Hedging foreign currency transaction exposure.
The primary subject matter of this case is hedging foreign currency exchange rate risk. Secondary issues examined include assessing transaction exposure and comparing hedging techniques to effectively manage unwanted exposure. The case requires students to have an introductory knowledge of accounting, statistics, finance and international business thus the case has a difficulty level of four (senior level) or higher. The case is designed to be taught in one class session of approximately 3 hours and is expected to require 3-4 hours of preparation time from the students.
St. Louis Chemical is a regional chemical distributor, headquartered in St. Louis. Don Williams, the President and primary owner, began St. Louis Chemical ten years ago after a successful career in chemical sales and marketing. The company has gradually expanded it product line and network of manufactures. However, a year-end report had shown shrinking profit margins on product lines that include chemicals purchased from a Canadian manufacturer. Williams has asked for recommendations regarding his firm's exposure to exchange rate risk.
St. Louis Chemical is a regional chemical distributor, headquartered in St. Louis. Don Williams, the President and primary owner, began St. Louis Chemical ten years ago after a successful career in chemical sales and marketing. During a year-end review, Williams noticed a significant deterioration in the profit margins of many specialty chemical lines. After further investigation, Williams learned their supplier, Norcand Chemical, required all orders to be invoiced in Canadian dollars. As a result of the invoicing policy, St. Louis Chemical was exposed to an average of 90 days of exchange rate transaction exposure. Williams solicited the help of James Thorton, a newly hired assistant in the finance office, in proposing alternatives to manage the exchange rate risk.
The primary subject matter of this case is foreign currency exchange rate risk. Secondary issues examined include assessing transaction exposure and comparing hedging techniques to effectively manage exposure. The case requires students to have an introductory knowledge of accounting, statistics, finance and international business, thus the case has a difficulty level of four (senior level) or higher. The case is designed to be taught in one class session of approximately 3 hours and is expected to require 4-5 hours of preparation time from the students.
TASKS TO BE PERFORMED
1. Calculate the percentage change in the #CAD/1USD exchange rate between the order month and invoice month for past transactions. Determine the US dollar cost difference per transaction between the estimate used by Packmore and the invoice paid by Scott. Explain the effect of exchange rate movements on profit margins during 2005.
During the first 6 months of 2005, the exchange rate risk had benefited St. Louis Chemical. A modest strengthening of the US dollar that had occurred for orders placed from October 2004 to March 2005 but paid for from January to June 2005 meant that St. Louis Chemical had actually paid a total of $18,260 less for Norcand orders compared to costs Young entered at the time of the orders. Unfortunately, the last 6 months of 2005 had provided a much different outcome. Orders placed from April to September of 2005 and paid for from July to December 2005 had resulted in actual payments of $46,390 more than costs entered in by Young. The US dollar cost difference is a function of the percentage change in the value of the dollar and the size of the order placed. Looking at all of 2005, St. Louis Chemical had actually paid $28,130 more for Norcand orders compared to cost estimates used by Packmore, thus reducing the already thin profit margins characteristic of the industry.
2. For the C$300,000 December 2005 order, determine a probability distribution of the US$ cost to St. Louis Chemical in March, 2006 incorporating the following assumptions:
- The percentage change in the Canadian dollar/US dollar (indirect quote) exchange rate follows a normal distribution.
- The expected percentage change between the spot rate in 90 days and the current spot rate is 0%, but the 90-day standard deviation in the percentage change between the spot rate in 90 days and the current spot rate is equal to 4%.
In the case of the December 2005 order valued at 300,000 Canadian dollars, the spot rate between the Canadian dollar and the US dollar at the time of the order is 1.17CAD / 1USD. If the expected percentage change in the spot rate in 90 days has a mean of 0% then the spot rate is 90 days is expected to be 1.17CAD / 1USD. Therefore, the expected payment in 90 days is equal to (300,000 / 1.17) $256,410. However, if the percentage change in the exchange rate has a standard deviation of 4%, then the probability distribution of the spot rate in 90 days and the corresponding range of payments in March 2006 would be as follows:
There is a 68% probability the CAD/USD exchange rate in 90 days will be between 1.12CAD/1USD and 1.22CAD/1USD corresponding to a March 2006 payment in US dollars of between $267.86 and $245.90 thousand. There is a 95% probability that CAD/USD exchange rate in 90 days will be between 1.08CAD/1USD and 1.27CAD/1USD corresponding to a March 2006 payment in US dollars of between $277.78 and $236.22 thousand. Assuming a normal probability distribution with an expected percentage change of 0% for the spot rate in 90 days implies that St. Louis Chemical is equally as likely to pay less than what was expected as they are to pay more than what was expected. Williams decision as to whether the additional currency risk is acceptable will depend on William's degree of risk aversion. If the additional currency risk is not acceptable to Williams, the risk must be transferred to a third party via a hedge position.
