1. From January 2016 to January 2017, the EUR appreciated 10% against the USD. If Norvatis, a European pharmaceutical company, raises the price of its hypertensive drug by 4%, what is the percentage pass-through?
a) 4%
b) 40%
c) 150%
d) 10%
2. For its latest handbags, Gucci, the Italian luxury goods company, has decided to use a 85% pass-through. This is in response to the appreciation of 12% of the EUR against the USD. As a result of this price adjustment, the US buyers of Gucci handbag will absorb ____% of the euro’s appreciation against the US dollar. Gucci, the parent company in Italy will absorb _____% of the euro’s appreciation against the US dollar.
a) 12 / 85
b) 15 / 12
c) 15 / 85
d) 85 / 15