,Show your working step by step.

You, as U.S investor, find the current annual interest rate in the U.S is 3% and the annual interest rate in canada is 5%. The spot exchange rate for canadian dollar is 0.95USD/CAD, the 90-day Canadian dollar forward exchange rate is 0.948 USD/CAD.

A) Based on covered interest rate parity theory, what is the implied 90-day forward rate of the canadian dollar? is there any arbitrage opportunity to trade the forward contract on canadian dollar?

B) Explain your arbitrage strategy using the forward contract and the investment in the money market.

C) How much arbitrage profit can you make if you can borrow up to $1 million us dollars? (Assume there is no transaction cost in the money market, so the borrowing interest rate equals the lending interest rate)

D) At the end of the 90 days, the Canadian dollar exchange turns out to be $0.92. Does it impact your covered interest rate arbitrage profit in (C)? Why?

Exercise 22. The function 13000110xl:2 Gm = 13000 has been proposed as the survival function Sour) for a mortality model. (a) What is the implied limiting age to? (b) Verify that the function G satises the criteria for a survival function. (e) Calculate mpg. (d) Determine the survival function for a life aged 20. (e) Calculate the probability that a life aged 20 will die beaveen ages 30 and 4( (0 Calculate the force of mortality at age 50. Exercise 2.3 Calculate the probability that a life aged 0 will die between age 19 and 36, given the survival function I 50(x) = \"10..\" 1001, 0 5x 5 100(=a1). Exercise 2.4 Let 1 2 C C Sg(x)expl (Ax+Bx +logDDI logD)l where A, B, C and D are all positive. 2.8 Exercises 3' (a) Show that the function So is a survival function. (h) Derive a formula for 310'). (c) Derive a formula for pix. (d) Now suppose that A = 0.00005, B = 01000005, C = 00003. D = 1.01. (i) Calculate rpm fort: 1,5, 10.20.5030. (ii) Calculate \"3'40 for t = l. 10.20. (iii) Calculateflmqgg for t = 1.10.20. (iv) Calculate ex for .r = 70,71. T2, 73,74. T5. (v) Calculates: forx = 70, 71, 72,73,14,75,using numerical integration likewise 2.5 Let F00) = l 8\"\Is) how many cupits thetal be sold in under to break eventYour college newspaper, The Collegiate Investigator, has fixed production costs of foll per edition and marginal printing and distribution costs of 39: per copy, The Collegute Meetcute (a). Write down the assodated cost function C(x) in dollars, Write down the revenue function A(x] In dollars. Write down the profit function P(x) In dollars. [b] What profit (or loss) results from the sale of 500 copies of The Collegiate Investigator (c) How many copies should be sold in order to break even? coplesYour college newspaper, The Collegiate Investigator, has fixed production costs of $68 per edition and marginal printing and distribution co (a) Write down the associated cost function C(x) in dollars. Write down the revenue function R(x) In dollars. R(X) Write down the profit function P(x) in dollars. P(x) (b) What profit (or loss) results from the sale of 500 copies of The Collegiate Investigator? (C) How many copies should be sold in order to break even? copies