Question 2 Suppose an American investor borrows $100 at an annual interest rate of 1%. The investor can invest this money in Country A. The currency of Country A is called peso and the exchange rate currently is 1$ = 10 pesos. The investor can make an investment in Country A in pesos with an annual return of 30%. Let x denote the exchange rate one year from now, when the investment in Country A matures and the investor needs to pay back the US dollars she borrowed. a) For what values of the exchange rate x, this is a profitable investment? b) Suppose the exchange rate at t=1 is x=11. What is the profit of the investor in pesos? c) Suppose the exchange rate at t=1 is x=13.5. What is the loss of the investor in pesos