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Describe in words the hedging strategy

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Describe in words the hedging strategy that the company should take in each of these cases. Remember that a possible answer is that the company should not be hedging at all.

a) A US restaurant would like to hedge fluctuations in the prices of key inputs because of the uncertainty regarding COVID-19.

b) A company needs to make a one-time payment of 50 million dollars in Mexican Pesos in about 6 months, and would like to hedge against the risk that exchange rates may change.

c) A US manufacturing firm that produces in the US and sells cars in Europe would like to reduce the effect of currency fluctuations on its profits.

d) A CFO believes that the price of oil (one of the company's main inputs) is going to increase, and wants to generate profits from this increase.

Reference no: EM132577052

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