1. Assume that a bank's bid rate on Euro is $1.45 and its ask rate is $1.47. What is its bid ask percentage spread?
2. Assume the Canadian dollar is equal to $.75 and the U.S. Dollar is equal to 1.35 Euro. What is the value of the Canadian dollar in Euros?
3. Which currency is used the most to denominate Eurobonds?
4. If a country experiences low inflation relative to the U.S., what is the expected effect on its exports to the U.S? Imports from the U.S.? Impact on its currency's equilibrium value? Will it increase, decrease or remain the same? Please provide an explanation for your answers.