Final Exam Guide Essay Example for Free

Final Exam Guide Essay Question 1: How would you define successful leadership? What standard do you apply when evaluating leadership success? Is it possible to predict success based on organizational cultures or other factors? Provide examples to support your answer. Solution: Successful leadership is the ability to channel and coordinate the energy of the group to attain the desired goals of the business. It is the capacity to motivate and inspire followers to go beyond the distance of their perceived limitations, to rise to the challenges of the task at hand, and to seek out innovative and novel solutions. In a word, success leadership is empowering. As Eleanor Roosevelt once said, â€Å"A good leader inspires people to have confidence in the leader; a great leader inspires people to have confidence in themselves.† A successful leadership can be evaluated by the following standards: a) Example – A successful leader leads by example, which is the key to authentic leadership. This is demonstrated by working hard, making difficult decisions, taking risks, and personal sacrifices. b) Integrity – There are no shortcuts to success. A successful leader is honest, dependable and uncompromising on his or her work and business ethics. c) Solid goals – A successful leader has solid goals and direction, which are communicated to the team. The leader makes the team identify and take ownership of the business’s goals in order to motivate them to achieve these goals. d) Knowledge – A leader is equipped with knowledge and skills necessary for the enterprise. The leader leverages the team’s best chance of success by knowing and understanding the obstacles, competition and risks present in an endeavor. e) Autonomous – A successful leader provides for autonomy by empowering the members to think, innovate and own the solution to a problem. f) High Expectations – A successful leader expects a high level of excellence from the team. Expectations create results; people want to proud of their work. However, high expectation does not mean perfection. Rather, it is learning through experience and errors, and being accountable for one’s mistakes. g) Humility – A successful leader knows the value of  teamwork and gives credit where it is due. Leadership is not about personalities; it is about directing the group’s efforts toward the completion of an endeavor. h) Execution – A successful leader has the discipline to get things done. He or she can bridge the gap between theory and actual execution of a plan. Nagavara Ramarao Narayana Murthy is an Indian businessman and co-founder of Infosys, which was founded in 1981. Mr. Murthy served as CEO of Infosys from 1982 to 2002, and as chairman from 2002 to 2011. He stepped down from the board in 2011, and became Chairman Emeritus. Mr. Murthy embodies the ideals of a successful leadership. He is a top leader, an institution builder, and an IT legend. He empowered his executives, management team and workers. He encouraged and nurtured leadership qualities in the organization through mentoring and training. He institutionalized ethical values of honesty and integrity throughout the organization. Question 2: What methods exist to develop leaders in an organization? What methods does your organization use? Why? Have any methods been counterproductive? In what ways? Solution: There are various approaches to leadership development in an organization that will be briefly describes as follows: 1) Formal Development Programs – In its basic format, a formal program consists of a classroom seminar covering basic theories and principles of leadership. It can be in the form of a tailored development program fitted to serve the needs of the specific organization. It can also be open-enrollment programs offered by private and academic institutions. 2) 3600 Feedback – This is also known as a multi-source feedback, and a multi-rater feedback. This method involves systematically collecting assessments of a person’s performance from different sources, which typically consists of supervisors, peers, subordinates, customers, and other stakeholders. 3) Executive Coaching – This method is defined as a practical, goal-oriented form of personal and one-on-one learning. Coaching is usually used to improve individual performance, enhance a career, o r work through organizational issues. 4) Job Assignments – This method works under the assumption that experience is the best teacher. This method trains would-be leaders in an organization by giving them a variety of job assignments that will expose them to different work environments; hence, it allows them to adapt, and become better  strategic thinkers. 5) Mentoring – Mentoring programs typically pair a senior and a junior manager, but pairing can also occur between peers. Mentoring involves advising and passing on lessons learned from the senior to the junior partner. 6) Networking – Some organizations include development activities designed to foster broader individual networks for better connection with partners in a global community. Leaders are expected to know not only the in and out of the organization, but also know who in terms of problem-solving resources. 7) Reflection – Introspection and reflection can foster self-understanding and understanding from lessons learned from exper ience. In leadership development, reflection can be used to uncover a person’s hidden goals, talents, and values, as well as their impact on a person’s work. 8) Action Learning – This is a project-based learning method characterized by a continuous process of learning and reflection, aided by colleagues, and with an emphasis on getting things done. This method connects individual development to the process of helping organizations respond to major business problems. 9) Outdoor Challenges – This is a team-building experience in an outdoor or wilderness setting, designed to overcome risk-taking fears, and to promote teamwork and leadership skills. Our organization uses formal programs to develop leaders. Recognizing that a classroom-based learning, while easy and flexible, is limited in the actual transfer of competencies, the formal program serves as a shell under which various development methods are incorporated. Hence, the formal program is structured by combining theoretical learning and problem-based learning. Then, a 360-degree feedback is given to each participant, which serves as a basis for an in-depth reflection. For most people, the 360-degree feedback is difficult to handle for several reasons. The primary reason is an inherent resistance to change. Another reason is the overwhelming amount of data, which can be complex, inconsistent, and difficult to interpret and translate into an action or behavior that can correct a given problem. Mere knowledge and acceptance of one’s developmental needs are not enough to bring about change. There is a need for follow-up guidance and support. That is why participants are also given short-term coaching to identify specific areas of concern and how to resolve these concerns. Question 3: In The Art and Science of Leadership, Nahavandi writes about the dark side of power. Provide an example. What organizational factors contributed to the leader’s behavior? What were consequences of the behavior? Solution: Nahavandi cites corruption as the dark side of power. An example of a scandal that shocked the corporate world was the case of the German engineering giant Siemens in 2006. A regulatory investigation revealed that hundreds of employees, spearheaded by Siemens’ top executives, had been siphoning millions of Euros into bogus deals to pay massive bribes to government officials and business contacts to win contracts in Russia and Nigeria. A trial judge described the scandal as a blatant disregard of business ethics and a systematic