial Market Analysis
ACCT3602

1

Importance of Money Markets

 The Money Market

 the component of financial markets that involves short-term
borrowing/lending, or the buying and selling of financial assets with
original maturities of one year or less.

 Are used by governments, banks, and other large institutions for the
raising of short term finance to fund short-term cash flow needs;

sometimes for loans that are expected to be paid back as early as
overnight.

 Funds borrowed from the money markets are typically used for general
operating expenses or to cover brief periods of illiquidity.

 Money markets also allow individual investors to invest small amounts of
money in a low-risk setting, usually through a money market fund.

2

Functions of the Money Market
3

 Financing Trade: Money Market plays crucial role in financing both
internal as well as international trade.

 Commercial finance is made available to the traders through bills of exchange,
which are discounted by the bill market.

 The acceptance houses and discount markets help in financing foreign trade.

 Financing Industry – Money market contributes to the growth of
industries in two ways:

 Money market helps the industries in securing short-term loans to meet their
working capital requirements through the system of finance bills, commercial
papers, etc.

 The short-term interest rates of the money market influence the long-term interest
rates of the capital market; as it serves as the benchmark.

Functions of the Money Market
4

 Self-Sufficiency of Commercial Bank – money market enables
the commercial banks to use their excess reserves in profitable
investment and become self sufficient.
 Commercial banks can earn income from its excess reserves as well as maintain

liquidity to meet the uncertain cash demand of the depositors.

 In the money market, the excess reserves of the commercial banks are invested in
near-money assets (e.g. short-term bills of exchange) which are highly liquid and
can be easily converted into cash. Thus, the commercial banks earn profits without
losing liquidity.

 In situations of emergency and commercial banks have scarce funds, they don’t have
to borrow from the central bank at higher interest rates.

 They can meet their requirements by recalling their old short-term loans from the
money market.

Functions of the Money Market
5

 Help to Central Bank:
 Though the central bank can function and influence the banking system in the

absence of a money market, the existence of a developed money market
smoothens the functioning and increases the efficiency of the central bank.

 Money market helps the central bank in two ways:
 The short-run interest rates of the money market serves as an indicator of the

monetary and banking conditions in the country and, in this way, guide the
central bank to adopt an appropriate banking policy.

 The sensitive and integrated money market helps the central bank to secure quick
and widespread influence on the sub-markets, and thus achieve effective
implementation of its policies.

The Importance of Capital Markets
6

 Capital Markets are financial markets for the buying and selling of
long-term debt or equity-backed securities.

 These markets channel the wealth of savers to those who can put it to
long-term productive use

 such as companies or governments making long-term investments.

 Capital Market securities includes:
 Stocks/Equities
 Corporate Bonds
 Long-term Government Bonds

The Importance of Capital Markets
7

 Capital market plays an important role in mobilizing saving and
channelling them into productive investments for the development of
commerce and industry.
 thereby helping capital formation and economic growth of the country.

 The capital market acts as an important link between savers and investors.
 The savers are lenders of funds while investors are borrowers of funds. The savers who do

not spend all their income are called. “Surplus units” and the borrowers are known as
“deficit units”.

 The capital market is the transmission mechanism between surplus units and deficit units.
It is a conduit through which surplus units lend their surplus funds to deficit units.

 Surplus units buy securities with their surplus funds and deficit units sells securities to raise
the funds they need.

The Importance of Capital Markets
8

 Funds flow from lenders to borrowers either directly or indirectly
through financial institutions such as banks, unit trusts, mutual
funds, etc.

 Funds flow into the capital market from individuals and financial
intermediaries which are absorbed by commerce, industry and
government.
 It thus facilitates the movement of stream of capital to be used more productively

and profitability to increase the national income.

 The borrowers issue primary securities
 which are purchased by lenders either directly or indirectly through financial

institutions.

The Importance of Capital Markets
9

 The capital market provides incentives to savers in the form
of interest or dividend and transfers funds to investors for
capital formation.

 It diverts resources from wasteful and unproductive
channels
 such as gold, jewellery, real estate, conspicuous consumption, etc. to

productive investments.

 A well-developed capital market comprising expert banking
and non-banking intermediaries brings stability in the value
of stocks and securities.
 It does so by providing capital to the needy at reasonable interest rates

and helps in minimizing speculative activities.

The Importance of Capital Markets
10

 The capital market encourages economic growth.
 The various institutions which operate in the capital market give quantitative and

qualitative direction to the flow of funds and bring rational allocation of resources.

 They do so by converting financial assets into productive physical assets. This leads to
the development of commerce and industry through the private and public sector,
thereby inducing economic growth.

 In underdeveloped or developing countries where capital is scarce, the
absence of a developed capital market is a great hindrance to capital
formation and economic growth.
 Even though people are poor, they do not have any inducements to save.

 Those who save, invest their savings in wasteful and unproductive channels, such as
gold, jewellery, real estate, conspicuous consumption, etc.

 Such countries can induce people to save more by establishing banking and non-
banking financial institutions for the existence of a developed capital market.

Importance of Capital Markets
11

 Capital market activities results in increase productivity within the
economy leading to more employment, increase aggregate
consumption and hence economic growth and development.

 It diffuses stress on the banking system by matching long-term
investments with long-term capital.

 It encourages the broader ownership of productive assets by small
savers and encourages a thrift culture that is essential for rapid
industrialization.

 It allows for risk dispersion between investors (diversifiable risks),
risks that could be realized by the help of different market
operations or market orders or derivatives.

