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Case 19-4 — Handout 1
Giant Manufacturing Cross-Currency Swap Documentation
Note that capitalized terms not defined herein are defined within the case facts.
The following represents details and facts associated with the proposed hedging
instruments and hedge designation. (Note that for purposes of this case scenario, some of
this information may not be relevant to the questions.)
• Giant’s risk management objective for this transaction is to protect EUR 120
million of Giant’s first previously unhedged net investment in Small Sub 1 (the
hedged item) against the risk of adverse changes in the EUR/USD exchange rate.
Giant’s strategy is to hedge the risk of changes in the USD equivalent value of a
portion of its net investment in its consolidated EUR subsidiaries attributable to
changes in the EUR/USD exchange rate between the designation date and
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