1. Review the characteristics of a confirmed documentary letter of credit and consider its value to: a) An exporter in Ghana dealing with an importer in France through BNP Paribas, a major international bank based in France. b) A transaction involving U.S. exports to Tanzania through the First National Bank of South Africa. In each case above, identify any obstacles which could impact the transaction and the associated risks for the importer and the exporter and consider whether a confirmed letter of credit should be used

2. A Canadian-based company that has an annual turnover of CAD 4 million is expecting three large payments in the coming year that will be paid in USD (approximately USD 1M each). a) Explain how a forward contract could be used to ensure the company is not exposed to exchange rate volatility. b) Explain how exposure netting could be used to minimize the companys exposure to exchange rate volatility. What are the strengths and weaknesses of each approach?