1 week USD Your start-up company has negotiated a contract to provide a database installation for a manufacturing company in Poland. That firm has agreed to pay you $113,000 in three months time when the installation will occur. However, it insists on paying in Polish Zloty (PLN) You don't want to lose the deal the company is your first client), but are worried about the exchange rate risk. In particular, you are worried the zloty could depreciate relative to the dollar. You contact Fortis Bank in Poland to see if you can lock in an exchange rate for the zloty in advance. You find the following table posted on the bank's Web site, showing zloty per dollar, per euro, and per British pound: 2 weeks 1 month 2 months 3 months purchase 3.1404 3.1447 3.1381 3.1424 3.1388 sale 3.1765 3.1727 3.1781 3.1727 3.1703 EUR purchase 3.7804 3.7814 3.7836 3.7871 3.7906 sale 3.8214 3.8226 3.8254 3.8298 3.8342 GBP purchase 5.5131 5.5131 5.5112 5.5078 5.5048 sale 5.5750 5.5750 5.5735 5.5705 5.5681 What exchange rate could you lock in for the zioty in three months? How many zloty should you demand in the contract to receive $113,000? b. Given the bank forward rates in part (a), were short-term Interest rates higher or lower in Poland than in the United States at the time? How did Polish rates to ouro or pound rates? Explain a. What exchange rate could you lock in for the zloty in three months? You could lock in an exchange rate of zlotyper U.S. dollar in three months time through a forward contract with the bank. (Round to four decimal places.) How many zloty should you demand in the contract to receive $113,000? You would need to write the contract for zoty. (Round to the nearest integer.) b. Given the bank forward rates in part (a), were short-term interest rates higher or lower in Poland than in the United States at the time? the dolar interest rate. (Select from the drop-down menu.) How did Polish rates compare to euro or pound ratos? Explain. (Select from the drop-down menus) In general, from the covered interest parity formula, we can tell which rate is higher by soning if the forward rate is above or below the spot rate. From the table, the for the British pound, so the pound interest rate was at the time of these quotes. The euro forward rates are the spot rates, however, suggesting that Polish interest rates were than those for the euro Thus, the zloty interest rate is forward rates appear to be V than