a) You are planning a trip to Switzerland and France. Your hotel will cost you SFr160 per night for 4 nights inSwitzerland and 95 per night for 6 nights in France. You are expected to spend another SFr450 for meals in Switzerland and 170 in Paris. You plan to buy souvenirsfor your friends and family with an expected total cost of US$500. You will be travel by train during your visit to both countries and the total expected cost is US$300 and you also need to standby cash US$550 for any emergency. Determine this trip cost you in Ringgit Malaysia (RM)given the following exchange rate?

(7 marks) (CLO2:PLO6:C4)

Country	U.S. $ Equivalent	Currency per U.S.$
Switzerland France (SFr)	1.08	0.92
France (Euro) ()	1.16	0.86
Malaysia ringgit (RM)	0.24	4.16

b) Suppose the South Korea won exchange rate is KRW1182 = $1, and the Taiwan dollar exchange rate is TW$1 = $0.036. If the cross-rate is KRW35 = TW$1, determine the arbitrage profit per 100 U.S. dollar.

(6 marks)

(CLO2:PLO2:C3)

c) Assume the spot rate on the Canadian dollar is C$0.9872. The risk-free nominal rate in the U.S. is 5.4 percent while it is only 3.8 percent in Canada. Which one of the following four-year forward rates best establishes the approximate interest rate parity condition?

(2 marks)