Question: 1. Briefly explain three factors that affect the spread (Bid/Ask) of exchange rate. 2. Define direct quotation of exchange rate, and indirect quotation of exchange

1. Briefly explain three factors that affect the spread (Bid/Ask) of exchange rate.
2. Define direct quotation of exchange rate, and indirect quotation of exchange rate.
3. Differentiate between currency call option and currency put option.
4. List the factors that affect exchange rate determination.
5. Distinguish between exchange rate risk and interest rate risk.

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