I9V(jm m1 P56 [Compatibility Mode] Home Insert Draw Design Layout References Mailings Review View 9 Tell me 13 Share 3 Comments [01 V [X Times New\" V 12 " A\" AV A3 " A0 E V E ' AuBchDdEe AaBchD AaBchDdE AaBchDdI AaBchDdEe AaBchD AaBchDdE ) Q Q; Paste g B I g v ab x, x' A V I v A v :1 E E Emphasis Heading1 Normal Strung Subtitle Title No Spacing 53:1: Dictaie 4. Answer the following questions using the diagram below an_d the uncovered interest parity (U IP) approximation 13 = + (giveEMNES/e (Round any calculations to two decimal places): Foreign Exchange Market Domestic . . Interest rate At our Startmg Pomt: - The interest rate on dollar deposits (13) is 2% o - The interest rate on euro deposits (is) is 1% 3 A - The dollar-euro spot exchange rate (Eye) is $1.00 - The dollar-euro expected exchange rate (513/6), 2% which remains constant throughout, is at $1.01 1 % . Foreign Return (FR) 0.93 0.99 1.00 1.01 1.02 Spot Exchange Rate, Em 4a. If the dollar interest-rate falls from 2% to 1%, does the dollar appreciate or depreciate? What is the new spot exchange rate? 4w the euro interest-rate falls from 1% to 0%, does the dollar appreciate or depreciate? What is the new spot exchange rate?| Page2 of2 308 words [13 English (United States) =_= E - _V + 170%