Importance of Capital Markets
12

 It provides not only equity capital but also infrastructure capital that
has strong socio-economic benefits through development of roads,
water, housing, telecommunications, transport, etc.

 Capital markets promote public-private sector partnerships by
encouraging participation of private sector in productive investment
by closing the financial resource scarcity gap.

 It also attracts foreign portfolio investors who are critical in
supplementing the domestic savings levels; thereby facilitating
foreign inflows.

Functions of Capital Markets
13

 Link between Savers and Investors

 Encourage to Savings

 Encourage to Investments

 Promotes Economic Growth

 Stability in Security Prices
 The capital market tends to stabilise the values of stocks and securities and reduce the

fluctuations in the prices to the minimum.

 The process of stabilisation is facilitated by providing capital to the borrowers at a lower
interest rate and reducing the speculative and unproductive activities.

Primary Market

Primary Market is that market in which shares,

debentures and other securities are sold for the first

time when raising long-term capital.

This market is concerned with new issues.

 Therefore, the primary market is also called NEW ISSUE

MARKET.

14

In this market, the flow of funds is from savers to
borrowers (industries),
 it helps directly in the capital formation of the country.

The money collected from this market is generally used
by the companies to modernize their plants, machinery
and buildings, for extending business, and for setting up
new business unit.

Primary Market
15

Methods of Raising Capital in the Primary Market

 The following are the methods of raising capital in the primary market:

 Public Issue – the company invites subscription from the public
through the issue of prospectus (and issuing advertisements in news
papers).
 Public issue is of two types, namely, initial public offer (either a fresh issue

of securities or an offer for sale of existing securities or both by an unlisted
company for the first time in its life to the public), and follow-on public
offer (an offering of either a fresh issue of securities or an offer for sale to the
public by an already listed company).

 Offer For Sale – securities are offered to the public through an
intermediary such as issue houses, merchant bank, investment bank or
firm of a stock broker. The intermediary will buy from the firm at an
agreed price and then sell to the public at market prices.

16

Methods of Raising Capital in the Primary Market
17

 Private Placement – the issue of securities of a company direct to one
investor or a small group of investors.
 Generally the investors are the financial institutions or other existing companies or

selected private persons such as friends and relatives of promoters. Company law
defines a privately placed issue to be the one seeking subscription from 50 members.
In a private placement, no prospectus is issued

 Right Issue – an existing company issues shares to its existing
shareholders in proportion to the number of shares already held by
them. Thus, a right issue is the issue of new shares in which existing
shareholders are given pre-emptive rights to subscribe to the new issue
on a pro-rata basis.
 If the shareholders neither subscribe the shares nor transfer their rights, then the

company can offer the shares to public.

 Electronic-Initial Public Offer – Electronic Initial Public Offers (e-
IPOs) allow investors to bid for shares through internet.

Secondary Market

 The secondary market is that market in which the buying and

selling of the previously issued securities are done.

 The transactions of the secondary market are generally done

through the medium of stock exchange.

 The chief purpose of the secondary market is to create liquidity

in securities.

 To sell or purchase through the stock exchange requires the

services of a broker.

18

Features of Secondary Markets

It creates liquidity.

It comes after primary market.

It has a particular place.

It encourages new investments.

19

Economic and Industry Analysis
20

The following factors will affect the prices of shares on the stock market.
 Demand and Supply – The trend of the stock market trading directly

affects the price.
 When people are buying more stocks, then the price of that particular stock

increases. On the other hand, if people are selling more stocks, then the price
of that stock falls. This is also the trend in individual stocks.

 The price is directly affected by the trend of stock market trading.

 Market Cap – If you are trying to guess the worth of a company from the
price of the stock, you are making a huge mistake.
 It is the market capitalization of the company, rather than the stock, that is

more important when it comes to determining the worth of the company.
 You need to multiply the stock price with the total number of outstanding

stocks in the market to get the market cap of a company and that is the worth
of the company.

Economic and Industry Analysis
21

 Earnings Per Share – Earning per share is the profit that the company
made per share in the last quarter.

 It is mandatory for every public company to publish the quarterly report
that states the earning per share of the company.

 This is perhaps the most important factor for deciding the health of any
company

they influence the buying tendency in the market, resulting in the
increase/decrease in the price of that particular stock.

 So, if you want to make a profitable investment, you need to keep watch on
the quarterly reports that the companies publish and scrutinize the
possibilities before buying stocks of particular companies.

Economic and Industry Analysis
22

 Price-Earnings Ratio or the P/E ratio gives you a fair idea of how a
company’s share price compares to its earnings.
 If the price of the share is much lower than the earning ratio of the company, the stock is

undervalued and it has the potential to rise in the near future. On the other hand, if the price
is way higher than the actual earning of the company, then the stock is said to overvalued and
the price can fall at any point.

 However, there are many other reasons behind the fall or rise of the share
price.

 Economic Growth Data- stock prices react in a positive way if the growth
of all the sectors of the economy is consistent otherwise they will react by
falling sharply.
 Sectors such as automobiles, banking and financial services, metal and commodities, capital

goods and infrastructure depend largely on economic conditions.

 In times such as economic recession, you will get stocks cheaper than they
were in times of market highs.

Systemic and Engineering Effects on Prices
23

 News
 Positive news about a company can increase buying interest in the market while a

negative press release can ruin the prospect of a stock.

 Always remember that often times, despite amazingly good news, a stock can show
least movement. It is the overall performance of the company that matters more
than news. It is always wise to take a wait and see approach in a volatile market or
when there is mixed reaction about a particular stock.

