part 2 : Answer the following multimple choice question No explanation is needed. Only choose the correct answer. 1 mark each. Total Mark 3

1. If a UK parent is setting up a French subsidiary, and funds from the subsidiary will be periodically sent to the parent, the ideal situation from the parent's perspective is a ____ after the subsidiary is established.

1 point

(a) weak euro

(b) stable euro

(c) strengthening euro

(d) a & b are both ideal

2. Assume that the forward rate is used to forecast the spot rate. The one-year forward rate of the Canadian dollar contains a 6% discount. Today's spot rate of the Canadian dollar is 0.47. The spot rate forecasted for one year ahead is:

1 point

a. 0.2032

b. 0.4982

c. 0.5982

d. 0.4418

e 0.5467