1. Why do firms borrow in a foreign currency? Was SaskPower justified in borrowing U.S. dollars?

2. Should SaskPower be concerned with fluctuations in the U.S. dollar exchange rate?

3. What is a foreign currency swap? Can foreign currency swaps help SaskPower hedge the currency exposure in its U.S. dollar debt?

4. How would you assess whether the proposed swap in the case (see case Exhibit 6) is a fair deal?

5. In the place of SaskPower management in December 2002, would you consider hedging the currency exposure? If yes, which hedging option would you adopt?