$1.$ You currently work for Apple Inc. You just secured a new supplier that is located in Japan. You will be purchasing chips from the Japanese manufacturer and they require to paid in Yen, and first payment is required three months from now.

a$.$What risk does Apple now face with this new international supplier?

b$.$ The current exchange rate is $156\mathrm{.}07.$ If you agreed to pay $10$ million yen, what is thepurchase order in dollar terms?

c$.$ What represents a bigger risk to Apple: the exchange rate of $196\mathrm{.}07$ or $136\mathrm{.}07$ in $3$months?

d$.$ What are some ways we can hedge this exposure?