Describe in words the hedging strategy

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Reference no: EM132820092

Describe in words the hedging strategy that the company should take in each of these cases.

a) A US restaurant with very low leverage would like to hedge against the risk that consumers will not like a major revamping of the menu.

b) A US company needs to receive 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) US manufacturing firm that produces cars in India to sell in the US would like to reduce the effect of currency fluctuations on its profits.

d) A CFO from a swiss company believes that interest rates in Switzerland are too low and would like to profit by holding cash in US dollars instead.

Reference no: EM132820092

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