3. Answer the following separate questions about uncovered interest parity (1G points] a. Suppose the UH. dollar interest rate is 3%, while the interest rate in the United Kingdom is 5%. Your friend thinks he can convert his dollars, invest in the United Kingdom and convert his pounds hack into dollars at the end of a year, allowing him to make a lot higher return. Assuming uncovered interest parity {UIPL explain why he is incorrect. h. Suppose interest rates in the United States are 5.5%; while they are 3% in the euro area. Currently the dollareuro exchange rate is at $2.511} per euro. It U'lP holds, what do you expect 1e exchange rate to he in the futnre? Round to three decimals