Assume the following information, i. Mexican one-year interest rate = 15 percent ii. U.S. one-year interest rate = 11 percent iii. If interest rate parity exists, what would be the forward premium or discount on the Mexican peso's forward rate? Would covered interest arbitrage be more profitable to U.S. investors than investing at home? Explain.

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2. Create a balance sheet for a typical bank, showing its main liabilities (sources of funds) and assets (uses of funds).
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