QUESTION01: The note on page 5 of this lesson states that For daily exchange rate changes, the best estimate of tomorrows spot rate is the current spot rate. Given that note, what is your forecast of the spot exchange rate between the British pound and the U.S. dollar if todays spot exchange rate is $1.2537/.

$1.2525/

$1.2530/

$1.2537/

$1.2540/

$1.2543/

QUESTION02: Assume that the spot rate of the euro is currently $1.1100/, while the five-year forward rate of the euro is $1.2400/. You can forecast the spot exchange rate of euro as ______________ five years from now.

$1.1200/

$1.1400/

$1.1700/

$1.2300/

$1.2400/