A. Given the following entries in the debit and credit columns of a BOP; calculate the current account balance. Credits(+) Debits(-) LExpert of goods 4,000 Increase in private assets abroad -4,000 2. Increase in foreign owned assets in US 10,000 Imports of goods -10,000 3.Export of corn 1,000 Unilateral transfer to UK -1,000 4. Export of service 2,000 Decrease in foreign private asset In US -2,000 5.Investment income Decrease in foreign private asset Received from UK 2,500 in US -2,500 6. Increase in foreign private Increase in US asset abroad -5,000 asset in US 5,000 (+)28,500 -28,500 (B) The spot rate for euro is $ 0.99 and the three month forward rate is $1.02. (i) Calculate the forward discount/premium. (ii) How can a US importer who has to pay 100 euro's three months from April 28 hedge foreign exchange risk in the forward market? (iii) Suppose a speculator believes that the spot rate in three months will be $ 1.05. How can he speculate using the forward market? If he invests $100, what will be his profit (in $) if his speculation is right