Price of BMW as a luxury car made in Germany is €45,000 (Euro). Spot rate is $1.025/€. If Euro (€) appreciate 25% A. If Euro (€) appreciate 20%. 

How much should the price of BMW be in the US after appreciation of Euro? Calculate the degree of exchange-rate pass through if the price of BMW in the US is $54,000 B. If Euro (€) appreciate 25%. 

How much should the price of BMW be in the US after appreciation of Euro? 

Calculate the degree of exchange-rate pass through if the price of BMW in the US is $55,000 2. Singapore firm bought imported turbine from United States. The payment will be made for next three months. The amount of imports was $850,000. The chief financial officer of that company bought the call option to protect it import. The exercise or strike price is S$ 1.3750/$, the call option premium is S$0.005 /$  

a. If the future spot rate for next three months is S$1.3750/$. If the future spot rate is correctly predicted, what should the firm do?

 b. If the future spot rate for next three months is S$1.425/$. If the future spot rate is correctly predicted, what should the firm do? 

c. What future spot rate is the firm indifferent between the call option and spot market?