Advanced Corporate Risk Management Case Assignment - Edubirdie

University:
Massachusetts Institute of Technology
Course:
15.501/516 | Accounting
Academic year:

2023
Views:

395

Pages:

1
Author:

dadreoli99

Case #1 Study Questions: Aspen Technology Aspen’s Business Strategy and Its Exchange Rate Exposure 1. How does a changing exchange rate affect Aspen? Focus first on its booked sales. 2. How might the exchange rate affect Aspen’s long-run competitive position? 3. How does Aspen’s business strategy create its exposure? 4. Could the company change its strategy and thereby its exposure without hedging using financial instruments? Quantifying the Exposure With and Without the Hedge 5. Can you measure Aspen’s exposure, before taking into account its hedging strategy? Is it long or short each of the relevant currencies? How much? 6. Describe Aspen’s hedging strategy? Does it eliminate all of the exposure? Is it long or short each of the relevant currencies after taking into account its hedge? How much? The Value of Hedging 7. Does Aspen’s exposure lower the company’s value? Does Aspen’s hedging raise the value of the company? 8. Does Aspen’s management have the same interest in hedging as the other shareholders?

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