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Background
Current Situation
Risk Guidelines
Risk Assumptions & Sources
Initial Position
Adjusted Price Risk
Hedge Scenario
Fractional Futures Hedge
Market Views - Yen
Option Scenarios I
Option Scenarios II

One 
Two 
Three 
Four

Conclusions
Team Members
 

   
   Risk Guidelines


 

The Board of Callaway Golf is concerned about once again experiencing currency losses similar to those which the company endured during the recent Asian economic crisis.
The Board has decided to establish the following guidelines for risk:

  • Expected 15% margin on sales.
  • Will accept a one-third loss of margin with 5% probability.
Total Contract Value: $10,657,500
Expected Margin:  $1,598,625
VAR Limit: $532,875


 
 
 


 
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