4) The one-year interest rate is 6% in the U.S. and 3% in the Eurozone. On the other hand, the one-year inflation is 5% in the U.S. and 4% in the Eurozone. The spot exchange rate is $1.10/. a) What is the equilibrium one-year forward exchange rate based on Interest Rate Parity (IRP)? (20points) b) What is the equilibrium one-year forward exchange rate based on Purchasing Power Parity (PPP)? (20points) b) Figure out the one-year forward premium/discount for euro using the forward exchange rate based on IRP. (20points)