Oriflame S.A. (A)
Posted: 14 Feb 2012
Date Written: October 5, 2011
A direct-selling cosmetics company involved in emerging markets exhibits significant foreign exchange risk exposure and profitability swings in the wake of the 2008 financial crisis. Students must review the company's use of derivative instruments and other hedging techniques to establish whether it pursues the right FX risk mitigation strategy.
Learning Objective: Introduce the students to different types of foreign exchange risk exposure and their financial impact; present and assess FX risk mitigation tools and strategies; discuss the impact of FX risk exposure on the investors.
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