Hedging Currency Risks at AIFS

Harvard Business School Case 205-026

Course Software 205-703
This course software was prepared solely as the basis for class discussion. Cases are not intended to serve as
endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright
2004 President and Fellows of Harvard College. No part of this product may be reproduced, stored in a
retrieval system, used in a spreadsheet or transmitted in any form or by any meanselectronic, mechanical,
photocopying, recording or otherwisewithout the permission of Harvard Business School.

Exhibit 9 Template for Currency Rate and Sales Volume Impact on Company Bottom Line
Final volume: _______________
% Cover
100%
100%
100%
100%
100%

Contracts
0%
25%
50%
75%
100%

Options
100%
75%
50%
25%
0%

75%
75%
75%
75%
75%

0%
25%
50%
75%
100%

100%
75%
50%
25%
0%

50%
50%
50%
50%
50%

0%
25%
50%
75%
100%

100%
75%
50%
25%
0%

25%
25%
25%
25%
25%

0%
25%
50%
75%
100%

100%
75%
50%
25%
0%

0%
0%
0%
0%
0%

0%
25%
50%
75%
100%

100%
75%
50%
25%
0%

USD Exchange Rate (USD/EUR)

1.01
1.22
1.48

Source: Adapted by case writers from AIFS. Numbers and levels have been disguised for confidentiality.