1. (5 points) Using the following information on the Chinese yuan () and the Indian rupee (?), a foreign exchange trader concluded that the following exchange rates and interest rates are "at parity. Use the Interest Rate Parity relationship to find the rupee to yuan (/) spot rate. 10.350 3-month forward rate (/) Spot exchange rate (/) Chinese yuan interest rate (per year) Indian rupee interest rate (per year) 4.20% 6.40% 2. (5 points) Using the following information on the Chinese yuan () and the Indian rupee (), a foreign exchange trader concluded that the following exchange rates and interest rates are "at parity". Use the Interest Rate Parity relationship to find the rupee to yuan (/) 30-day forward rate. 30-day forward rate (A) Spot exchange rate (A) Chinese yuan 30-day interest rate (annualized) Indian rupee 30-day interest rate (annualized) ???? 9.790 4.80% 9.60% 3. (5 points) Given the following information on the dollar and the Russian ruble, a foreign exchange trader at Morgan Stanley (NYSE:MS) has concluded that it is NOT possible to make a profit through covered interest arbitrage. What must have been the U.S. dollar 6-month interest rate at that time? (Interest rates are per year) Spot exchange rate (P/$) 6-month forward rate (P/S) U.S. dollar 6-month interest rate (annualized) Russian ruble 6-month interest rate (annualized) 62.70 64.10 ???? 6.00%