This case study analysis seeks to answer the question of how a multinational firm should manage foreign
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Question:
- 1. Should multinational firms hedge foreign exchange risk? If not, what are the consequences? If so, how should they decide which exposures to hedge?
- 2. What do you think of GM’s foreign exchange hedging policies? Would you advise any changes?
- 3. Should GM deviate from its policy in hedging its CAD exposure? Why or why not?
- 4. If GM does deviate, how should GM think about whether to use forwards or options for the deviation from the policy?
- 5. Why is GM worried about the ARS exposure? What operational decisions could it have made or now make to manage this exposure?
Related Book For
Operations Management in the Supply Chain Decisions and Cases
ISBN: 978-0073525242
6th edition
Authors: Roger Schroeder, M. Johnny Rungtusanatham, Susan Goldstein
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