1. Consider the forward contract on Euros that we discussed in class. (a) Instead of assuming fixed interest rates rd,re, suppose we have zero coupon bonds in dollars, worth Zd(t,T) at time t and in Euros, worth Ze(t,T) at time t. Here the price Ze(t,T) is given in Euros. Find the forward price of a foreign exchange contract of the type we discussed in class. (b) Suppose that some time has passed since the forward contract on foreign exchange was initiated, so its value VK(t,T) is no longer 0 . Find VK(t,T). The forward contract is of the same type as we discussed in class, and you should assume, as in part (a), that interest rates are not fixed. 1. Consider the forward contract on Euros that we discussed in class. (a) Instead of assuming fixed interest rates rd,re, suppose we have zero coupon bonds in dollars, worth Zd(t,T) at time t and in Euros, worth Ze(t,T) at time t. Here the price Ze(t,T) is given in Euros. Find the forward price of a foreign exchange contract of the type we discussed in class. (b) Suppose that some time has passed since the forward contract on foreign exchange was initiated, so its value VK(t,T) is no longer 0 . Find VK(t,T). The forward contract is of the same type as we discussed in class, and you should assume, as in part (a), that interest rates are not fixed