1.The data provided below presents macro-economic statistics for all the countries participating in the European monetary system (EMS). To prevent you from guessing, I gave each country another name that only provides a vague hint on the actual European country of origin (Refer to the picture to see the chart).

Legend for Chart:

A - Currency's ERM position as of Sept 15^th, 1992. A value of -100 means that the currency is at its lower bound and is weak relative to all other currencies in the zone. A value of 100 means that the currency is at its upper bound and is strong relative to all other currencies in the zone.

B - Currency's over/under valuation relative to its PPP value (%)

C - Ratio of foreign reserves at the central bank to average monthly imports

D - Budget deficit as % of GDP, 1992

E - Inflation rate %, latest

F - GDP growth, %, 1992

G - Devaluation risk

Based on the information provided above, answer the following questions:

A.Which countries have the highest currency risk (devaluation risk)? Please rank them in column G with 1=highest risk.

B.What are the effects of devaluation on companies in those high-risk countries (i.e. profit margin, exports, cost of foreign debt, and etc.)?