 Dividend

 Dividends act as a signalling device for share price movement. If companies
announce dividends, generally share prices of those companies tend to
increase. An important point to note is, if the rate of dividend announced is less
than what was expected by investors, share prices would decline, whereas if
they are up to or more than expectations, share prices would increase.

Systemic and Engineering Effects on Prices
24

 Bonus Issue
 Bonus issues are additional shares distributed by the company to its shareholders. The

advantage is that, the company is able to reinvest the dividend cash for better earnings
growth while awarding their loyal shareholders. Increasing the number of outstanding
shares decreases the stock’s price; making the stock more affordable for investors.

 Company Performance
 Future expansion policies of the company, present acquisitions, the kind of management

of the company, revenues, free cash flows generated, all determine the stock prices.
 Finding companies with impressive performance, will help you emerge successful in markets

which are hard to predict.

 Investor Behaviour
 Investors will first of all look for profitable bets. They will be booking profits at every level

which can bring down stock prices. So, investor behaviour in stock markets affect stock
prices greatly.

 Stock prices see an all time high in times of bull market, while they can correct to a great
extent in a bearish market trend.

Bull vs Bear Markets
25

 A bull market is a market that is on the rise and is economically sound,
while a bear market is a market that is receding, where most stocks are
declining in value.

 Although some investors are “bearish,” the majority of investors are “bullish.”
 The stock market, as a whole, has always posted returns.

 A bear market is more dangerous to invest in as many equities lose value.
 Since it is hard to time a market bottom, most investors withdraw their money from the

markets and sit on cash until the trend reverses.

 The most recent U.S. bear market started in 2020. The stock market crashed
in March, with the Dow Jones Industrial Average and the S&P 500 Index both
falling more than 20% from their 52-week highs in February. Prior to that was
2007-2009 – down 57% over 1.4 years.

Systemic and Engineering Effects on Prices
26

 Foreign Institutional Investor Behaviour

 These are the institutions which buy and sell stocks in huge quantities.

 So, any kind of buying will be positive for stock prices and selling will affect them negatively.

 By imposing restrictions on the foreign investors, many stock exchanges across the word have
brought in more transparency and regulations for the benefit of retail investors. This also helps
you in knowing how to predict future stock prices.

 Political Conditions

 For a steady economic growth, a stable and effective government is required.

 In absence of conducive political environment, the entire stock market is expected to take a hit.

 Valuations of Stocks

 Investors consider the valuations of stocks before purchasing them and they may postpone buying
stocks if the current valuations are not good enough.

 This can affect the price of the stock in a negative manner.

Economic & Industry Influences: Inflation

 High Inflation

 slows sales and reduces profits

 higher prices will also often lead to higher interest rates

 these changes will tend to bring down stock prices.

 High inflation also causes investors to think that companies may hold back on
spending

 this encourages investors to lock in their cash from equities to more attractive, less
risky securities, like money market funds which will cause a fall in stock prices.

 Stocks can beat inflation over time because companies can raise prices to account for
rising costs brought about by inflation.

 For example, when cost of sales and wages increases due to inflation, companies can
simply pass on the higher cost to consumers by raising prices over time. When
companies increase their prices, their revenues and earnings also increase.

27

Economic & Industry Influences:
Interest Rates

 Slowly rising interest rates can have a beneficial effect on stock prices.

 Rates generally creep up when the economy is booming.

 Higher market interest rates can also create a “buyers’ boycott” of the stock
market, as more attractive investment opportunities emerge.

 For example, Treasury bonds are considered a “risk-free” asset. Many
investors will choose Treasury bonds over the stock market.

 While stocks have a higher long-term average return, they are also volatile and
carry much higher risks than Treasury bonds.

 Fewer buyers mean less money to push up stock prices.

28

Economic & Industry Influences:
Interest Rates

 Higher interest rates also increase the cost of borrowing for companies.
 This directly reduces corporate earnings.

 Furthermore, higher rates make bonds more compelling to investors
compared to stocks.
 Bonds are generally safer, and a higher rate generally increases demand for bonds and may hurt

demand for stocks.

 Higher rates increase the cost of cash.
 This makes investors more impatient with companies with high cash reserves like Apple.

Investors will demand clear, compelling plans to grow or else demand cash be returned via
share buybacks and higher dividends.

 If this doesn’t happen, stock prices in cash rich companies will go lower and stay lower than
they would if the cash was freed up.

29

Economic & Industry Influences:
Savings

 Savings, according to Keynesian economics, are what a person has left over
when the cost of his or her consumer expenditure is subtracted from the
amount of disposable income earned in a given period of time.

 For those who are financially prudent, the amount of money left over after
personal expenses have been met can be positive;

 for those who tend to rely on credit and loans to make ends meet, there is
no money left for savings.

 Savings can be used to increase income through investing in different
investment vehicles.

30

Economic & Industry Influences:
Savings

 If disposable income increases

 the resultant increase in consumption could increase corporate sales and
corporate earnings which will increase the value of individual stocks.

 The increase in individual share price valuations could then lead to a market-
wide increase in value and potentially leads to an economic boom.

 If disposable income decreases

 consumers become thriftier and the decreased consumption could then
decrease corporate sales; corporate earnings and hence the value of
individual stocks.

 This decrease in individual share price valuations could then lead to a
market-wide decrease in value and potentially leads to a depression or
recession.

31

Economic & Industry Influences:
Savings

 Increases in disposable income don’t always result in an increase in value of the
stock market, and vice versa.