3. Discuss with Williams the extent of exchange rate risk faced by St. Louis Chemical arising from the C$300,000 Dec. 2005 transaction using a 90-day Value-at-Risk methodology based on a 95% confidence level.
- The December 2005 spot rate (indirect quote) at the time of the order is 1.17CAD / 1USD.
- The Dec. 2005 order is expected to cost US$256,410 in 90 days.
- A Value-at-Risk methodology incorporates the time horizon, confidence level and transaction size to determine a maximum loss on the value of the position at risk.
- The maximum loss is determined by the lower boundary of the probability distribution, which is approximately 1.65 standard deviations away from the mean for a 95% confidence level.
- The percentage change in the Canadian dollar/US dollar (indirect quote) exchange rate is assumed to follow a normal distribution.
- The expected percentage change between the spot rate in 90 days and the current spot rate is assumed to be 0%, but the 90-day standard deviation in the percentage change between the spot rate in 90 days and the current spot rate is assumed to be equal to 4%.
To determine the extent of the downside risk faced by St. Louis Chemical using a Value-at-Risk methodology, the transaction size, time horizon, and confidence level must be given. In the case of the Dec. 2005 order, the transaction size is C$300,000, the time horizon is 90 days, and the confidence level is given as 95%. The expected payment in 90 days converted to US dollars is $256,410. However, any variation in the exchange rate over the next 90 days gives rise to the exchange rate risk faced by St. Louis Chemical. The Value-at-Risk methodology attempts to provide a single number summarizing the total risk exposure for a particular transaction. If the percentage change in the exchange rate is assumed to be normally distributed, the 95% confidence level for a 90-day maximum loss is determined by the lower boundary of the probability distribution approximately 1.65 standard deviations away from the expected percentage change in the exchange rate. This implies a -0.066 change in the exchange rate (0.0 + 1.65*-0.04 = -0.066). Since the expected spot rate in 90 days is 1.17CAD / 1USD, a -0.066 change in the expected spot rate in 90 days would result in an exchange rate equal to 1.09CAD / 1USD: 1.09 = [1.17*(1+0.066)]. Based on a 95% confidence level, the maximum price for the C$300,000 Dec.2005 order would be US$275,229. This implies a 90 day 95% Value-at-Risk equal to US$18,819 (US$275,229-US$256,410).
4. Discuss the strengths and weaknesses of paying Norand at the time of delivery rather than waiting 60 days until the invoice is due.
An advantage of paying Norand at the time of delivery is a reduction in the exchange rate transaction exposure from 90 days to 30 days. However, many disadvantages arise including a lengthening of the cash cycle due to an elimination of the accounts payable period, an increase in net working capital requirements, and an increase in the effective cost of the order. In order for early payment to be beneficial, St. Louis Chemical would have to negotiate a sufficient cash discount to compensate for the loss of 60 days free credit. However, this would only reduce the magnitude of the transaction exposure, not eliminate it entirely. St. Louis Chemical would still be exposed to 30 days of exchange rate risk, the average length of time required by Norcand to deliver the order.
5. Describe a money market hedge that could be used to eliminate the exchange rate risk associated with the Dec. 2005 order valued at C$300,000 incorporating the following assumptions.
- The Dec. 2005 spot rate is 1.17CAD / 1USD.
- According to St. Louis Chemical's banker, the company can currently borrow US dollars for 3-months at an annual rate of 7.25%, but would only earn an annual rate of 2% on a 3-month Canadian dollar time deposit for transactions below $1 million.
A money market hedge is generally an arrangement with the bank requiring St. Louis Chemical to buy the present value of C$300,000 today in the spot market and place it in a Canadian dollar time deposit or some other Canadian dollar asset until it is needed for payment. The purchase of Canadian dollars today would be financed in US dollars by a short-term loan or by using cash reserves if they were available. The cost of this hedge would be the difference between the interest paid on the US dollar loan and that received from the Canadian dollar deposit. If cash reserves are used, an opportunity cost of funds must be estimated. Using the assumptions given, St. Louis Chemical would need to purchase C$298,507 in the spot market at the time of Dec. 2005 order:
C$300,000/[1 + (0.02/4)] = C$298,507.
