EurOMA and POMS: Exchange Rate Policy
Two not-for-profit organizations the Production and Operations Management Society (POMS) and the European Operations Management Association (EurOMA) are about to offer joint memberships for their respective group of members. Considering that these organizations collect membership fees in different currencies, they are wondering what would be the fairest approach for developing an exchange rate policy. Their alternatives include using different spot exchange rates, forward contracts or currency options.
Collection: IESE (España)
Ref: F-798-E
Format: PDF
Number of pages: 10
Publication Date: Sep 19, 2006
Language: English
What material is included in this case:
Description
Two not-for-profit organizations the Production and Operations Management Society (POMS) and the European Operations Management Association (EurOMA) are about to offer joint memberships for their respective group of members. Considering that these organizations collect membership fees in different currencies, they are wondering what would be the fairest approach for developing an exchange rate policy. Their alternatives include using different spot exchange rates, forward contracts or currency options.
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Year: 2005
Geographic Setting: Estados Unidos, Europa
Learning Objective
This case has been designed to introduce students to the idea of currency rate hedges in the context of a not-for-profit organization. The case reinforces the following concepts:
a) Currency exchange rate risk and how it affects not-for-profit organizations;
b) Hedging tools such as spot exchange rates, forward contracts and currency options;
c) Development of an appropriate hedging strategy.
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