1. Briefly describe the Foreign Exchange Market. What mechanisms created the need for the Foreign Exchange Market and why is the market important to the global economy? 2. What is an exchange rate? Using figures to illustrate, explain the difference between the indirect and direct quotes of exchange rates (Hint: one is the inverse of the other). 3. In terms of currency fluctuations, explain the difference between currency appreciation and depreciation. Complete exercise 5 on page 25 in the case. 4. Explain cross-exchange rates using Formula 1 shown on page 7. Given that USD-MX exchange rate is (0.08675 USD = 1MXN) and USD-NPR exchange rate is (0.02167 USD = INPR), find the MXN-NPR cross rate. 5. Define the Bid and Ask prices as they relate to exchange rates. Using the Bid/Ask Spread Formula 2 on page 8, recalculate Example 4 - Bid/Ask Spreads and cost of currency conversion with the assumption that you want to convert $1,200 (All other information remains the same)