Suppose the Canadian dollar/US dollar exchange rate (Ee

cad=usd) is expected to be $ 1.33 per USD a year from today, the US dollar interest rate is 0.9% per year.

(a) (10 points) Use the given information to calculate the expected dollar depreciation rate when today's CAD/USD exchange rate is $1.35 per USD, $1.32 per USD, and $1.29 per USD respectively

(b) (10 points) Use the given information to calculate the expected CAD return on USD deposits when today's CAD/USD exchange rate is $1.35 per USD, $1.32 per USD, and $1.29 per USD respectively

(c) (15 points) Use the following coordinates, plot your answers in part (b). Now suppose the return on Canadian dollar deposits is 1.1% per year. Find the equilibrium CAD/USD exchange rate in the figure. You don't need to give the exact number.

(d) (15 points) Suppose now CAD interest rate rises to 1.5% per year while US interest rate and expected future CAD/USD exchange rate remain the same. Will the equilibrium CAD/USD exchange rate increase or decrease?