practice of organized irresponsibility that was implicitly condoned by management. The scandal resulted to the departure of Siemens top executives, including then CEO Klaus Kleinfield, who was later convicted of corruption, placed on probation for 2 years, and fined 160,000 Euro for his complicity. Hans-Werner Hartmann, who was the accounting head in the company’s telecommunications arm, was also placed on probation for 18 months and fined 40,000 Euro. The scandal cost Siemens around 2.5 billion Euro to pay for fines, reparations and damages. The firm was also barred from dealings with certain clients. The cost to Siemens’ employees, who had to endure intense public scrutiny and shame, is difficult to quantify. Organizational factors that contributed to a culture of bribery within Siemens were identified as follows: an aggressive growth strategy that compelled managers to resort to bribes in order to meet performance targets; a complex and matrix-like organizational structure that allowed divisions to operate independently, with no established checks and balances; poor accounting processes; a corporate culture openly tolerant of bribes. It should be noted that bribes were tax-deductible, and were the norms, not the exceptions, in German business practice at that time. Question 4: What obstacles exist for leaders involved in participatory management? What methods may a leader employ to overcome these obstacles? Solution: Participative management, also known as employee involvement and empowerment, encourages the participation of all the organization’s stakeholders in the analysis of problems, development of strategies, and implementation of solutions. While participative management seems like a utopian ideal, leaders face many obstacles in its effective implementation. One obstacle is encouraging the participation of employees in the managerial process of planning and making decisions. Employees may not fully participate due to lack of competencies, lack of confidence, and fear of rejection. Another reason is the employee’s lack of trust that his or her contributions will be valued. The presence of tension and rivalry among employees are also barriers to effective communication, and ability to work together. Leaders can address these issues by being sincere in their desire to implement participative management. Leaders should strengthen communication within the workplace, and initiate team-building activities to strengthen bonds between peers, and between employees and management. Training programs should also be initiated to develop employees’ competencies, leadership skills and self-confidence. Once employees are fully committed to engage in participative management, other obstacles arise, which includes the amplification of the complexity of the organization’s activities and the growing volume of information that managerial decisions are based on. These can lead to difficulty in getting things done, and slow response time to issues that need fast reactions and actions. Leaders cannot solve these obstacles alone; these require the concerted effort of the entire organization. However, leaders can take the lead in delegating responsibilities to reduce the hierarchic levels in the organization, and to decentralized authority so that the organization can respond to issues quickly and efficiently. Leaders can also establish quality circles, which are composed of around 8 to 10 employees along with the supervisor who share areas of responsibility among themselves. These circles can meet regularly to discuss problems in their respective areas and  brainstorm for solutions, which they can later present to the entire organization as a fully developed action plan. In this way, the complexity of participative management is simplified. Another obstacle to participative management concerns security issues. It is harder to ensure confidential information stays within the organization when more people are involved in managerial decisions. This confidential information can include patents, and product research and development. Leaders can address this obstacle by motivating employees to be accountable for their actions and to stay committed to the company by valuing their contributions. Question 5: What are some reasons employees and managers resist change? As a leader, what methods would you use to help employees and managers adapt to change? Solution: Adaptability to change is a prerequisite to become successful in the modern world characterized by increasing global awareness and fast turnover of technology. Organizations must respond to change and be willing to change to retain their competitive edge and relevance. However, implementing organizational changes are daunting for leaders, not least because most employees and managers resist change. The common reasons why employees resist change are the following: change promotes fear, insecurity and uncertainty, difference in perception and lack of understanding, reaction against the way change is presented, cynicism and lack of trust, and threats to vested interest. In order to overcome resistance to change, leaders can involve workers in the change process by openly communicating about the need for change, providing consultation to alleviate employees’ fears, and being sensitive to employees’ concerns. In order to implement change, leaders must decide on the method they will use to overcome resistance to change, and modify behavior. The three-step approach is an example of such a method; it is characterized by three basic stages: unfreezing, changing, and refreezing. 1) Unfreezing: Most people prefer to maintain the status quo, which is  associated with stability, rather than confronting the need for change. The starting stage, therefore, of a change process must involve unfreezing old behaviors, processes, and structures. This stage develops an awareness of the need for change, and the forces that supports and resists change. Awareness is facilitated with one-on-one discussions, presentations to groups, memos, reports, company newsletter, seminars, and demonstrations. These activities are designed to educate employees about the deficiencies of the current set-up and the benefits of the replacement. 2) Changing: This stage focuses on learning new behaviors, and implementing the change. Change is facilitated when employees become uncomfortable with the identified deficiencies of the old system, and are presented with new behaviors, role models, and support structures. 3) Refreezing: This stage focuses on reinforcing new behaviors, usually done by positive results, public recognition, and rewards.

Foreign Exchange Risk in Banks Overview and Analysis