 Banks offer savings accounts as means of enticing depositors to provide extra
cash so bankers can make loans.

 When banks want extra deposits

 they can raise the interest rate offered on saving accounts to attract cash

 which can contribute to a decrease in prices in the stock market

 some customers would now be interested in opening savings accounts or
depositing larger sums of money into banks rather than purchasing shares of
stock.

32

Industry Indicators

 Industry Indicators are key variables that are used by businesses to
measure their performance and success against the industry in which they
operate.

 These indicators can be used to compare a company’s performance between
periods to determine whether the company against the industry has
performed favourably, unfavourably or indifferent.

 Note again that the stock price of the companies in the same industry will
move in tandem with each other. This is because market conditions generally
affect the companies in the same industry the same way.

 But sometimes, the stock price of a company will benefit from a piece of bad
news from its competitor if the companies are competing for the same
market.

33

Overvalued or Undervalued Stocks
34

Investors may be willing to pay more for stocks with superior growth
potential, but they don’t want to overpay for a company whose growth
prospects don’t justify its current price.

 P-E Ratio: A stock might be overvalued if the Price-to-Earnings Ratio is
high.
 The ratio is calculated by dividing the market value price per share by the company’s

earnings per share

 The average P/E for the S&P 500 has historically ranged from 13 to 15.
 For example, a company with a current P/E of 25, trades at 25 times earnings. The high

multiple indicates that investors expect higher growth from the company compared to the
overall market.

 A high P/E does not necessarily mean a stock is overvalued.
 Any P/E ratio needs to be considered against the backdrop of the P/E for the

company’s industry.

Overvalued or Undervalued Stocks
35

 PEG ratio: One way to determine whether a stock may be overvalued
is to look at the price-to-earnings-growth ratio.
 The price-to-earnings-growth ratio is the estimated price-to-earnings ratio (the

current price divided by the earnings per share forecast for the next 12 months)
divided by the median long-term earnings growth forecast.

 A stock is considered to be fairly valued if the PEG ratio is 1 (in which case the P/E
equals the estimated earnings growth) and possibly overvalued if the PEG is over 1.

P/E Ratio = stock price
EPS

PEG Ratio = P/E Ratio
Earnings Growth Rate

Growth Rate = Current EPS – 1 X 100
Last EPS

Overvalued or Undervalued Stocks
36

 Cyclical industry: A stock might be overvalued if it is in a cyclical
industry and profits are at all time highs.

 Dividend yield: the dividend amount divided by the stock price.
 It tells you what percentage of your purchase price the company will return to you in

dividends. When stocks are cheap, dividend yields are high.

 Interest rates: Interest rates are important, because they determine,
amongst other things, the return investors get on government bonds.
 Government bonds are, in theory at least, the most secure way to invest your money, since

the government guarantees your returns. Therefore, the yield on government bonds is
sometimes referred to as the risk-free rate.

 If bonds yield more than stocks, investors will naturally put their money in the risk-free
bonds instead of in volatile stocks, therefore creating less demand for stocks which
inevitably results in lower stock prices.

Overvalued or Undervalued Stocks
37

 Market capitalization to GDP: Buffett’s personal favourite!

 He said that the Market Cap to GDP ratio is “…probably the best
single measure of where valuations stand at any given moment.”
 The idea is that when the market cap is higher than GDP, the stock market is

overvalued.

 If the market cap is below the GDP, the stock market is undervalued.

Liquidity and Illiquidity of Securities Market
38

 Market liquidity: is a market’s ability to facilitate an asset being sold
quickly without having to reduce its price very much (or even at all).

 Asset’s market liquidity (or simply “an asset’s liquidity”): is the
asset’s ability to sell quickly without having to reduce its price very much.

 Liquidity is about how big the trade-off is between the speed of the sale and
the price it can be sold for.
 In a relatively liquid market, the trade-off is mild: selling quickly will not reduce the price

much. In a relatively illiquid market, selling it quickly will require cutting its price by some
amount.

 Liquid asset: this has some or all of the following features: It can be sold
rapidly, with minimal loss of value, and any time within market hours.

Liquidity and Illiquidity of Securities Market
39

 Speculators and market makers are key contributors to the liquidity of a
market, or asset.
 Speculators and market makers are individuals or institutions that seek to profit from

anticipated increases or decreases in a particular market price.

 By doing this, they provide the capital needed to facilitate the liquidity.

Liquidity Risk
40

Financial institutions and asset managers that oversee portfolios are subject
to what is called “structural” and “contingent” liquidity risk.

 Structural Liquidity Risk
 sometimes called funding liquidity risk, is the risk associated with funding asset

portfolios in the normal course of business.

 This is the risk affecting or potentially affecting results or capital as a result of the Bank
being incapable of meeting its payment obligations upon maturity, without incurring
unacceptable losses

 Mismatched maturities

 Contingent Liquidity Risk
 the risk associated with finding additional funds or replacing maturing liabilities under

potential, future stressed market conditions.

 When a central bank tries to influence the liquidity (supply) of money, this process is known
as open market operations.

Characteristics of Liquid Markets
41

 The essential characteristic of a liquid market is that there are always
ready and willing buyers and sellers.

 It is similar to but distinct from market depth:
 market depth relates to the trade-off between quantity being sold and the price it can

be sold for;

 rather liquidity relates to the trade-off between speed of sale and the price it can be
sold for.

 A market may be considered both deep and liquid if there are ready
and willing buyers and sellers in large quantities.

