Easton Bell Inc., Dealing With Forgiven Currency Exchange Rate Risks

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This 38 page paper looks at the value of hedging to reduce risks of foreign exchange rate fluctuations. Easton-Bell is a company that has a number of financial issues, including a low profit margin, a high level of debt and the majority of its finished goods being subject to exchange rate movements. The paper examines the company and its position in order to assess the risks and benefits of hedging and the approaches or tools which could be used for hedging, including forward contracts, futures, options and swaps. The use of hedging is considered in both theoretical terms and in the context of the company's current position. The bibliography cites 20 sources.