Question 1 a. Describe the role a letter of credit plays in an international commercial transaction. b. List and describe at least three other documents that are critical to complete a commercial transaction where a letter of credit is used to complete payment to the seller. Question 2 A firm based in Brazil agrees to buy goods valued at 2 million U.S. Dollars from a firm based in Mexico. The Brazilian firm agrees to pay 2 million U.S. Dollars in 60 days You are the CFO of the Brazilian firm. You know that the Brazilian Real has been strengthening against the U.S. Dollar anxp s trnd oth nest 0 days a. Does this problem illustrate translation or transaction risk? b Who is exposed to exchange rate risk? e Describe in detail three hedging strategies you would consider using to ensure that when the Brazilian firm makes the payment in U.S. Dollars 60 days from now, it minimizes its risk of loss in converting Reals to U.S. Dollars. d Briefly describe the difference between hedging and speculation