Please answer the questions quickly

PJSC Gazprom (Gazprom) is a Russian multinational energy corporation headquartered in Saint Petersburg, Russia. Its functional currency is the Russian ruble (RUB). Gazprom is Europes largest supplier of natural gas. On October 29, 2021, Gazprom extended its contract with the Moldovan government for another five years, starting from November 1, 2021. Energy transactions are typically settled in the USD; Moldova will pay an average US$450 per 1,000 cubic metres on November 30, 2021 (Reuters, 2021). Moldova is an Eastern European country. It is not a member of the EU and its currency is the Moldovan leu (MDL).

Suppose the following interest rates are available as of November 1, 2021.

	Russia	Moldova	Eurozone	U.S.
Benchmark 30-day Interest Rate (p.a.)	7.96%	7.15%	0.25%	3.54%

The following spot exchange rates are also available: USD/RUB 71.6116, AUD/USD 0.7459, EUR/USD 1.1597, EUR/RUB 82.9201, and EUR/MDL 20.2150.

Based SOLELY on informationprovided aboveandwhat we have learntin this course,answer the following questions.

a. A U.S.-based FX trader has programmed a trading algorithm to scan market information in the hopes of finding riskless profits.

(i) If the trader began with US$100,000, would he be able to find such a profit and if so, what is the percentage return? Describe and show step by step reasoning, accompanied by calculations. (6 marks)

(ii) Suppose you are the trader, and you are relying on profits from this trade to pay one years tuition fee at the ANU (let it be A$45,360). How much start fund would you need in the strategy described in part (i)? (3 marks)

b. The existence of trading algorithms quickly and fully exploited away all available free lunches in an instant. Market has returned to equilibrium. With the Moldovan deal confirmed, Gazprom entered an appropriate 30-day forward contract to hedge FX exposure as implied in the question. What would have been the forward rate obtained by Gazprom on the Russian FX market at home? Show step by step calculations and reasoning. Do not use approximation. Also explain whether Gazprom should have hedged on the money market instead. (6 marks)