You are an American manufacturer with two customers, China and the United Kingdom. China has a fixed exchange rate system, and its exchange rate is relatively steady. On the other hand, the United Kingdom has a flexible exchange rate system, and its exchange rate has been volatile.

As a manager, how might these two different systems affect profitability?

What might you need to do differently as it relates to managing risk?

Finally, what are the pros and cons of the different systems? (Answer this as it relates to policy.)