Case - Voyages Soleil The Hedging Decision

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Case - Voyages Soleil The Hedging Decision

Option 1: Wait and exchange the Canadian dollars in October at the prevailing spot exchange rate at that time.

Option 2: Employ forward contracts for all the payable, locking in the Canadian dollar price. The six-month forward rate at April 1, 2002, for contracts buying up to US$100 million was .6271 US$/Cdn$.

Option 3: Borrow Canadian dollars to buy U.S. dollars on April 1, 2002, and invest the U.S. dollars for six months. The loan could then be paid using the Canadian dollars available for the hotel payments.

Attachment:- Case - Voyages Soleil The Hedging Decision.rar

Reference no: EM132357093

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