118 FX E A B D 1 2 Country US Iceland 3 4 0.76 5 US Year 1: Interest Rate Year 2: Interest Rate Year 3: Interest Rate Year 4: Interest Rate 5.15 5.27 2.96 0.56 12.35 14.29 15.82 11.28 Year 1: Inflation Rate Year 2: Inflation Rate Year 3: Inflation Rate Year 4: Inflation Rate 3.07 2.66 1.96 8,8 4.16 11.39 8.15 Year 1: % Change in IQ Year 2: % Change in IQ Year 3: % Change in IQ Year 4: % Change in IQ 0 0 0 0 11.43 -8.73 37.3 40.58 6 Iceland 7 8 US 9 Iceland 10 11 12 Q5. What is the 4-year geometric mean of percentage change in the foreign exchange Indirect Quote (in %)? Q6. What is the 4-year geometric mean of percentage change in the foreign exchange Direct Quote (in %)? 13 14 15 16 32 18 Q10. Over this 4-year period, what was the annual uncovered rate of return from the foreign country's point of view (Rud)? Q11. Over this 4-year period, you should have borrowed in the country and invested in the country Q12. If you had access to a $1,000,000 line of credit from your preferred borrowing country, over this 4-year period, your net profit from an uncovered interest rate arbitrage would have 19 20 21 22 been + Sheet1 118 FX E A B D 1 2 Country US Iceland 3 4 0.76 5 US Year 1: Interest Rate Year 2: Interest Rate Year 3: Interest Rate Year 4: Interest Rate 5.15 5.27 2.96 0.56 12.35 14.29 15.82 11.28 Year 1: Inflation Rate Year 2: Inflation Rate Year 3: Inflation Rate Year 4: Inflation Rate 3.07 2.66 1.96 8,8 4.16 11.39 8.15 Year 1: % Change in IQ Year 2: % Change in IQ Year 3: % Change in IQ Year 4: % Change in IQ 0 0 0 0 11.43 -8.73 37.3 40.58 6 Iceland 7 8 US 9 Iceland 10 11 12 Q5. What is the 4-year geometric mean of percentage change in the foreign exchange Indirect Quote (in %)? Q6. What is the 4-year geometric mean of percentage change in the foreign exchange Direct Quote (in %)? 13 14 15 16 32 18 Q10. Over this 4-year period, what was the annual uncovered rate of return from the foreign country's point of view (Rud)? Q11. Over this 4-year period, you should have borrowed in the country and invested in the country Q12. If you had access to a $1,000,000 line of credit from your preferred borrowing country, over this 4-year period, your net profit from an uncovered interest rate arbitrage would have 19 20 21 22 been + Sheet1