3. Why is GM worried about the ARS exposure? What operational decisions could it have made or now make to manage this exposure? (Check exhibit 12 and 13what are the forward rates telling you? Recall that we learned that forward rates capture market expectations of future exchange rate movements? What does this mean for how expensive hedging is by this time? Indeed, this is why anticipatory risk management is so criticalwhen hedging a risk is the most desirable, the cost of that hedge rises substantially too. Good news is that there are some non-financial alternatives to hedging this exposure)

Foreign Exchange Hedging Strategies at General Motors 204-024 12 months 6 months Exhibit 12 Argentinean Peso/U.S. Dollar Forward Rates by Contract Maturity 1.5500 1.5000 Non-deliverable forward rates 1.4500 1.4000 1.3500 1.3000 1.2500 1.2000 1.1500 1.1000 1.0500 1.0000 Les per This w 1 month 1 8 15 22 1 8 15 22 29.5 12 19 26 3 10 17 24 31 7 14 21 28 5 12. 19- 26- 2 Feb Feb Feb Feb Mr Mar M Mar Mar Apr Apy Apr Apr May May May May May Jun Jun Jun An MA Mil Aug Source: Company documents. Exhibit 13 Cost of Hedging the ARS Exposure in Argentina Time Horizon / Hedging Period Cost ($ millions) $6.4 18.2 One-month Forward Three-month Forward Six-month Forward Twelve-month Forward 28.7 40.3 Source: Company documents. Foreign Exchange Hedging Strategies at General Motors 204-024 12 months 6 months Exhibit 12 Argentinean Peso/U.S. Dollar Forward Rates by Contract Maturity 1.5500 1.5000 Non-deliverable forward rates 1.4500 1.4000 1.3500 1.3000 1.2500 1.2000 1.1500 1.1000 1.0500 1.0000 Les per This w 1 month 1 8 15 22 1 8 15 22 29.5 12 19 26 3 10 17 24 31 7 14 21 28 5 12. 19- 26- 2 Feb Feb Feb Feb Mr Mar M Mar Mar Apr Apy Apr Apr May May May May May Jun Jun Jun An MA Mil Aug Source: Company documents. Exhibit 13 Cost of Hedging the ARS Exposure in Argentina Time Horizon / Hedging Period Cost ($ millions) $6.4 18.2 One-month Forward Three-month Forward Six-month Forward Twelve-month Forward 28.7 40.3 Source: Company documents