Subject category:
Finance, Accounting and Control
Published by:
Ivey Publishing
Version: 2017-02-27
Length: 8 pages
Data source: Field research
Topics:
Options; Risk management; Forwards; Exchange rates; Foreign exchange; International; Finance
Abstract
In September 2014, F Mayer Imports Pty Ltd, an Australian gourmet food importer, had a narrow window of opportunity to potentially protect its budget exchange rate for the rest of that, and the following, financial year. With imports such as European butter, chocolate, and cheese, the company procured a significant portion of its product in euros. The Australian dollar to euro exchange (AUD/EUR) dropped from a high of 0.7027 in October 2013 to a low of 0.6369 in January 2014. With the AUD/EUR recently rebounding and edging back toward the company's budget rate of 0.6900, the company's chief financial officer needed to choose between four proposed hedging strategies.
Subject category:
Finance, Accounting and Control
Published by:
Ivey Publishing
Version: 2017-02-27
Length: 8 pages
Data source: Field research
About
Abstract
In September 2014, F Mayer Imports Pty Ltd, an Australian gourmet food importer, had a narrow window of opportunity to potentially protect its budget exchange rate for the rest of that, and the following, financial year. With imports such as European butter, chocolate, and cheese, the company procured a significant portion of its product in euros. The Australian dollar to euro exchange (AUD/EUR) dropped from a high of 0.7027 in October 2013 to a low of 0.6369 in January 2014. With the AUD/EUR recently rebounding and edging back toward the company's budget rate of 0.6900, the company's chief financial officer needed to choose between four proposed hedging strategies.
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Subject category:
Finance, Accounting and Control
Published by:
Ivey Publishing
Version: 2017-02-27
Length: 8 pages
Data source: Field research