prefith. It does not pian to remit afy hunts to Decke, the US. pareat. If the yen aoprecates apaine the dellac, \&? If the kibuidion abs eutarlished in Toicyo, tapont, \& woils be eapored ta exithinge rate risk. If the subaicary needs to borrew manex, it should borrew. sold to lapan are denominated is Japanese yen Assume that Decko Ca. expects that the Chinese yuan will continue to stay stable against the dolar, The subsidiary's main gool is to generate profits for assex and reinvest the grofts. It does not plan to remit any tinds to Decko, the U.S. parent. a. Assume that the lapanese yen strengthens havinet the lis. dollar over time. How would this be expected to attect the profits earnes by the Chinese subvidarv? If the yen appreciates aganst the oollar, an against the Orinese youn (assuming the was is sable against the doltar), which results in yuan cash flows to the Chinese subridiary. It the subsidiary was estabishied in Tokyo, zapen, it wouls be exposes to exchunge rate risk. c. If the Chisese subvidiary needs to borrow money to Anance its expansion and wants to resice is exchange rate risk, shouls it borrow u.s. dollars, Chinese yuan, or lapanese yen? It the subsidiary seets to berrow money, it should borrowi