Question
1. What is AIFS business model? 2. In what currency or currencies does AIFS receive the bulk of its revenue? Why? 3. In what currency
1. What is AIFS business model?
2. In what currency or currencies does AIFS receive the bulk of its revenue? Why?
3. In what currency or currencies does AIFS pay the majority of its bills? Why?
4. What would happen if Archer-Lock and Tabaczynski did not hedge at all?
5. What would happened with a 100% hedge using forward contracts? A 100% hedge using option contracts? Use the forecast final sales volume of 25,000 and analyze the possible outcomes relative to the zero impact scenario described in the case.
6. What happens if sales volumes are lower or higher than expected as outlined at the end of the AIFS case?
7. What hedging decision would you advocate? Why?
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