2. Economic exposure is a common challenge to multinational corporations with diverse operations in foreign country. Answer briefly questions in the following:

a) Based on your understanding, what is the logical reason for economic exposure to also be known as operating exposure? (4 marks)

b) How would the conditions of macroeconomic affect a companys economic exposure? (4 marks)

c) Explain the impact of currency volatility on the economic exposure of an MNC. (4 marks)

d) Could currency volatility pose a challenge to domestic company? Explain briefly. (4 marks)

e) Matching currency cash flows is one of the ways employed by MNCs to mitigate operating exposure. List the three alternatives of matching currency cash flows. (9 marks)