Analysis
Hedging FX Risk for a Sydney D2C Cosmetics Brand
Overview
What this challenge is about.
You are a risk management consultant hired by GlowSydney. Analyze the company's FX exposure using provided data on forecasted USD payables and AUD receivables. Recommend a hedging mix of forwards and options, quantify the cost and risk reduction, and present a clear implementation plan. Success means the strategy reduces FX-related profit volatility by at least 50% without exceeding a 2% cost of revenue hedging budget.
The Brief
What you'll do, and what you'll demonstrate.
Design a cost-effective FX hedging strategy to protect GlowBerlin's profit margin from EUR/USD fluctuations over the next year.
Earning criteria — what you'll demonstrate
- Apply currency forward and option pricing models to a real-world hedging problem
- Quantify FX exposure and evaluate hedging effectiveness using metrics like hedge ratio and residual risk
- Design a hedging strategy that balances cost, complexity, and risk reduction
- Communicate derivative-based solutions to non-financial stakeholders
Program Fit
Where this fits in your program.
Sharpens the same skills your degree expects you to demonstrate.
Skills
Skills you'll demonstrate.
Each one shows up on your verified credential.
Careers
Roles this prepares you for.
Real titles. Real skill bridges. Pick the one closest to your trajectory.
Career mappings coming soon.