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Q You are the CFO of a U.S. firm whose wholly owned subsidiary in Mexico manufactures component parts for your U.S. assembly operations. The subsidiary has been financed by bank borrowings in the United States. One of your analysts told you that the Mexican peso is expected to depreciate by 30 percent against the dollar on the foreign exchange markets over the next year. What actions, if any, should you take?

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I would first verify the information on the foreign exchange rate and would like to know about the different types of the expectations of the foreign exchange rate over the next few years as well. Then when confirmed that there is a depreciation of the value of the Mexican peso I would advise the team to make the operations at the Mexican unit double