First, review the module resources, including the Harvard Business Review case study “F. Mayer Imports: Hedging Foreign Currency Risk,” and then introduce the problem at hand and address the following:
Current State: What is the current state of the Eurozone—and the political risks and volatility of the Australian dollar (AUD)?
Efficacy: How effective is F. Mayer’s current hedging practice?
Procurement: Should F. Mayer leave its Euro procurement unhedged? Why or why not?
Hedging Strategies: Assume that F. Mayer will not leave its position unhedged; what hedging strategies should the company use in order to protect its investment? Refer to Exhibit 3 in the case and briefly analyze the different hedging strategies for soundness.
Refer to the case study, your text, and other course materials to support your responses.