Q5. A) Why Firms Forecast Exchange Rates? Explain with reference to value of firm? B) Assume that you obtain a quote for a one-year forward rate on the Mexican peso. Assume that Mexico's one-year interest rate is 40 percent, while the U.S. one-year interest rate is 7 percent. Over the next year, the peso depreciates by 12 percent. Do you think the forward rate overestimated the spot rate one year ahead in this case? Explain. C) Explain any two provisions of the Foreign Exchange Regulation Act, 1947 with an example Q5. A) Why Firms Forecast Exchange Rates? Explain with reference to value of firm? B) Assume that you obtain a quote for a one-year forward rate on the Mexican peso. Assume that Mexico's one-year interest rate is 40 percent, while the U.S. one-year interest rate is 7 percent. Over the next year, the peso depreciates by 12 percent. Do you think the forward rate overestimated the spot rate one year ahead in this case? Explain. C) Explain any two provisions of the Foreign Exchange Regulation Act, 1947 with an example