If cash reserves are not available, a short term loan of $255,134 would be required at the time of the December 2005 order:
C$298,507/1.17 = $255,134.
At the time of the invoice payment 3 months later, C$300,000 would be available for payment to Norcand and St. Louis Chemical would then repay $259,758 for the dollar denominated loan:
$255,134*[1+ (0.0725/4)] = $259,758.
The money market hedge locks in a payment price at the time of the December 2005 order equal to $259,758. This implies a 3-month forward rate of 1.1549 CAD/1USD:
C$300,000 / $259,758 = 1.1549.
6. Describe a Forward Rate Hedge that can be used to eliminate the exchange rate risk associated with the Dec. 2005 order valued at C$300,000.
- The Dec. 2005 spot rate is 1.17CAD / 1USD.
- A 3 month forward rate at the time of the order is quoted at a bid price of 1.1590 CAD/1USD and an ask price of 1.1600 CAD/1 USD for transactions valued at $1 million or more.
A forward rate contract is an agreement between a corporation and a commercial bank to exchange a specified amount of currency at a specific exchange rate (forward rate) on a specified date in the future. Using a forward hedge to lock in an exchange rate implies the future price of the Canadian dollar would in effect be set today. This type of hedge ensured that whatever the spot rate in the future might turn out to be, the effective price paid for the shipment of goods would still be that which was agreed upon at the time the forward contract was established. For example, the exchange rate at the time of the Dec.
2005 order between the USD and CAD was 1.17 and the three month forward rate was 1.1590 for transactions valued at $1 million or more. Note the bid price is used in this example because St. Louis Chemical would be selling US dollars and receiving Canadian dollars. While a bank might quote a forward rate for a smaller amount, the most competitive forward rates are for larger transactions. If available, St. Louis Chemical would agree to buy C$300,000 at the time the invoice is due at an agreed upon rate today (regardless of the spot rate in the future) and use the Canadian dollars purchased from the bank to pay the Canadian supplier.
7. Describe the specific details of a Canadian dollar futures contract. Propose a Canadian dollar futures contract hedge that can be used to eliminate the exchange rate risk associated with the Dec. 2005 order valued at C$300,000.
- The Dec. 2005 spot rate is 1.17CAD / 1USD (indirect quote) or 0.8547USD/ 1CAD (direct quote).
- A March 06 Futures contract is quoted as 0.8620 (direct quote)
- A June 06 Futures contract is quoted as 0.8641 (direct quote)
- A September 06 Futures contract is quoted as 0.8659 (direct quote)
The purchase of C$300,000 worth of specialty chemicals by St. Louis Chemical invoiced in Canadian dollars has exposed them to a "natural short" position in Canadian dollars for 90 days. In order to remove the currency risk, St. Louis Chemical must enter into a "long hedge" position in Canadian dollars of equal value. A futures contract hedge is provided by an instrument sold on the Chicago Mercantile Exchange (CME). Quotations for Canadian dollar futures are given as direct quotes. Futures contracts are established through a member of the futures exchange, usually a broker. Currency futures come in standard contract sizes (each Canadian dollar futures contract is for 100,000 Canadian dollars) and standard maturity dates (the third Wednesday of March, June, September, and December).
In order to trade on the futures market, the client must open and maintain a margin account with the broker. The current margin requirements on the Canadian dollar include an initial margin of $1,215 per contract and a maintenance margin of $900. In addition, the broker will charge a commission on all transactions. Buying a futures contract implies a long position and selling a futures contract implies a short position. As protection against loss from currency fluctuations, St. Louis Chemical would buy a sufficient number of futures contracts to create the long hedge. It could wait until the futures contract came to maturity and take delivery of the Canadian dollars paying the futures price previously established, assuming the delivery date and the invoice date were identical. More often, the invoice date and maturity date will not match and a hedge position will need to extend beyond the invoice date.
