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4. ABC Co. a UK based plans to borrow funds to support its expansion in South...

4. ABC Co. a UK based plans to borrow funds to support its expansion in South Korea. The Korean interest rates are presently lower than U.K. interest rates, so ABC Co. obtains a loan denominated in Korean Won in order to support its expansion in South Korea. Will the borrowing of Korean Won increase, decrease, or have no effect on ABC Co. exposure to exchange rate risk? Briefly explain your arguments.

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