1. If Euro has an exchange rate of IEuro-$1.47 today and we are expecting an exchange rate of IEuro-$1.52 in three months, what is the premium/discount of Euro against $ (annual in % term)? What is the premium/discount of $ against Euro (annual in % term)?
2. Suppose you travel to China and find that a pair of NIKE AIR sneakers is selling at ¥560 (RMB) there. You know that the same style sneakers are selling in US, for $70. Based on purchasing power parity, what would the implied ¥/$ exchange rate be?