Business Report for Corvette: Mean, Standard Deviation and Probability Analysis

3769 Words Jan 9th, 2013 16 Pages
Business Report for Corvette

Executive Summary: This report talks about a Company is called Corvette, which sells luxury sports cars in twelve months from now. There is a table shows the order of five customers and in which currencies. Using those data I will find out mean, standard deviation and some probability for analysis. In addition, these is a case involves an offer was given to Corvette by HSBC for estimating whether it is risk or not. Furthermore, we also thought about what role banks plays in the case, and analyzed the bank itself. Banks expected profit is also mentioned. Finally I used the data about my birthday graphed the two models.

Introduction: Reading through the whole report, you can
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Actually, the company can invest the money or operate own company whatever. The key is that company can get money quickly, maybe it can solve problem of liquidity of money in the company. On the contrary, payment in twelve months’ time does not have this usage.
In my view, bank would prefer the payment could be dealt as late as possible, because bank can hold that money to investment and reduce the risk of liquidity. On the other side, company would prefer the payment could be dealt as soon as possible, as the company can hold that money to operate itself, such like paying salary, buying assets and so on.

Part 3: Risk of bank taking
Liquidity risk
Liquidity risk refers to the probability that a bank may not have sufficient funds with which to meet the demands for cash (or to make transfers on the part of customers). In addition, a bank is insolvent (has negative net worth) only if its total assets are insufficient to meet total liabilities. (bankofengland)
Furthermore, there is the danger that a liquidity crisis at one bank can cause a ‘systemic’ failure of the banking system through a process of ‘contagion’.

Payment risk
Payment risk refers to the possibility that a bank may be asked to transfer funds which it does not receive. The risk arises from the fact that instructions to a bank to make payment can be
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