Effects of Liquidity on Asset Value
42

 The market liquidity of assets affects their prices and expected returns.

 Investors require higher return on assets with lower market liquidity to
compensate them for the higher cost of trading these assets.
 That is, for an asset with given cash flow, the higher its market liquidity, the higher its

price and the lower is its expected return.

 Risk-averse investors require higher expected return if the asset’s
market-liquidity risk is greater.
 This risk involves the exposure of the asset return to shocks in overall market

liquidity, the exposure of the asset own liquidity to shocks in market liquidity and the
effect of market return on the asset’s own liquidity.

 Here too, the higher the liquidity risk, the higher the expected return on the asset or
the lower is its price.

Effects of Liqui

Financial markets homework help

Assignment #4 template – Business 100

Name:

Question 1: Organizational Structure

Based on your knowledge of hierarchies, would you say that this company has a tall hierarchy or a flat hierarchy and why?

· Tall Structure.

· Flat Structure.

Question #2: Human Resources

Which step of the Human Resources Cycle is missing from what is described in the memo?

· Recruit.

· Employ.

· Reward.

· Manage.

· Develop.

· Transition or Exit.

Why is the missing step so important?

Question #3: leadership style

Identify this leader’s leadership style:

· Pacesetting.

· Visionary.

· Affiliative.

· Coaching.

· Coercive.

· Democratic.

Explain why you selected that style. Also, provide two benefits and two drawbacks to that leadership style.

Next step: submit your work

1. Save this completed template to your desktop

· Navigation: Select File at the top, then select Save As > Browse > Desktop, select Save.

2. Log into your class and select Assignment #3 on the left, scroll down and select Submit Your Work, click Browse My Computer, find your file on the desktop, click Open, then click Submit.

3. If you have any issues please email me or call.

I will provide you assignment feedback and you can then make any changes you would like and resubmit for grading.

Congrats on completing Assignment #4!

Financial markets homework help

The most played slots in the UK

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Financial markets homework help

Discussion Question

Generational differences in response to marketing campaigns

Every generation “has its own needs, values, and consumption patterns” (Lamb et. al., 2021, p. 54), and it is up to marketers to ensure that they are properly marketing to their target demographic. This does not mean that an advertisement from a decade ago geared towards individuals in their 30’s will appeal to today’s 30-something-year-olds. As the world changes, the music, images, and references that appeal to age classes change as well. A great example of this is the use of late 90’s/early 2000’s music in commercials recently, such as Discover Card’s use of Shaggy’s 2000 song “It wasn’t me” (iSpot.tv, 2022, 1) to market a credit card and Samsung’s use of Backstreet Boys’ 1999 song “I want it that way” (iSpot.tv, 2022, 2), to market a phone purchase. These companies are looking to appeal to adults that are of the age to make big purchases/decisions such as getting another credit card or buying a phone for a teen/tween son or daughter. These adults are in the generation who grew up in the 90’s, and thus find music and references such as the above nostalgic and entertaining. This subtle marketing can influence the purchase of the goods or service being marketed in ways that more overt marketing could not.

International trade agreements throughout the world

Pages 80-85 of MKTG13: Principles of Marketing (Lamb et. al., 2021) covers various trade agreements across countries. Many of these trade agreements remove tariffs and limits on imported goods, and some agreements create complete free trade. In fact, it would seem that most developed countries, and many developing countries, are involved in these trade agreements. Free trade is a cornerstone of globalization, as it creates “competition to drive down prices and increase product service quality” (Lamb et. al., 2021, p. 73) and supports the local and global economy. Countries that are not involved in any of these agreements should examine the “why” (is it lower quality products? Poor working conditions? Products priced above the global market equilibrium price?) and adjust these inputs in order to take advantage of the benefits of free (or low-cost) international trade.

Additional complications in the global marketing mix

In chapter 2 of MKTG13: Principles of Marketing, Lamb et. al. (2021) highlight the four P’s of the marketing mix: production, place, promotion, and pricing. While these apply in any marketing context, there are additional factors within each of these principles when looking at the global marketing mix (Lamb et. al., 2021, pp. 90-95). In a single market, product standardization is king. However, in a global market adapting a product to better fit the local market, as well as creating new products for local markets, will ensure company longevity in the market. Lamb et. al. (2021) uses the examples of different Pringles and Oreo flavors for different countries to best speak to the tastes of consumers in those markets (p. 91). Constantly fluctuating exchange rates also impacts the fourth P in the marketing mix, pricing. Depreciating currency will lead to price increases for imported goods and appreciating currency will lead to price decreases (well, maybe not…) for imported goods (Lamb et. al., 2021, p. 93). Despite no production costs changing, the change in exchange rate can influence the price of a good in a country, making consumers more or less likely to purchase a product. If the value of currency in that country depreciates, importers of goods need to evaluate other aspects of their marketing mix in order to keep sales of their product up.

References:

iSpot.tv (2022). Discover Card TV spot, ‘Straight’ song by Shaggy. Retrieved from https://www.ispot.tv/ad/qR9s/discover-card-fraud-protection-song-by-shaggy (Links to an external site.)

iSpot.tv (2022). Samsung Mobile TV spot, ‘You are the gift’ song by Backstreet Boys. Retrieved from https://www.ispot.tv/ad/qR57/samsung-mobile-you-are-the-gift-song-by-backstreet-boys (Links to an external site.)

Lamb, C., Hair, J., & McDaniel, C. (2021). MKTG13: Principles of marketing. Boston, MA: Cengage.

