Prof. Lin Guo FIN 417 HBS Case: Hedging Currency Risks at AIFS Due date: April 12‚ 2012 Instructions: This case should be done individually. You should prepare a written analysis‚ and hand in two copies of your analysis on April 12 in class. Only hard copies of the case analysis are accepted. I will submit one of the copies to the Dean’s office for assessment purpose. Each student should also bring his/her own copy of the write-up to class‚ as well as the case itself‚ so that we can refer
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to invest in the core business of the firm and not assume any foreign exchange risk. Foreign exchange risk is a core risk to Aspen’s business because they have many customers outside of the United States. We believe that transferring this risk to the customers would limit Aspen’s growth on the foreign markets: Aspen should keep its current marketing strategy‚ which includes credit installment payments and payments in local currencies for Japan‚ the UK and Germany. The current risk management program
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cons of hedging foreign exchange transaction exposure‚ and examine the alternatives available to a firm to manage a large and significant transaction exposure. (600 worlds) Many firms attempt to manage their currency (foreign exchange) exposures through hedging. Hedging is the taking of a position‚ acquiring either a cash flow‚ an asset‚ or a contract (e.g.‚ a forward contract) that will rise (fall) in value and offset a fall (rise) in the value of an existing position While hedging can protect
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References: Investopedia Staff. (2010). Foreign Exchange Rates Quotations . Retrieved April 4‚ 2011 from: http://mutualfunds.about.com/od/managingyourportfolio/a/International_Funds_and_a_Depreciating_Dollar.htm Yahoo! Finance. (2011). Retrieved April 4‚ 2011 from http://finance.yahoo.com
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preparing official plans and zoning by laws all under Ontario’s provincial policies. However not all decisions made by municipalities may prove to be beneficial for a community or even it may be the case‚ other controversies make the decision making process and get-go sign more complicated to achieve. It is in such situations‚ the Ontario Municipal Board plays a very crucial part. The Ontario municipal board early in the 19th century was recognized as the Ontario Railway and Municipal board. However later
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contrast foreign currency futures and options. Identify situations where you may choose one or the other. When Barings Bank‚ the oldest merchant bank in London‚ collapsed in 1995 after one of the bank’s employees lost £827 million due to speculative investing‚ primarily in futures contracts‚ it illustrated the extreme danger and volatility of derivatives. Options and futures can be used to eliminate‚ reduce‚ hedge and manage risk‚ but can also be highly speculative. Foreign currency futures
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PLEKHANOV RUSSIAN UNIVERSITY OF ECONOMICS INTERNATIONAL BUSINESS SCHOOL Case Study HEDGING CURRENCY RISKS at AIFS Risk Management Master’s Degree Students: Bostandzhyan Kristina Inarkaeva Lamara Kirpichnikova Mariya Starovoytov Stanislav Sysoev Alexander Supervisor: Yulia Finogeeva Moscow 2015 INTRODUCTION AND PROBLEM STATEMENT AIFS is an American based company which was found in the U.S. in 1964. There are two main divisions in the company: the College division‚ which offers
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Introduction Overview of the hedging techniques In the financial market‚ almost all of companies need to face the currency risk. In order to manage the currency risk‚ companies will use different hedging techniques‚ such as financial and operational hedging techniques. For example‚ money market‚ futures contracts‚ options and forwards contracts are commonly used by firms‚ as well as operational hedging techniques. All of 4 types of financial hedging techniques are short-term hedge. Money market
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were stemming from this product in 1995. The company gives great significance to R&D as the customers commitment depends on the development of Aspen’s current products. In 1995‚ 11.4 million dollars was dedicated to R&D. There is a factor of foreign currency expense as 20% of the total R&D expense was denominated in British pounds; the rest was in U.S dollars. Aspen enjoys a collection of committed and loyal customers; we can come to this from the increase of the licensing fees between the periods
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Session 4 CASE Questions Innocents Abroad: Currencies and International Stock Returns The goal of this case is to help Sandra Meyer develop a presentation to address Henry Bosse’s concerns about international investments. The general idea is to demonstrate to Henry the benefits of international diversification‚ if any. To achieve this goal‚ you need to have a view on 1) the impact of foreign exchange (FX) rates on the return and risk of international investments‚ and 2) the impact of having
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