When the hedge position is no longer needed but before the futures contract reaches maturity, the futures contracts can be sold. If the Canadian dollar strengthens over the 90 days, the invoice (natural short) will cost more in terms of US dollars then what was expected. However, the hedge position will profit from the strengthening Canadian dollar. The net cost will be close to that which is established today. In order to fully hedge the Dec. 2005 order and take advantage of the full 60 days of free credit, St. Louis Chemical would buy 3 Canadian dollar June 06 futures contracts at the time of the order to establish a long hedge position. Because the invoice date is March 31, 2006 and the March 06 contracts expire on March 15, 2006 (the third Wednesday in March), a June 06 contract would be required to fully hedge the position. On March 31, the June 06 contract would be sold. Any profit on the futures trade resulting from a strengthening of the Canadian dollar over the next 90 days would offset a higher price paid for the Dec. 2005 order. Any loss on the futures trade resulting from a weakening of the Canadian dollar over the next 90 days would be compensated by a lower price paid for the Dec. 2005 order. The net result is that the cost of Dec. 2005 order is established at the time of the order.
8. Compare the strengths and weaknesses of a forward rate hedge and a futures contract hedge in terms of the following:
a) Size of the contract
b) Delivery date
c) Transaction costs
Forward Contract: The size of the transaction is tailored to an individuals needs, although most competitive rates (smallest bid/ask spreads) are for transactions involving $1 million or more.
Futures Contract: Futures contract sizes are standardized. One Canadian dollar futures contract represents C$100,000. While the Dec. 2005 order is for exactly C$300,000, many other transactions are not divisible by 100,000 and an over hedging (a hedge position that exceeds the natural position) or under-hedging (a hedge position that is less than the natural position) of the natural position would result. If the order were for C$342,000, a long position in three future contracts would hedge most, but not all, of the natural short position as C$42,000 would remain unhedged. On the other hand, four futures contracts would represent an over-hedging of C$58,000. The potential overpayment or underpayment relative to the expected payment would be substantially reduced but not entirely eliminated.
Forward Contract: The delivery date is tailored to a specific date based St. Louis Chemical's anticipated payment date. However, there is no flexibility if shipment orders are delayed.
Futures Contract: Delivery date is standardized and is always the third Wednesday of the delivery month. A purchase of a futures contract with a delivery date extending beyond the estimated invoice payment date would provide additional flexibility if shipments were delayed. For example, a Dec. 2005 order is expected to arrive in Jan. 2006 with payment due 60 days after the end of the delivery month (March 2006). If the Dec. 2005 order experienced a delay in shipment and was not received until Feb. 2006, then payment would also be delayed until April 2006). Hedging a Dec. 2005 order with a June 2006 contract would allow for additional flexibility in the event of a shipment delay.
Forward Contract: The transaction costs involved in a forward contract are determined by the bid-ask spread. The larger the size of the transaction the lower the transaction cost (narrowest spread). Most forward contract hedges are for large transactions (typically involving $1 million or more).
Futures Contract: To trade on the futures market, a client must open and maintain a margin account with the broker. The initial margin requirement for a Canadian dollar futures contract is $1215 per contract and the maintenance margin requirement is $900 per contract. In addition, the broker will charge a commission for each transaction.
9. Describe a currency pair spot transaction. Discuss the strengths and weaknesses of hedging the Dec. 2005 order valued at C$300,000 using a currency pair spot hedge.
- The Dec. 2005 currency pair quote USD/CAD
Bid = 1.1698 Ask = 1.1702
The purchase of C$300,000 worth of specialty chemicals by St. Louis Chemical invoiced in Canadian dollars has exposed them to a "natural short" position in Canadian dollars for 90 days. In order to remove the currency risk, St. Louis Chemical must enter into a "long hedge" position in Canadian dollars of equal value. A currency pair spot hedge involves the buying of one currency and the selling of another simultaneously. For example, the USD/CAD currency pair refers to the US dollar and the Canadian dollar. The first currency, USD is referred to as the base currency. The second currency, CAD, refers to as the counter or quote currency. The currency pair exchange rate is given as a bid price and an ask price. An example would be a quote of USD/CAD 1.1698/02. The bid price of the USD/CAD currency pair is 1.1698 and the ask price of the currency pair is 1.1702. Buying one unit of the currency pair at the ask price implies buying one unit of the first, base currency and selling an equivalent amount of the second, quote currency (to pay for the base currency). Selling one unit of the currency pair at the bid price implies selling the first, base currency, to buy an equivalent amount of the second, quote currency. When a trader buys or sells a currency pair, the value of the currency pair, as an instrument, is close to zero. As market rates fluctuate, the value of the currency pair position held will also fluctuate. A margin deposit is required is case the position results in a loss. The initial margin deposit requirement may be as little as 1% of the value of the position, but is often slightly higher (2% or more).
