GM - FX Hedging Strategies at GM 1 Discussion Questions 1....

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1 FX Hedging Strategies at GM
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2 Discussion Questions 1. Based on your reading of this case, what decisions have to be made to implement a hedging policy? 2. What is GM’s hedging policy? 3. Should GM deviate from its policy in hedging its CAD exposure? Why or why not? 4. Why is GM worried about the ARS exposure? What operational decisions could it have made or make to manage this exposure?
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3 Q1: Based on your reading of this case, what decisions have to be made to implement a hedging policy? Q2: What is GM’s hedging policy? 1. What to hedge? 2. How much to hedge? 3. How to hedge? 4. Where to hedge? 5. When to deviate? Transactional exposure only 50% “passive” (vs. Dell Mercosur) Forwards (0-6) and options (6-12) Regionally Try to stay “passive” The goals of GM’s hedging policy: (1) to reduce cash flow and earnings volatility; (2) to minimize management time and cost; and (3) to align foreign exchange risk management with business objectives
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4 Q3: Should GM deviate from its policy in hedging its
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This note was uploaded on 02/23/2011 for the course CAREER DEV 101 taught by Professor Bruneil during the Spring '09 term at American Dubai.

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GM - FX Hedging Strategies at GM 1 Discussion Questions 1....

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