Please provide me with the answers andsolutionshow you solved.

QUESTION 7

Use the following information to answer the next two questions.

Suppose a French investor with access to 600,000 euros sees the following:

SR: C$1.05/euro

FR: C$1.25/euro

French interest rate=.09

Canadian interest rate=.16

What should the forward premium be according to IRP?

.1905

.0642

-.0603

-.16

6.6667 points

QUESTION 8

Find the percentage return available via covered interest arbitrage.

.1856

.1744

.1156

.291