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You are the financial manager of growing U.S. manufacturing firm that about to expand sales into China. You are concerned about the dollar value of

You are the financial manager of growing U.S. manufacturing firm that about to expand sales into China. You are concerned about the dollar value of your Yuan receivables. Your banker informs you that, based on current inflation expectations, the Yuan should appreciate in value against the U.S. dollar.

a.How would you evaluate whether his claim is true?

b.Should you hedge your Yuan receivables? How?

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