4. Assume that you are a fund manager in Malaysia and you just used a set of historical data to obtain previous values of the Indonesian Rupiah, influenced by Inflation and Income, which has enabled you to develop this model below. IR+ = 0.004+0.2 INF-1 + 2 INC+1 Where IR is the Indonesian Rupiah INF:-1 is the inflation differential, and INC 1-1 is the income differential. a) Assume that the most recent quarterly percentage change in INFt-1 is 5% and that INCH-1 is 3%. Using this information along with the estimated regression coefficients, forecast the change in the value of the Indonesian Rupiah. (4 marks) b) Assume that regression analysis had provided the following estimates for the regression coefficients; the constant is 0.001, the inflation regression coefficient is 0.2, and the Income regression coeffiecient is 0.4. Use sensitivity analysis to determine the Indonesian Rupiah's percentage change over the coming period with the following probability distribution. (4 marks) Probability 40% 35% 25% Possible Outcome -7% -5%