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How equilibrium is reached in a foreign exchange m

How equilibrium is reached in a foreign exchange market?1. A firm has been operating successfully in a particular country though foreign investment. It is reviewing its strategy in that country. It has the following choices: i) expand through partnership, ii) expand by going alone without partner, or iii) withdraw from the country. Which strategy would you recommend and why?2. In attempting to choose a country for investment, firm ABC decides, to use a matrix for country selection. It decides to look at the following factors: 1- economics 2-political risk, 3- cost of labor, 3- tax structure, and 4- country similarity to home country. On the scale of 1 to 10 (1 being very unattractive and10 being very attractive) management has ranked each factor and has decided importance of each one (again 1 unimportant and 10 very important) for the company. Below is table showing management’s assessment. Company only chooses a location if its weighted average is 7 or higher. Should the company ABC select country 1 or country 2?

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