international Finance question. Articulate it well so that I can able to understand also put some references to help me as I prepare for my exams

QUESTION THREE ABC Electronics is a small but innovative electronics manufacturer based in the United States. The company has built a solid reputation for producing highquality consumer electronics, particularly smart home devices and accessories. With steady growth in its domestic market, ABC Electronics is now exploring opportunities to expand its presence in the international market. As the company prepares to engage in foreign trade, foreign exchange management becomes a crucial aspect of its business strategy. ABC Electronics faces several challenges in its journey toward international expansion. One of the primary challenges is dealing with foreign exchange risk, specifically transaction exposure. When the company conducts international transactions, fluctuations in currency exchange rates can significantly impact the cost of goods and profitability. This challenge necessitates a well-thought-out foreign exchange risk management strategy. TASK: A. Explain the concept of foreign exchange risk (2 Marks) B. Describe foreign exchange risk management strategies that can be adopted by ABC Electronics and explain how each strategy can help mitigate currencyrelated risks (8 marks) C. ABC Electronics recently secured a contract to sell its products in Europe. The payment for this contract is due in 6 months, and it is concerned that the exchange rate between the US dollar (USD) and the Euro (EUR) might fluctuate, potentially affecting the revenue it receives in USD. To mitigate this risk, it has decided to enter into a 6 -month forward contract. Given Information: Current exchange rate: 1 USD =0.85 EUR Amount expected to be received in 6 months: 100,000 EUR Forward contract duration: 6 months Forward rate quoted for 6 months: 1 USD =0.88EUR Forward contract is used to lock in the exchange rate for the future. i) Calculate the potential future exchange rate for USD to EUR without the forward contract. (2 Marks) ii) Calculate the difference in USD between using the forward contract and not using it and interpret the results. (8 Marks)