High School Travel Pricing prices set on a calendar year basis January December

High school travel pricing prices set on a calendar

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High School Travel Pricing: prices set on a calendar year basis, January-December, - followed a strategy of slow, but steady price increases year of year
-increased own prices by $200 or more --- market reactedHedging at AIFS-Used currency hedging to help manage 3 types of risk 1. Bottom-line Risk: risk that an adverse change in exchange rates could increase the cost base2. Volume Risk: foreign currency bought based on projected sales volume, different from final sales volumes3. Competitive Pricing Risk: no matter how currencies fluctuated, AIFS price guarantee meant it could not transfer rate changes into price increasesWhen did hedging activities occur? College Division:hedging occurred in earnest in JanuaryHigh School Travel Division: hedging took place throughout thy year, company policy was to hedge at least 25% by December, 40% by end of March, and a full 100% by the pricing date in JuneWhen purchasing currency, AIFS worked with 6 different banks-banks all granted AIFS lines of credit, based on own analyses-AIFS would have to deposit funds at each bank to cover its hedging activities-credit lines came close to $100 million USDDescribe industry/competitive advantages: Key Players/Objectives/Incentives: Risks/Challenges

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