Questions 3. Exchange Rate Effects on Investing. Explain how the appreciation of the Australian dollar against the U.S. dollar would affect the return to a U.S. firm that invested in an Australian money market security 4. Exchange Rate Effects on Borrowing. Explain how the appreciation of the Japanese yen against the U.S. dollar would affect the return to a U.S. firm that borrowed Japanese yen and used the proceeds for a U.S. project. 6. Bid/ask Spread. Utah Bank's s bid price for Canadian dollars is S.7938 and its ask price is $.81. What is the bid/ask percentage spread? 9. Euro. Explain the foreign exchange situation for countries that use the euro when they engage in international trade among themselves. 10. Indirect Exchange Rate. If the direct exchange rate of the euro is $1.25, what is the euro's indirect exchange rate? That is, what is the value of a dollar in euros? 36 Questions 11. Cross Exchange Rate. Assume Poland's currency (the zloty) is worth S.17 and the Japanese yen is worth $.008. What is the cross rate of the zloty with respect to yen? That is, how many yen equal a zloty? 19, Foreign Stock Markets. Explain why firms may issue stock in foreign markets. Why might U.S. firms issue more stock in Europe since the conversion to the euro in 1999? 24. Interpreting Exchange Rate Quotations. Today you notice the following exchange rate quotations: $1 is equal to 3.00 Argentine pesos * 1 Argentine peso = 0.50 Canadian dollars You need to purchase 100,000 Canadian dollars with U.S. dollars. How many U.S. dollars will you need for your purchase