Below is an example of a currency linked deposit.

Interest rate (p.a.)	Conversion rate	Spread
8.50%	5.4122	-0.0265
9.00%	5.4218	-0.0169
9.50%	5.4309	-0.0078
10.00%	5.4397	0.0010
10.50%	5.4481	0.0094
11.00%	5.4562	0.0175
11.50%	5.4640	0.0253

Suppose you would like to deposit HKD5000 into this currency linked deposit account for a month (30/365). You choose the conversion rate to be 5.4218 HKD per AUD. If the actual exchange rate 1 month later (HKD/AUD) is higher than the conversion rate, you will be able to get back your principal and interest in HKD. If the actual exchange rate 1 month later is below the conversion rate, you will get back your principal and interest in AUD, i.e. your deposit will be converted into AUD at the conversion rate.

a) If 1-month later, the spot exchange rate is 5.5, how much in HKD will you be able to get back? (leave answer in 2 d.p.)

b) If 1-month later, the spot exchange rate is 5.4, how much in AUD will you be able to get back? (leaves answer in 2 d.p.)

c) If 1-month later, the spot exchange rate is 5.4, how much in HKD will you be able to get back? (leaves answer in 2 d.p.)

d) Supposed that currently, the 1-month interest rate in HKD is 2% p.a., if you would like to deposit HKD to yield a payoff equal to your answer in question 7, how much do you need to deposit? (leaves answer in 2 d.p.)

e) Based on the above findings, what is the premium of the option embedded in the product?