If U.S. inflation suddenly increased while European inflation stayed the same, what would happen to the euro/dollar exchange rate? What should a US company that sells its products in Europe do to hedge its exposure? Provide at least 2 methods.

If U.S. economy slides into a recession, while Chinese economy still goes strong, what would happen to the yuan/dollar exchange rate? Should a US company that plans to import products from China choose to pay its Chinese supplier a fixed price in dollars or in yuan?

Over the last 5 years, U.S. worker productivity has been grown at 2.1% per year, while the worker productivity in the U.K. grew at 1.6% per year. If this trend continues, and the other factors remain unchanged, what do you expect to happen to the dollar/pound exchange rate? Should an investor who considers a long-term investment pick U.S. or U.K. assets?