Micro-hedging programs

Micro-hedging is a type of hedging program based on the hedging of forecasted exposure. True or false?

• TRUE

• FALSE

What hedging goal is linked to a micro-hedging program that hedges FirmCo?

• Smoothing the hedged rate

• Protecting the budget rate

• Protecting the “dynamic” pricing rate

• Reduce FX gain & losses

What hedging goal is linked to a micro-hedging program that hedges BSi?

• Smoothing the hedged rate

• Protecting the budget rate

• Protecting the “dynamic” pricing rate

• Reduce FX gain & losses

When micro-hedging FirmCo to protect the margin per transaction, the hedging rate (HR) is equal to the pricing rate (PR). True or false?

• TRUE

• FALSE

When does the BS risk start:

• When the company issues the invoice

• When the company gets the FirmCo

• When the company does their pricing

The impact of FX on the margin is fully represented as an FX loss in the balance sheet. True or False.

• TRUE

• FALSE

When a company is looking to defend their profitability, what risk should they tackle?

• Pricing risk and transactional risk

• Only transactional risk because it is when the cashflow is exposed

• Only Balance sheet risk because it is when the company shows if they are profitable or not

When can we start with micro-hedging?

• After the sales order

• Before the sales order

• When it’s needed

What type of conditional orders exist?

• Take profit

• Stop Loss

• Take profit and stop loss

• Take profit, stop loss, Min to Hedge and Max to Hedge

When hedging aggregated micro exposure using the take-profit and stop-loss, the hedge is executed when?

• The rate hits the take profit limit

• The rate hits the stop loss limit

• Both

• When the pricing exchange rate changes