! Case Study 6 Foreign exchange hedging strategies at General Motors: Transactional and translational exposures ! General Motors (GM) was the largest automaker in the world‚ and the unit sales in 2001 was 8.5 million vehicles which occupied 15.1% of the total vehicle market. With the expansion through the world‚ GM faced more risk in the foreign exchange (FX). In other world‚ it would create gains or losses due to the changes in FX rate. According to the exhibit 2 and exhibit 3‚ Latin
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Questions: Foreign Exchange Hedging Strategies at GM − Competitive Exposures 1. Why is GM worried about the yen? GM’s concern about fluctuations in the Yen is due not only to the impact on GM’s costs‚ but the fact that Japanese competitors face reduced costs when the Yen is depreciating. Also‚ with increasing profit margins‚ end-price to consumer can be lowered and lead to gain in market share for Japanese competitors. Research had shown that a 10 Yen appreciation to the dollar reduces operating
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EXECUTIVE SUMMARY This case shows us that apart from transaction‚ translation and economic exposure to currency risk‚ firms also have the very real strategic impact on their competitive position from competitive exposure. Apart from GM’s exposure to the yen which is reflected in their financial statements‚ their competitive position vis-à-vis Japanese manufacturers is affected by a potentially declining yen. This is because a declining yen reduces the Japanese manufacturers’ $ cost‚ enabling
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1.0 Introduction GM was the world’s largest automaker and‚ since 1931‚ the worlds sales leader. In 2001‚ GM had unit sales of 8.5 million vehicles and a 15.1% worldwide market share. Founded in 1908‚ GM had manufacturing operations in more than 30 countries‚ and its vehicles were sold in approximately 200 countries. In 2000‚ it generated earnings of $4.4 billion on sales of $184.6 billion. Table 1:GM Consolidated Income Statement GM’s global operations gave rise to significant currency risk
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“I’m Worried About My Grade” “I’m worried about my grade”‚ is a you tube video that I had to watch. Its about a conversation between a teacher and a lazy student ‚ that thinks his teacher owes him another chance to better his grade. The sad thing about this that it’s the end of the semester and there’s nothing he can do make up his work. But this student keeps pushing the issue of extra credit and make up work thinking it would do him some good. When watching this video the first
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[pic] HOW ARE EXCHANGE RATE EXPOSURES MANAGED BY MNCs? BY 0808982 A project report submitted in part requirement for the M.A in Business Economics University of Glasgow
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lution to solve the issue that parents are worrying about. One point which I consider to be absolutely vital is the balance of subject-liking preference for both girls and boys. In other words‚ there are gender-typical subject preferences in both education systems: Single-sex school and Co-ed school. A British researcher has carried the research based on the attitudes of the students toward different subjects. “Students at co-ed schools tended to have gender-typical subject preferences: boys
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Take-Home Exam – Marketable Securities & AR/Inventory Management Name: _________________________ Score:____________ I. Selection __________1. A company which foregoes the discount when credit terms are 4/15 net 70 is essentially borrowing money from his supplier for an additional: (A) 40 days (B) 55 days (C) 70 days (D) 85 days. __________2. A company that foregoes a discount of 1/7 net 30 is essentially borrowing money from the vendor at: (A) 1% (B) 12.29% (C) 16% (D) 52.7%. __________3
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What is Al Rahnu? Ar Rahnu-i is an Islamic pawn broking service that allows gold jewellery to be used as a surety against credit. The Bank will retain the gold as collateral and charge for safekeeping service. The gold will be valued at the prevailing market price and the loan amount is up to 70% of the current market value. The safekeeping period is determined and agreed upon by both parties. At the end of the period‚ the loan must be paid to the Bank and the collateral reclaimed. The item maybe
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The Concept and Challenges of Islamic Pawn Broking (Ar-Rahnu) 1 S. Hisham‚ 1S. Abdul Shukor‚ 1A.B. Ummi Salwa and 2Kamaruzaman Jusoff Faculty of Economics and Muamalat‚ Universiti Sains Islam Malaysia‚ 71800 Bandar Baru Nilai‚ Negeri Sembilan‚ Malaysia 2 Department of Forest Production‚ Faculty of Forestry‚ Universiti Putra Malaysia‚ 43400 UPM Serdang‚ Selangor‚ Malaysia 1 Abstract: The introduction of Islamic pawn broking (Ar-Rahnu) in Malaysia is seen as a new micro credit instrument
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