Consider the cases below.

Champion Ltd imports toys from China for sale in Ghana. It just received a shipment of toys for a total invoice value of US$800,000, which is payable in three months time. The Ghanaian cedi is expected to depreciate against the U.S. dollar in the coming months.

Slim-Fit Klothin Ltd, an Accra-based fabric manufacturer, established a factory in Thailand to take advantage of the lower production cost in that country. The factory was wholly financed with its shareholders equity. The current value of the factory is THB20 million. The Ghanaian cedi is expected to appreciate against the Thai baht by December 31, the financial year end.

Required:

For each case, state the type of currency exposure the firm is facing and state whether the risk exposure is downside or upside.