Foreign Exchange Risk in Banks Overview and Analysis Objective of the Project:- The objective of this project is to understand the various types of foreign exchange risks. And the potential impact of the foreign exchange risks on the institutions involved in foreign exchange trading. Background:- In this project, I have calculated the value of risk involved in foreign exchange transactions at United Bank of India. Methodology:- The data used in this project is obtained from secondary research. Historical method is used to calculate the Value at Risk (VaR). The Value at Risk is thus calculated is used to find the actual amount at risk in terms of INR. Findings and Conclusion:- By finding the total risk, we get to know the total amount that the organization can lose in the worst possible scenario. It happens if the allocation of fund is not based upon the possible value at risks. In carrying out this project, I have found that the bank has allocated more funds for its forex operations than required. Recommendations:- At present the bank is operating at the 99% confidence level to calculate the value at risk. As they are working at 99% confidence level, due to this they need to employ more capital for their forex operations. United Bank of India should operate at 95% confidence level. This will help them cut down funds employed for their forex operations. Introduction to Foreign Exchange The creator of the universe has not distributed resources needed by the civilised world evenly on our planet earth. What is available easily at one place is hardly available at another place. This has resulted in an environment of interdependency among the countries. The interdependency among countries has given rise to international trade. The growth of international trade of goods and services has necessitated a method of exchange. Let us evaluate a transaction involving supply of goods from India to United Kingdom. The value of goods is known to the Indian supplier in INR. Thus the Indian supplier will price the goods so that he can make profit in INR. At the same time the purchasing power available with the UK customer is in GBP (Great Britain Pound). Therefore the customer will want to know the price in GBP. Now, if buyer and seller decide to settle the transaction in USD. Therefore to complete such transactions, the parties to the transaction need to know the value of one currency in terms of another. This mechanism of converting one currency in terms of another is known as â€Å"Foreign Exchange†. Foreign Exchange is defined in Foreign Exchange management Act 1999 as:- Ø All deposits, credits, balances payable in any foreign currency and any drafts, travellers cheque, letter of credit and bill of exchange expressed or drawn in Indian currency and payable in foreign currency. Ø Any instrument payable at the option of the drawee or holder thereof or any other party thereto, either in Indian currency or in foreign currency or partly in one and partly in the other. In short, Foreign Exchange is the method of conversion of one currency into another. As foreign currency is treated as a commodity, it is traded in a market. Trade constitutes a small portion of the â€Å"Foreign Exchange Market†. The cross border movement of capital forms the major portion. Major participants of Foreign Exchange Market include commercial banks, central banking institutions, investment banks, foreign exchange brokers and merchants. The commercial banks become the vehicles for conversion, as most of the foreign exchange operation takes place through the account maintained with these banks. Objective of the Project A Project Report on FOREIGN EXCHANGE risks in Bank. Foreign Exchange is a very large financial market. At times foreign exchange market becomes very volatile. This is responsible for the various risks in foreign exchange market. Everyone involved in the foreign exchange trading should we aware of foreign exchange risk. To ascertain Foreign Exchange risk in Bank we need to execute the following tasks:- Various types of foreign exchange services available at Banks. The various types of foreign exchange risks. The various foreign currencies which has significant demand. The possible Hedging strategies that can be deployed to manage foreign exchange risks. Determination of Value at Risk (Var). Research Methodology Data / Information Collection. Study of data collected to calculate the value at risk (VAR). Calculation of mean return. Calculation of Standard Deviation. Data/Information Collection Data and information is collected from the various sources. These sources include data from the Bank, magazines, journals, books and newspapers. The information thus collected is used to calculate the Value at Risk. Value at risk (VaR) Risk is about odds of losing money and VaR is based on that common sense fact. Here risk is the odds of really big loss. Big loss is different for every investor depending on the investors appetite. But every investor whether big or small does wants to know his/her losses in the worst case. VAR answers the question, What is my worst-case scenario? To calculate VaR we need three components. These three components are: a time period, a confidence level and a loss amount or loss percentage. Using VaR investor will get to know things like: What is the most I can expect to lose with 95% confidence over a period of 10 days? What is the maximum percentage I can expect to lose with 95% confidence over a period of 10 days? We consider a relatively high level of confidence, mostly 95% or 99% confidence level. Time period taken can be anything like a day, 10 day, a month or a year depending upon what investor is looking for. A one day VAR of $10mm using a probability of 5% means that there is a 5% chance that the portfolio could lose more than $10mm in the next trading day. There are three methods of calculating VaR: the Historical method, the parametric method also known as variance-covariance method and the Monte Carlo simulation. The Historical Method: The historical method simply re-organizes actual historical returns, putting them in order from worst to best. It then assumes that history will repeat itself, from a risk perspective. We then put these data in the histogram that compare the frequency of return. Tiny bars in histogram represent the less frequent daily return while the highest point in histogram represents the most frequent daily return. Parametric Method:This method assumes that the stock returns are normally distributed. In this method we estimate only two factors an expected return and a standard deviation. These two factors allow us to plot a normal distribution curve. Monte Carlo Simulation: The third method involves developing a model for future stock price returns and running multiple hypothetical trials through the model. A Monte Carlo simulation refers to any method that randomly generates trials, but by itself does not tell us anything about the underlying methodology. Every run of Monte Carlo Simulation gives different result. But differences between these results are likely to be very narrow. Calculation of Value at Risk (VaR) To calculate the value at risk, at first we need to collect the historical data. Historical data is the historical exchange rate of a particular foreign currency against INR. The foreign currencies which we are considering here are United States Dollar (USD), Great Britain Pound (GBP), Euro and Japanese Yen (JPY). We are considering these currencies because they are the major currencies as exchange is easily available for these currencies. We will calculate the value at risk the investor faces in case he/she invests in any of these currencies. At first we will consider the case in which an investor is investing in United States Dollar. The investor will buy United States Dollar in exchange of INR. USD/INR The historical exchange rate for USD/INR for a period of 22 days starting from 15th April 2011 to 6th May 2011 is as follows: From the everyday exchange rate the periodic return is found by using the formula given below: Natural Logarithm (Present date exchange rate/ previous date exchange rate) The Value at Risk from the above data is calculated by using the given formula in excel: PERCENTILE (array of the periodic return,5%) Here the array of the periodic return is the everyday return of the period for which historical data is taken. The second attributes i.e., 5% tells that 95 times out of 100 the loss will not exceed the calculated VaR. Therefore we can say with 95% confidence that the loss will not exceed the Value at Risk (VaR) thus calculated. From the above data the Value at Risk (VaR) calculated at 95% confidence level is: 0.35% From the above data the Value at Risk (VaR) calculated at 99% confidence level is: 0.46% Euro/INR The historical exchange rate for Euro/USD for a period of 22 days starting from 15th April 2011 to 6th May 2011 is as follows: Euro/USD Euro/INR Historical exchange rate for Euro/INR is determined from the historical