A. Given the following entries in the debit and credit columns of a BOP: calculate the current account balance. Debits(-) Increase in private assets abroad -4,000 Credits(+) LExport of goods 4,000 2. Increase in foreign owned assets 10,000 3.Export of com 1,000 4. Export of service 2,000 in US -10,000 -1,000 Imports of goods Unilateral transfer to UK Decrease in foreign private asset In US Decrease in foreign private asset in US Increase in US asset abroad -2,000 5.Investment income Received from UK 2,500 6. Increase in foreign private asset in US 5.000 -2,500 -5,000 (+)28,500 -28,500 (B) The spot rate for euro is $0.99 and the three month forward rate is $1.02. (1) Calculate the forward discount/premium (1) 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? A. Given the following entries in the debit and credit columns of a BOP: calculate the current account balance. Debits(-) Increase in private assets abroad -4,000 Credits(+) LExport of goods 4,000 2. Increase in foreign owned assets 10,000 3.Export of com 1,000 4. Export of service 2,000 in US -10,000 -1,000 Imports of goods Unilateral transfer to UK Decrease in foreign private asset In US Decrease in foreign private asset in US Increase in US asset abroad -2,000 5.Investment income Received from UK 2,500 6. Increase in foreign private asset in US 5.000 -2,500 -5,000 (+)28,500 -28,500 (B) The spot rate for euro is $0.99 and the three month forward rate is $1.02. (1) Calculate the forward discount/premium (1) 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