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Suppose you are trying to forecast the exchange rate of the Australian dollar for the next year as you have a business in Australia. The

Suppose you are trying to forecast the exchange rate of the Australian dollar for the next year as you have a business in Australia. The current spot rate is US$0.89/A$. The 1-year interest rate in Australia is 4.00%, and the 1-year interest rate in the U.S. is 1.00%. (a) What is the expected percentage change in the A$ exchange rate one year from now? Explain the intuition. (b) What would be the forecast for the exchange rate next year

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