Question: 2 (4+4+2) a. UBS expects that the Thai Baht value will be against the dollar from its spot rate of $0.17 to $ 0.1 in 60 days. The following interbank lending and borrowing rates exist: Currency US dollar Thai Baht Lending rate 5.5% 7.5% Borrowing Rate 6.25% 8.5% Assume UBS has a borrowing capacity of either $ 17 million or 75 million Baht in the interbank market, depending on which currency it wants to borrow. 1. How UBS could attempts to capitalize on its expectation without using deposit fund? Estimate the profits and rate of return that could be generated from this strategy and interpret your findings. b.Demonstrate different exchange rate systems? Explain managed float and fixed exchange rate system with major pros and cons taking note of Bangladesh economy. c. The Corona virus attack on February 15, 2020 in the Chain caused expectations of a weaker China's economy. Explain how such expectations could have affected China's interest rates and therefore have affected the forward rate premium (or discount) on various foreign currencies