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QUESTION 1 1.1 point 3. The one-year risk-free interest rate in China is 5%. The one-year risk-free rate in the U.S. is 2%. Assume that

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QUESTION 1 1.1 point 3. The one-year risk-free interest rate in China is 5%. The one-year risk-free rate in the U.S. is 2%. Assume that interest rate parity exists. The spot rate of the Chinese Yuan is $.14. (1.1 points) a. What is the forward rate premium? b. What is the one-year forward rate of the peso? c. Based on the international Fisher effect, what is the expected change in the spot rate over the next year? d. If the spot rate changes as expected according to the IFE, what will be the spot rate in one year

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