N4)Suppose that the three-month forward rate on the dolar is $8.43 but you think that the spot price in three months will be $8.20 . Using only the forward market, what actions should you take and how much profit per dolar do you expect to make?

N5)Suppose that on January 1 2009,the TL price of the dollar is 1.40 overthe year, inflation rate in Turkeyis 25 % and U.S. inflation rate is10%. If theexchange rate is $1= 1.50 TL at the end of the year, which currency appear to beovervalued.? Explain your answer.