4. The current exchange rate between the Singaporean dollar and the Malaysian ringgit is 3.1200 ringgit per dollar. Alice Wong, a telco employee who lives in Kuala Lumpur, invested in 100 shares of the preferred stock of Media Corp (listed in Singapore Stock Exchange) at SGD100 per share. The stock is expected to pay a dividend of SGD5 per share at the end of one year, and Alice would expect to sell the shares for an expected price of SGD110. The exchange rate at the time of the sale is expected to be 3.2000 ringgit per dollar. a. Calculate the rate of return on this investment. [10 marks] b. How much of the total return is due to the domestic return on the security? How much is due to the foreign exchange gain? [10 marks] C. Assuming that the stock of Media Corp is also listed in Kuala Lumpur Stock Exchange with an expected return of 12%. Is there any violation of the approximate form of uncovered interest parity? If yes, what would an arbitrager do? [10 marks] d. Explain why uncovered interest parity model is not useful in making exchange rate predictions, [Word Limit: 200 words] [20 marks]