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Global Business Today 8th Edition by Charles Hill
Edition 8ISBN: 978-0078112621Global Business Today 8th Edition by Charles Hill
Edition 8ISBN: 978-0078112621 Exercise 4
Reread the Management Focus feature on Volkswagen in this chapter, then answer the following questions:
a. Why do you think management at Volkswagen decided to hedge only 30 percent of their foreign currency exposure in 2003? What would have happened if they had hedged 70 percent of their exposure?
b. Why do you think the value of the U.S. dollar declined against that of the euro in 2003?
c. Apart from hedging through the foreign exchange market, what else can Volkswagen do to reduce its exposure to future declines in the value of the U.S. dollar against the euro?
a. Why do you think management at Volkswagen decided to hedge only 30 percent of their foreign currency exposure in 2003? What would have happened if they had hedged 70 percent of their exposure?
b. Why do you think the value of the U.S. dollar declined against that of the euro in 2003?
c. Apart from hedging through the foreign exchange market, what else can Volkswagen do to reduce its exposure to future declines in the value of the U.S. dollar against the euro?
Explanation
Verified
Verified
a) Volkswagen would have had to pay an e...
Global Business Today 8th Edition by Charles Hill
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