International Exposure Management and Valuation

Faculty Author:  Karen K. Lewis

Students assume the role of CFO and use various hedging strategies to mitigate the risks of foreign exchange.

IEMAV contains several scenarios that allow students to learn the intricacies of mitigating foreign currency risks. Though the simulation’s interface varies slightly from scenario to scenario, there are several common elements.

  • Description/Scenario — the detailed information about a company and a specific transaction that involves currency risk. In addition, this paragraph describes the available hedging tools. The purpose of this section is to provide students with a real-world context for their decisions.
  • Equation — the equations required for students to make a sound hedging decision.
  • Data — any supplemental information that will be useful to participants. The information provided varies by scenario (e.g., sample distribution of exchange rate, historical data).
  • Input area — the area that captures students’ hedging decisions and parameters.

Students have the opportunity to practice their hedging strategies for each scenario by entering parameters and viewing the results.

Wharton Learning Lab International Exposure Management Valuation Practice Result

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