1. Managing economic exposure is generally more complicated than managing transaction exposure. Explain what is economic exposure and give 1 (ONE) example of the economic exposure facing by the MNC. (5 Marks)

2. If the direct quote for the euro is AUD1.35=EUR1, then the indirect quote for the euro is:

Select one:

a. EUR0.74 = AUD1.

b. EUR0.51 = AUD1.

c. EUR0.65 = AUD1.

d. EUR0.68 = AUD1.

3. If the exchange rate of euros/U.S. dollars is USD1.351 = EUR1, then:

Select one:

a. one dollar is worth approximately .74.

b. one dollar is worth approximately 1

c. the euro is worth less than one U.S. dollar.

d. it takes 1.35 euros to buy one US dollar.