Your answers must be specific to the situation/question presented.

1. The United States is going through an economic slowdown because of the covid 19 pandemic. How might the Federal Reserve use direct intervention in the foreign exchange market to stimulate economic growth?

2. The United States is going through an economic slowdown because of the covid 19 pandemic. How can the Federal Reserve use indirect intervention in the foreign exchange market for economic growth?

3. Suppose you are the CFO at Makeover Cosmetics, an emerging beauty products MNC with a $100 million capital budget. You have the option to expand into South Korea and/or Singapore. You can either invest the entire budget in either country or split it into $30 million in S. Korea and the rest in Singapore. If the following details are provided, what is your best option? Compute expected return and standard deviation of the portfolio and compare with each countrys numbers.

	Expected Return	Standard Deviation	Correlation Coefficient
South Korea	10%	20%	-0.9
Singapore	30%	25%

4. The Federal Reserve wishes to depreciate the U.S. dollar against the euro using non-sterilized direct intervention. Explain the steps involved using a flow chart. What potential problems arise after the intervention? How can the problem get mitigated with a sterilized intervention? Use flowcharts to explain your answers. Make sure you dont miss answering any part. (10)