"Measuring and managing exchange rate risk exposure is important for reducing a firm's vulnerabilities from major exchange rate movements, which could adversely affect profit margins and the value of assets"

(a) Briefly identify why a Multi-National Company (MNC) should concern about exchange rate risk.

(b) Distinguish transaction and translation exposure with examples.

(c) What do you mean by arbitrage and is it possible in a forward market.

(d) Explain how money market hedge and forward market hedge can be used to manage foreign currency exposure.

(Please provide detailed answers)