Q3: Should GM deviate from its policy in hedging its CAD exposure? Why or why not? 3" CAD exposures: CAD 1.682 billion cash flow (transactional exposure) and CAD 2.143 billion net monetary liability (translational exposure); short positions > GM's passive hedging policy: 50% of the CAD 1.682 billion but not the CAD 2.143 billion > Feldstein: 50%-)75% for the 1.682 billion? What about the 2.143 billion? > What would GM really be hedging if it decided to hedge 75% of its transactional exposure