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a. The price of the EUR one year ago was $1.3613 while today it is at $1.3520. Has the EUR appreciated or depreciated over this
a. The price of the EUR one year ago was $1.3613 while today it is at $1.3520. Has the EUR appreciated or depreciated over this year? What is the return on the EUR over this one year period? What is the rate of appreciation or depreciation that USD experienced over the same period?
b. Now suppose that the exchange rates given above are both bid rates, and the bid-ask spread is 5 pips (i.e., $0.0005), both one year ago as well as today. How much return would you earn if you had bought the EUR one year ago and sold it today?
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