a. Many academics and professionals have tested the foreign exchange and interest rate markets to determine their efficiency. What have they concluded?

b. What is the real interest cost (adjusted for inflation) to Chile Copper Mining Group, in Chilean peso-denominated terms, of borrowing the pounds for one year, again assuming purchasing power parity?

c. If the actual spot rate at the end of the year turned out to be CLP$900.15 = £1.00, what was the actual Chilean peso-denominated interest cost of the loan?