Question: a.Given the figures below,quantify the forward premium or discount. spot $1.4615/ 1 month forward $1.4600 b.5 million ghana cedis has to be paid for supplies

a.Given the figures below,quantify the forward premium or discount. spot $1.4615/ 1 month forward $1.4600 b.5 million ghana cedis has to be paid for supplies received by an American company.Today,the cedi appreciates by 3% against the dollar.The American company can pay today to avoid any additional increase tomorrow.However,the company has determined that an appreciation of the cedi against the dollar by more than 1% is normally followed by a reversal of about 60% the following day.what should the company do? c.Assume US inflation is expected to be 1% over the next year,while the Australian inflation is expected to be 6%. According to purchasing power parity,calculate how the Australian dollar exchange rate should move. d,Briefly distinguish between the following terms: i.spot and forward markets ii.direct and indirect quotes iii.forward premium and forward discount iv.appreciation and depreciation of currency v.exchange rate and arbitrage

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