Please answer e - k and provide explanations for better understanding

2. Let S represent the spot exchange rate between the US. dollar / Mexican peso ($/pesos). Let R be the real interest rate of the U.S., R,\" be the real interest rate of Mexico, and exp( S'\") _ S') be the market expection of the Mexican peso' This question has you use the I balance of payment accounts and interest rate parity condition to explain the Mexican peso crisis of 1994. exp(St+l) SI) .t As a result of part e, fell sharply to -8%. Was the market expecting a larger depreciation or appreciation of the Mexican peso? . To make matters worse, the Fed raised U.S. real interest rates R to 5% in 1994. If E1 Banco de Mexico was to defend the Mexican peso, what should they have raised the Mexican real interest rate R" to? . Instead, El Banco de Mexico defended the Mexican peso by conducting foreign exchange transactions. Would they be buying or selling pesos to raise St ? Would they be buying or selling U.S. dollars to raise S, ? As a result of the foreign exchange transactions in part g, what would happen to the stock of foreign reserves held by El Banco de Mxico? Given the foreign reserve stocks are S t published frequently, what would happen to the market expectation In December 1994, the Mexican government abandoned the xed exchange rate and the peso plunged 35% against the U.S. dollar. Such a devaluation would do what to the current spot rate S, ? . Much of the sovereign (government) debt of Mexico was denominated (i.e. paid out) in U.S. dollars. As a result of part j, would it cost the Mexican government more or less pesos to meet its sovereign debt obligations