Tullow Oil is a German based Ghanaian Company located in the Tema industrial area. The company is expected to import 20

[answerhappygod]

Tullow Oil is a German based Ghanaian
Company located in the Tema industrial area. The company is
expected to import 20 million barrels of crude oil in twelve (12)
months. The prevailing exchange rate and price of crude oil
are 1$/5.84GH¢and 54 dollars/per barrel, respectively.
Further, Auras limited has secured a loan facility in Ghanaian
cedis (to be repaid over the next 60 months) to partly finance the
importation. Following the current global trends, it is
anticipated oil price will continue to rise, while the Cedi
continues to depreciate over the coming months. Further, the
Monetary Policy Committee (MPC) of Bank of Ghana has just increased
the policy or prime rate and Ghanaians will be going to the polls
in twelve (12) months to elect a new president.
REQUIRED:
As the risk
manager of the BDC, write a report to the board outlining
the various risks the company would be exposed to?
Design appropriate hedging strategies for each risk type
(Hint: Be specific with your hedging strategies).