a) Foreign exchange risk management has become a strategic necessity for multinational corporations in an increasingly volatile global financial environment because exchange rates can fluctuate unpredictably, creating potential risks that affect a company's profitability. Multinational corporations (MNCs) deal with currencies from different countries, and variations in exchange rates can lead to significant financial losses or gains. To protect themselves, firms employ risk management strategies like hedging, which helps to stabilize cash flows and reduce the uncertainty in revenue generation. In an environment where geopolitical events, economic crises, or policy changes can lead to rapid currency movements, effective foreign exchange risk management becomes critical for sustaining profitability, ensuring operational efficiency, and protecting shareholders’ interests. b) The balance of payments is not only a record of international transactions but also a reflection of a country's economic strengths and weaknesses because it indicates how much a country is earning or spending on foreign trade, investments, and loans. A surplus in the balance of payments suggests that a country is earning more from its international dealings than it is spending, which can be seen as an indication of economic strength. Conversely, a deficit can highlight that the