(a)It is now beginning of year 2006. the spot bid rate for the US Dollar is Tshs 1.240 while the post bid-ask spread is Tshs 15. A forecaster provides the following forecasts for the bid-ask spread and inflation rates for Tanzanian and United States in the four years: REQUIRED (i) Compute the normal interest rate per annum in both Tanzania and Ken (ii) Calculate the expected future spot Tshs/ Kshs exchange rate in three (ii) Determine the expected one year forward discount /premium at which the Tshs will be yan, assuming that the Fisher Effect holds. (2marks) years from now assuming that the International Fisher Effect holds.(2marks) trading against the Kshs. Assume that the Interest Rate Parity holds the Tshs against the Kshs, one year hence (2marks) (iv) Assuming that the PPP holds, calculate the expected percentage depreciation/appreciation of (a)It is now beginning of year 2006. the spot bid rate for the US Dollar is Tshs 1.240 while the post bid-ask spread is Tshs 15. A forecaster provides the following forecasts for the bid-ask spread and inflation rates for Tanzanian and United States in the four years: REQUIRED (i) Compute the normal interest rate per annum in both Tanzania and Ken (ii) Calculate the expected future spot Tshs/ Kshs exchange rate in three (ii) Determine the expected one year forward discount /premium at which the Tshs will be yan, assuming that the Fisher Effect holds. (2marks) years from now assuming that the International Fisher Effect holds.(2marks) trading against the Kshs. Assume that the Interest Rate Parity holds the Tshs against the Kshs, one year hence (2marks) (iv) Assuming that the PPP holds, calculate the expected percentage depreciation/appreciation of