(Answered) Case hedging currency risks at aifsquestions to discuss1

Management Studies

Case: Hedging Currency Risks at AIFS

Questions to discuss

1. What gives rise to the currency exposure at AIFS?

2. What would happen if Archer-Lock and Tabaczynski did not hedge at all?

3. What would happen with a 100% hedge with forwards? A 100% hedge with options? Use the forecast final sales volume of 25,000 and analyze the possible outcomes relative to the ‘zero impact' scenario described in the case.

4. What happens if sales volumes are lower (10,000) or higher (30,000) than expected as outlined at the end of the case?

5. What hedging decision would you advocate?

Attachment:- Hedging Case.rar

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