FIN5IFM Exchange Rate Exposure- test and expand your understanding

Task Overview

 

Lecture 5 introduces the foreign exchange market with a particular focus on forecasting exchange rates and the basics of currency-related derivatives and their use in mitigating exchange rate risk. Lectures 5 and 6 introduce various forms of exchange rate exposure that MNCs faces and highlights the various mechanisms to mitigate exchange rate risk exposure. Building on the concepts primarily related to Lecture 4, 5, and 6 this Managing Exchange Rate Exposure Report aims to test and expand your understanding to assess the value of forecasting exchange rate, the most suitable methods of managing exchange rate risk for Nike Limited.

Understanding the Nature of Exchange Rate Exposure Nike Faces

• Nature and the major sources of exchange rate risk exposure Nike faces.
• Briefly explain the types of exchange rate risk exposure and their specific nature. Preferably examples.
• The risk tools management applied to hedge these risks by Nike.