exchange rate of Euro/USD and USD/INR. Exchange rate of Euro/INR = Exchange rate of Euro/USD * Exchange rate of USD/INR In this case again the periodic return is found by using the formula given below: Natural Logarithm (Present date exchange rate/ previous date exchange rate) The Value at Risk from the above data is calculated by using the given formula in excel: PERCENTILE (array of the periodic return, 5%) Here the array of the periodic return is the everyday return of the period for which historical data is taken. The second attributes i.e., 5% tells that 95 times out of 100 the loss will not exceed the calculated VaR. Therefore we can say with 95% confidence that the loss will not exceed the Value at Risk (VaR) thus calculated. From the above data the Value at Risk (VaR) calculated at 95% confidence level is: 1.21%. From the above data the Value at Risk (VaR) calculated at 99% confidence level is: 1.53%. GBP/INR The historical exchange rate for GBP/USD for a period of 22 days starting from 15th April 2011 to 6th May 2011 is as follows: GBP/USD GBP/INR Historical exchange rate for GBP/INR is determined from the historical exchange rate of GBP/USD and USD/INR. Exchange rate of GBP/INR = Exchange rate of GBP/USD * Exchange rate of USD/INR In this case again the periodic return is found by using the formula given below: Natural Logarithm (Present date exchange rate/ previous date exchange rate) The Value at Risk from the above data is calculated by using the given formula in excel: PERCENTILE (array of the periodic return, 5%) Here the array of the periodic return is the everyday return of the period for which historical data is taken. The second attributes i.e., 5% tells that 95 times out of 100 the loss will not exceed the calculated VaR. Therefore we can say with 95% confidence that the loss will not exceed the Value at Risk (VaR) thus calculated. From the above data the Value at Risk (VaR) calculated at 95% confidence level is: 0.49% From the above data the Value at Risk (VaR) calculated at 99% confidence level is: 1.03% JYP/INR The historical exchange rate for USD/JYP for a period of 22 days starting from 15th April 2011 to 6th May 2011 is as follows: USD/JYP JPY/USD Historical exchange rate for JPY/USD is determined from the historical exchange rate of USD/JPY. Exchange rate of JPY/USD = 1/ (Exchange rate of USD/JPY) JPY/INR Historical exchange rate for JPY/INR is determined from the historical exchange rate of JPY/USD and USD/INR. Exchange rate of JPY/INR = Exchange rate of JPY/USD * Exchange rate of USD/INR In this case again the periodic return is found by using the formula given below: Natural Logarithm (Present date exchange rate/ previous date exchange rate) The Value at Risk from the above data is calculated by using the given formula in excel: PERCENTILE (array of the periodic return, 5%) Here the array of the periodic return is the everyday return of the period for which historical data is taken. The second attributes i.e., 5% tells that 95 times out of 100 the loss will not exceed the calculated VaR. Therefore we can say with 95% confidence that the loss will not exceed the Value at Risk (VaR) thus calculated. From the above data the Value at Risk (VaR) calculated at 95% confidence level is: 0.60% From the above data the Value at Risk (VaR) calculated at 99% confidence level is: 0.93% Calculation of Standard Deviation Standard deviation is a measure of how far apart the data are from the average of the data. If all the observations are close to their average then the standard deviation will be small. In finance, standard deviation is applied to the annual rate of return of an investment to measure the investments volatility. Standard deviation is also known as historical volatility and is used by investors as a gauge for the amount of expected volatility. Suppose that an investor has INR 45,000 to invest and is considering buying the USD. Currently one USD is valued at INR 45. The investor assesses a 0.75 probability that the USD will appreciate against INR over a coming period, so that one USD will be equivalent to INR 46 and a 0.25 probability that the USD will depreciate against INR to become equal to INR 44. INR 45,000 (at one USD equal to INR 45) = 45,000/45 = USD 1000 The payoffs from the proposed investment are as follows:- If the USD appreciates (One USD becomes equal to INR 46): USD 1000 *46 = INR 46,000 If the USD depreciates (One USD becomes equal to INR 44): USD 1000*44 = INR 44,000 PAYOFF (INR) RATE OF RETURN PROBABILITY EXPECTED RATE OF RETURN VARIANCE (1) (2) (3) (4) = (2) x (3) (5) 46,000 (46 45)/45 = 0.022 0.75 0.0165 (0.022 0.011)^2 x 0.75 = 0. Foreign Exchange Risk in Banks Overview and Analysis Foreign Exchange Risk in Banks Overview and Analysis Objective of the Project:- The objective of this project is to understand the various types of foreign exchange risks. And the potential impact of the foreign exchange risks on the institutions involved in foreign exchange trading. Background:- In this project, I have calculated the value of risk involved in foreign exchange transactions at United Bank of India. Methodology:- The data used in this project is obtained from secondary research. Historical method is used to calculate the Value at Risk (VaR). The Value at Risk is thus calculated is used to find the actual amount at risk in terms of INR. Findings and Conclusion:- By finding the total risk, we get to know the total amount that the organization can lose in the worst possible scenario. It happens if the allocation of fund is not based upon the possible value at risks. In carrying out this project, I have found that the bank has allocated more funds for its forex operations than required. Recommendations:- At present the bank is operating at the 99% confidence level to calculate the value at risk. As they are working at 99% confidence level, due to this they need to employ more capital for their forex operations. United Bank of India should operate at 95% confidence level. This will help them cut down funds employed for their forex operations. Introduction to Foreign Exchange The creator of the universe has not distributed resources needed by the civilised world evenly on our planet earth. What is available easily at one place is hardly available at another place. This has resulted in an environment of interdependency among the countries. The interdependency among countries has given rise to international trade. The growth of international trade of goods and services has necessitated a method of exchange. Let us evaluate a transaction involving supply of goods from India to United Kingdom. The value of goods is known to the Indian supplier in INR. Thus the Indian supplier will price the goods so that he can make profit in INR. At the same time the purchasing power available with the UK customer is in GBP (Great Britain Pound). Therefore the customer will want to know the price in GBP. Now, if buyer and seller decide to settle the transaction in USD. Therefore to complete such transactions, the parties to the transaction need to know the value of one currency in terms of another. This mechanism of converting one currency in terms of another is known as â€Å"Foreign Exchange†. Foreign Exchange is defined in Foreign Exchange management Act 1999 as:- Ø All deposits, credits, balances payable in any foreign currency and any drafts, travellers cheque, letter of credit and bill of exchange expressed or drawn in Indian currency and payable in foreign currency. Ø Any instrument payable at the option of the drawee or holder thereof or any other party thereto, either in Indian currency or in foreign currency or partly in one and partly in the other. In short, Foreign Exchange is the method of conversion of one currency into another. As foreign currency is treated as a commodity, it is traded in a market. Trade