What following statements are correct?I. Planning for operating exposure is a finance responsibility. II. From a broader perspective, operating exposure is not just the sensitivity of a firm’s future cash flows to unexpected changes in foreign exchange rates, but also to its sensitivity to other key macroeconomic variables. III. Operating exposure is inevitably subjective, because it depends on estimates of future cash flow changes over an arbitrary time horizon. IV. Money market hedges almost always return more than forward hedges because of the greater risk involved.

1. the political environment in india has proven to be critical to company performance for both pepsico and coca-cola india. what specific aspects of the political environment have played key roles? could these effects have been anticipated prior to market entry? if not, could developments in the political arena have been handled better by each company? 2. timing of entry into the indian market brought different results for pepsico and coca-cola india. what benefits or disadvantages accrued as a result of earlier or later market entry? 3. the indian market is enormous in terms of population and geography. how have the two companies responded to the sheer scale of operations in india in terms of product policies, promotional activities, pricing policies, and distribution arrangements? 4. “global localization” (glocalization) is a policy that both companies have implemented successfully. give examples for each company from the case.