Assume that the interest rate on a one-year insured Egyptian bank deposit is 4%, and the interest rate on a 1-year insured United States bank deposit is 2.5%.

a. (4 points) Using the simplified formula, for the actual returns of these two investments to be similar from the perspective of investors in the United States country, by how much (as a percentage) does the Egyptian currency have to change (relative to the U.S. dollar) over the investment horizon?

b. (4 points) Using the full formula, for the actual returns of these two investments to be similar from the perspective of investors in the United States country, by how much (as a percentage) does the Egyptian currency have to change (relative to the U.S. dollar) over the investment horizon?