Read the case “Swatch Group and Francogeddon” and answer the questions:
Q1. Examine, with the help of graphs, how “flight to safety” caused an outward shift in demand for Swiss Francs, increasing the exchange rate, and evaluate the impact of rising exchange rates on Swiss GDP, based on the given case.
Q2. Investigate the effect of the Swiss Franc appreciation against foreign currencies, such as the dollar or the euro, on Swatch Group profit and stock price.
Q3. Propose and substantiate the relevant monetary policy Swiss Central Bank should adopt to protect local industries from the effects of increased demand for the Swiss Franc.