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Answer all questions 1. In January, 2022 (when SF3-S1) it was expected that by the end of 2022 the price level in the U.S. would

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Answer all questions 1. In January, 2022 (when SF3-S1) it was expected that by the end of 2022 the price level in the U.S. would have risen by 10% and in Switzerland by 5%. The real rate of interest in both countries is 4% a Project the expected SF/S at the end of 2022 b. Estimate the nominal interest rates in each country which makes it possible for investments in each country to earn their real rate of interest. c. Estimate the current one-year forward rate of 5F/5. d. Compare your estimate of the current forward rate in partc with your estimate of the expected future spot rate in a. Explain. 2. During 1995, the Mexican peso exchange rate rose from peso 5.33/$ to peso 7.64/$. At the same time. U.S. inflation was approximately 3% in contrast to Mexican inflation of about 48.7%. a. By how much did the real value of the peso change over this period

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