Exchange rate is the price of one country's currency in terms of another country's currency. Companies can protect themselves from the risk involved with potential loss from a currency fluctuation by hedging.

a. Outline at least four examples of methods companies can use to hedge funds and suggest when each are more suitable / appropriate for a company.

b. Offer your view as to whether it is better for a country to have higher or lower exchange rates, and what are the risks with both.