Case Name :      Pixonix Inc. – Addressing Currency Exposure

Authors :           Colette Southam, Karim Moolani

Source :             Ivey Publishing

Case ID :            908N13

Discipline :        Finance

Case Length :    04 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

The chief financial officer of Pixonix Inc. is trying to decide if she should hedge, given the current strength of the Canadian dollar. Her company licenses proprietary software through a U.S. company that will cost $7.5 million in three months time. The case provides the students with the opportunity to understand the impact of exchange rate fluctuations on her firm’s cash flows and some of the instruments available to manage risk, including puts and calls and forward contracts.