constitutes a small portion of the â€Å"Foreign Exchange Market†. The cross border movement of capital forms the major portion. Major participants of Foreign Exchange Market include commercial banks, central banking institutions, investment banks, foreign exchange brokers and merchants. The commercial banks become the vehicles for conversion, as most of the foreign exchange operation takes place through the account maintained with these banks. Objective of the Project A Project Report on FOREIGN EXCHANGE risks in Bank. Foreign Exchange is a very large financial market. At times foreign exchange market becomes very volatile. This is responsible for the various risks in foreign exchange market. Everyone involved in the foreign exchange trading should we aware of foreign exchange risk. To ascertain Foreign Exchange risk in Bank we need to execute the following tasks:- Various types of foreign exchange services available at Banks. The various types of foreign exchange risks. The various foreign currencies which has significant demand. The possible Hedging strategies that can be deployed to manage foreign exchange risks. Determination of Value at Risk (Var). Research Methodology Data / Information Collection. Study of data collected to calculate the value at risk (VAR). Calculation of mean return. Calculation of Standard Deviation. Data/Information Collection Data and information is collected from the various sources. These sources include data from the Bank, magazines, journals, books and newspapers. The information thus collected is used to calculate the Value at Risk. Value at risk (VaR) Risk is about odds of losing money and VaR is based on that common sense fact. Here risk is the odds of really big loss. Big loss is different for every investor depending on the investors appetite. But every investor whether big or small does wants to know his/her losses in the worst case. VAR answers the question, What is my worst-case scenario? To calculate VaR we need three components. These three components are: a time period, a confidence level and a loss amount or loss percentage. Using VaR investor will get to know things like: What is the most I can expect to lose with 95% confidence over a period of 10 days? What is the maximum percentage I can expect to lose with 95% confidence over a period of 10 days? We consider a relatively high level of confidence, mostly 95% or 99% confidence level. Time period taken can be anything like a day, 10 day, a month or a year depending upon what investor is looking for. A one day VAR of $10mm using a probability of 5% means that there is a 5% chance that the portfolio could lose more than $10mm in the next trading day. There are three methods of calculating VaR: the Historical method, the parametric method also known as variance-covariance method and the Monte Carlo simulation. The Historical Method: The historical method simply re-organizes actual historical returns, putting them in order from worst to best. It then assumes that history will repeat itself, from a risk perspective. We then put these data in the histogram that compare the frequency of return. Tiny bars in histogram represent the less frequent daily return while the highest point in histogram represents the most frequent daily return. Parametric Method:This method assumes that the stock returns are normally distributed. In this method we estimate only two factors an expected return and a standard deviation. These two factors allow us to plot a normal distribution curve. Monte Carlo Simulation: The third method involves developing a model for future stock price returns and running multiple hypothetical trials through the model. A Monte Carlo simulation refers to any method that randomly generates trials, but by itself does not tell us anything about the underlying methodology. Every run of Monte Carlo Simulation gives different result. But differences between these results are likely to be very narrow. Calculation of Value at Risk (VaR) To calculate the value at risk, at first we need to collect the historical data. Historical data is the historical exchange rate of a particular foreign currency against INR. The foreign currencies which we are considering here are United States Dollar (USD), Great Britain Pound (GBP), Euro and Japanese Yen (JPY). We are considering these currencies because they are the major currencies as exchange is easily available for these currencies. We will calculate the value at risk the investor faces in case he/she invests in any of these currencies. At first we will consider the case in which an investor is investing in United States Dollar. The investor will buy United States Dollar in exchange of INR. USD/INR The historical exchange rate for USD/INR for a period of 22 days starting from 15th April 2011 to 6th May 2011 is as follows: From the everyday exchange rate the periodic return is found by using the formula given below: Natural Logarithm (Present date exchange rate/ previous date exchange rate) The Value at Risk from the above data is calculated by using the given formula in excel: PERCENTILE (array of the periodic return,5%) Here the array of the periodic return is the everyday return of the period for which historical data is taken. The second attributes i.e., 5% tells that 95 times out of 100 the loss will not exceed the calculated VaR. Therefore we can say with 95% confidence that the loss will not exceed the Value at Risk (VaR) thus calculated. From the above data the Value at Risk (VaR) calculated at 95% confidence level is: 0.35% From the above data the Value at Risk (VaR) calculated at 99% confidence level is: 0.46% Euro/INR The historical exchange rate for Euro/USD for a period of 22 days starting from 15th April 2011 to 6th May 2011 is as follows: Euro/USD Euro/INR Historical exchange rate for Euro/INR is determined from the historical exchange rate of Euro/USD and USD/INR. Exchange rate of Euro/INR = Exchange rate of Euro/USD * Exchange rate of USD/INR In this case again the periodic return is found by using the formula given below: Natural Logarithm (Present date exchange rate/ previous date exchange rate) The Value at Risk from the above data is calculated by using the given formula in excel: PERCENTILE (array of the periodic return, 5%) Here the array of the periodic return is the everyday return of the period for which historical data is taken. The second attributes i.e., 5% tells that 95 times out of 100 the loss will not exceed the calculated VaR. Therefore we can say with 95% confidence that the loss will not exceed the Value at Risk (VaR) thus calculated. From the above data the Value at Risk (VaR) calculated at 95% confidence level is: 1.21%. From the above data the Value at Risk (VaR) calculated at 99% confidence level is: 1.53%. GBP/INR The historical exchange rate for GBP/USD for a period of 22 days starting from 15th April 2011 to 6th May 2011 is as follows: GBP/USD GBP/INR Historical exchange rate for GBP/INR is determined from the historical exchange rate of GBP/USD and USD/INR. Exchange rate of GBP/INR = Exchange rate of GBP/USD * Exchange rate of USD/INR In this case again the periodic return is found by using the formula given below: Natural Logarithm (Present date exchange rate/ previous date exchange rate) The Value at Risk from the above data is calculated by using the given formula in excel: PERCENTILE (array of the periodic return, 5%) Here the array of the periodic return is the everyday return of the period for which historical data is taken. The second attributes i.e., 5% tells that 95 times out of 100 the loss will not exceed the calculated VaR. Therefore we can say with 95% confidence that the loss will not exceed the Value at Risk (VaR) thus calculated. From the above data the Value at Risk (VaR) calculated at 95% confidence level is: 0.49% From the above data the