1. The U.S.-pound exchange rate is 1.20 $ / . The U.S.-Indian rupee exchange rate is 70 rupees /S. a. What is the Indian rupee / exchange rate? Show work. 1. 208 x 70 rupee =84 rupee / If b. Suppose the Indian rupee / exchange rate is 80 rupees / . If you had $1,000, explain how you could turn that into more than $1,000 in three exchange rate transactions. Show work. Suppose the U.S.-Indian rupee exchange rate is 70 rupees/$. Suppose interest rates in India are 10% and 4% in the United States. What is the forward rate for the rupee /$ rate? Is this an appreciation or depreciation of the rupee? ! 3. A Big Mac costs 183 rupees in Mac costs 183 rupees in India and US$5.74 in the United States. you use the Big Mac as a basket to measure the price level in a country, was the rupee / S rate be? the price level in a country, what should If the actual rate is 70 rupee /S, then is the rupee over or under valued? What is real exchange rate in US Big Macs per Indian Big Macs? You notice that the interest rate in Euros is 5% and the U.S. interest rate is 15%. The current exchange rate is 1.1 $/ . The forward rate (one year) is 1.25 $/ . You currently have 1,000 Euros and $1,000 on hand. Show how you can make almost 20% after one year