Question: May you please show work. a 1. (15 points) (Ch.9) Forecasting with a Forward Rate. Assume that the three-year annualized interest rate in the United

May you please show work.

a 1. (15 points) (Ch.9) Forecasting with a Forward Rate. Assume that the three-year annualized interest rate in the United States is 2 percent, and the three-year annualized interest rate in Thailand is 5 percent. Assume covered interest rate parity holds for a three-year horizon. Assume that the spot rate of the Thai baht (THB) is USD 0.03, which also means the spot rate of "THBUSD." If the forward rate is used to forecast exchange rates, what will be the forecast for the Thai baht's spot rate against the USD in three years? (10 points) What percentage appreciation or depreciation does this forecast imply over the three-year period? (5 points)

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