a) The net export of Lovely DaVida, a well-established US firm from numerous foreign currencies reported in the following table: Currency Net Inflow or Outflow Spot Exchange Net Inflow or Outflow (USD) Rate C$28,000,000Inflow $.95 Canadian dollars (CS) Australian dollars (NZ$) Mexican pesos (MXP) .60 AUD$4,000,000 Inflow MXP1,000,000Inflow 26,600,000 Inflow 2,400,000 Inflow 180,000 Inflow 2,600,000 Outflow .18 Singapore dollars (SS) S$4,000,000Outflow .65 The company has predicted that the future spot rate would be equal to today's spot rate. If the company's prediction went wrong, the forecasted net cash flows in dollars for each of the foreign currency would be inaccurate. The company realized that Mexican Peso, Singapore dollars and Australian dollars are moving in tandem against the U.S. while the movement of the Canadian dollar is independent from the movements of the other currencies. As a risk analyst of the company, do you observe any currency diversification effects? Explain. (5 marks) a) The net export of Lovely DaVida, a well-established US firm from numerous foreign currencies reported in the following table: Currency Net Inflow or Outflow Spot Exchange Net Inflow or Outflow (USD) Rate C$28,000,000Inflow $.95 Canadian dollars (CS) Australian dollars (NZ$) Mexican pesos (MXP) .60 AUD$4,000,000 Inflow MXP1,000,000Inflow 26,600,000 Inflow 2,400,000 Inflow 180,000 Inflow 2,600,000 Outflow .18 Singapore dollars (SS) S$4,000,000Outflow .65 The company has predicted that the future spot rate would be equal to today's spot rate. If the company's prediction went wrong, the forecasted net cash flows in dollars for each of the foreign currency would be inaccurate. The company realized that Mexican Peso, Singapore dollars and Australian dollars are moving in tandem against the U.S. while the movement of the Canadian dollar is independent from the movements of the other currencies. As a risk analyst of the company, do you observe any currency diversification effects? Explain