Value at Risk (VaR) calculated at 99% confidence level is: 1.03% JYP/INR The historical exchange rate for USD/JYP for a period of 22 days starting from 15th April 2011 to 6th May 2011 is as follows: USD/JYP JPY/USD Historical exchange rate for JPY/USD is determined from the historical exchange rate of USD/JPY. Exchange rate of JPY/USD = 1/ (Exchange rate of USD/JPY) JPY/INR Historical exchange rate for JPY/INR is determined from the historical exchange rate of JPY/USD and USD/INR. Exchange rate of JPY/INR = Exchange rate of JPY/USD * Exchange rate of USD/INR In this case again the periodic return is found by using the formula given below: Natural Logarithm (Present date exchange rate/ previous date exchange rate) The Value at Risk from the above data is calculated by using the given formula in excel: PERCENTILE (array of the periodic return, 5%) Here the array of the periodic return is the everyday return of the period for which historical data is taken. The second attributes i.e., 5% tells that 95 times out of 100 the loss will not exceed the calculated VaR. Therefore we can say with 95% confidence that the loss will not exceed the Value at Risk (VaR) thus calculated. From the above data the Value at Risk (VaR) calculated at 95% confidence level is: 0.60% From the above data the Value at Risk (VaR) calculated at 99% confidence level is: 0.93% Calculation of Standard Deviation Standard deviation is a measure of how far apart the data are from the average of the data. If all the observations are close to their average then the standard deviation will be small. In finance, standard deviation is applied to the annual rate of return of an investment to measure the investments volatility. Standard deviation is also known as historical volatility and is used by investors as a gauge for the amount of expected volatility. Suppose that an investor has INR 45,000 to invest and is considering buying the USD. Currently one USD is valued at INR 45. The investor assesses a 0.75 probability that the USD will appreciate against INR over a coming period, so that one USD will be equivalent to INR 46 and a 0.25 probability that the USD will depreciate against INR to become equal to INR 44. INR 45,000 (at one USD equal to INR 45) = 45,000/45 = USD 1000 The payoffs from the proposed investment are as follows:- If the USD appreciates (One USD becomes equal to INR 46): USD 1000 *46 = INR 46,000 If the USD depreciates (One USD becomes equal to INR 44): USD 1000*44 = INR 44,000 PAYOFF (INR) RATE OF RETURN PROBABILITY EXPECTED RATE OF RETURN VARIANCE (1) (2) (3) (4) = (2) x (3) (5) 46,000 (46 45)/45 = 0.022 0.75 0.0165 (0.022 0.011)^2 x 0.75 = 0.

Preschool Education in The United States Essay example -- Education

Preschool programs began in the United States during the first quarter of the twentieth century. In 1925, the first public preschool began in Chicago at Franklin School. After the 1970’s the popularity of preschool increased since women were entering the workforce and people believed that children needed early preparation before they attended elementary school. Barbara Wiler, Ph.D., deputy executive director of the NAEYC says, â€Å"Good Preschools provide children with rich experiences that give them skills, information, and attitudes that prepare them for the primary grades and for life. † (WKRLIP, P1) Preschool isn’t like kindergarten. It’s a stepping-stone that will prepare young students for the years of schooling they will have later in life. The NAEYC Accreditation was made to help families find the best care for their children. It provides the early childhood education field with a convincing outcome and ensures the quality in children’s daily experiences. Early Childhood Education plays a key role in academic development in children because they learn soft skills, job skills, and are personality fixed by age 4. Soft skills include paying attention, focusing, being curious, open to new experiences and controlling your temper. These skills are important in getting a job. It can help children become more self motivated and open minded. As they grow older it will benefit them because they will be willing to take risks, be able to retain information that they learned and have the urge to experience new things. When they can’t do something right, they will ask and try to fix any imperfections that they once had. These skills are not taught in other areas of schooling. Preschool is the most important grade that p... ...2/139583385/preschool-the-best-job-training-program. Barnett, W. Steven., and Hustedt, Jason T. Preschool: The Most Important Grade. Educational Leadership Apr2003, Vol.60 Issue 7, p54, 4p, 1 Color Photograph. October 31, 2011. http://web.ebscohost.com. Ames, Gillespie., and Haines, Jacqueline., The Gesell Institute’s Child from One to Six: Evaluating the Behavior of the Preschool Child, October 20, 2011. P30,40-41 NAEYC. August 17, 2011. NAEYC Early Childhood Education Program Standards and Accreditation Criteria. P5, 7-8. Personality Development: Age 2-6. September 1, 2011. P1-2. http://www.cliffsnotes.com/study_guide/Personality-Development-Age-26.topicArticleId-26831,articleId-26775.html. What Kids Really Learn in Preschool. Parenting; Fall99 Special issue, Vol. 13 Issue 7, p74, 4p, 3 Color Photographs. October 31, 2011. http://web.ebscohost.com.

Lincoln and The 1864 Presidential Election Essay -- Government

The 1864 presidential election was one of the important elections in the American History. In the middle of a devastating civil war, the United States had held its presidential election almost without discussing any alternative (American President: A Reference Resource). None of the other Democratic nations had ever conducted a national election during the time of war. While there was still talk going in postponing the election. That was when Lincoln pointed out that America needs a free government and without conducting the election we have ruined ourselves (Boller P.115). So, before even the year had ended United States had gone forward with its voting just as in peacetime. This was one of the deeply anxious election outcomes for both, the Republican and Pro-war Democrats. They both joint together and formed the National Union Party, which re-nominated Lincoln and selected Andrew Johnson, of Tennessee a prominent War Democrats. The campaign of 1864 was noisy and abusive. The threat posed by the Democratic Party, which met in Chicago in August. The Democrats came forward boldly and proclaimed the Civil War a failure, demanded the immediate ending of hostilities, and called for the convening of a national convention to restore the Union by negotiation with the Confederate government (American President: A Reference Resource). The Democrats nominated General George B. McClellan, former commander of Union forces whom Lincoln had fired because of his failure to pursue Confederate General Robert E. Lee's army after the battle at Antietam in 1862. Some of the Radical Republicans were completely against Lincoln’s reelection (Mintz). Lincoln then had asked the congress to seat representative from the three recently conquered Con... ... to George W. Bush. January 2004. Chadwick, Bruce. Lincoln For President. Sourcebooks, Naperville: Illinois, 2009. McNamara, Robert. The Election of 1860 Brings Abraham Lincoln to the White House: Presidential Politics at a Time of National Crisis. Retrieved: March 29th, 2012. http://history1800s.about.com/od/presidentialcampaigns/a/1860election.htm Mintz, S. The 1864 Presidential Election. Digital History. (2007). Retrieved: March 30th, 2012. http://www.digitalhistory.uh.edu/database/article_display.cfm?HHID=121 Walsh, Kenneth T. The Most Consequential Elections in History: Abraham Lincoln's Victory in 1864 Led to the End of the Civil War: Lincoln's victory in 1860 triggered the Civil War, and his victory in 1864 allowed him to win it. Retrieved: March 29th, 2012. http://www.usnews.com/news/articles/2008/07/30/the-most-consequential-elections-in-history

