3. Assume annualized interest rates in the U.S. and United Kingdom respectively, and one are 4% and 6%, pound is worth $1.35. (a) What is the one-year forward rate that makes you indifferent between investing in the U.S. and investing in the U.K? (b) What is the one-year forward rate that makes you prefer the UK investment over the US investment? 6. Consider Problem 3, again (a) Does uncovered interest parity predict the pound against the U.S. dollar? 180-day appreciation depreciation of an or (b) What is the expected 180-day spot rate under no arbitrage? (c) Quantify the expected percentage change in the 180-day exchange rate under no arbitrage or (d) Answer all questions again using the opposite exchange rate