23. Consider two bonds, one issued in yuan in China, and one issued in pound in United Kingdom. Assume that both government securities are one-year bonds paying the face value of the bond one year from now. The exchange rate, E, stands at 1 pound 8.58 yuan. The face values and prices on the two bonds are given by Face Value Price United Kingdom $10,141.4 $10,000 1-year bond 10,000 10,001.5 China 1-year bond a. Compute the nominal interest rate on each of the bonds. [5 points] b. If you expect the pound to appreciate relative to the yuan, which bond should you buy? [5 points] c. Assume you are a UK investor. You exchange pounds for yuans and purchase the Chinese bond. One year from now it turns out the exchange rate, E, is actually 8.72 (1 pound 8.72 yuan). What is your realized rate of return in pounds compared to the realized rate of return you would have made had you held the UK bond? [5 points]