In order to hedge the natural short position created by the Dec. 2005 C$300,000 order using a currency pair spot hedge, St. Louis Chemical would take a long hedge position equal to 300,000 Canadian dollars. Since the currency pair spot rate is quoted as USD/CAD 1.1698/02, St. Louis Chemical would establish a long hedge in Canadian dollars by selling 256,454 units of the currency pair USD/CAD. This would imply that the St. Louis Chemical is short US$256,454 and long C$300,000 Canadian dollars using the bid price of 1.1698. (C$300,000 / 1.1698 = 256,454) In 90 days, St. Louis Chemical would buy 256,454 units of USD/CAD using the ask price to close out the currency pair spot hedge. If the US dollars weakens and the ask price of the USD/CAD currency pair is for example 1.16, then buying 256,454 USD/CAD will close the hedge position out (long US$256,454 and short C$297,487). St. Louis Chemical's account will show a balance (C$300,000-C$297,487) of C$2,513. Converting the balance (C$2,513) into US dollars will result in a profit of US$2,166 (C$2,513 / 1.16). The cost of the goods at invoice would rise from an expected US$256,410 to an invoice cost of US$258,621, a difference of US$2,211. The US$2,166 profit from the currency pair trade hedge will offset the higher cost of the goods.
The advantage of hedging with a currency pair transaction includes maturity date flexibility (the hedged position has no defined maturity date) and specific size determination (any size transaction can be hedged). The disadvantage may be higher transaction costs (margin deposit, bid/ask spread, and interest rate differentials) compared to a futures contract hedge, although an exact comparison of costs would have to be calculated on a case by case basis.
10. Make a recommendation to Williams regarding the exchange rate risk faced by St. Louis Chemical.
St. Louis Chemical faces an average of 90 days of transaction exposure due to Norcand's requirement of invoicing specialty chemical orders in Canadian dollars. In the event of a neutral exchange rate forecast for the Canadian dollar, Williams must decide if the addition risk faced by fluctuations in the exchange rate is worth assuming. The extent of transaction risk exposure can be explained to Williams using a value-at-risk methodology. In light of very thin profit margins faced by Chemical distributors, it is likely that Williams will decide to hedge the exchange rate transaction exposure. While there are many potential hedging mechanisms available, the most likely vehicles include a futures hedge or a currency pair spot hedge. Paying Norcand early has many disadvantages as described above. While a money market hedge will eliminate exchange rate risk, the cost of the hedge is relatively large given the spread between interest paid in US dollars and interest received from the deposit. In addition, the money market hedge may artificially inflate St. Louis Chemical's balance sheet due to additional deposits and loans used in the money market hedge. Forward rate hedges, while simplistic, are usually most cost efficient for large transactions ($1 million or more) and not readily available for smaller transactions. At present, the amount of transaction exposure per order is likely too small to utilize the forward markets. A futures contract hedge provides flexibility in terms of maturity but in most cases will not provide a complete hedge (over-hedging or under-hedging) for orders not divisible by 100,000. However, a significant amount of transaction exposure will be reduced through the futures hedge. A currency pair spot hedge has many advantages in terms of size (any size order can be fully hedged) and maturity flexibility (no defined maturity date). A direct comparison of the actual transaction costs (margin requirements and brokerage commissions for the futures hedge versus the margin requirements and bid/ask spread involved in a currency pair spot transaction) between a futures hedge versus a currency pair spot hedge would have to be calculated on a case by case basis. However, due to interest rate parity, the difference between a futures hedge and a currency pair spot transaction is minimal and often times is simply a matter of preference. From an operational perspective, Williams will also have to clearly specify who is responsible for managing transaction exposure and make explicit any constraints on the use of exposure-management techniques. Finally, Williams will need to develop a system of monitoring and evaluating any risk management activities his company chooses to engage in.
