Design a Corporate Hedging Strategy

FINC-634 Group Project: Design a Corporate Hedging Strategy

Suppose your group is a consulting firm advising a company on their corporate hedging strategy.

Start with an outline of the company’s business profile, a brief summary of its industry, competitors and the economic climate they are operating in. Select a hypothetical company that could be an importer of goods or an exporter of goods from and to various countries. Give an outline of their potential exposures to various countries (currency exposure) and/or exposure to various input factors such as materials, commodities etc. (commodity risk). In addition, consider the overall economic, interest rate and global market risks the company might face.

Order Custom Essay

FINC-634 Group Project: Design a Corporate Hedging Strategy

Your task is to help this company assess all these potential issues. You are to write a 2-3 page written report identifying the pros and cons of hedging and providing possible hedging alternatives. You are also asked to do a 12-minute presentation summarizing your research report recommending an ideal hedging strategy. To give your presentation a sense of reality, open a virtual trading account (CBOE or mocktrading.com) and show how you would have implemented the size and timing of the proposed hedging strategy. You can include PowerPoint slides to aid in your presentation but it is not required. However, everyone in the group should take part in the presentation.

Your final advice is to initiate a board discussion with a view to generate a corporate hedging policy statement. Document all your sources of information. The final group project, reports and presentations are due in week 6.
Hint:

The objective of this project is to give a presentation that clearly outlines the challenges and opportunities your target company is facing. Put yourself in the shoes of the company that you wish to consult. How can you enhance your presentation that would make the sale? Is your corporate hedging strategy plausible and executable enough so that your group can earn its consulting fees?

By admin in Essays on November 22, 2015