Hedging currency risks at aifs excel Solution For Please read the case "Hedging Currency Risks at AIFS". The liquidity premium for the corporate bond is estimated to be 0. It asks students to identify sources of foreign exchange exposure for companies and reasons for managing those risks. June 2, 2025. If AIFS would not have gone for hedging then, company had to take full exposure towards the currency risks which would have ultimately resulted in the loss in dollar denominations (if found depreciation in the US dollar Jun 3, 2019 ยท Currency exposure at AIFS can be caused by 3 risks: the bottom-line risk, volume risk and competitive pricing risk and these 3 risks happen at AIFS because of the AIFS's hedging policies, so before analyzing these 3 risks it is necessary to analyze AIFS's hedging policies. 000 1. It works by offsetting the potential losses from an unfavorable change in exchange rates between the foreign currency and the investor's home currency. Students are asked to evaluate different hedging instruments and strategies while considering volume uncertainty. Hedging. 000 B: Below the arbitrage-free 7-month forward price is calculated‚ also is shown the currency forward contract via replicating.
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