Businesses nowadays are going into a global market. They are importing raw materials from other countries and exporting their final goods to other countries. International transactions are common especially for multinational enterprises (MNCs). Hence, payments and receipts can be in different currencies. Having these international trade transactions, integrated financial markets and foreign exchange market are deemed important.

a)Explain how the fluctuations in exchange rates would affect businesses that are involved with international trade transactions.

b) If these fluctuations in exchange rates are considered risks, how can businesses manage these risks?