Ten Guiding Principles for Organizations Essay -- Business Management

Ten Guiding Principles Introduction Every organization’s success depends on the organization’s ethical behavior and accountability for its actions. Nonprofit organizations are no different. On the contrary these organizations have a greater difficult in succeeding. Each aspect of a nonprofit organization requires the time, energy, strength, passion and fortitude of simple individuals who have the vision and mission of the organization at hand. This essay will explain and use Florence Green’s ten guiding principles as indicated by Ronald Riggio and Sarah Orr, share a Guam nonprofit organization and how it measures up to the ten guiding principles. Green’s Ten Recommended Guiding Principles As indicated by Riggio & Orr (2004), the following are the ten recommended guiding principles that non-profit organizations must do in the twenty-first century: (a) become a learning organization; (b) become a transformational leader; (c) form strategic alliances; (d) give accountability and ethical behavior top priority; (e) develop indicators that measure the consequences on the community; (f) adopt results-based budgeting tied to indicators; (g) financially empower the organization so that it can do more mission over time; (h) creatively rethink resource development governance, and management styles; (i) adopt a vision and a mission that incorporate diversity; (j) be at the table (as explained by Green, 2004, p. 19-35). Leaders must commit to utilizing the guiding principles their non-profit organizations can further promote and provide the awareness and service that they sent out to accomplish. Principle One: Become a learning organization. With the first guiding principle nonprofit organization want to continue to expand its ide... ...nd its stakeholders. With the open awareness of HIV/AIDS, there is more legislation that is being introduced and more public or private testimonies must be heard. Conclusion In conclusion, the Guahan Project analysis which was directed by Florence Green’s ten guiding principles indicated that this non-profit organization is on the right track and so long as it keeps to its vision, mission and objective to include diversification whenever necessary, it will succeed. Non-profit organizations like Guahan Project, promotes opportunities for all to volunteer or contribute to a worthwhile cause. Works Cited Aidsportal (2010). Guahan project, Guam HIV/AIDS Network. Retrieved from http://www.aidsportal.org/Organisation_Details.aspx?orgid=1455 Riggio, R. & Orr, S. (2004). Improving leadership in non-profit organizations. San Francisco, California: Jossey-Bass.

Advanced Network Management Essay

Short for remote monitoring, RMON is a network management protocol that allows network information to be gathered at a single workstation. The RMON has been specially designed to help network manager to understand the operation of the network as a whole and as an individual devices (switches, routers, hosts,) and how its affect its mode of operation. RMON provides network administrators with more freedom in selecting network-monitoring probes and consoles with features that meet their particular networking needs. RMON was defined by the user community with the help of the Internet Engineering Task Force (IETF). It became a proposed standard in 1992 as RFC 1271 (for Ethernet) and then became a draft standard in 1995 as RFC 1757, effectively obsoleting RFC 1271. The RMON standard was developed in order to resolve issues that other management protocols were not able to handle it properly and can be supported by hardware monitoring devices (known as â€Å"probes†) or through softw are or some kind of combination. â€Å"For example, any vendor LAN switches includes software in each switch that can trap information as traffic flows through and record it in its MIB. A software agent can gather the information for presentation to the network administrator with a graphical user interface. A number of vendors provide products with various kinds of RMON support. RMON collects nine kinds of information, including packets sent, bytes sent, packets dropped, statistics by host, by conversations between two sets of addresses, and certain kinds of events that have occurred, alarms, history, statistics and much more. A network administrator can find out how much bandwidth or traffic each user is imposing on the network and what Web sites are being accessed. Alarms can be set in order to be aware of impending problems†. (Rouse, 2010) An RMON probe can sometimes be management appliance software or could be in the device that is managed. They can also reside near monitored network elements. The probe analyzes RMON information such as traffic and alarms. RMON probes delegate certain tasks such as collecting statistics, periodic polling, subscribing to certain notifications, and generating threshold-crossing alerts through specific configuration of MIBs. Some advantages of utilizing RMON probes are that they reduce SNMP traffic as well as reduce t he processing load of the clients. They also use periodic polling instead of continual polling which also reduces processes. (Clemm, 2007) References * Clemm, A. Network Management Fundamentals Edition 1 (1st ed). Pearson Learning Solutions. Retrieved from http://devry.vitalsource.com/books/9781256084068/id/ch02lev2sec9 * Waldbusser, S. ((2000, May)2000, May). Rfc 2819. Retrieved from http://tools.ietf.org/html/rfc2819 * Rouse, M. ((2010, November)2010, November). Rmon (remote network monitoring). Retrieved from http://searchmobilecomputing.techtarget.com/definition/RMON * Javvin. (n.d.). Rmon: remote monitoring mibs (rmon1 and rmon2). Retrieved from http://www.javvin.com/protocolRMON.html

The Effects of Preventive and Detective Controls on Employee Performance and Motivation Essay

Organizational behavior is an important aspect of every organization or company since it determines the overall performance of an organization. Within every organization, there are certain behaviors which are associated with that particular organization. This means that in every company or organization, there are certain behaviors which are considered as the norms of the company and practiced by all employees in the company. Organizational behavior affects how the operations within a company re carried out, how customers of the business are handled and how the employees within the organization relate with each pother. Q1             One of the justice dimensions which I would have applied during a morning briefing with the staffs would be procedural dimension. Procedural dimension aims at providing the employees with the relevant and sufficient information which they can also use to make decisions as well as understand the position of the company, hear the opinions of the employees and gives room for appeal on the decision of the company (French, 2011). In making decisions, it is important to have all stakeholders understand and get involved before the final decision is made. Andrea should be honest with the staffs and provide them, with full information on the downsizing, give them a chance to express their view. Explaining to the staffs why the company has taken such measures trhough a procedural manner is important because the employees will feel valued. The implication of being guarded with information will generate distrust among the employees since they will not be able to understand why the decision was made. If Andrea uses procedural dimension, the ethical implication is that the relationship between the employees and the company will remain strong (French, 2011). There will be trust from the