that while devaluation is far more common than revaluation, both occur because the exchange rate has been fixed at an artificially low or high level. The one of best way to protect your firm against currency fluctuation is through hedging. You can createa natural hedge by purchasing needed products in the same market where you sell, as well as doing all of your business in a single currency. However, even when doing business in one currency, you are vulnerable to fluctuations. To better protect yourself,there are financial instruments available, such as forward contracts and options, that allow you to lock in foreign exchange rates for export or import contracts. These are essentially insurance policies on foreign transactions that you can set up with yourbank. Suppose you are the CFO of a Canadian firm whose wholly owned subsidiary in Mexico manufactures component parts for your U.S. assembly operations. The subsidiary has been financed by bank borrowings from the U.S. One of your analysts told you that the Mexicanpeso is expected to depreciate by 30% against the U.S. dollar on the foreign exchange markets over the next year. What actions, if any, should you take and why