1. IAMCLOTHING, a well-known clothing retailer in England has signed a two-year agreement(Rupee-based) with ISUPPLYCLOTHING in India. In recent months, rise in political tension and deteriorating economic condition in India has led the Indian Rupee to decrease in value. What would be the impact of this decrease in value on IAMCLOTHING?

1) Increase in profit margins as the translated cost in British Pound is expected to be lower.

2) Decrease in profit margins as the translated cost in British Pound will be higher.

3) Increase in cost of imports due to higher shipping costs.

4) Increase in revenues as clothing will be more affordable in India.

2. Heavy Equipment Brokers(HEB) is a brokerage firm registered in the Cayman Islands that helps companies locate manufacturers of specialized heavy machinery for large infrastructure construction projects. The Government of Mexico wants to purchas underwater drilling equipment form HEB to construct a tunnel. HEB is acting as the middleman in this transaction and has the obligation to issue the required 20% performance guarantee in favor of The Government of Mexico while also paying 25% advance payment to the equipment manufacturer in Brazil to start the manufacturing of the specialzed equipment. Which type of letter of credit should HEB ask the Brazilian manufacturer to issue to help HEB meet the condition of issuing the performance guarantee?

1) Transferable standby letter of credit

2) Revolving documentary letter of credit

3) Red clause standby documentary letter of credit

4) Corporate documentary letter of credit