Forces for Change Essay Assignment
Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages
Forces for Change Essay Assignment
Using the Internet, AUO library and other sources research a recent case study (less than 5 years old) about a company which experienced major organizational changes. Now consider that you are an organizational behavior consultant assigned to help the company navigate and manage the change. Write a report to your supervisor analyzing the reasons for the change and discussing the following points in your report:
- What was the internal or external pressure that caused the change? Compare the driving force for the change to the specific types of pressures noted in your reading assignments.
- What organizational changes resulted from the pressure for change?
- Consider that there were probably forces within the company that resisted the change. What might have been their rationale against the change? Do you feel these are valid points? Why or why not?
- Do you think that other organizations in the same industry would have reacted in the same way? Why or why not?
Your report should be no more than 4-5 pages and in current APA edition format. Submit this to the M1: Assignment 3 Drop box by Wednesday, July 2, 2014.
Assignment 3 Grading Criteria Maximum Points Discussed the internal and/or external pressure that caused the change. 25 Explained the organizational changes which resulted from the change. 25 Explained the validity of resistance to the change. 20 Explained how other organizations in the same industry might have reacted. 20 Case study was less than 5 years old, report used correct grammar, spelling, and word choice and cited all sources as per the APA style. 1
Assignment 3 Details
Complete and submit Assignment 3, which is worth 15% of your final grade, after you have finished Unit 6. If you have any questions about this assignment and how to complete it, contact the Student Support Centre.
This assignment contains ten problems and is worth a total of 100 marks.
Read the requirements for each problem and plan your responses carefully.
Ensure that you answer each of the required questions as concisely and as completely as possible and include supporting calculations where required.
1. (7 marks) You are a bright new analyst in the risk-management division at RMS, a multinational technology company, and have recently been put in charge of managing the Euro/CAD exchange-rate risk that RMS faces. Consider RMS’s operations in Europe and Canada.
a. Suppose monthly revenues in Europe average 10 million Euros and monthly production and distribution costs average 8 million Euro. If the resulting profits are repatriated to the production unit in Canada monthly, what risk does this production unit face? How might it hedge this risk? (2 marks)
b. RMS’s worldwide retirement benefits unit is located in Canada and has the obligation to pay its retired European employees 20 million Euros monthly. What does this unit face and how could it hedge the risk? (2 marks)
c. Given the transactions of the production and retirement units as given previously, what do you conclude are the exchange-rate risks faced by RMS as a whole in Europe? Does RMS need to enter into forward contracts? (3 marks)
2. (10 marks) Suppose the spot exchange rate between U.S. dollar and Canadian dollar is US$1.03/C$. The U.S. dollar risk-free rate is 2% per annum, compounded annually.
The price of a two-year European call option and put option with an exercise price of US$1.05/C$ is US$4.45 and US$4.54, respectively. What is the Canadian dollar risk-free rate?
FNCE 403v2 Assignment 3 Revised Nov. 7, 2012
3. (10 marks) Two firms have the borrowing rates shown below.
Firm Fixed Rate Floating Rate
AAA 5 yr. T-bond + 60 bp LIBOR
BBB 5 yr. T-bond + 75 bp LIBOR + 30 bp
As the CFO of firm AAA, you always consider an interest rate swap before
borrowing money. Explain how, if at all, a swap with BBB would be
advantageous to you if
a. you wanted to borrow at a fixed rate. (7 marks)
b. you wanted to borrow at a floating rate. (3 marks)
4. (10 marks) A corporation enters into a $35 million notional principal plain
vanilla interest rate swap. The swap calls for the corporation to pay a fixed
rate and receive a floating rate of LIBOR. The payments will be made every
three months for one year. The term structure of LIBOR when the swap is
initiated is as follows:
Months Rate (%)
Assume all of rates are continuously compounded.
a. Determine the fixed rate on the swap. (7 marks)
b. Calculate the first net payment on the swap. (3 marks)
5. (10 marks) Suppose that the British pound interest rate is 0.65% per
annum and Canadian dollar interest rate is 1% per annum for all maturities,
The current exchange rate is 1.6033 CAD/£. Under
the terms of a swap agreement, a bank receives 2% per annum in Canadian
dollars and pays 3% per annum in British pounds. Payments are exchanged
every year, with one exchange having just taken place.
amounts are $10 million Canadian dollars and $6 million British pounds. The
swap will last two more years.
a. Determine the cash flows to the bank. (4 marks)
b. What is the value of the swap to the bank in terms of Canadian
dollars? (6 marks)
6. (6 marks) PQR Company longs an FRA on 2-month LIBOR with a fixed rate of
5.25 percent and a notional principal of $38 million. If the market LIBOR rate
is 6.125 percent at expiration, what would be the payoff of this FRA to PQR?
Assume that there are 30 days in a month.
FNCE 403v2 Assignment 3 Revised Nov. 7, 2012
7. (6 marks) A portfolio consists of 1,000 shares of stock and 500 short calls on that stock. If the delta for the call is 0.5, what would be the dollar change in the value of the portfolio in response to a one dollar increase in the stock price?
8. (16 marks) A firm has a portfolio composed of stock A and B with normally distributed returns. Stock A has an annual expected return of 10% and annual volatility of 25%. The firm has a position of $100 million in stock A. Stock B has an annual expected return of 20% and an annual volatility of 20% as well.
The firm has a position of $50 million in stock B. The correlation coefficient between the returns of these tow stocks is 0.2.
a. Compute the 5% annual VAR for the portfolio. (8 marks)
b. If the firm sells $10 million of stock A and buys $10 million of stock B, by how much does the 5% annual VAR change? (8 marks)
9. (16 marks) A firm has total assets with a market value of $1,500,000. It has one issue of 1,000 zero coupon bonds outstanding, each with a face value of $1,000 and a maturity of 3 years. The volatility of the assets is 20%, and the risk-free rate is 5%.
a. What is the market value of the firm’s equity? (7 marks)
b. What is the market value of the bonds? (2 marks)
c. What is the continuously compounded yield on the bonds? (2 marks)
d. Analyze the credit risk structure for this firm by varying the maturity on the bonds from 3 to 7 years. Discuss this credit risk structure. (5 marks)
10. (9 marks) Given interest rate options with notional principals of $10 million on an underlying 120-day LIBOR. The options have exercise rates of 6% and will expire in 30 days.
a. What is the payoff on the call option if the LIBOR in 30 days is 7%, in 60 days is 8%, and in 90 days is 9%? (3 marks)
b. What is the payoff on the put option if the LIBOR in 30 days is 3%, in 60 days is 4%, and in 90 days is 5%? (3 marks)
c. Discuss the difference between the payoff on an FRA and the payoff on an interest rate option. (3 marks)
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points: Student failed to submit the final paper. 5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors 10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points: Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper.
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