a) Suppose that the market conditions of interest rate and exchange rate of USD $ and European is summarized as follows. Assuming that you work with 51,000,000, is the interest rate parity holding? Demonstrate how to realize profitable arbitrage at these prices. (10 marks) b) The value contribution of a subsidiary of a multinational firm to the firm can be reported in the income statement or balance sheet of the consolidated firm. Explain the reporting of the changes in the value of a: subsidiary as a result of the change in an exchange rate changes to the income and the assets of the subsidiary in the consolidated financial statements of the parent company. (10 marks) a) Suppose that the market conditions of interest rate and exchange rate of USD $ and European is summarized as follows. Assuming that you work with 51,000,000, is the interest rate parity holding? Demonstrate how to realize profitable arbitrage at these prices. (10 marks) b) The value contribution of a subsidiary of a multinational firm to the firm can be reported in the income statement or balance sheet of the consolidated firm. Explain the reporting of the changes in the value of a: subsidiary as a result of the change in an exchange rate changes to the income and the assets of the subsidiary in the consolidated financial statements of the parent company. (10 marks)