Please calculate the following problems. Provide solutions.

Problem 1: Suppose that the current exchange rate, or spot exchange rate, between the US and another country is $1.2544/1.00. Suppose that the US has an interest rate of 4% and the second country has a rate of 2%. Compute for the forward exchange rate.

Problem 2: You are provided with the following details. Calculate the forward exchange rate as per the interest rate parity concept.

• Spot exchange rate (Euros/USD) - 0.7864
• Interest rate in the United States - 5%
• Interest rate in Germany - 3%

Problem 3: Suppose an American visits a particular market in India. The visitor bought 25 cupcakes for 250 Indian rupees and remarked that cupcakes are quite cheaper in India. The visitor claimed that on an average 25 such cupcakes cost $6. Based on the given information calculate the purchasing power parity between the two countries.

Problem 4: In January 2018, a McDonald's Big Mac costs $5.28 in the US, while the same Big Mac could be bought for $3.17 in China during the same period. Based on the given information calculate the purchasing power parity between the two countries.