1. Suppose 90-day investments in Britain have a 6% annualized return and a 1.5%

1. Suppose 90-day investments in Britain have a 6% annualized return and a 1.5% quarterly (90-day) return. In the U.S. 90-day investments of similar risk have a 4% annualized return and a 1% quarterly (90-day) return. In the 90-day forward market 1 British pound equals $1.65. If interest rate parity holds what is the spot exchange rate?1 pound = $1.80001 pound = $1.65821 pound = $1.00001 pound = $0.85001 pound = $0.60312. A box of candy costs 28.80 Swiss francs in Switzerland and $20 in the United States. Assuming that purchasing power parity (PPP) holds what is the current exchange rate?1 U.S. dollar equals 0.69 Swiss francs1 U.S. dollar equals 0.85 Swiss francs1 U.S. dollar equals 1.21 Swiss francs1 U.S. dollar equals 1.29 Swiss francs1 U.S. dollar equals 1.44 Swiss francs 3. Suppose 144 yen could be purchased in the foreign exchange market for one U.S. dollar today. If the yen depreciates by 8.0% tomorrow how many yen could one U.S. dollar buy tomorrow?155.5 yen144.0 yen133.5 yen78.0 yen72.0 yen4. Suppose 6 months ago a Swiss investor bought a 6-month U.S. Treasury bill at a price of $9708.74 with a maturity value of $10000. The exchange rate at that time was 1.420 Swiss francs per dollar. Today at maturity the exchange rate is 1.324 Swiss francs per dollar. What is the annualized rate of return to the Swiss investor?-7.92%-4.13%6.00%8.25%12.00%