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  • AIFS

    Diunggah oleh

    Tanmay Mehta
    868 tayangan1 halaman
    This document provides a case study on hedging currency risks at AIFS. It asks students to identify sources of foreign exchange exposure for companies and reasons for managing those risks. Students are asked to evaluate different hedging instruments and strategies while considering volume uncertainty. The case questions have students analyze the impact of full hedging with forwards and options on profits given a sales forecast, and recommend hedging decisions. It also asks how the analysis would change with different sales volumes.

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    finance

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    AIFS (2)

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    © Attribution Non-Commercial (BY-NC)

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    This document provides a case study on hedging currency risks at AIFS. It asks students to identify sources of foreign exchange exposure for companies and reasons for managing those risks. Students are asked to evaluate different hedging instruments and strategies while considering volume uncertainty. The case questions have students analyze the impact of full hedging with forwards and options on profits given a sales forecast, and recommend hedging decisions. It also asks how the analysis would change with different sales volumes.

    Hak Cipta:

    Attribution Non-Commercial (BY-NC)
    Unduh sebagai DOCX, PDF, TXT atau baca online dari Scribd
    Tandai sebagai konten tidak pantas
    868 tayangan1 halaman

    AIFS

    Diunggah oleh

    Tanmay Mehta
    This document provides a case study on hedging currency risks at AIFS. It asks students to identify sources of foreign exchange exposure for companies and reasons for managing those risks. Students are asked to evaluate different hedging instruments and strategies while considering volume uncertainty. The case questions have students analyze the impact of full hedging with forwards and options on profits given a sales forecast, and recommend hedging decisions. It also asks how the analysis would change with different sales volumes.

    Hak Cipta:

    Attribution Non-Commercial (BY-NC)
    Unduh sebagai DOCX, PDF, TXT atau baca online dari Scribd
    Tandai sebagai konten tidak pantas
    dari 1

    MiF Art Durnev International Corporate Finance Spring 2012

    CASE 2: HEDGING CURRENCY RISKS AT AIFS


    Case to solve Hedging currency risks at AIFS. Refer to template file AIFS.xls and example file AIFS_E.doc. Case requirements To answer case questions and be prepared for an active discussion in class. Objectives Identify the sources of exposure to exchange rate fluctuations and why companies choose to manage those risks. Consider the use of different instruments in hedging foreign exchange exposure Evaluate different hedging strategies in the presence of volume uncertainty Consider what outcomes should be hedged against Case questions 1. What gives rise to the currency exposure at AIFS? 2. What would happen if Archer-Lock and Tabaszynsky 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 (by changing the proportion of currency covered) relative to the zero impact scenario described in the case. Refer to template file AIFS.xls. 4. What hedging decisions would you advocate? 5. Will the hedging pictures look the same if the final volumes are different? How will the analysis change if final volume is 30,000? 6. How will the analysis change if final volume is 10,000?

    International Corporate Finance

    Case2: AIFS

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