1.

When stock prices fall the company therefore must sell more shares of stock to raise
the same amounts of proceeds. Also, If it falls too much then the company may have
the need to borrow money to raise funds for expansion. The share price may also
impact its financing from banks. This is due to the fact that the bank sees a link between
a company’s earnings and its share price. Creditors in general would be more receptive
to companies which have stronger share prices and offer them a lower rate. They will
see that companies with strong earnings have a better position to repay long term
debts.
2.
Due to the substantial decrease in the demand for chinese export. The Chinese Yuan
will suffer from depreciation of its value. Under the law on demand if there is a
decrease in demand for a particular currency assuming that the supply would remain
constant, It would cause depreciation of the said currency. Inversely assuming if the
demand increased for a particular currency and the supply would remain constant, this
would result in the appreciation of the said currency. On the other hand if there is an
increased supply for a particular currency and the demand would remain constant this in
turn would result in a depreciation of the said currency. Contrary to that if there is a
decrease and supply for a particular currency and a constant demand this will result in
the appreciation of the same currency.

3.
There would be 2 options for the Philippine exporter to be able to preserve the value of
his foreign currency (1) The Philippine exporter can opt to sell his expected USD
receipts on a 3-month forward contract at a contracted exchange rate that would be
more favorable compared to the expected market rates or (2) The Philippine exporter
can opt to a acquire a foreign currency option to sell USD with a 3-month settlement
date.