Financial markets homework help

Kingdom of Saudi Arabia

Ministry of Education

Saudi Electronic University

A picture containing text, outdoor, sign  Description automatically generated

المملكة العربية السعودية

وزارة التعليم

الجامعة السعودية الإلكترونية

College of Administrative and Financial Sciences

Assignment-2

FIN-405-Financial Derivatives

Due Date: 17/4/2022@ 23:59

Course Name: Financial Derivatives

Student’s Name:

Course Code: FIN-405

Student’s ID Number:

Semester: Second

CRN:

Academic Year:2021-22-2nd

For Instructor’s Use only

Instructor’s Name:

Students’ Grade:

Marks Obtained/Out of 10

Level of Marks: High/Middle/Low

General Instructions – PLEASE READ THEM CAREFULLY

· The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.

· Assignments submitted through email will not be accepted.

· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.

· Students must mention question number clearly in their answer.

· Late submission will NOT be accepted.

· Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.

· All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).

· Submissions without this cover page will NOT be accepted.


Assignment 2

Submission Date by students: 17/04/2022-11:59 PM

Place of Submission: Students Grade Centre via blackboard.

Marks: 10 Marks


Assignment Purposes/Learning Outcomes:

CLO-2: Describe trading strategy which incorporates the use of call and put options

CLO-4. Calculate option maximum gain, maximum loss, and breakeven on various options positions


Assignment Question(s): (Marks 10)

Q1.Explain each of the following concepts as they relate to call options. (3 Marks)

a. Delta ( 1 Mark)

b. Gamma ( 1 Mark)

c. Rho ( 1 Mark)

Q2.What are the differences among scalpers, day traders, and position traders? (3 Marks)

Q3. Assume the possible stock prices of Hull Inc. are $150, $155, $160, $165, $170, $175, and $180. The price(premium) is $5 for October165 put option of Hull Inc.

Suppose you buy one October 165 put option contract(Np=100) of Hull Inc. and hold it until the options expire.

a) Determine the profit and loss at respective stock prices of Hull Inc. (2 Marks)

b) Determine the breakeven stock price at expiration. (1 Mark)

c) What are the maximum possible profit and loss on this transaction. (1 Mark)

Financial markets homework help


Assignment #4 INSTRUCTIONS – Business 100

Name:

QUESTION 1: ORGANIZATIONAL CULTURE

Background information needed to answer Question #1:

Review the organizational chart below and the different types of company hierarchies:

Key Learning: Organizational Structures: Tall versus Flat Hierarchies

tall hierarchy is a traditional way to organize management. There are many levels of employment, and a few employees at each level report up to a manager at the next level. For example, at Starbucks, baristas report to store managers, and store managers report to regional managers, and regional managers report to executives at headquarters. This works really well for Starbucks! Baristas are carefully and consistently trained and supervised so that you can count on the same cup of coffee at any store. Employees who want to advance can work hard and make their way up the chain to gain more management responsibilities. Business is efficient and quality is consistent.

On the other hand, some businesses prefer a flat hierarchy. When Paul and Ari founded Zingerman’s Delicatessen, they wanted to make sure that every employee felt empowered to make decisions to improve the customer experience. In their service-oriented business, Paul and Ari’s employees get their jobs done in creative and collaborative ways. A flat hierarchy makes this possible.

Go to the Assignment #4 Template and complete Question 1.

QUESTION 2: HUMAN RESOURCES

Background information needed to answer Question #2:

Review how this company applies the Human Resources Cycle by reviewing the following memo:

“Hello, Head of HR here providing you a bit more insight into our process. I’ve included a flow chart on the high-level process (see below) but also wanted to provide a more detailed explanation. Our HR cycle begins with our recruiting department. We have campus recruiters who attend career fairs and develop relationships from select universities around the country. We also do a substantial amount of recruiting through LinkedIn, targeting professionals further along in their career with the backgrounds we look for. We then conduct phone screens with qualified candidates, followed by rigorous in-person interviews. We hire approximately 10% of the candidates we interview in-person. Once an employee comes on-board, our performance management system begins. Employees are required to write out goals and objectives after their first 30 days on the job. They have regular ongoing conversations with their direct managers, as well as with assigned mentors, regarding their performance. On or near their anniversary date, we conduct a formal performance review. In the review, we evaluate how the employee performed relative to the goals they mapped out for themselves, and relative to our expectations. Based on the result of the performance review, we make compensation adjustments and promotion decisions. Finally, when an employee does exit their role, by transitioning to another role within the company or by terminating their employment, we conduct formal exit interviews. Hope this helps. Look forward to your feedback on how we can improve.”

Key Learning: these are all of the components of the Human Resources Cycle:

Go to the Assignment #4 Template and complete Question 2.

QUESTION 3: LEADERSHIP STYLE

Background information needed to answer Question #3:

You have been asked to help improve the leadership style of the team leader in order to meet the team’s performance goals. The team leader has given you a description of what is most comfortable in terms of leading others in this memo:

“Hi, I’m writing this email in response to your request for an overview of my leadership style. First, I think it’s important to tell you how I got to my role as the General Manager. I started at the bottom and I’ve worked my way up through the ranks by being the top performer in every role I’ve had. I’ve worked hard to get to where I am today, nothing has been given to me, and I believe everyone reporting to me should have a similar mindset and work ethic. I’m looking for people who can keep up with my level of performance; that’s what we need to achieve our organizational goals. I demand a lot from people. Some might say I’m difficult to please, but I believe in continually pushing people to achieve results they previously didn’t think possible. To do that, my employees must move fast and execute on the directives I give them. If they can’t, then I need to find others who can keep up. That may sound harsh, but I view maintaining a strong performance-based culture as my responsibility as a leader. Please feel free to contact me with any questions.”