Benjamin L. Dow, III, Southeast Missouri State University
David Kunz, Southeast Missouri State University
Spot Rate used Spot Rate by Young Used by Scott % Change Order at time of order Payment to Pay Invoice in Value Month #CAD/1USD Month #CAD/1USD of USD 4-Jan 1.33 Apr-04 1.37 3.01% 2/4/08 1.34 May-04 1.36 1.49% 3/4/08 1.31 Jun-04 1.35 3.05% 4/4/08 1.37 Jul-04 1.33 -2.92% 5/4/08 1.36 Aug-04 1.32 -2.94% 6/4/08 1.35 Sep-04 1.27 -5.93% 7/4/08 1.33 Oct-04 1.22 -8.27% 8/4/08 1.32 Nov-04 1.19 -9.85% 4-Sep 1.27 Dec-04 1.2 -5.51% 4-Oct 1.22 Jan-05 1.24 1.64% 4-Nov 1.19 Feb-05 1.24 4.20% 4-Dec 1.20 Mar-05 1.22 1.67% 5-Jan 1.24 Apr-05 1.26 1.61% 5-Feb 1.24 May-05 1.26 1.61% 5-Mar 1.22 Jun-05 1.23 0.82% 5-Apr 1.26 Jul-05 1.22 -3.17% 5-May 1.26 Aug-05 1.19 -5.56% 5-Jun 1.23 Sep-05 1.17 -4.88% 5-Jul 1.22 Oct-05 1.18 -3.28% Aug-08 1.19 Nov-05 1.17 -1.68% 5-Sep 1.17 Dec-05 1.17 0.00% Oct-08 1.18 Jan-06 ? 5-Nov 1.17 Feb-06 ? Dec-08 1.17 Mar-06 ? Purchase Packmore's Invoice Cost Amount Cost Estimate Cost Difference (Thous) Order (Thous) Payment (Thous) (Thous) CAD Month USD Month USD USD 110.25 Jan-04 $ 82.89 Apr-04 $ 80.47 $ (2.42) 85.16 Feb-04 $ 63.55 May-04 $ 62.62 $ (0.93) 65.33 Mar-04 $ 49.87 Jun-04 $ 48.39 $ (1.48) 90.23 Apr-04 $ 65.86 Jul-04 $ 67.84 $ 1.98 42.21 May-04 $ 31.04 Aug-04 $ 31.98 $ 0.94 75.12 Jun-04 $ 55.64 Sep-04 $ 59.15 $ 3.51 41.34 Jul-04 $ 31.08 Oct-04 $ 33.89 $ 2.81 45.08 Aug-04 $ 34.15 Nov-04 $ 37.88 $ 3.73 85.14 Sep-04 $ 67.04 Dec-04 $ 70.95 $ 3.91 159.34 Oct-04 $ 130.61 Jan-05 $ 128.50 $ (2.11) 155.26 Nov-04 $ 130.47 Feb-05 $ 125.21 $ (5.26) 175.19 Dec-04 $ 145.99 Mar-05 $ 143.60 $ (2.39) 265.23 Jan-05 $ 213.00 Apr-05 $ 210.50 $ (3.40) 272.05 Feb-05 $ 219.40 May-05 $ 215.91 $ (3.49) 241.14 Mar-05 $ 197.66 Jun-05 $ 196.05 $ (1.61) 256.32 Apr-05 $ 203.43 Jul-05 $ 210.10 $ 6.67 283.45 May-05 $ 224.96 Aug-05 $ 238.19 $ 13.23 325.15 Jun-05 $ 264.35 Sep-05 $ 277.91 $ 13.56 310.34 Jul-05 $ 254.38 Oct-05 $ 263.00 $ 8.62 300.21 Aug-05 $ 252.28 Nov-05 $ 256.59 $ 4.31 295.14 Sep-05 $ 252.26 Dec-05 $ 252.26 $ 0.00 286.11 Oct-05 $ 242.47 Jan-06 315.21 Nov-05 $ 269.41 Feb-06 300 Dec-05 $ 256.41 Mar-06 CAD/USD Probability distribution for spot rate in 90 days -2 Stdev -1 Stdev Expected +1 Stdev +2 Stdev % Change -0.08 -0.04 0.0 +0.04 +0.08 CAD/USD <=1.08 <=1.12 1.17 >=1.22 >=1.27 Probability 0.025 0.16 0.16 0.025 US$ Cost $277.78 $267.86 $256.41 $245.90 $236.22 (thousands)
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|Title Annotation:||CASE NOTES|
|Author:||Dow, Benjamin L.,III; Kunz, David|
|Publication:||Journal of the International Academy for Case Studies|
|Article Type:||Case study|
|Date:||Mar 1, 2008|
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