employees as well as avoid conflict as a result of the decisions. It will show representation, consistency, accuracy as well as eliminate bias. Q2             Based on justice and ethics discussions, the advice that would be appropriate for Andrea to take in terms of making use of a bigger budget for compensation would be that she should make gradual changes. Employee motivation is an important aspect for the success of any organization and must be handled with care (Njoroge, & Yazdanifard, 2014). The employees should not be offered a short-term â€Å"retention bonus† nor a permanent raise. By giving the employees a permanent raise, it will mean that one need of the employees will have been met hence the level of motivation may decrease with time. However, if offered the short-term â€Å"retention bonus† the employees will be motivated for a short while until the need is met. Therefore, based on â€Å"Maslow’s Hierarchy of needs theory†, when one need is satisfied, one moves to the next need until all needs in the hierarchy are met it would be advisable to have the funds used in supporting changes in work structure. This can be done for the staffs that have a workload that is expanded (Phillips, & Gully, 2012). Offering a bonus or a permanent raise does not solve the problem of work load hence it is ethical to solve the issue of work load through a new work structure for the employees. The short-term, retention bonus and the permanent raise will only help to motivate the employees for a short-while but what will have a lasting impression is making changes that will lighten the workload for the employees. It is not ethical to raise the salaries of the employees while the working conditions are not satisfactory. This will mean that one of the needs of the employees is not met if short-term bonuses and the permanent raise are provided under the same work conditions. Therefore, it is important that Andrea applies the four-component model and the three concepts that are involved in ethical decisions making (Nelson, & Quick, 2012). The decision should be based on moral awareness of the situation that the employees are undergoing due to the workload. In addition to that, the concept of moral judgment and moral intent should form the basis of the final decisions on changing the work-place structure for the benefit of all the employees using the funds available. Q3             Andrea has to make a decision on combining the staffs so that they can work together and share the work load although it has been observed that there are those that will have to do more than others (Chung Hee, & Scullion, 2013). The staffs have the free-will to choose the amount of work load they would like to add hence there is need to be careful with the way Andrea works out the whole process of combining. The theory applicable and suitable for this situation is the theory of Job Characteristics theory (Schermerhorn, 2012). This theory explains that employees consider jobs to be enjoyable when the tasks involved in the job are more challenging and provide them with a feeling of fulfillment. From the case study, it can be noted that there are tasks which will need to be undertaken even by staffs that have not been performing them, hence this will present a challenge for those that will take up the tasks. The challenge of the tasks and the fulfillment that the staffs will gain from carrying out the tasks will act as the motivating factors towards them combining their areas of work. On the motivational factors that Andrea would require top apply when combining the staffs, there will be need to consider factors such as recognition, achievement, responsibility as well as growth of the employee and their career advancement. These factors as have been identified by Herzberg’s Two-factor theory explain that employees that obtain the above mentioned factors are likely to be motivated in their performance (Christ, Emett, Summers, & Wood, 2012). This case of combining the staffs will mean taking on some different roles and duties, therefore, these factors will contribute to wards the success of the whole process within the firm. The satisfaction in the new versions will be provided by ensuring that the employees are properly recognized for their performance. Furthermore, it would advisable for Andrea to ensure that there are plans for the advancement of the employees as well as their personal growth in their new job versions (Chao-Chan, & Na-Ting, 2014). It is important that the employees should grow with the company and see some changes in their career, something which will help in bringing satisfaction in their new roles. McClelland’s Acquired Needs theory observes that employees seek for achievement in what they do. What this means is that when the employees take up the new roles within the company, they aim to achieve something in the long run. Therefore, to ensure that the employees are satisfied in their new roles, it will be important to ensure that they have been accorded the necessary help and assistance which will enable them gain some achievement. Q4             When employees are given voice, there are various benefits which an organization or company is able to realize in the short and long run. As the company, Blaze, transitions from its old operations to its â€Å"new normal† it would important that Andrea gives the staffs a voice and allow them to be part of the decision making process (Christ, Emett, Summers, & Wood, 2012). The employees should be given a voice in routine operations that closely affect their work as well as on matters that deal with staff welfare. One thing that has been observed as the impact of giving employees a voice is organizational commitment. This means that employees would want to remain part of the company and continue to provide their services. When Andrea gives a voice to the employees in matters pertaining to the routine operations in the company, it will motivate the employees to want to stick around since they know they can be heard and that they are important within the compan y (Nelson, & Quick, 2012). The Job Characteristics theory applies in this case with regard to â€Å"critical psychological states†. The employees However, staffs should not be given voice in sensitive matters of the organization. The employees are not permanent in the company, meaning they can leave employment any time that they feel they want to leave or in case there is an issue that results in their dismissal. Mitigation would involve allowing voice to the employees in matters that are not sensitive. References Chao-Chan, W., & Na-Ting, L. (2014). Perceived Organizational Support, Organizational Commitment and Service-Oriented Organizational Citizenship Behaviors. International Journal Of Business & Information, 9(1), 61-88. Christ, M. H., Emett, S. A., Summers, S. L., & Wood, D. A. (2012). The Effects of Preventive and Detective Controls on Employee Performance and Motivation. Contemporary Accounting Research, 29(2), 432-452. doi:10.1111/j.1911-3846.2011.01106.x Chung Hee, K., & Scullion, H. (2013). The effect of Corporate Social Responsibility (CSR) on employee motivation: A cross-national study. Poznan University Of Economics Review, 13(2), 5-30. French, R. (2011). Organizational behaviour. Hoboken, N.J: Wiley. Nelson, D. L., & Quick, J. C. (2012). Organizational behavior: Science, the real world, and you. Mason, Ohio: South-Western. Njoroge, C., & Yazdanifard, R. (2014). THE IMPACT OF SOCIAL AND EMOTIONAL INTELLIGENCE ON EMPLOYEE MOTIVATION IN A MULTIGENERATIONAL WORKPLACE. International Journal Of Information, Business & Management, 6(4), 163-170. Phillips, J., & Gully, S. M. (2012). Organizational behavior: Tools for success. Mason, OH: South-Western Cengage Learning. Schermerhorn, J. R. (2012). Organizational behavior. Hoboken, N.J: Wiley. Source document