PROBLEM SET 2 FACTS to use in the problems CROSS RATES Currency codesames Canadian Dollar Euro Hong Kong Dollar Japanese Yen Swiss Franc US Dollar Afghan Afghani Albanian Lek United Kingdom Pound Algerian Dinar 0.6389 na 0.8341 1.3066 0.08143 0.1276 1.5678 GBP CAD EUR HKD JPY YEN CHF USD 0.007725 0.012105 0.009266 0.09491 1.2004 0.7667 7.8489 0.6914 1.0833 0.8291 8.4935 89.5682 12.2924 10.3864 108.016 1.2071 0.01281 0.02006 0.01537 0.1573 1.6595 0.01854 0.02027 129.655 0.6317 0.9898 0.758 7.7603 81.8609 0.9147 1 49.53 107.958 0.006064 0.009501 0.007277 0.0745 0.7859 0.008781 0.0096 0.4755 1.4484 92.7957 0.9251 1.0114 50.0956 109.191 0.1179 0.1289 6.385 13.917 1.584 78.4565 171.008 118.597 0.011183 0.01223 0.6058 1.3204 AFN 65.3875 1.0945 54.2099 118.159 81.9454 142.522 2 1885 DZD 75.726 98.8417 9.6517 0.9157 74.871 1.5178 0.7188 Problem 3 One year rates are 2.5% in Japan and 4.1% in France. inflation is 2.0% in Japan and 3.2% in France. The spot rate is I yen buys .009257888 Euro's or 1 Euro buys 108.016 Yen (the same thing) just said diffently. Does interest parity hold? Compare it to the answer you calculate. The forward rate your broker is quoting you is 110.00 yen/euro