b) The table below shows hypothetical values for the consumer price indexes (CPI) of the U.S., the U.K., and Japan in 2014 and 2018. U.S U.K Japan Currency: $ E CPI 2014: 100 200 150 CPI 2018: 120 230 165 Their currencies are also indicated as the dollar ($), pound (E), and yen (Y) respectively. Suppose that exchange rates in 2004 were 2014: $/f = 1.60, Y/$ = 100, and Y/f = 160 (2+2+2=6 marks) . Calculate the following exchange rates for 2014: O E/S O $/Y O E/ Y Calculate the following exchange rates for 2018, assuming that the Purchasing Power Parity Theory holds: (2+2+2=6 marks) O $/E o Y/$ O Y/E Activate Windows Go to Settings to activate Stop sharing Hide Focus reen.Page 6 of 14 d) State True or False for each of the following statements (1+1+1+1+1+1+1+1=8 marks) o Every financial market allows loans to be made. o An example of direct financing is if you were to lend money to your neighbour. o The New York Stock Exchange is an example of a primary market. o Commercial paper is not traded in the capital market. o Eurodollars are traded in the money market. o The process of financial intermediation is also known as direct finance. o A mutual fund is not a depository institution. o A pension fund is not a contractual savings institution. Activate Window Go to Settings to acti screen, Stop sharing Hide Focus Le