Problem 1: Compare and contrast the terms translation, transaction, and economic exposure. Does FAS 52 resolve the issue of accounting versus economic exposure?
Problem 2: You are currently working for a consulting firm that provides risk management products for clients. You task is to provide your companies sales force with information on prospective clients. Assume that General electric corporation whose financial statements and notes appear at www.generalelectric.com is a prospective client.
Required to do:
a. Using GE' 2003 financial statements and accompanying notes as a starting point identity as many exposures as you can that impact the company. Be sure to cross-reference your findings with the specific page number of the financial statement you are referring to.
b. Identify any exposures that the company is currently hedging