1. You are a U.S.investor who is trying to calculate the present value of a 5mil

1. You are a U.S.investor who is trying to calculate the present value of a 5million cash inflow that will occur one year in the future. Thespot exchange rate is S = $1.25/ and the forward rate isF1 = $1.215/. Youestimate that the appropriate dollar discount rate for this cashflow is 4% and the appropriate euro discount rate is7%.