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- 2011-7-11
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- 2014-8-4
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FX hedge for Corporate Treasurers
Fellow CFAs and CFA aspirants...I need your smart opinion:
I have a tough assignment from the CFO on my first week of joining a Global real estate company. Here is the business model of the company:
The company's functional currency is USD and it basically do equity advances for real estate deals to corporate clients in four different currencies: Euro, SGD, CAD & Pound. The clients will at a later stage return the funds plus agreed interest but there is uncertainity regarding timing of receiving these funds in their respective currencies. Now my assignement is to come out with the model:
1. To measure FX exposure (G/)on an ongoing basis
2. To devise the best mechanism to hedge currency risk for such transactions. Thought of multi-notional currency pooling but damn...the mechanics are soo technical |
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