a. Why do you think management at Volkswagen decided to hedge only 30% of the automaker's foreign currency exposure in 2003?

b. What would have happened if it had hedged 70% of exposure?

c. Apart from hedging through the foreign exchange market, what else can Volkswagen do to reduce its exposure to future declines in the value of the U.S. dollar against the euro?

Answer rating: 100% (QA)

a Volkswagen would have had to pay an expensive commission to hedge agai... View the full answer