1. Mexico and Argentina are trade partners. Which of the following is the most likely impact of the Mexican peso depreciating compared to the Argentinian peso?
   1. Argentina will import fewer Mexican goods, hurting Mexican exports
   2. Argentina will import more Mexican goods, helping Mexican exports
   3. Mexico will import more Argentinian goods, helping Argentinian exports
   4. There will be no impact as foreign currency exchange rates dont impact trade
2. Suppose U.S. interest rates are 10%, European interest rates are 7%, and the current spot rate is 1 Euro = 1.19 US Dollars. According to interest rate parity, what is the equilibrium forward rate (in other words, based on the forward rate, how many US dollars will 1 Euro be worth in the future)? Give your answer to four decimal places (for example if 1 Euro will be worth 1.5555 US Dollars, write your answer as 1.5555).
3. You are trying to estimate the price risk faced by a bank that owns a 30 year fixed rate mortgage that has an 8% annual rate with monthly payments of $1,100.65. The loan is for $150,000 (i.e. value of the loan originally is $150,000). You consider the change in the price (present value) of this asset if rates fall by 1%. What is the percent change in the price from rates falling 1% (suppose the change happens immediately when there are still 30 years of monthly payments remaining)? Give your answer to the closest 0.01% and enter your answer as a percentage.