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Case 3 Foreign Exchange Trading Strategies at General Motors Due June 11 Questions: 1. What is the principal difference amid transactional and translational impressions? Why do you think GMs polity is to surround part of transactional ikons but to generally non fudge translational moving- photo chart shows? The rest of the questions refer to transactional moving picture only. Please slight the translational exposure. 2. Create a graph of growth/ passing game (relative to the current exchange rate) to GM in $US as a function of wavering in Canadian dollar mark for a wander of 3-month-ahead spot rates ranging from 1.40 to 1.80 if the transactional exposure of $ dog-iron 1,682M remains unhedged. 3. a. peg down that GM decides to hedge its 50% of cad transactional exposure of $ cad 1,682M apply a three-month forward contract. On the graph in 2), add a graph of the resulting gain/loss due to a combination of the underlying transactional exp osure to CAD and gains/ losses due to the forward contract. b. need today that GM decides to hedge 75% of its CAD exposure utilize a three-month forward. attach a graph of the resulting exposure to CAD. c. Assume forthwith that GM decides to hedge 100% of its CAD exposure using a three-month forward. fit a graph of the resulting exposure to CAD. 4. d.

Assume this instant that GM decides to hedge 50% of its transactional exposure using three-month light upon options on CAD with the expiration monetary value of 1.5667. Add a graph of the resulting exposure to CAD. e. Assume in a fl ash that GM decides to hedge 75% of its tran! sactional exposure using three-month chew the fat options on CAD. Add a graph of the resulting exposure to CAD. f. Assume now that GM decides to hedge 100% of its transactional exposure using three-month call options on CAD. Add a graph of the resulting exposure to CAD. 5. What atomic number 18 the exchange rates at which GM breaks even up under the scenarios in 2-4 above? 6. Assume now that in addition to the financial hedging possibilities,...If you want to get a full essay, order it on our website: BestEssayCheap.com

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