Winwin Limited is an electrical appliance manufacturer denominated in dollars. Winwin Ltd. is considering setting up a production plant in Spain to produce intelligent home appliances. The variable costs and fixed cost of production and the cost of construction of the production plant are all denominated in euros. The production cost includes labor, raw materials, utilities, security and management etc. For operation management purpose, the financial variable of interest (the bottom-line) to the owner of Winwin Ltd is the operating income which does not include finance costs and taxes. The finished products will be sold in EU countries.

Goody Limtied is also an electrical appliance manufacturer denominated in dollars. Like Winwin Ltd., Goody is also considering setting up a production plant in Spain to produce intelligent home appliances. The variable costs and fixed cost of production and the cost of construction of the production plant are also denominated in euros. And the financial variable of interest to the owner of Goody Ltd is also the operating income.

Goody is the same as Winwin in every aspect of the business except that Goody will sell the finished products in the home market instead.

Both owners of Winwin Ltd. and Goody Ltd. consider that foreign exchange rate risk is the only major market risk facing their business.

Compare the risk profile faced by Winwin Ltd and Goody Ltd. You can draw a graph to illustrate your explanation.