HEDGING CURRENCY IN THE AUTOMOTIVE INDUSTRY: A MANUFACTURING CASE STUDY

John Frazier
Southern Wesleyan University
ABSTRACT
This paper investigates the currency hedging strategy of a Manufacturing firm for the year
2012. A brief review of risk management and hedging currency is provided. A regression analysis
is performed to determine if there are any variables that would be useful in predicting the exchange
rate. The study is limited in the fact that it only examines one company and one year of a currency
hedging policy. This study concludes that the manufacturing firm’s hedging strategy for the year
2012 was successful in limiting the company’s risk to exchange rate fluctuations.