$1.$ Describe AIFS$$s business. Which are the main risks that AIFS

faces?

$2.$Analyze and compare the impact of the three basic hedging

strategies that AIFS is considering:

a$.$ Do nothing $($i$.$e$.,$ not hedge at all$)$

b$.100\%$ hedge with forwards

c$.100\%$ hedge with options

Use the expected final sales volume of $25,000$ and compute the possible

outcomes of each strategy relative to the $$zero impact$$ scenario described

in the case under three possible levels for the USD$/$EUR exchange rate:

$$ Stable dollar $(1\mathrm{.}22$ USD$/$EUR$)$

$$ Strong dollar $(1\mathrm{.}01$ USD$/$EUR$)$

$$ Weak dollar $(1\mathrm{.}48$ USD$/$EUR$)$

$3.$Analyze and compare the impact of the alternative hedging

strategies shown in Exhibit $9$ of the case that use different mixes of forwards

and options, and different levels of coverage.

$4.$ Analyze how the impact of each hedging strategy changes under

two different sales volumes scenarios: $($i$)$ a best case scenario in which final

sales volumes are $30,000$ and $($ii$)$ a worst case scenario in which final sales

volumes are $10,000.$

$5.$ Which hedging strategy would you recommend to AIFS?