This Case is about Finance

Publication Date: 06/08/1999

An auto components manufacturer, iFC Production, was trying to raise capital to finance growth in Mexico. In order to ensure funding, lender banks required an evaluation of the financial risk management equipment of the IFC. IFC had exposures to interest rates as well as foreign exchange. Data is supplied, which enables pupils to qualify transactional and translational risk vulnerabilities. Advice is, in addition, provided enabling pupils to assess IFC’s portfolio of hedging instruments including single barrier options, basic vanilla options, double barrier options and typical rate options.

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