mitigating transaction translation and economic risks
JP MORGAN AND CHASE
For this discussion, you will first examine financial statements for a specific company and then provide a summary of its hedging techniques. This discussion will help prepare you for Milestone Two, due in Module Five.
First, review the annual financial statements (Form 10-K) for the company you have selected for your final project. You can either retrieve the statements from the SEC EDGAR Company Filings or directly from the companyâ€™s website (usually listed under â€œInvestor Informationâ€). This task will help prepare you for Milestone Two and will also give your classmates a chance to see which company you are analyzing for your final project.
Next, in your initial post to the discussion, address the following:
- What company have you selected for your final project and what foreign countries does the company do business in?
- What are a couple different hedging techniques/derivative contracts the company is currently using to mitigate its foreign transaction, translation, and economic risks?
- In your own opinion, do you think the company is doing enough to hedge its risk? Explain your reasoning.
In responding to your classmates, share your opinion about the companyâ€™s hedging strategy. Offer them suggestions based on what other types of hedging the company might use to fit its product/industry to its risk. This might provide them with some hints for their own Milestone Two submission in Module Five.