Foreign Exchange Hedging Strategies at General Motors: Transactional and Translational Exposures Harvard Case Solution & Analysis

As multinational firms manage currency risks? Considering transactions and sustained impact and alternative answers to these exposures by analyzing two specific hedging decisions by General Motors. Description of General Motors' corporate hedging policy, risk management, structure, and how accounting rules decisions impact of hedging. Although the overall corporate hedging policy provides a consistent approach to foreign exchange risks that General Motors must manage, the company should take into account the deviations from prescribed policies. Description of two such situations: a significant impact on the Canadian dollar to the adverse effects of accounting and the impact of the GM when the Argentine currency devaluation widely anticipated. Students must assess the risks of General Motors is facing in each situation and determine which hedging strategy - if any - may be appropriate. In addition, asks students to analyze financial and accounting costs of alternative derivative instruments for hedging purposes. Rewritten version of the previous case. "Hide
by Mihir A. Desai, Mark F. Veblen Source: Harvard Business School 24 pages. Publication Date: Mar 08, 2005. Prod. #: 205095-PDF-ENG

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