1. Expound on operating FE exposure. Assume we have a foreign affiliate in Thailand and our parent firm in the States, and the Thai baht revalues relatively to the US $. Also, assume we have 2 affiliates in the UK and in Greece. Assume that the currencies of our 2 affiliates (the pound and the euro) devalue relatively to the $. If you want to decrease any FE negative effects, what would be appropriate to do in terms of sourcing, production, financing, fund and sales in any of the aforementioned currencies.? You may produce, source, fund and sell in any of the above nations.

2. a)We have a I billion won payable in one year from now. How do we appropriately hedge ourselves against it? b) Compare and contrast how a revaluation of our foreign subsidiary would affect the value of our subsidiary in terms of translation and operating exposure.