4. Suppose that the European Central Bank (ECB) has set the official value of the euro at $1.00/ and intervenes in the foreign exchange market to keep the euro at this target value. a. In order to maintain the target exchange rate, does the ECB need to buy or sell euros? How many euros must the ECB buy or sell per year, if any? (Give a numerical answer.)

Imagine yourself a wealthy international investor, the next George Soros. You come to believe that the ECB is going to allow the euro to float at some point in the coming months.

d. What actions would you take to protect or increase your net worth? Briefly explain. e. What effect would your actions have on the scale of the ECB's purchases or sales of euros? Briefly explain.