Consider a situation of two countries, Home and Foreign, in which Homos interest rate is 11%, Foreign's interest rate is 2%, the expected rate of deprecation of Homes currency against Foreign's is 5%, the risk premium, rho, on domestic assets in domestic currency is 4%, and the exchange risk premium (again on domestic assets in domestic currency), rho E, is 1%. All of these values are yearlong ones, e.g. the interest rates are annual ones and the expected rate of depreciation is over the next year. (a) What should be rho D, the default risk premium (country premium) on domestic assets in domestic currency? (b) What should be the- currency premium for the Home currency? (c) Is this situation consistent with uncovered interest parity? Explain why or why not. (d) How can the central bank cause rho, to decrease without changing the Home money supply. No diagram is necessary to explain your answer, but be specific as to what happens on the central banks balance sheet. Note that parts (c) and (d) can be answered even if you do not know how to answer parts (a) and (b)