Support your answers with diagrams/graphs and or mathematical expressions

a) Explain or derive the short-run relationship between a country's current exchange rate and the expected return on foreign assets as underlies the RET schedule from the model of short-run exchange rate determination. (20 marks) bUsing this model of short-run exchange rate determination, illustrate and explain the short-run exchange rate implications of an increase in the expected exchange rate. (5 marks)

cHow does this model help to explain overall exchange rate volatility? (5 marks)