Assist kindly..

SynClear, of Seattle, Washington, produces equipment to clean polluted waters. It has a subsidiary in Canada that imports and markets its parent's products. The value of this subsidiary, in terms of CAD, has recently decreased to CAD 5m due to the depreciation of the CAD relative to the usD (from the traditional level of usD/CAD 0.85 to about 0.75). SynClear's analysts argue that the value of the CAD may very well return to its former level if, as seems reasonable, the uncertainty created by Canada's rising government deficit and Quebec's possible secession is resolved. If the CAD recovers, SynClear's products would be less expensive in terms of CAD, and the CAD value of the subsidiary would rise to about 6.5m. 1. From the parent's (uso) perspective, is the exposure of SynClear Canada to the USD/CAD exchange rate positive or negative? Explain the sign of the exposure.3. Zeppo doubles as treasurer of Duck Soup Inc.-admittedly owing his position to the fact that he is from the ruling family. Duck Soup Inc. has an asset of $25 million and he needs to know the 99% worst-case loss over a 1-day period. Assume that the daily price volatility is 2.7% and the FDK/USD exchange rate is 3.4567. Give Zeppo an answer and then add all caveats that you think are appropriate.2. Determine the exposure, and verify that the corresponding forward hedge eliminates this exposure. Use a forward rate of USD/CAD 0.80, and UsD/CAD 0.75 and 0.85 as the possible future spot rates.Suppose that you are a manager at a British firm, and you are responsible for managing exchange rate exposure. Determine whether the following statements are related to accounting exposure, operating exposure, or contractual exposure. 1. Your German subsidiary has recently made new investments. 2. You bought a call option on EUR to hedge an EUR accounts payable. 3. You have just sold goods to an American customer. The customer has ninety days to pay in usp. 4. You have just developed an exciting new product. The success of this product depends on how it is priced in the local currencies of your export markets. 5. You have made a bid to deliver your exciting new product to schools in France during the next academic year. You will learn whether or not the bid has been accepted in three months. 6. You sell wool but face potential competition from Australia. If there are no imports, the price of your wool will be Ger 1. However, Australians enter your market once the exchange rate falls below GBP/AUD 2.5. Suppose that the currentspot rate is So = usD/GBP 2 and the one-period interest rates today are r is 5 percent and r" is 10 percent. Also, you are given that in the next period the spot rate will either be usD/GBP 2.2 or UsD/GBP 1.8. (a) What is the value today of a one-period put option on the GBP that has a strike price of usD/GBP 1.9? (b) Suppose that you already hold this put option. If you wish to hedge the payoff from the put, so that the net payoffof your portfolio is independent of the exchange rate, how many additional units of the spot should you buy/sell