Interest rates in Australia are currently 2.35% p.a. and in Chile interest rates are currently offered

at 10.75% p.a. Current exchange rates are AUD/USD 0.6836 and 882.25 USD/CLP

The AUD/USD one year forward points are 29. The USD/CLP one year forward points are 15.

(a) Generate a one-year forecast for the value of the Australian Dollar in terms of Chilean Pesos using unbiased forward expectations (4 Decimal places)

(b) Generate a two-year forecast for the value of the Australian Dollar in terms of Chilean Pesos using the International Fisher Effect. (4 Decimal places)