8. According to the UIP, the spot nominal exchange rate at time t,St is determined as (1+it)(1+it)Et[St+1] where it is the domestic nominal interest rate at time t,it is the foreign nominal interest rate at time t, and Et[St+1] is the expected nominal exchange rate at time t+1 conditioned on the information at time t. (8-1) Show that the UIP in equation (1) implies the following equations (i) and (ii) : (i)St(ii)St=(1+it)(1+it)(1+it+1)(1+it+1)Et[St+2]=(1+it)(1+it)(1+it+1)(1+it+1)(1+it+)(1+it+)Et[St+] Hint: Assume that the future domestic and foreign interest rates ar known at time t, and use the property Et[Et+1[St+2]]=Et[St+2]. 8. According to the UIP, the spot nominal exchange rate at time t,St is determined as (1+it)(1+it)Et[St+1] where it is the domestic nominal interest rate at time t,it is the foreign nominal interest rate at time t, and Et[St+1] is the expected nominal exchange rate at time t+1 conditioned on the information at time t. (8-1) Show that the UIP in equation (1) implies the following equations (i) and (ii) : (i)St(ii)St=(1+it)(1+it)(1+it+1)(1+it+1)Et[St+2]=(1+it)(1+it)(1+it+1)(1+it+1)(1+it+)(1+it+)Et[St+] Hint: Assume that the future domestic and foreign interest rates ar known at time t, and use the property Et[Et+1[St+2]]=Et[St+2]