Key Learning: Here are the different leadership styles

Go to the Assignment #4 Template and complete Question 3.

Next step: submit your work

1. Save your completed template (not these instructions) to your desktop.

· Navigation: Select File at the top, Save As, select Desktop, and select Save.

2. Log into your class and select Assignment #4 on the left, scroll down and select Submit Your Work, click Browse My Computer, find your file on the desktop, click Open, then click Submit.

3. If you have any issues please email me or call.

I will provide you assignment feedback and you can then make any changes you would like and resubmit for grading.

Congrats on completing assignment #4!

Assignment #4 Instructions Page of

Financial markets homework help

HARVARD BUStI{ESS scHooL

9-898-131
REv: $BPTDlttIER 21, 20t{

MI(.’HANI. WHRRI.PR

Discount and Hawkins Exercise: Confidential
Instructions for Tenant

Instructions

You represent a major retail chain engaged in a difficult negotiation with the developer of a
proposed new shopping centrer. Although you have worked out most of the key pncvisions of a long-
term lease, your company and the developer at€ currenuy at impasse over the clause that would
govern the allowable use, assignment, and subletting of the premises.

Your assignment is to make one last effort to break this impasse. If the developer insists on its
proposed Erms, you witl kill the deal and seek another shopping cenbr in this region for your store.
Before you abandon this projecb however, you should try to craft a soludon that would meet your
intercsb but which you can also persuade the other side to accepl

Generd Background

The Merrimack Works, once a thriving glass factory on the ba*s of the Merrimack River in the
town of Northport, Massachusetb, is the si0e of a new shopping mall planned by thwkirs
Development (“Hawkins”). Ftrawkins is a small but reputable dcvelopment company founded about
20 years ago. Since then it has developed a number of successful officg commercial, and mixed-use
proJc\cts, though the Menimack Works Mall would be Hawkint’s largest venturc to date.

Flawkins recently approached Discount Marketplace (“Discoun(‘), a loading national retailer of
discount soft goods-clothing shoes, accessories, housewares, gifb, etc.-as a possible anchor tenant
for the mall. Reasonably well-known operations like Discount (which has more than 200 stores
nationwide) draw customerc to a mall and thus encourage smaller satellits tenanb to locate there as
well. Developers typically need signed leases from one or mor€ anchor tenants in order to get
lenders to provide project financing.

The Merrimack Worls site is a good locatioru near the expressway that links Northport to
metropolibn Boston. The local economy is reasonably strong though there is some concenr that
conUnuing cutbacks ln ftderal defense spending may be felt by some indush:lal employers. The mall
ibelf would coruist of approximately 350,000 square feet-84,000 of which would-be in the new
Discount sbore. In this particular design” there would be only one major anchor, with the rest of the
space occupied by much smaller retail stores.

Pm6esmr Ml<{uol Whrwh propred lhl$ ecerr{l* ti lhc hnrh for claee diruackrn rrthcr than b ttlutrrtp either Cfetiw or lneJfertlw hrrxtltng
of an admlnbtn[\rc rltultion.

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thio.publi:ntion may be rcproduc4 e0orcd in a reEievat 6y8rc’rt urcd tn a EpredCr€et, or trrns-mitted ln any form or Ly any ,rlnnr-cleirq,ii
nnchanical photo@Plh& tcording,orotherrvbe-wiltrout lhc pcmbbnof Haryard BurlftsSdrool

898,131 Dlocount and Hawklna Ц,xerd8で :Cわ nndeneJal lnattuctiona ror Tenant

As PIanS fOr the mau crystalよ 変d′ DscOunrs Cenerai COu出 産i and lhwttns’s senior vice
president began megodaばng a long‐te二 Ⅱ]lease for Dttountin he MerttRack Works pЮ

鮮 七 As a
basis For he negoば atiOtt Discomt Presentt its sぬ ndard FOm iease to Hawk沌 .For the most Par与

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pemanentlendeみ which has not mised any sottOus obiecばOns sO Far.

穏 静 幾 群 押 鍵 1報 騨 猟 離 盤 爵 隷 報 輔
uttimately extend the period to tt years.Alhough the rentai agreemenL wih sateili俺 俺nants
rema温 to be negoばa回′hey wiu be at si8nincanuy皿 gher per‐ square‐foot rates and wiu genemu/
mn for temns of 3 to 10 years.Hawmns has a ttn憔 岨ve lending commiment From a pension fund′
hough thと Is cOntingent On s∝ uring a″ Fimnceable leasざ w測にa cttditworthy anchor retailer,Iike
ЫscounL Such ttnancing is typically for 10 years.

Neg。籠aばons bemeen Hawkins and DttOuntr∝ enuy got bogged down′ howeveL over he″ use,
assignment and subleth8r Ciau策 、l h a nutthdL Discount sought terlns hat wOuld g市 e it
signincant iadmde in what it can do with the premises. By conttstt Hawkins wanted臣

8htre敵的 ns on how the sPace would be used and who could use it.Theお sues raised by he use′
assignIHlent and subletting dause are far ttom面 宙al. When serious iegal dね putes arise between
shopping center owners and heir nittr ttnttntt hey are ohen over pttdsely hese ttms.The

沼 肥 離 瀦

とPancular chutt wm ttgnhandy shape the ongoing確 皿 o礎mp礎脩 ∝n Haw節郎

Discount ittsぬken the position that botヽ ause of dunging ttaFketCOndittons and some uncerttinty
about uus pardcular site′ it canmOt iOck iber ink)。 ne format over a lon3‐ term lease. hwkins has
countered hat in order to atract sateMite tenanh and to saLrン :ぃ tendeL ule lease tems must

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that Dscownt w工I色y tO capmre heircustomers by inttduttg ntt g∞ ds and PrOduc皓 .

