The Dutch Investor Question Consider a Dutch investor with 1,000 euros to place in a bank deposit in either the Netherlands or Great Britain. The (one-year) interest rate on bank deposits is 1% in Britain and 5% in the Netherlands. The (one-year) forward euro-pound exchange rate is 1.65 euros per pound and the spot rate is 1.5 euros per pound. Answer the following questions, using the appropriate equations for uncovered interest parity (UIP) and covered interest parity (CIP) as necessary. Show all your computations here or submit a spreadsheet in your Drop Box. e. Suppose the forward rate takes the value given by your answer to (d). Compute the forward premium on the British pound for the Dutch investor (where exchange rates are in euros per pound). Is it positive or negative? Why do investors require this premium/discount in equilibrium? f. If UIP holds, what is the expected depreciation of the euro (against the pound) over one year? g. Based on your answer to (f), what is the expected euro-pound exchange rate one year ahead