2. The one-year interest rate in the Cayman Islands is 3.5 percent, in Costa Rica it is 18 percent. The current spot rate (Cayman Islands dollar, KYD, to Costa Rican Colon CRC) is 681 CRC/KYD, and the expected spot rate in one-year is 824 CRC/KYD. Show all of your work a) What do you expect the one-year forward rate to be? b) What is the one-year forward premium? Is the CRC selling at a premium or discount to the KYD? c) What is the one-year expected premium? d) What is the one-year risk premium? e) According to your answer to part d), which country's bond market is more risky? 2. The one-year interest rate in the Cayman Islands is 3.5 percent, in Costa Rica it is 18 percent. The current spot rate (Cayman Islands dollar, KYD, to Costa Rican Colon CRC) is 681 CRC/KYD, and the expected spot rate in one-year is 824 CRC/KYD. Show all of your work a) What do you expect the one-year forward rate to be? b) What is the one-year forward premium? Is the CRC selling at a premium or discount to the KYD? c) What is the one-year expected premium? d) What is the one-year risk premium? e) According to your answer to part d), which country's bond market is more risky