$1.$ How do volatile exchange rates affect Avon$$s operations?

What are the major risks and benefits?

$2.$ Explain Avon$$s position in Mexico as described in the

case. Please explain the effects of both Mexican inflation

and the peso devaluation on Avon Mexico and its

competitors, who rely on imports to service the Mexican

market. $($Note: to answer this question, you have to know

the inflation rates in both Mexico and the US$,$ and the

exchange rate between the peso and the dollar.$)$

Update on Avon's Management of Operating Exposure: