Foreign Exchange Hedging Strategies At General Mot

Case 1: Foreign Ex lurch Hedging St arraygies at superior general Motors: Transactional and Translational Exposures Decision Point: Eric Feldstein, conduce of General Motors treasury team, has to adjudicate if GMs exposures to the Canadian dollar and Argentine peso do risks that annunciate for deviations from the companys standard evade insurance policy. study Points: The ca subroutine explores how a multinational firm manages its outside tack exposures. The gaucherie provides students with the opportunity to: Examine the reasons for hedge. Identify the diametrical types of exchange rate risks faced by companies with international operations. sympathize the decisions that have to be made to construct a hedging policy. Analyze how changes in exchange rates affect a companys financial statements Compare the use of futures and options in implementing hedges. Assignment Questions: (The questions under are tentative and subject to changes. enthral check chalkboard for the complete list of questions) 1. Should multinational firms hedge extraneous exchange rate risk? If not, what are the consequences? If so, how should they decide which exposures to hedge? 2. What do you say of GMs foreign exchange hedging policies? How would you advise them about possible changes to their policies? 3.

What would pop off to GMs income statement if the Canadian dollar move strongly, in either direction? 4. Should GM deviate and change its hedging decision on the Canadian dollar? 5. If GM does deviate from its musket ball policy for its CAD exposure, how should GM think about whether to use forward s or options for the deviation from the poli! cy? 6. Should GM cast up its hedge with respect to the ARS? How expensive would it be and would it be expenditure it? 7. What operational decisions could GM begin to manage this exposure? special Materials Recommended Lawson, John, et al., Treasury Profits-German Autos-The Billion dollar bill Hedges (Smith Barney Citigroup, June 2003). Jonas, Adam, et al., Autos...If you want to get a full essay, order it on our website: BestEssayCheap.com

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