1. In the currency markets, $1 = 1.2 Swiss Francs and 1 Euro = $1.25. Wolverine Cola produces cherry cola in Switzerland at a cost of 0.9 Swiss Francs per unit. The product is sold in France for 1.3 euros. In terms of U.S. dollars, how much profit is Wolverine realizing on each unit sold?
a. $0.37 b. $0.675 c. $0.875 d. $1.04
2. Suppose that Switzerland fixed its currency to the Euro at a rate of 2 francs per euro. If they changed the exchange rate to 2.2 francs per euro, we would say that the franc has
a. Appreciated b. Devalued c. Strengthened d. Revalued