The Financial Engineering Subject Assignment Lecturer: Prof. Dr. Markus Freiburghaus Vo Tran Dinh Hieu – EMFB 5 Topic B: Hedging Currency Risk The discussion on Chinese government exchange rate policy of the Yuan and its impacts to the US economy and the hedging solution What have been the exchange rate policies of the Yuan (CNY) or Reminbin (RMB) of the Chinese Government? Let’s start with the reviewing of the exchange rates separately throughout the history. There are not a lot of readers
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Chiquita‚ great work on the discussion‚ you highlighted the impact and struggles experienced by GM over the years on the American society and the world to be exact since they are a multinational organization. I am in agreement that even though the company has gone through difficult times they are still among the top in the industry throughout the world. Personally what gives great confidence as an investor in GM is the fact that they have gone through difficulties and manage to rebound time and time again
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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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whole issue constitutes towards the sex-gender ratio in India. In 2001‚ there were 927 girls to every 1000 boys. From the 1980’s and 1990’s it is presumed that more than 10 million girls had been aborted (Wicks‚ Andrew C. 2010). This speaks to the Indian cultural itself
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For the analysis of GM and its environment Porter’s Five Forces will be used. This tool is primarily used to analyze the competitive environment in terms of five main categories; the threat of new entrants‚ bargaining power of both supplier and buyers‚ threat of substitute products and how intense the current rivalry is among existing competitors. In each of the five categories there are conditions/ sources that further provide insight to each; they will be analyzed in terms the car industry. This
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Hedging Currency Risks at AIFS The American Institute for Foreign Study (AIFS) is a foreign exchange program organization that provides 50‚000 students the opportunity to study abroad. AIFS serve American students traveling abroad to Europe‚ China‚ Mexico‚ and other locations. Therefore‚ AIFS receive cash inflows in dollars while they pay outflows in mostly Euros and British Pounds. The organization had $200 million in annual revenues. AIFS provides two main divisions: the College division primarily
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university? Answer: 0.45 Instructor Explanation: (.75)(.60) = 0.45 4. Question : In a report on high school graduation‚ it was stated that 85% of high school students graduate. Suppose 3 high school students are randomly selected from different schools. What is the probability that all graduate? Answer: 0.614 Instructor Explanation: (.85) (.85) (.85) = 0.614 5. Question : A pharmaceutical company has determined that if a new cholesterol-reducing drug is manufactured
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implementing diversification. For each strategy discussed in the book‚ including diversification and merger and acquisition strategies‚ the company creates value only when its resources‚ capabilities‚ and core competencies are used productively. Companies from different industries decide to use an acquisition strategy for several reasons; however‚ acquisition strategies are not without problems. When acquisitions contribute to poor performance‚ a company may deem it necessary to restructure its operations
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These most important family influences can greatly help in positive development of the child or the lack of it. Some decisions that have substantial impact are: How will the child be educated? The choice between institutional and hearing schools. Should we opt for cochlear implants? These are just a couple many important decisions and choices that are made by the parents or caregivers. The building of
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POINT OF VIEW The case will be studied from the point of view of a third party consultant. CASE CONTEXT Robert Stempel became CEO of General Motors in August 1990. Unfortunately‚ this decade began with an economic recession‚ which inevitably took a toll on the automotive industry. General Motors experienced big losses during this period. Members of the board and investors sought Stempel’s leadership‚ along with his handpicked team of executives‚ to recover from the slump. In 1991‚ General Motors loses
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