Ыscounrs″ standard″ lense From whlch he parues have been working lndudes he Following
clause:

2 Use,Assittnment and SubleHin史 .The premises herett demised may be used for any
:awFul pばPoseo Tenant Enay aSsign this iense or sublet the whole or any part of the deHlised

PrenliSes′ butifit does so′ it sllall rettah liable and rttpolisible under uus iease。

The negotiattons betveen Hawkins and ttcOunt had ttn genettIIy productive to ttb pomtt as

beatt the begimdng Of a lontttem business reladonshiP′ but nOW here L a chillin he air.Discount

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偽Ⅱowing ciause:

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薄 軸 都 争 震 脚

2

DI箕ouneand Hawkana Exe鷲 :ae:COnftdential lnatrucuo郎 For Tenane
S98‐13a

The Tenant may use hese p― ises
only in a maginer consと tent wih itt son gOOds rettil opemuon as d(斑 dbed herein for he term
oF tms tea`燈 .The Tenant may nOt ass18n or suЫ etthese Pttmises h whOle orin Part tO any
other vendor or entity withoutthe pHOr wtttten aP,ЮVal of heI´andiom,

旅 絆 穏 温 !鶏 翠 協 幣 許 与ギ慧 需
such a tOng term. Convorsely′ even if Discount were wttling to substanttnⅡ y sweeben the base rent or
pettentage agreemenし dOing so wOuld not meet Hawki1ls′ s stated needs. In shOrt his issueと a
potendal donl‐ breakeR

who wOre not di,電 〔uy invoivod in he 触dばal

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erson and realize that there wiu be no deal unless

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Norheast Reがo恥 DiscOult MttkettlaCe

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unt cannot agree to lease tems that could seriously

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mainttining titt Operadon.Nevetthe烙彬Dttount su‖ mttht benent by havhg dttredon to suЫ et
some ofitt space or to nlOdiら

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FegaFded aSchnβ

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For these ttasOils and undOubtedly mOre),Discount has iにluded Article 22 in ttL soでali頷

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Financial markets homework help

U NI T 2 – T H E S T O C K M A R K E T

Financial Market Analysis
ACCT3602

1

The Role of a Stock Market
2

A stock exchange allows companies to raise funds by providing them with access to a pool of
private and institutional investors. The role of an exchange is therefore to:

 Bring companies and investors together

 Enable issuers and companies to raise new capital
 Facilitate the process of investors subscribing in shares (securities)

 Provide capital to companies and investors
 Facilitates

– trading in securities after the IPO
– buying and selling of securities between investors

 Organises and oversees a fair and efficient market

 Ensures an efficient price discovery process (the process of determining the price of the
securities in the market place)

 Provides timely and accurate trading and company disclosure information to inform
private investor trading

The Role of a Stock Market

 Central roles of a stock market:

 Making available cost-effective trading platforms.

 Bundling of liquidity by concentrating supply and demand.

 Guaranteeing the interchangeability, as well as the identical
structuring of a particular category of security.

 Ensuring the greatest possible transparency for investors.

 Providing information on prices and volume.

Benefits of the Stock Market
4

 Stock markets are an integral part of the economy
 they provide unique services and benefits to corporations, individual investors and

governments.

 Benefits for Corporations
 Raising Capital: A corporation is able to make an Initial Public Offering (IPO) on

the stock exchange and gain access to many investors, as well as to supply new capital
for their business. Once listed, there is the opportunity for further issuance if needed.
Access to the stock markets also facilitates growth by merger or acquisition through
share purchases.

 Companies have many options to raise capital.

 Self financing – generation of one’s own capital from one’s own income, instead of
acquiring it from external resources

Benefits of the Stock Market
5

 Bank loans – are the most
“traditional financial resources and
are normally used to finance smaller
projects.

 Fund raising options such as Private
Equity and IPOs are used to finance
extraordinary events such as
mergers and acquisitions or to
support companies during their
growth phase.

Benefits of the Stock Market
6

 Benefits for Investors

 Improved Returns: Equities have no maturity date and no fixed rate of return. This makes
them a riskier investment than money market securities or bonds. What equities provide is
the prospect of a combination of income and capital gains, plus a superior rate of return. The
stock market gives the flexibility to invest small or large amounts and the choice of a vast
number of different corporations and industries in which to invest.

 Benefits for the Economy

 Putting Peoples’ Savings to Work: If individuals keep their savings in cash, or even a bank
account, there is little or no benefit to the economy. Investment in stocks, however, is a
direct investment in the success of individual businesses and helps promote stronger
economic growth.

 Measure of the Economy’s Performance: Although the health of the economy cannot be
directly correlated with the performance of the Stock Market, it is true that the performance
of share prices in general will be a good indication of its current condition and of the
confidence of individuals within that economy.

Benefits of the Stock Market
7

 Corporate Governance:
 The regulations required for a corporation’s stock to be listed on the Stock Exchange

and the ongoing requirements to maintain that listing are a good way to ensure that
management standards and standards of record keeping within that corporation are
maintained at a high level.

 There have been notable exceptions, but genera