Currency hedging

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  • Currency Hedging

    970 Words  | 4 Pages

    What is hedging? Hedging is a strategy used to protect risks posed by worldwide currency fluctuations. One hedges the currency risk by contracting to sell foreign currency in the future, at the current exchange rate (Fries). If fund managers think the dollar is going to be stronger when they are ready to change the foreign currency back into American dollars, then they take out a foreign futures contract (a hedge). Thus, they lock in the exchange rate beforehand, so that they will not lose profits

  • Currency hedging Essays

    937 Words  | 4 Pages

    What is hedging? Hedging is a strategy used to protect risks posed by worldwide currency fluctuations. One hedges the currency risk by contracting to sell foreign currency in the future, at the current exchange rate (Fries). If fund managers think the dollar is going to be stronger when they are ready to change the foreign currency back into American dollars, then they take out a foreign futures contract (a hedge). Thus, they lock in the exchange rate beforehand, so that they will not lose profits

  • Currency Hedging at Aifs

    1652 Words  | 7 Pages

    Q1. What gives rise to the currency exposure at AIFS? * Currency exposure is the extent to which the future cash flows of an enterprise, arising from domestic and foreign currency denominated transactions involving assets and liabilities, and generating revenues and expenses, are susceptible to variations in foreign currency exchange rates. * AIFS organizes educational and cultural exchange programs throughout the world. AIFS receives most of its currencies in American dollars (USD but

  • Hedging Currency Risk at Aifs

    2629 Words  | 11 Pages

    Dollars (USD), most of their costs are in foreign currencies as Euros (EUR) and British Pounds (GBP). Consequently, foreign exchange hedging has a crucial importance for the company because it provides protection against different types of risk that derive from its activity. In order to reduce risk, the company is using two hedging derivatives: forward contracts and put options to sell dollars. The aim of the paper is to determine an appropriate hedging policy which answers two main questions: how much

  • Hedging Currency Risks at Aif

    1085 Words  | 5 Pages

    ACFI 703 March 27, 2013 Hedging Currency Risks at AIF The American Institute of Foreign Studies (AIFS) is a company that organizes student exchange programs worldwide with two main divisions. The College Division arranges academic years and semesters or summer schools. The High School Division organizes 1-4 week educational travels for students and teachers. More than 50,000 students participate each year in exchange programs of AIFS, which leads to annual revenues of around $ 200 million. AIFS

  • Hedging Currency Risks At AIFS

    3336 Words  | 14 Pages

    PLEKHANOV RUSSIAN ECONOMIC UNIVERSITY INTERNATIONAL FINANCIAL MANAGEMENT Case Study REPORT Hedging Currency Risks At AIFS Professor: Yulia Y.Finogenova Performed by: Budeanu Diana Gabaydullin Ilnar Kulikova Ekaterina

  • Hedging Currency Risks At Aifs

    2313 Words  | 10 Pages

    FIN 46059 summer 2015 William Billik 08/08/2015 Hedging Currency Risks at AIFS Risk is an inherent aspect of every business activity and its effective management can determine the success or failure of a company. Companies dealing with foreign currencies are at a risk of significant losses caused by fluctuations in the exchange rates. The American Institute for Foreign Study (AIFS) operates in more than one currency and this exposes it to currency risks. The company incurs its expenses in dollars

  • Hedging Currency Risks at AIFS

    1354 Words  | 6 Pages

    AFM 322 Hedging Currency Risk at AIFS 1. Case Synopsis Christopher Archer-Lock and Becky Tabaczynski both work for American Institute for Foreign Study (“AIFS”). Archer-Lock is the controller of AIFS and Tabaczynski is the CFO of AIFS’s high school travel division ACIS. AIFS a student exchange organization that organizes educational and cultural exchange programs throughout the world. Founded in the U.S. in 1964, AIFS has annual revenues of close to $200 million and sent more than 50,000 students

  • Hedging Currency Exposures in a Multinational Corporation

    26743 Words  | 107 Pages

    MASTER’S THESIS Financial theory offers several rationales for financial risk management. Hedging enables firms to maintain their access to internal funds as well as reduces the costs of financial distress. The theoretical framework offers, however, few tools for currency risk identification and for choosing a proper hedging instrument. This Thesis seeks to help firms manage risks better by defining the currency risk exposures of a multinational corporation, by describing their effects on the cash flows

  • Aspen Technology, Inc. Currency Hedging Review

    1796 Words  | 8 Pages

    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 hurts the company because it doesnot consider Aspen’s expenses abroad that balance sales exposures to currency fluctuations. We then recommend that

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