Problem Two Explain the effect of a rise in the dollar interest rate on sport exchange rate (Ese) assuming uncovered interest rate parity and investors are risk neutral. Exchange rate ES Dollar return Esie Ele Expected euro return RS R Rates of return (in dollar terms) Figure 2-a Explain the effect of a rise in the Euro interest rate sport exchange rate (Es/el assuming uncovered interest rate parity and investors are risk neutral. Explain the effect of a rise in the expected future price of euros in terms of dollars (Es/), on sport exchange rate (E$/). Exchange rate Egy Dollar return Rise in euro interest rate Ege Egle Expected euro return RS Rates of return (in dollar terms) Cimur 2 h