Protection with potential
REAL-LIFE PROBLEMS, INNOVATIVE SOLUTIONS
Background: An Australian-based company is in the business of exporting, and receives payments for its goods in US dollars. So the client is exposed to fluctuations in the AUD/USD exchange rate. The client's central forecast is that the AUD will depreciate against the USD over the next 12 months. However, it has some uncertainty over its currency forecasts.
Part of the client's risk management practice involves implementing strategies that help to protect its profits against adverse currency
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