1.A U.S. student studied abroad in
Zürich, Switzerland. When he arrived in Zürich in January 2005, he exchanged
$20,000 for Swiss francs when the exchange rate of USD/CHF (U.S. dollars to
Swiss francs) was 1.15. When he left Zürich in January 2006, the exchange rate
was 1.30. If he had started his year abroad in January 2006 instead of January
2005, would he have gotten more or fewer francs? What is the exact difference?
2. The USD is rising quickly relative to
the Indian rupee (INR). Will an Indian company that imports cars made in the
United States find that car prices in INR will rise or fall? Explain.