Novak Djokovic wants to start a tennis academy in India and is looking for funding options. He finds that the interest rates in India are around 12% per annum. Lenders in his parent country, Serbia are willing to extend similar loans at 3% per annum. a. Advise him on the suitability of the two options. b. If 1 Serbian Dinar can be bought in the spot market for Rs 0.72 and in the 3- month forward market at 0.78, calculate the annualised forward premium/ discount of the rupee to the Serbian Dinar. (2 marks) 3-B Zeta, an automotive battery manufacturer, uses Zinc as a manufacturing input. Zinc costs presently Rs 275 per kg and Zeta uses around 20 metric tonnes of zinc per month. Concerned about the volatility in zinc prices, the manufacturer is considering the following alternatives: Not hedging the zinc price risk Buying and keeping inventory of zinc Using derivative contracts (forwards, futures, and options) a. What positions Zeta should take in each derivative contract (forwards, futures, and options)? (2 marks) b. What are the comparative advantages and disadvantages of using each of the derivative contracts considering the alternatives?