please answer the 4 following Qustions:

1.According to the international Fisher effect, if U.S. investors expect a 3% rate of domestic inflation over one year, and a 2% rate of inflation in European countries that use the euro, and require a 2% real return on investments over one year, the nominal interest rate on one-year U.S. Treasury securities would be:

A.3% B.5% C.2% D.4%

2.The existing spot rate of the Canadian dollar is $.80. The premium on a Canadian dollar call option is $.04. The exercise price is $.82. The option will be exercised on the expiration date if at all. If the spot rate on the expiration date is $.89, the net profit per unit is:

A.$0.03 B.$0.02 C.$0.01 D.$0.04

3.Which of the following theories suggests that the percentage difference between the forward rate and the spot rate depends on the interest rate differential between two countries?

	A	purchasing power parity (PPP).
	B	interest rate parity (IRP).
	C	triangular arbitrage.
	D	international Fisher effect (IFE).

4.Among the reasons for government intervention are:

	A	to smooth exchange rate movement.
	B	to establish implicit exchange rate boundaries.
	C	to respond to temporary disturbances.
	D	all of the above