1. What are the main component sub-accounts of the current account in the balance of payments (BoP)? Give and explain one debit and one credit example for each component sub-account for the United States.

2. Use the following spot and forward bid-ask rates for the JPY/USD exchange rate to answer the following questions:

a. Are the rates quoted in American or European terms?

b. What is the mid-rate for each maturity?

c. Is the JPY is trading forward at a premium or discount?

d. What is the annual forward premium or discount for all maturities?

e. Which maturities have the smallest and largest forward premium or discount?

f. What do these rates indicate about the market