her through forward, futures or options market. Even though one cannot outguess the market it makes sense to hedge because forward rates determined by the interest rate differentials. Also, by hedging a company eliminates the non-systematic risk. If a certain country's currency depreciates dramatically over a short period of time it'll be protected from huge loses.
             1. Assuming the vendors are paid 11 weeks prior to the program (when money from the customers are received) and the prices are fixed 9 month before that a company could be in risk if it priced the trips at the spot rate at the time when the price with vendors was agreed on. They would face loses in case the foreign currency appreciates during the 9 month period. The organization would have to pay much more dollars than it expected in order to repay the vendors. On the other hand, if the foreign currency depreciates they would be in favorable position. Keeping in mind that this
             ...