Lufthansa Case
He couldn`t wait
till the dollar/deuchemark exchange rate would drop. In addition he thought about safety of
flights and wanted to renew company planes. We can also observe the given trend in movements
of the dollar/deuchemark rate over previous 3 years. Trend tends upward, so the postponing the
desision of purchase can bring company to a higher dollar exchange rate, that, as a result, will
mean that expences will be substantially higher.
2)To leave the whole amount of exposure unhedged was too risky at that time. Herr Ruhnau
wasn`t also hundred percent confident, that exchange rate would drop. Remaining the whole
explosure unhedged could bring Lufthansa to bankrupt. It was in Herr Ruhnau interests to protect
Lufthansa Investments. Herr Ruhnau decision to cover partly an explosure was based on a
research, which he had made. As a result Ruhnau didn't loss. His decision to cover half an
explosure brought to company 225 mil. DEM, because in the worst case if he used full forward
annaabi.ee 
