The Foreign Exchange Market Chapter
Case Discussion Questions
1. Why did the strong U.S. dollar during 2015 have a negative impact on Apple’s earnings?
2. Why did Apple not fully hedge its foreign ex- change exposure to avoid a hit on earnings?
3. Why was the U.S. dollar so strong during the 2014–2016 period? Was the strength in the dollar a rational response to economic fundamentals?
4. Under what conditions do you think the U.S. dollar might weaken against other major currencies (e.g., the euro, yen and yuan?
5. How would a fall in the value of the U.S. dollar against other major currencies impact Apple?
6. Some companies do not hedge their foreign ex- change exposure? Do you think Apple is correct to hedge? Why?