1. What is hedging? Explain how Volkswagen's failure to fully protect itself against foreign exchange fluctuations had a negative effect on the company? What can Volkswagen and other companies learn from this experience?
2. Why was Volkswagen so vulnerable to the change in the value of the Euro against the US Dollar relative to the US Dollar?
3. In 2015 and 2016 strong dollar affected several US companies. Please see the one of the examples in the following links (2015 and 2016) where the strong dollar hurt the company. What can this company do to protect itself from exchange rate fluctuations? Since the beginning of 2017, the dollar has been weakening. What does that mean for US companies? How will the weaker dollar affect US businesses?