question 3 and 4(just part C)

Thank you.

3. Forward Exchange Rates If the $/ spot rate is $1.14/ and three-month fc $1.15/? Is the dollar selling at a premium or a discount? Explain. 4. Using Spot and Forward Exchange Rates Suppose the spot exchange rate for the South African rand is R15/ and the six-month forward rate is R16/. (a) Which is worth more, the British pound or the South African rand? (b) Assuming absolute PPP holds, what is the cost in the United Kingdom of a Castle beer if the price in South Africa is R20? Why might the beer actually sell at a different price in the United Kingdom? (c) is the British pound selling at a premium or a discount relative to the South African rand? (d) Which currency is expected to appreciate in value? (e) Which country do you think has higher interest rates - the United Kingdom or South Africa? Explain