Homework: Foreign Currency Transactions and Hedging – Hedging Currency Risk at AIFS Case 1. What gives rise to the currency exposure at AIFS. Currency exposure or currency risk is the type of risk that an individual or a company faces due to the fluctuation in price of one currency against another. For AIFS –a student …
1. Introduction There are many reasons to celebrate Macau’s economic growth which enabled Macau push up the exchange rate of domestic currency Pataca. Unfortunately, the Pataca has been depreciating rapidly the currency RMB, its largest trading partner mainland. Macau Pataca fell from 1. 03 Yuan/MOP at July 2005 to 0. 85 Yuan/MOP in April 2009. …
Currency hedging simply means to the control cost of foreign exchange in future. The AIFS used currency hedging to protect its bottom line from damaging their exchange rates in relation to the American students sent abroad for their studies. The AIFS did this two years in advance basing this on the expected cost they …
