Stastistics Assignment Example | Topics and Well Written Essays - 2250 words

Stastistics - Assignment ExampleIn order to calculate the risk, uncertainty estimates are provided by HSBC bank. The Mean of uncertain returns for US Super Cars are equal to $2,092,868 and the fixed amount offered by HSBC is $2,150,000. If the uncertain revenues and the amount offered by HSBC are compared, the offer appears to be a very good for US Supper Cars as the uncertain revenues are less than the money offered by HSBC and also by accepting this offer the exchange rate risk impart be transferred from USA Super Cars to HSBC. In addition US Super Cars will not have to pay any additional charges (contractual fee etc.) to destroy into the contract. Introduction The todays business environment is highly globalized and is truly lacking borders. The businesses have moved beyond domestic and national boundaries to include markets round the globe which has topiced in the increased interconnectedness of distant localities. The goods produced in one area of the world are consumed in a separate distant locality. The companies are outsourcing their productions to areas where labor or material costs are lower in the effort to earn higher winningss. When local competition intensifies the organizations start catering to markets in other countries where competition is less and market is relatively immature. In such cross border transactions, organizations are exposed to exchange rate risk which they will not face if they are involved in merely domestic transactions. Moving beyond the boundaries has several positive as well as conglomerate negative aspects. On the positive side, the market is expanding day by day and the number of customers is increasing with the same proportion, therefore, the business sales increase rapidly. Keeping in view the fact, the US Super Car company has taken a step to sell their luxury sport cars in five (5) countries including the United Kingdom, Japan, Canada, mho Africa and United State of America. While doing business across the wo rld, there is always a risk of fluctuation in the exchange rate that may result in an increase or decrease in the profit margin. There are certain calculations include but not limited to the standard deviations, misbegotten, average, sum, and the profit which needs to be performed in order to cope with exchange rate uncertainty. Mean & Standard Deviation Initially, it is vital to calculate the mean, standard deviation and sectionalization on the selling price of the customer. In order to perform the calculations, it is equivalently important to convert / exchange the money currencies into dollars (as we need to answer in dollars) (AGAInstitute, n.d). The following put back shows the details of the calculated values of the mean, standard deviation and variance. In order to calculate the uncertain revenues in dollars, the dollar per local currency rate provided by HSBC bank is multiplied by the selling price and the quantity for example in order to calculate uncertain revenues gene rated by sales in UK, $1.41/? mean provided by HSBC is multiplied by the selling price in the UK which is equal to ?57,000 and the quantity sold (12). The product obtained is the uncertain revenue generated through sales in the UK. The same process is repeated to get uncertain revenues in each individual foreign country (Japan 1, Japan 2, Canada 1, Canada 2, and South Africa). The total