International Finance
SIBM Bangalore – MBA EE – Semester IV International Finance
Take-Home Assignment - 1 – 01.05.2013
You may use the issues discussed in the case of ‘Lufthansa – to hedge or not to hedge” to submit this assignment. 1. Assume that Lufthansa placed an order to Boeing to buy 10 jets of Boeing 787-9 model on 1st December 2012. The transaction is invoiced in Euros using the spot USD-EUR exchange rate prevailing on 1st December. 2. The payment terms: Lufthansa has to make the payment in USD to Boeing on 1st December 2013. 3. Discuss the various alternatives available to Lufthansa to hedge the exchange rate risk. 4. You may make necessary assumptions, within the framework of the theory and concepts 5. State all your assumptions very clearly in all the documents you are submitting. 6. This is a group assignment for 30 marks. The group is responsible for the submission. 7. The submission should be done through LMS 8. The last date of submission is 19th May 2013. 9. The submission file should include: a) A detailed analysis presented in a word document of not more than 10 pages. (10 marks) b) All supporting spreadsheets c) A Power Point Presentation d) All the documents you have used for your analysis 10. Each group has to present its analysis to the class during the last two sessions of the course. 11. Use the following convention to name your files: Group #_ Take-Home Assignment-I (10 marks) (5 marks) (5 marks)
Take-Home Assignment - 1 – 01.05.2013
You may use the issues discussed in the case of ‘Lufthansa – to hedge or not to hedge” to submit this assignment. 1. Assume that Lufthansa placed an order to Boeing to buy 10 jets of Boeing 787-9 model on 1st December 2012. The transaction is invoiced in Euros using the spot USD-EUR exchange rate prevailing on 1st December. 2. The payment terms: Lufthansa has to make the payment in USD to Boeing on 1st December 2013. 3. Discuss the various alternatives available to Lufthansa to hedge the exchange rate risk. 4. You may make necessary assumptions, within the framework of the theory and concepts 5. State all your assumptions very clearly in all the documents you are submitting. 6. This is a group assignment for 30 marks. The group is responsible for the submission. 7. The submission should be done through LMS 8. The last date of submission is 19th May 2013. 9. The submission file should include: a) A detailed analysis presented in a word document of not more than 10 pages. (10 marks) b) All supporting spreadsheets c) A Power Point Presentation d) All the documents you have used for your analysis 10. Each group has to present its analysis to the class during the last two sessions of the course. 11. Use the following convention to name your files: Group #_ Take-Home Assignment-I (10 marks) (5 marks) (5 marks)