Assume that the basket of goods and services consumed by a typical household costs 100pounds () in the UK and 8,000 rupees () in India. The market exchange rate betweenthe pound and the rupee is S / =101.33. Would the pound be considered overvalued orundervalued relative to the rupee by Purchasing Power Parity standard?(10)(b) Mary is the global sourcing manager for a UK retailer. She has just signed a deal to importwine from a French vineyard. The contract is invoiced in euros, and the payment of800,000 euros is due in six months. The six-month interest rate is 4.45% per annum in theUK and 2.95% per annum in the Eurozone. The spot and forward exchange rates betweenthe pound sterling and the