3. If Bigmac is sold in Canada for C$6.10 and its price in the US is $5.30

Find the %% of under- or overvaluation of the CAD.

Input your answer in percentages (%) not in decimals.

4. By using data below determine if the Market is in equilibrium by forecasting the future exchange rate 180 days from now, implied by the interest rates according to the interest rate parity. (Round your answer to four decimal places).

Consider 180-day investment
Amount	$1,000,000
Interest Home (for investments in USD)	6%
Interest Abroad (for investments in FC)	1%
Spot Rate	1.2532	FC/$
180-day Forward rate	1.2100	FC/$

5. By using data below compute Covered Interest Arbitrage profit or loss by investing in the Foreign Currency for 180 days. (Round your answer to the nearest dollar)

Consider 180-day investment

Amount $1,000,000

Interest Home (for investments in USD) = 6%

Interest Abroad (for investments in FC) = 1%

Spot Rate 1.2532

FC/$ 180-day

Forward rate 1.2100 FC/$

2.