ACC 312 Module Six Case Guidelines andRubric
Case 6-4: Hedging Foreign Exchange Risk
Review the textbook case material and draft a memo per the requirement
listed below the case. Provide an analysis that demonstrates your inquiry
into the case concepts.
What to Submit
This short paper assignment must be 2–3 pages in length (plus a cover
page and references) and must be written in APA format. Use double
spacing, 12-point Times New Roman font, one-inch margins. Cite at least
two sources in APA format.
“Case 6-4
Better Food Corporation
Better Food Corporation (BFC) regularly purchases nutritional supplements from a supplier in
Japan with the invoice price denominated in Japanese yen. BFC has experienced several foreign
exchange losses in the past year due to increases in the U.S.-dollar price of the Japanese
currency. As a result, BFC’s CEO, Harvey Carlisle, has asked you to investigate the possibility of
using derivative financial instruments—specifically, foreign currency forward contracts and
foreign currency options—to hedge the company’s exposure to foreign exchange risk.
Required:
Draft a memo to CEO Carlisle comparing the advantages and disadvantages of using -forward
contracts and options to hedge foreign exchange risk. Make a recommendation for which type
of hedging instrument you believe the company should employ, and provide your justification
for this recommendation”
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Formatting
Title Page
Citation
Outline
